ICD-10 transition estimated to cost small practices more than $200,000

The transition from ICD-9 to ICD-10 has already caused many headaches for physicians in charge of small practices. The exponential increase in orthopedic billing codes alone have prompted many providers to dedicate more resources to data entry departments in charge of navigating which of the thousands of new codes apply to medical diagnoses. Physicians have already noted that there is a significant disconnect between the information they are used to providing in the old system and the information coders require for ICD-10 – often, doctors are required to submit more patient data days or weeks after making an official diagnosis. The transition to the new codes has seen its fair share of speed bumps along the way, and a recent study suggests that rather than being a minor nuisance to small practices, the ICD-10 transition could cost tens, if not hundreds of thousands, of dollars.

A troublesome transition
The grumbles of physicians over the ICD-10 transition have been given new life with a recent letter from the American Medical Association to Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services. James Madara, M.D., the AMA's chief executive officer and executive vice president, penned the letter to Sebelius and urged the HHS to consider major changes to the implementation of ICD-10 or even the outright abolition of it.

"Adopting ICD-10, while it may provide benefits to others in the health care system, is unlikely to improve the care physicians provide their patients and takes valuable resources away from implementing delivery reforms and health information technology," Madara wrote. "The AMA strongly urges [the Centers for Medicare and Medicaid Services] to reconsider the ICD-10 mandate."

Madara cited several data points that all indicate an over-burdening of physicians in small practices. In addition to navigating the new ICD-10 requirements, Madara argued that it is too much for the same professionals to implement new technologies like electronic health records, optimize the flow of information within their offices and recommit to patient-focused care while also adopting ICD-10.

"By itself, the implementation of ICD-10 is a massive undertaking," Madara wrote. 

A big bill for small practices
The letter from the AMA cited a recent study from healthcare IT analytic firm Nachimson Advisors that stated the estimated costs for small practices transitioning to ICD-10 should be drastically increased for an accurate picture of the impact the process will have on those workplaces.

While Nachimson's 2008 estimates placed the cost of the ICD-10 transition for small practices at $83,290, the most recent report has widened the range of projected costs. For a typical small practice, the implementation of the new coding system could now run anywhere between $56,639 to $226,105.

These updated figures take into account the disruption that the transition is predicted to have on a normal work environment. More than half of the costs will come from productivity issues and the resultant stops in cash flow, with the remainder comprised of expenses related to testing EHR software upgrades and training staff on its proper usage.

Large hospitals may be able to afford the losses in revenue, but for smaller practices that depend on each and every transaction to survive, the effects could be catastrophic.

"Many physicians are small business owners and, thus, their operating margins are already thin," Madara wrote to the HHS.

The new statistics and the AMA's vote of no confidence does not paint a smooth picture leading up to the Oct. 1 deadline for transition. The HHS has already postponed the implementation of ICD-10 once already, and the AMA hopes that Sebelius will be prompted to consider a delay for the sake of overworked physicians in small practices.