ICD-10 implementation costs for physician practices are expected to be significantly more costly than previously estimated, according to an updated cost analysis report from the AMA (American Medical Association).
The updated 2014 AMA cost analysis study written by Carolyn Hartley, Physicians EHR, and Stanley Nachimson from Nachimson Advisors takes into account the convergence of dynamic and financially demanding physician requirements which include:
Costs associated with paying for upgrades to EHR or PM (Practice Management System)
Meeting meaningful use requirements
ICD-10 testing
ICD-10 training
AMA’s Response Letter to HHS
In response to the recent updated findings from Nachimson Advisors, AMA CEO and Executive VP James Madara sent a letter to HHS Secretary Kathleen Sebelius stating,
AMA CEO and Executive VP James Madara
“By itself, the implementation of ICD-10 is a massive undertaking. Yet, physicians are being asked to assume this burdensome requirement at the same time that they are being required to adopt new technology, re-engineer workflow, and reform the way they deliver care; all of which are interfering with their ability to care for patients and make investments to improve quality.
The AMA recognizes that our position on ICD-10 is at odds with many other well-intended stakeholders in the health care industry. We are not discounting the value ICD-10 data could have for research, public health surveillance, and other data analysis activities. Based on the concerns we articulate below, however, we question the logic of requiring physicians to adopt a new coding structure at this point in time.”
Madara also urged CMS and Medicare to:
Conduct true end-to-end testing.
Adopt a policy for Medicare that states when the most specific ICD-10 code is submitted by a physician no additional information will be required to adjudicate the claim, particularly in the absence of an attachment standard.
adopt a policy for Medicare that provides a two-year ‘implementation’ period during which Medicare will not be allowed to deny payment based on the specificity of the ICD-10 code, will provide feedback to the physician on any coding concerns, and will not be allowed to recoup payment due to a lack of ICD-10 specificity.
Methodology
The updated report followed the general methodology used in the original 2008 report in addition to interviews from ICD-10 services based vendors and consultants. Additionally, six EHR vendors were interviewed to estimate the ICD-10 impact on Meaningful Use EHR systems. Costs are broken by:
Pre-Implementation Costs (Training, Assessment, Vendor/Software Upgrades, Process Remediation, Testing)
Post Implementation Costs (Productivity Loss, Payment Disruption)
Based on new information, the report categorized physician practices by:
Small Size Practice (3 Physicians & 2 Administrative Staff)
Medium Size Practice (10 Physicians, 1 Full-Time Coder, & 6 Administrative Staff)
Large Size Practice (100 Physicians, 64 Administrative Staff, & 10 Full-Time Coders)
Updated 2014 ICD-10 Implementation Costs Summary
The 2014 updated cost summary can be seen below:
Typical Small Practice
Typical Medium Practice
Typical Large Practice
2018 Estimate
$83,290
$285,195
$2,728,780
2014 Estimate
Pre-implementation costs
Training
$2,700 ‐ $3,000
$4,800 ‐ $7,900
$75,100
Assessment
$4,300 ‐ $7,000
$6,535 ‐ $9,600
$19,320
Vendor/Software Upgrades
$0 ‐ $60,000
$0 ‐ $200,000
$0 ‐ $2,000,000
Process Remediation
$3,312 ‐ $6,701
$6,211 ‐ $12,990
$14,874 ‐ $31,821
Testing
$15,248 ‐ $28,805
$47,906 ‐ $93,098
$428,740 ‐ $880,660
Total Pre‐Implementation Costs
$25,560 ‐ $105,506
$65,452 ‐ $323,588
$538,034 ‐ $3,006,901
Post ImplementationCosts
Productivity Loss
$8,500 ‐ $20,250
$72,649 to $166,649
$726,487 ‐ $1,666,487
Payment Disruption
$22,579 ‐ $100,349
$75,263 ‐ $334,498
$752,630 ‐ $3,344,976
Total Post‐Implementation Costs
$31,079 ‐ $120,599
$147,912 ‐ $501,147
$1,479,117 ‐ $5,011,463
Total Costs
$56,639 ‐ $226,105
$213,364 ‐ $824,735
$2,017,151 ‐ $8,018,364
For physicians practices, a poorly executed ICD‐10 implementation effort will increase those risks and expose practices to large costs in 2014 and beyond.
