New Codes Could Cost Big Bucks

When the Department of Health and Human Services published a rule that would require doctors and other health providers to adopt an updated diagnosis coding set—ICD-10—by 2011, a coalition of physician groups, insurance companies, and clinical laboratories joined forces to ask that the implementation date be pushed back.

When the Department of Health and Human Services published a rule that would require doctors and other health providers to adopt an updated diagnosis coding set—ICD-10—by 2011, a coalition of physician groups, insurance companies, and clinical laboratories joined forces to ask that the implementation date be pushed back. These groups recently got fresh ammunition in the form of a study commissioned by the Medical Group Management Association that outlines the staggering costs connected to adopting the new codes.

According to the study, a medium-size 10-doctor practice would have to spend more than $285,000 to comply with the rule, while a large 100-doctor practice would face a price tag of more than $2.7 million. The typical small practice would incur costs of more than $83,000. The study also identified a large nationwide laboratory chain that estimated its cost of adopting the new codes to be about $40 million.

The new ICD-10 code set has five times as many diagnosis codes as the ICD-9 set currently in use. Compounding the problem is another HHS rule that will require implementation of new HIPAA transaction standards, which all parties agree must be in place before the ICD-10 codes can be adopted. The HHS deadline for the HIPAA standards is April 1, 2010. This one-two punch could be a knockout blow to the nation’s healthcare system, say some critics, including the American Medical Association. The AMA has called for a rollback of the deadlines, noting that more time is needed for physician education, software updates, and employee training.