News Feature | February 19, 2014

AMA: ICD-10 Costs Could Have ‘Devastating Effects' On Practices

Source: Health IT Outcomes
Christine Kern

By Christine Kern, contributing writer

AMA Finds Costs of New Coding Implementation A Drastic Burden For Many

According to a cost study sponsored by the AMA and conducted by Nachimson Advisors, the costs of rolling out the new ICD-10 Coding system will put far greater financial strain on the medical industry that previously projected.

An AMA press release reported estimated costs are nearly triple what had been predicted by a 2008 study, also produced by Nachimson Advisors. In 2008, the predicted costs for implementation ranged from $83,290 for a small practice to $285,195 for a medium practice to $2,728,780for a large practice. The 2014 study found the following cost ranges for each practice size based on variable factors such as specialty, vendor, and software:

  • Small practice: $56,639 - $226,105
  • Medium practice: $213,364 - $824,735
  • Large practice: $2,017,151 - $8,018,364

According to the AMA, nearly two-thirds of physician practices are projected to fall into the upper range of these estimates. These costs could have devastating effects on the sustainability of many practices.

AMA President Ardis Dee Hoven, MD, concluded in the release that: “The markedly higher implementation costs for ICD-10 place a crushing burden on physicians, straining vital resources needed to invest in new healthcare delivery models and well developed technology that promotes care coordination with real value to patients.” The association also argued that because vendor readiness for ICD-10 is lagging, few practices have conducted appropriate testing to ensure a smooth transition.

In a letter from the AMA to Health and Human Services Secretary Kathleen Sebelius, James L. Madara, MD, executive vice president and CEO of AMA, wrote, "By itself, the implementation of ICD-10 is a massive undertaking. Yet, physicians are being asked to assume this burdensome requirement at the same time that they are being required to adopt new technology, re-engineer workflow, and reform the way they deliver care; all of which are interfering with their ability to care for patients and make investments to improve quality.

“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.” The AMA requested that Sibelius reconsider the ICD-10 mandate and launched a Twitter campaign with the hashtag #StopICD10.