Is Your Medical Practice ICD-10 CM Ready?

Is Your Medical Practice ICD-10 CM Ready?

After years of delay, the U.S. Department of Health and Human Resources (HHS) will finally implement the International Classification of Disease -10th Revision (ICD-10) on October 1, 2015. 

Delays in implementing ICD-10 were intended to give providers ample time to prepare, but according to Jim Daley, chairmen of the Workgroup for Electronic Data Interchange, the majority of physicians have not used this reprieve wisely. He noted in a letter in September 2014 to HHS Secretary Sylvia Burwell, “It appears the delay has negatively impacted provider progress, causing two-thirds of provider respondents to slow down efforts or place them on hold.”

ICD-10 is the largest mandate in U.S. healthcare history, and physician practices can expect the shift to ICD-10 Clinical Modification (CM) to have a profound impact on staff and operations, because the new code set involves five times as many diagnosis and procedure codes as ICD-9 CM, 68,000 vs. 13,000. It also requires more documentation, revised forms, additional staff and physician training, and software and other information technology (IT) changes.

The combined impact of these changes will be costly for physician practices, according to a 2014 study by Nachimson Advisors, LLC, a health care IT consulting firm, which found that implementation of ICD-10 CM will cost up to $226,105 for for small practices, up to $824,735 for medium-size practices; and potentially in excess of $8 million for large practices with 100 physician or more.

Changes in reimbursement patterns may also occur due to expansive ICD-10 CM coding changes, which will impact billing activities and possibly result in cash flow interruptions. The Nachimson analysis noted that with the greater specificity of the ICD-10 CM code set, compliance may cause health plans to modify provider contracts and adjust payment terms accordingly. Plans will also revise coverage determinations based on new diagnostic codes and the additional documentation required to support patient treatment plans.

Additionally, the tremendous increase in diagnosis and procedure codes will require significant changes to super bills—those documents physicians provide payers specifying medical services provided and why they were necessary, along with the CPT and ICD codes. 

  Typical Small Practice Typical Medium Practice Typical Large Practice
2008 Estimate
$83,290 $285,195 $2,728,780
2014 Estimate
Pre-implementation Costs
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
Total Pre-Implementation Costs $25,560-$105,506 $65,452-$323,588 $538,034-$3,006,901
Post-implementation Costs
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 Post-Implementation Costs $31,079-$120,599 $147,912-$501,147 $1,479,117-$5,011,463
Total Costs $56,639-$226,105 $213,364-$824,735 $2,017,151-$8,018,364
The delay in implementing ICD-10 CM was intended to provide physician practices time to prepare, but the delay has also been costly. A 2008 Nachinson Advisors, LLC, study estimated costs for medical practices to implement ICD-10 CM at between $83,290 and $2.7 million, depending on the size of the practice. Now the cost range is up to an estimated $226,105 for small practices to in excess of $8 million for large practices.


Getting Started

Jeff Goldstein, MD, MS FACHE, a clinical transformation consultant at Allscripts, in a blog posted on Allscripts website, suggested that successful implementation of ICD-10 CM requires strong leadership and a diligent, comprehensive team effort to prepare for the transition. Preparation must encompass three key areas: governance, education and standardization of documentation, he stressed, noting for example, proper coding will ensure medical bills get paid “without leaving money on the table.”  

While this new coding system does not require use of an electronic health record system (EHR), with so many new codes in use, an EHR system can simplify the documentation process, he pointed out, warning, however, that information generated by an EHR is only as good as the information entered.

Role of Strong Governance  

To provide strong ICD-10 CM leadership, Goldstein recommended designating an executive sponsor and ICD-10 CM czar to be responsible for driving the preparation effort and maintaining the project on a steady, consistent course. This governance role includes establishing an operational team composed of representatives from key areas affected by ICD-10 CM, including health information management, coding, billing, finance IT, education, nursing and medical staff.

Practices that do their billing internally, will need to ensure that coding and billing staff work together to retrieve clinical information and produce a clean, accurate claim,” Goldstein added. If practices uses outside medical billing and/or coding services, the appropriate representatives from these services should be included on the ICD-10 CM team

Using various mediums, this committee’s job is to communicate to everyone in the organization the importance of a successful ICD-10 CM transition and its goals, objectives, milestones and successes and organize ICD-10 CM training for everyone whose job is affected by the transition.

He also pointed out that allocation of sufficient resources, in terms of people, money and most importantly time, is essential for this team’s success. 

Value of Education

Goldstein stressed the importance of education to success of both implementation of ICD-10 CM and ongoing operations. While he contends all members of an organization should receive education in ICD-10 CM areas that affect performance of their jobs, Goldstein stressed that training is critical for clinical and administrative, coding and billing staff or services.  

He pointed out that the overlap between governance and education is an important part of the path to ICD-10 CM readiness, explaining that the governance team should begin with an assessment of the organization’s ICD-10 CM readiness and develop a meaningful education program based on the findings.

“It’s a critical area of responsibility for the governance team,” Goldstein emphasized, suggesting that if an organization does not have the in-house resources to assess, analyze, develop and implement ICD-10 CM education programs, the team should seek outside help. 

Big Jump in Documentation

By far the greatest workload burden presented by ICD-10 CM will result from a 15 percent to 20 percent increase in documentation, which translates to a 3 percent to 5 percent escalation in the time a physician must spend on this task.

“This is a permanent increase, not just an implementation or learning curve increase,” noted the Nachimson report. “It is a physician workload increase with no expected increase in payment, due to the increased requirements for providing specific information for coding. Electronic health record systems will not be able to eliminate the extra time requirement.”

Standardization of documentation is critical to saving time and money, as a wide variation in physician documentation processes within the same organization complicates coding, prolongs billing cycles and inhibits effective communication across providers and with the patient, cautioned Goldstein.

Consistent, concise, thorough, comprehensive documentation is essential for both ICD-10 CM and value-based payment strategies, like bundled payments, to ensure positive financial, clinical and operational outcomes. It also can help practices survive costly audits, like the Centers for Medicare & Medicaid’s Recovery Audit Program. (RAC). The RAC program seeks to recoup Medicare and Social Security overpayments and has recovered $3 billion to the Medicare Trust Fund since its inception in 2013.

“ICD-10 readiness is a journey, but unless the fundamentals are in place, moving toward an October 1 launch is an uphill journey on a very steep slope, Goldstein concluded, noting that only organizations that have invested time and resources in governance, education and documentation will be ready to move into ICD-10 CM pre-go-live activities, such as testing and dual coding.

— Patricia Kirk

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