New cost estimates, guidance help insurers implement ICD-10

Implementing ICD-10 could cost health insurers between $2 billion and $3 billion, according to an AHIP analysis.

Health insurance plans are required to implement the ICD-10 system over the next three years. The enhanced data resulting from the switch to ICD-10 will lay the building blocks to refine payment systems, bolster pay-for-performance and identify fraud and abuse. "While the new system will provide the U.S. healthcare system a wide range of benefits, it represents a significant change from the current ICD-9 code set and the incremental costs of implementation will be substantial," AHIP said.

The AHIP findings, based on a survey of 20 health insurance plans, indicate an average cost for ICD-10 implementation of about $12 per member, ranging from $38 per member for small health plans (less than one million members) to $11 per member for large plans (more than 5 million members). The overall incremental cost for ICD-10 implementation for all responding plans is estimated to be $1.7 billion. Since the 20 responding health plans do not comprise the entire U.S. health insurance market, the total system-wide cost for insurers is likely to be in the range of $2-3 billion.

To help insurers and other healthcare stakeholders implement the costly ICD-10 code set, the National Quality Forum (NQF) has released a guidance report and best practices outlining:

  • the impact of differences between ICD-9 and ICD-10 code sets;
  •  equivalency of code sets and populations;
  •  impact of code transitions on measure integrity;
  •  current practices and required resources for conversion;
  • methodologies for converting code sets;
  • recommendations for NQF measure submission and maintenance processes involving multiple code sets; and
  • implications of additional code sets, coding changes, and coding equivalency on measure development and submission.

NQF's recommendations focused on several central themes--resources needed to facilitate the transition, best practices for approaching the coding conversion process for quality measures and responsibilities of cooperating parties.

"NQF's guidance can help ensure this conversion is completed in a timely and accurate manner, allowing stakeholders to continue monitoring quality across our healthcare system," says Patrick Romano, professor of medicine and pediatrics at the University of California Davis School Of Medicine.

To learn more:
- check out AHIP's cost estimate document
- read the NQF press release
- view the NQF guidance 

Related Articles:
Guest Commentary: The pros and cons of transitioning to ICD-10 via a tactical approach 
ICD-10 implementation: Are you ready for Oct. 1, 2013?
CMS offers fact sheet explaining ICD-9 to ICD-10 changes

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