What will ICD-10 cost your organization?

We know it will take a huge time commitment. We know it will require an inordinate amount of organization and coordination across departments. We know the training for coders and physicians and others in your organization will be extensive. But what is the transition to ICD-10 going to cost in dollars and cents? Consider the following excerpt from the Medical Group Management Association Web site:

The American Academy of Dermatology, American Academy of Professional Coders, American Association of Neurological Surgeons, American Association of Orthopaedic Surgeons, American Clinical Laboratory Association, American College of Physicians, American Medical Association, American Optometric Association, American Physical Therapy Association, American Society of Anesthesiology, and the Medical Group Management Association retained Nachimson Advisors to assess the cost impact of the proposed ICD-10 rule on providers.  Nachimson Advisors estimated the cost impact of an ICD-10 mandate on three different provider practices:

• A typical “small” practice, comprised of three physicians and two impacted administrative staff.
• A typical “medium” practice, comprised of 10 providers, one full-time coder, and six impacted administrative staff.
• A typical “large” practice, comprised of 100 providers, with 64 coding staff comprised of 10 full-time coders and 54 impacted medical records staff.

Total Cost Impact of ICD-10 Mandate on Individual Provider Practices

• For a typical small practice, Nachimson Advisors estimates the total cost impact of the ICD-10 mandate as $83,290.
• For a typical medium practice, Nachimson Advisors estimates the total cost impact of the ICD-10 mandate as $285,195.
• For a typical large practice, Nachimson Advisors estimates the total cost impact of the ICD-10 mandate as more than $2.7 million.

Cost Impact of ICD-10 Mandate in Six Key Areas

Requiring five times as many codes as the previous code set, the  proposed rule would impact every aspect of business operations for physician practices and clinical laboratories and produce significant added costs in six key areas:

1. Staff Education & Training.  Nachimson Advisors estimates the staff education and training costs associated with an ICD-10 mandate would range from $2,405 for a small practice to $46,280 for a large practice.
2. Business-Process Analysis of Health Plan Contracts, Coverage Determinations & Documentation.  Nachimson Advisors estimates the business-process analysis costs associated with an ICD-10 mandate would range from $6,900 for a small practice to $48,000 for a large practice.
3. Changes to Superbills.  Nachimson Advisors estimates the changes to new claim form software (superbills) costs associated with an ICD-10 mandate would range from $2,985 for a small practice to $99,500 for a large practice.
4. Information Technology (IT) System Changes.  Nachimson Advisors estimates the IT costs associated with an ICD-10 mandate would range from $7,500 for a small practice to $100,000 for a large practice.
5. Increased Documentation Costs.  Nachimson Advisors estimates the increased documentation costs associated with an ICD-10 mandate would range from $44,000 for a small practice to $1.785 million for a large practice.
6. Cash Flow Disruption.  Nachimson Advisors estimates the cash-flow disruption costs associated with an ICD-10 mandate would range from $19,500 for a typical small practice to $650,000 for a typical large practice.