AMA: ICD-10 costs more than prior estimates

ICD-10 implementation costs will be more expensive--in some cases more than three times previous cost estimates--for physician practices, according to updated research published Wednesday by the American Medical Association.

The study, an update of research published in 2008, predicts that small practice costs will range anywhere from $56,639 to more than $226,000. Medium practices, it estimates, will pay between $213,364 and $824,735 for implementation; costs for large practices are predicted to run between $2 million and $8 million.

"These figures indicate that physician practices face significant costs with ICD-10 implementation, and especially the risk of payment disruptions," the report's authors say. "A poorly executed ICD-10 implementation effort will increase those risks and expose practices to large costs in 2014 and beyond."

In a letter sent Wednesday to U.S. Department of Health & Human Services Secretary Kathleen Sebelius that cites the study, AMA Executive Vice President and CEO James Madara calls on the Centers for Medicare & Medicaid Services to "strongly … reconsider" the mandate for ICD-10. Within the letter, Madara also urges CMS to adopt several policies and practices, including:

  • "True" end-to-end testing by CMS for all physicians, or "at least 100 different physician practices of varying sizes and specialties"
  • A change to the agency's advance payment policy that takes into account different extraneous circumstances in which a physician is in good standing with the program
  • A policy for Medicare that states that when the most specific codes are submitted by physicians, no additional information will be required to adjudicate the claim
  • A two-year implementation period during which Medicare won't have the authority to deny payment based on ICD-10 code specificity

"Adopting ICD-10, while it may provide benefits to others in the healthcare system, is unlikely to improve the care physicians provide their patients and takes valuable resources away from implementing delivery reforms and health information technology," Madara says.

A survey published last week by the Medical Group Management Association found that less than 10 percent of responding physician practices were ready for the transition to ICD-10. For the survey, MGMA received responses from more than 570 medical groups comprised of more than 21,000 physicians.

MGMA called on the Centers for Medicare & Medicaid Services to offer end-to-end testing for providers, in addition to:

  • Releasing all Medicare & Medicaid payment edits
  • Consistently publishing and updating the readiness levels of Medicare contractors and Medicaid agencies
  • Assessing vendor readiness
  • Expanding education efforts

To learn more:
- here's the AMA study (.pdf)
- read the letter to Sebelius (.pdf)