AMA: ICD-10 Implementation To Be Significantly More Costly

February 12, 2014 in News

ICD-10 implementation for physician practices could be up to three times more costly than previously estimated, according to an updated cost study published Wednesday by the American Medical Association, FierceHealthIT reports (Bowman, FierceHealthIT, 2/12).

The study updates research AMA conducted on ICD-10 in 2008.

For the studies, AMA’s cost estimates include expenses related to:

  • Payment disruptions;
  • Physician productivity losses;
  • Practice assessments;
  • Testing; and
  • Training.

Study Findings

The updated 2014 analysis found that ICD-10 implementation will cost:

  • $56,639 to 226,015 for small practices, compared with an estimated $83,290 in 2008;
  • $213,364 to $824,735 for medium practices, compared with an estimated $285,195 in 2008; and
  • $2,017,151 to $8,018,364 for large practices, compared with an estimated $2,728,780 in 2008.

According to Healthcare IT News, about 66% of physician practices are likely to fall into the upper range of the cost estimates.

The higher 2014 cost estimates are the result of significant post-implementation expenses, such as testing and the potential risk of payment disruption (Miliard, Healthcare IT News, 2/12). 

AMA Letter

In response to the findings, AMA CEO and Executive Vice President James Madara sent a letter to HHS Secretary Kathleen Sebelius asking the agency to “strongly … reconsider” the ICD-10 mandate (FierceHealthIT, 2/12).

He wrote, “By itself, the implementation of ICD-10 is a massive undertaking,” adding, “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.”

Madara said that “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.” However, he added, “we question the logic of requiring physicians to adopt a new coding structure at this point in time” (AMA letter, 2/12).

Madara also recommended that CMS introduce:

  • End-to-end testing for all physicians;
  • A two-year implementation period in which Medicare cannot deny reimbursements based on ICD-10 code requirements;
  • A Medicare policy that no additional data will be required if the most specific codes are submitted by doctors; and
  • A tweak to CMS’ advance payment policy to allow for extenuating circumstances if a physician has a good reputation with the program (FierceHealthIT, 2/12).
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