Preparing for ICD-10’s Financial Impact

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Preparing For ICD-10s Financial Impact
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ICD Changeover Draws Near
By October 2015, health care providers are
required by law to change their coding method
from the ICD-9 to the ICD-10. This changeover
will be expensive in terms of software,
productivity dips during the transition, training
and other costs. Financially prudent practices
will estimate the cost of the changeover and set
budgets accordingly.
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What Is The ICD-10?
The ICD-10 is an update to the ICD-9 that will
allow more accurate coding. The ICD-9 is more
than 30 years old and can no longer accurately
reflect modern medicine. The new coding system
takes into account new diagnoses and treatments
that the ICD-9 cannot accurately reflect. It also
can be easily expanded to include new
discoveries.
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How Much Will It Cost?
Its no surprise that such a huge shift will come
with costs to health care providers. A recent
American Medical Association study estimated the
following costs related to ICD-10 implementation
Small practice 56,639-226,105
Medium practice 213,364-824,735
Large practice 2,017,151-8,018,364
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What Are The Costs Of Transition?

• Increased documentation demands
• New software purchases
• Decreased productivity during the transition
• Billing inaccuracy during the changeover
• Education costs

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Short Long Term Costs
Some of the increased costs associated with the
changeover will be short-term, while others will
have a long-reaching impact on practices. Costs
related to productivity, accuracy, denial of
claims and renegotiation of contracts are
expected to be high in the near-term future,
leveling off as practices acclimate to the
ICD-10. Costs related to the denial of claims and
renegotiation of contracts will also continue to
have a moderate effect on cost over several years.
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Cost Breakdown By Source
  Typical Small Practice Typical Medium Practice Typical Large Practice
Training 2,700-3,000 4,800-7,900 75,100
Assessment 4,300-7,000 6,535-9,600 19,320
Vendor/Software Upgrades 0-60,000 0-200,000 0-2,000,000
Process Remediation 3,312-6,701 6,211-12,990 14,874-31,821
Testing 15,248-28,805 47,906-93,098 428,740-880,660
Productivity Loss 8,500-20,250 72,649-166,649 726,487-1,666,487
Payment Disruption 22,579-100,349 75,263-334,498 752,630-3,344,976
Total Costs 56,639-226,105 213,364-824,735 2,017,151-8,018,364
Source AMA
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Tips To Minimize Costs

• Get started now making sure your software and
  that of your vendors and payers are up-to-date
  and ready to seamlessly process the new ICD-10
  codes. If your payers and vendors arent up to
  speed, you may want to politely suggest that
  failure to get up to speed may result in your
  practice seeking new payers and vendors.
• Save up some cash to keep your practice in good
  financial health if some hiccups occur on your
  way to adjusting to the new system. A line of
  credit may also help.
• Get a good idea of how your practice codes, the
  turnaround time on claims and what impact
  substantial delays will have. Knowing your
  metrics will help you better prepare.

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Who Benefits From ICD-10?
Although ICD-10 will be costly to implement, in
the long run it will benefit patients and the
medical community, according to industry experts.
Doctors will benefit by having more accurate
records and a more efficient system of billing
resulting from the code changes. Research will
also be more accurate thanks to more detailed
records.
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About LS Coding Education LLC
LS Coding Education, LLC provides training for
professional medical coders in the Tucson area,
enabling them to get the certification they need
to attain AAPC certification. LS Coding
Education offers online and in-person classes
aimed at quickly teaching coders medical
terminology, ICD-10 codes and other coding
protocols necessary for them to pursue a
successful career in this growing field. For
more information, visit http//cpc.certifiedcodert
raining.com/ or call 866-737-3701.