Health Information Management

ICD-10 implementation cost estimate redux

HIM-HIPAA Insider, November 24, 2014

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One of the biggest stumbling blocks for ICD-10 implementation by small physician practices was the estimated cost of the transition. Those costs may not be as high as originally estimated, according to an article in the Journal of AHIMA.
Back in 2008, Nachimson Advisors estimated that small physician practices would spend a median of $83,000 to implement ICD-10.
In a 2014 update to the report, Nachimson Advisors upped those expected costs for a small physician practice to a wide-ranging estimate of $56,639?$226,105.
The AMA has jumped all over those cost estimates in its ongoing quest to kill ICD-10. Small practices simply can’t afford that kind of investment, AMA claimed.
The new AHIMA report authored by a group of 3M consultants lowers the estimated implementation costs to $1,960-$5,900 for a three-physician practice with two impacted staff members, such as coders and/or front desk or back office personnel.
That’s a considerable difference in costs. The article’s authors go a step further and break down the costs as follows:
Training: $50-$300 for three hours of online training in a particular specialty. Note they are talking specialty specific training, not general code set training, which makes sense. If you are a small pulmonary practice, you don’t need to know the changes for digestive diseases or orthopedic diagnoses. Comprehensive ICD-10 training for staff ranges from $350 to $700.
Coding manual: Free to $70. Yes, you can download the ICD-10-CM and ICD-10-PCS Manuals from the CDC and CMS websites at absolutely no cost. You may need to download multiple searchable PDFs to get all of the tables (neoplasm and drug) and the guidelines in addition to the codes, but still, it’s free. And because physician practices will still report procedures using CPT®, they don’t need the ICD-10-PCS Manual at all.
Software upgrades: Free (maybe, it depends on the vendor). Many ICD-10 opponents bewailed the expected costs of converting software, billing systems, and electronic health records (EHR). How could a small physician practice possibly afford to implement an EHR, then update the entire thing for ICD-10? Turns out, many vendors are including the ICD-10 updates as part of their regular software updates, so the practice incurs no additional costs. Also, it’s a little deceptive to include the costs of implementing an EHR with the costs to implement ICD-10. You don’t have to have an EHR to use ICD-10. It will probably help and U.S. healthcare is moving more toward electronic records in general. An EHR will make the transition to ICD-10 easier, the article authors admit. However, they also state that many physician offices have received $44,000-$64,000 government incentive payments for implementing EHRs. The government, after all, is encouraging the healthcare industry to move to electronic records, hence the incentives for implementation and demonstrating meaningful use.
Superbill conversion: A day’s worth of work. Physician practices that use superbills already update them yearly, so changing the superbill to ICD-10 is not significantly more involved, the authors state. In fact, most practices can complete the conversion in less than one day, they say. The bigger discussion may be whether to even continue to use a superbill. ICD-10-CM codes are much more detailed than ICD-9-CM codes, so a superbill could become too big to really be useful.
End-to-end testing: Zero dollars. End-to-end testing is an important part of the ICD-10 implementation process. Complete and accurate documentation and accurate code assignment don’t do you any good if you can’t submit the claim. No claim submission, no reimbursement. End-to-end testing should allow providers to make sure they can submit claims and that the payer can accurately process the payment. Physicians generally don’t need to be involved in the testing. The office staff would handle that and even then, small practices will not incur costs for testing, according to the AHIMA article.
Productivity declines and increased documentation requirements: Providers commenced major hand-wringing and offered apocalyptic predictions about documentation and productivity, especially when they looked at statistics from Canada. Canadian coders experienced a 50% decline in productivity immediately after ICD-10 implementation. In 2008, Nachimson estimated additional documentation costs for a small practice would be $44,000. No way can small practices afford that, the anti-ICD-10 faction wailed. However, that cost was based on data from inpatient hospitals. Physician practices still get to use CPT codes, so they don’t need to change their documentation for procedures. Inpatient hospitals will be using ICD-10-PCS codes, which are completely different from ICD-9-CM Volume 3 codes.
The authors of the AHIMA article state, “New data in a large study in 2014 confirms physician practice progress when it reported that ‘a very large practice needed one hour or less for any necessary updating of documentation for the ICD-10 upgrade,’ illustrating that a number of practices have already established appropriate documentation practices well in advance of ICD-10 implementation.”
I’m not sure I would go that far. I’m not sure physician documentation is all that great right now. Think about how many not otherwise specified or default codes you currently report. You will still have default codes in ICD-10-CM, but no one knows how long payers will accept a default code like E11.9 (the ICD-10-CM equivalent of everyone’s favorite unspecified diabetes code, 250.00). The ICD-10-CM Official Guidelines for Coding and Reporting tell you it’s perfectly okay to report unspecified codes in some cases. Not all of the time though, and really laterality should never be unspecified. What’s the point in moving to a more specific code set if we aren’t capturing the more specific information?
The biggest cost associated with documentation is probably going to be auditing your current records and identifying what information is missing. Keep in mind, we aren’t trying to train physicians on how to code. We don’t want them coding. Instead of teaching them the codes, teach them the new concepts for ICD-10-CM: episode of care, laterality, weeks gestation (for OB). And keep it specific to what they aren’t doing now. If your physicians document laterality, don’t spend time telling them they need to document it.
The quality of the documentation will largely determine the loss in productivity for coders. The more time we have to spend querying, the longer it takes to drop the bill. And the longer it takes to get the reimbursement back in the door.
The new study is worth reading to see how they break down the costs, but remember every practice is going to be different. You can certainly use this information to allay some of your physicians’ fears about the costs of ICD-10 implementation.
This article originally appeared on HCPro’s ICD-10 Trainer blog.

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