Backed by New Research, AMA Questions ICD-10 Mandate | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Backed by New Research, AMA Questions ICD-10 Mandate

February 12, 2014
by Rajiv Leventhal
| Reprints
Updated study says ICD-10 implementation costs could be triple of what was once expected

Some physician practices may be paying up to three times more for ICD-10 implementation than had been previously estimated, according to updated research from the American Medical Association (AMA).

The AMA study, updated from 2008 and conducted by Nachimson Advisors, previously estimated costs to implement ICD‐10 in six areas for three hypothetical practice sizes. The 2008 findings showed that the ICD‐10 costs ranged from an estimated $83,290 for a small practice up to $2,728,780 for a large practice.

The updated study demonstrates that costs to implement ICD‐10 may be much higher than what was estimated in 2008, especially for physicians who must pay for upgrades to their electronic health records (EHR) and practice management systems. Now, the research predicts that small practice costs will range anywhere from $56,000 to more than $226,000. Medium practices, it estimates, will pay between $213,000 and $824,000 for implementation. And large practices are predicted to run between $2 million and $8 million.

The deadline for the switch to the ICD-10 code-set is Oct. 1, as mandated by the Centers for Medicare & Medicaid Services (CMS). But in a letter sent on Feb. 12 to U.S. Department of Health & Human Services (HHS) Secretary Kathleen Sebelius that cites the study, AMA executive vice president and CEO James Madara, M.D., asks CMS to “strongly reconsider the ICD-10 mandate.”

Regarding the study, Madara says in the letter, “The previous estimate did not account for the costs to upgrade to certified EHR software since Congress had not yet enacted the meaningful use program. Therefore, many physicians are expected to have to spend considerably more to upgrade their software given the new regulatory environment.”

In the letter, Madara writes, “Continuing to force physicians down the ICD-10 path will result in significant financial burdens for physicians. This impact will be compounded by their inability to devote time and resources to meeting other federal mandates that carry hefty financial penalties, which further threaten their financial viability. Physicians are facing serious financial obstacles from multiple sources including:

  • Incurring costs to comply with the EHR meaningful use program, which exceed available incentives
  • Purchasing EHR software certified for 2014 or a software upgrade that allows for use of ICD-10
  • Seeking upgrades from practice management system vendors for ICD-10 software
  • Incurring financial penalties in the form of cuts to Part B reimbursement, including a 2 percent cut if Medicare e-prescribing is not met (cut taken in 2014), a 1 percent cut if meaningful use is not met (cut taken in 2015), and a 1.5 percent cut under the Physician Quality Reporting System (PQRS) (cut taken in 2015)
  • Mitigating a 2 percent cut stemming from sequestration

A survey published last week by the Englewood, Colo.-based Medical Group Management Association (MGMA) found that less than 10 percent of physician practices are ready for the switch to the ICD-10 code-set, and a survey last month from KPMG, the N.Y.-based audit, tax and advisory firm, found that healthcare organizations were largely unprepared for ICD-10 implementation.

Get the latest information on Health IT and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More

Topics

News

Geisinger National Precision Health Hires Illumina Exec to Lead Business Development

Integrated health system Geisinger has hired a high-profile genetic counselor to head up business development for Geisinger National Precision Health, which was created to extend the Geisinger model on the national scene.

$30M VC Fund Launched to Spur Innovation in Cardiovascular Care

The American Heart Association, together with Philips and UPMC, has announced the launch of Cardeation Capital, a $30 million collaborative venture capital fund designed to spur healthcare innovation in heart disease and stroke care.

Epic Wins Labor Dispute in Closely Divided Supreme Court Decision

Epic Systems Corporation won a major labor-law ruling in the Supreme Court on Monday, centering around the extent of corporations’ right to force employees to sign arbitration agreements, and with a 5-4 ruling in its favor

Survey: Two-Thirds of Physician Practices Seeking Out Value-Based Care Consulting Firms

Most physician organizations are not prepared for the move to value-based care, and 95 percent CIOs of group practices and large clinics state they do not have the information technology or staff in-house needed to transform value-based care end-to-end, according to a recent Black Book Market Research.

Cumberland Consulting Buys LinkEHR, Provider of Epic Help Desk Services

Cumberland Consulting Group, a healthcare consulting and services firm, has acquired LinkEHR, which provides remote application support, including Epic help desk services.

Population Health Tool that Provides City-Level Data Expands to 500 Cities

A data visualization tool that helps city officials understand the health status of their population, called the City Health Dashboard, has now expanded to 500 of the largest cities in the U.S., enabling local leaders to identify and take action around the most pressing health needs in their cities and communities.