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AMA study says physician cost of ICD-10 transition will be dramatically higher than original estimates



February 20, 2014
Area(s) of Interest: Payor Issues and Reimbursement Practice Management 

A new study conducted by the American Medical Association (AMA) found that physician practices will have to spend anywhere from an estimated $83,290 for a small practice up to $2,728,780 for a large practice in order to meet the transition to ICD-10 code set by the October 1, 2014, deadline.


In a letter to Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services, the AMA said “the transition to ICD-10 represents one of the largest technical, operational and business implementation in the health care industry in the past several decades.


“Implementing ICD-10 requires physicians and their office staff to contend with 68,000 diagnosis codes—a five-fold increase from the approximately 13,000 diagnosis codes in use today,” the letter said.


The costs the AMA study looked at included training, vendor and software upgrades, testing and payment disruption. It also took into account the convergence of dynamic and financially demanding physician requirements; several of which focus on the cost to purchase new or upgraded software.


 “The markedly higher implementation costs for ICD-10 place a crushing burden on physicians, straining vital resources needed to invest in new health care delivery models and well-developed technology that promotes care coordination with real value to patients,” said AMA President Ardis Dee Hoven, M.D.


Dr. Hoven said that compelling physicians to adopt this new coding structure threatens to disrupt innovations by diverting resources away from areas that are expected to help lower costs and improve the quality of care.


ICD-10 (The International Classification of Disease tenth revision) is a system of coding created in 1992 as the successor to the current ICD-9 system. The transition to ICD-10 is required for everyone covered by the Health Insurance Portability Accountability Act (HIPAA).


For more information, see the AMA website.

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