|ICD-10 Mandate Hardship For
Healthcare Providers Says Study
A proposed rule from the Department of Health and
Services (HHS) requiring all physician practices and other providers to
adopt a new coding set – the ICD-10 code set – by
would dramatically increase costs for physician practices and clinical
laboratories, according to a new cost study initiated by a broad group
of provider organizations and conducted by Nachimson Advisors.
According to the study, the total estimated cost
10-physician practice to move to ICD-10 would be more than $285,000.
These expenses include:
a. Total training expenditures estimates – $4,745
b. New claim form (superbill) software
c. Business process analysis – $12,000
d. Practice management and billing system
software upgrades – $15,000
e. Increases in claim inquiries and reduction in
cash flow – $65,000
f. Increased documentation costs –
The study also said for a small, three-physician
practice, the total cost to implement ICD-10 is estimated to be
$83,290; for a large, 100-physician practice the estimated costs to
implement ICD-10 is more than $2.7 million.
"We are just now beginning to learn the increased
on physician practices associated with moving to the ICD-10 code set
– and they are staggering," said Dr. William F. Jessee,
Group Management Association president and CEO. "If HHS’s
proposed 2011 timeframe for implementing ICD-10 goes forward as
planned, physician practices will have to cope with a crushing burden
of added costs, duplicative systems and confusion over health
insurers’ coverage decisions. HHS’s proposed
unworkable for patients, physician practices and clinical laboratories
and needs to be changed." MGMA was one of the organizations that
commissioned the study.
HHS proposed a new rule that would require all
Dr. Joseph M. Heyman, board chair, American
Association (AMA), stated "The AMA is deeply concerned that HHS is
rushing head-first into the transition to a complex coding system
without fully recognizing the impact on the healthcare system.
Physicians, insurers, medical labs and others are raising the alarm
that the costs, documentation and training required by ICD-10 will be
significantly greater than HHS now recognizes. We are committed to
improving the healthcare system, but we cannot let history repeat
itself as CMS attempts to quickly implement yet another major HIPAA
change without allowing time for physician education, software vendor
updates, coder training and testing with payers – steps that
needed for a smooth transition and cannot be rushed."
Clinical laboratories will also be impacted.
In the study, Nachimson Advisors identified a
national laboratory as estimating its up-front cost of implementing
ICD-10-CM to be approximately $40 million, including IT and education
"This study illuminates the fact that adopting
will be far more costly for physician practices and clinical labs and
much more complicated than HHS acknowledges in the proposed rule," said
Alan Mertz, president of the American Clinical Laboratory Association.
"We are hopeful that HHS will review this study closely and revise
their compliance strategy to correspond with a more appropriate
Addresses: Nachimson Advisors, 11 Valley Glen Ct.,
Reistertown, MD 21136; (410) 935-7084, www.nachimsonadvisors.com.
Medical Group Management Association, 104 Inverness Terrace East,
Engelwood, CO 80112; (303) 799-1111, www.mgma.org.