What Does the ICD-9 to ICD-10 Transition Mean for You?
Early research predicted the financial impact of the ICD-10 transition could cost the healthcare industry between $475 million and $1.5 billion over ten years. In fact, these costs would come from staff training, loss of productivity, and changing systems. On the plus side, however, the study also predicted significant financial gain as a result of the changeover. These estimated savings are between $700 million to $7.7 billion. So, in the complicated world of medical billing, these savings can’t be ignored.
ICD-10 Financial Impact
Other analysts have also studied the widespread financial impact of ICD-10. The Nachimson Advisors, a health care strategic planning firm, has conducted multiple studies focused on estimating costs by the size of each practice. The most recent survey from February 2014 demonstrates the variability in costs and confirms the need to assess the ICD-10 impact on a practice specific basis in a number of the main categories:
The RAND prediction actually has smaller estimated costs than that of a more recent study. In 2011, the U.S. Department of Health and Human Services (HHS) estimated that the overall cost of transitioning from ICD-9 diagnosis and medical procedure codes to ICD-10 codes would be $1.64 billion. This estimate includes $357 million for staff training, $572 million for losses in productivity, and $713 for system changes. The good news is the HHS’ savings prediction is greater too, estimating that health care entities will save more than $87.7 million annually—and as much as $3.95 billion by 2023.3
Overall Impact on Healthcare Practices
The worries of many health care entities go beyond just the financial ramifications of the transition. Some are concerned about the overall impact of converting to ICD-10 diagnosis and medical procedure codes, including the operational hassle, time spent training, and the necessary changes to systems.
The Centers for Medicare & Medicaid Services assessed and predicted the business areas that would be most impacted, considering operations, modifications to processes and costs. The cost impacts were categorized as high (> $10,000,000), medium ($1,000,000 to $10,000,000), modest ($100,000 to $1,000,000), and minor (under $100,000).4
Overall Impact Prediction
Highest areas of impact
• Claims processing
• CMS system repositories
• Developing and implementing payment policies
• Quality measures and payment initiatives
• Developing and utilizing assessment tools
• Risk adjustment
• Quality improvement activities
Medium areas of impact
• Coordination of benefits
• Medicare integrity
• Medicare secondary payers
Modest areas of impact
• Medicaid Integrity
• Medicaid policy and operations
• Provider cost reporting
About Innovative Computer Systems
Innovative Computer Systems is a Managed Services Provider specializing in Healthcare Information Technology (HIT) and Corporate Business Technology. We work closely with our clients to understand their daily workflow requirements. Some of our clients include leaders in Ophthalmology, Facility Maintenance, Pediatrics, Law, Urology, Dermatology, Commercial Real Estate, Internal Medicine and Ambulatory Surgery.