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The costs to medical practices for implementing ICD-10 have been grossly underestimated, according to a recent study.
The costs to medical practices for implementing the International Classification of Diseases-10th Revision (ICD-10) coding system have been grossly underestimated, according to a recent study by Nachimson Advisors for the American Medical Association (AMA). The association is calling for a delay in the October 1, 2014, ICD-10 go-live date in order to give practices more time to prepare for the financial and administrative requirements.
Small practices can expect to spend between $56,639 and $226,105 and medium-size practices can spend between $213,364 and $824,735 to implement ICD-10. Expected costs include up to $100,000 in payment disruption for small practices, and up to $166,000 in productivity losses for medium-size practices. Large practices can expect to spend between $2 million and $8 million to implement the new coding system, according to the study. The study estimated that two-thirds of physicians will pay the upper range of cost estimates. In 2008, the AMA estimated that it would cost a small practice $83,290 to implement ICD-10.
"The markedly higher implementation costs for ICD-10 place a crushing burden on physicians, straining vital resources needed to invest in new health care delivery models and well-developed technology that promotes care coordination with real value to patients," AMA President Ardis Dee Hoven, M.D. said in a press release. "Continuing to compel physicians to adopt this new coding structure threatens to disrupt innovations by diverting resources away from areas that are expected to help lower costs and improve the quality of care."
The AMA sent a letter to the Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services, outlining the hardships physicians are facing in implementing ICD-10. The letter calls for Medicare to offer “true end-to-end testing” of ICD-10 coding to ensure practices and payers will be able to communicate.
“While it will allow a physician to know whether his or her claim was received or not, it does not give any indication as to whether it will be paid, how much it will be paid, whether they have used the correct ICD-10 code, or whether Medicare believes more information is needed to adjudicate the claim,” James L. Madara, MD, AMA’s assistant director of federal affairs said in the letter. “To draw a simple analogy, this is like receiving a package on your doorstep that you can only view from your window. While it is helpful to know the package has arrived, you have no idea what is inside until you are able to open it.”
Other suggestions include expanding advance payment options and offering free Medicare billing software for practices facing financial hardships. The AMA also requests that the Centers for Medicare and Medicaid Services allow for a two-year implementation period where miscoded claims are not denied, but are returned to physicians with feedback on how to correct them.
According to a February survey by the Medical Management Group Association, 79% of physicians report that they haven’t begun ICD-10 implementation, or were “somewhat ready.”