Report: Cost of ICD-10-CM conversion dependent on facility size

Size of practice could influence cost of ICD-10 conversion. Image Source: HIPAA Source

The Medical Group Management Association (MGMA), which has contended that the proposed ICD-10-CM code set would be too costly for quick adoption, could gain increased support for its argument with a report from Nachimson Advisors that estimates the cost to small, medium and large practices.

The U.S. government has proposed implementing the codes by October 2011, a deadline the MGMA describes as unworkable and expensive.

The size of a practice and vendor costs play a major part in the overall cost, according to the paper. Nachimson found that the total cost to implement ICD-10 at a 10-physician group practice would be $285,000. A three-physician practice would need to invest $83,290, while a 100-physician practice would pay more than $2.7 million to implement the codes, which are far more complex that the current ICD-9 diagnosis codes.

”This change will have some onetime costs, such as training for most staff, changes to bills to include ten times as many codes, upgrading IT systems for the new code set and changing templates and reviewing insurance plan contracts for changes to payment and coverage,” the report said.

In addition to the one-time costs involved, there will also be additional permanent costs. The greater specificity of the ICD-10-CM code set will require more specific documentation in provider records. The permanent increase will take physicians additional time, adding about 34 percent to their workload, according to the report.

William Jessee, MD, MGMA’s president and CEO, said that moving forward with the current timeline will result in a crushing burden of added costs, duplicative systems and confusion over health insurers’ coverage decisions for many physicians’ practices.

The complete study is available at nachimsonadvisors.com.