The ICD-10 Mandate - What is it and How Much Will it Cost Your Practice?

In August 2008 the U.S. Department of Health and Human Services (HHS) announced that it would update the universal health-care diagnosis and procedure codes with the expanded ICD-10 set and initially required providers to fully implement this system by October 11, 2011. This date has since been pushed back to October 2013 due to organizations that protested that it simply could not be done by the initial deadline date. For the past 30 years providers have used the ICD-9 set. HHS has called the ICD-9 coding system "outdated" due to what it describes the codes inability to accommodate new procedures and diagnoses. The ICD-10 coding system has 210,000 codes compared to the 17,000 codes that are currently used under the ICD-9 coding system. Nachimson Advisors, a Maryland-based health care information technology consulting group have estimated the costs for practices as follows:
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Small practice comprised of three physicians and two administrative staff $83,290. Medium practice comprised of 10 providers, one full time coder and six administrative staff - $285,195. Large practice comprised of 100 providers and 64 coding/medical records staff $2.7 million.

The study indicated six key areas in which the transition to ICD-10 would increase costs to physician practices:
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Staff education and training Business-process analysis of payer contracts, coverage and supporting documentation. Updates to "Superbills" IT system updates Expenses associated with increased documentation costs Cash flow disruption

Several organizations, including the Medical Group Managers Association (MGMA), objected to the time frame that was initially allotted for medical practices to adopt the new coding set. MGMA's President William F. Jessee, MD stated "We are just now beginning to learn the increased costs on physician practices associated with moving to the ICD-10 code set and they are staggering.".

In addition to the ICD-10 mandate, the HHS is also requiring that practices become compliant with the 5010 version of the Health Insurance Portability and Accountability Act (HIPAA) electronic transactions. The initial deadline was set at April 2010 but this has also been pushed back to January 1, 2012. The 5010 version of the HIPAA electronic transactions is supposed to supersede the 4010 version and provide a more secure environment for electronic transactions under the HIPAA regulations. The final version of 4010 was implemented in 2001 and took four years to implement. The National Provider Identifier also took four years to implement and bogged providers down with huge costs, administrative headaches and cash flow problems. Organizations such as the MGMA pushed hard for the HHS to reconsider their time line for the ICD-10 implementation and 5010 mandate. Due to their efforts, the required deadline dates were reconsidered and adjusted as mentioned in this article. Although the deadline dates have been pushed back, this is still a major concern to the health care industry and should not be taken lightly. Dallas L Alford IV, CPA is a licensed Certified Public Accountant in the state of North Carolina and owner of Atlantic Financial Consulting, a consulting firm that provides comprehensive medical billing services, practice management consulting, coding audits, Medicare compliance, and other general medical practice consulting services. To learn more about Atlantic Financial Consulting and to sign up for their monthly educational newsletter, you may visit their website at or contact Dallas L Alford IV, CPA at 1 888-428-2555, Ext. 200.

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