The transition to ICD-10 is one of the largest technical implementations the health care industry has seen in decades. With the October 1 deadline approaching, many physicians are struggling to ensure their office is in compliance. The American Medical Association (AMA) recently sent a letter to Health and Human Services (HHS) Secretary Kathleen Sebelius urging the HHS to reconsider the mandate.
Costs Higher Than Expected
The AMA sponsored a study that shows the costs of implementing ICD-10 will be as much as three times higher than initially estimated. The research found the costs will range from $56,000 to $226,000 for small practices, $213,000 to $825,500 for mid-sized practices and between $2 and $8 million for large practices. Researchers say the costs vary based on specialty, vendor and the software used. It's estimated that two-thirds of physician practices will be on the higher side of the ranges due to the cost of software upgrades needed to transition to ICD-10. Surprisingly, much of the estimated cost is post-implementation. This will be due to testing and possible payment delay and disruption. The Centers for Medicare & Medicaid Services (CMS) estimates claim denial rates could increase by 100 to 200 percent just after transition.
The AMA's rationale goes beyond the cost of implementation. Logistically, the AMA says the health care system is just not ready. A survey by the Medical Group Management Association (MGMA) found that less than 10 percent of physicians feel they've made significant progress in getting ready for the transition. The MGMA's senior policy advisor said, "providers, payers, the government and other players in the ICD-10 movement are not working in a cohesive and coordinated fashion. ICD-10 is like a cascade. Things can't happen until other things happen."
The AMA cites its main reason for calling for a repeal of the mandate is because ICD-10 is not expected to improve overall care and it may even hinder transition to "new delivery models." The burden of ICD-10 is taking resources away from innovations and technologies that could help lower costs and improve care, says the AMA.
Implementing ICD-10 is a huge undertaking for practices. It involves converting to a system that uses 68,000 diagnosis codes compared to just 13,000 codes used currently. It remains to be seen if the HHS will heed the warning of the AMA. Therefore, it's best to get prepared.
If you have any questions about the impact of ICD-10 on your practice, give us a call or post a question here. Our medical coding bookkeepers have been recertified in ICD-10 best practices and will be happy to respond to your questions or concerns.