Switch to ICD-10 codes could be costly

These costs are estimated to start hitting the overall healthcare industry in 2009—two years before ICD-10 is implemented—and will “zero out” with no continuing costs after 2014, according to HHS. However, the benefits of the update won’t be seen until 2012, but are estimated to be fully realized after five or six years and continue each year through 2023.

HHS has acknowledged that providers could face serious cash flow issues at the onset because of the risk of payment slowdowns caused by the changes. HHS estimated that claim-error rates could rise to 6 percent to 10 percent in 2011. However, looking at other countries that have already implemented ICD-10 codes, HHS said such issues should be resolved within six months of implementation.

In its proposal, HHS broke down the transition costs of the ICD-10 conversion by provider type. Outpatient care centers in the United—which included dialysis centers—number 13,624 and would see approximately $9.93 million in ICD-10-related costs, according to HHS. Hospitals would have a transition cost of $186.16 million. Computer system design and related services would see a transition cost of $96.5 million.

"The AMA is deeply concerned that HHS is rushing head-first into the transition to a complex coding system without fully recognizing the impact on the healthcare system,” Joseph M. Heyman, MD, board chair, American Medical Association said in a statement. “Physicians, insurers, medical labs and others are raising the alarm that the costs, documentation and training required by ICD-10 will be significantly greater than HHS now recognizes. We are committed to improving the healthcare system, but we cannot let history repeat itself as CMS attempts to quickly implement yet another major HIPAA change without allowing time for physician education, software vendor updates, coder training, and testing with payers—steps that are needed for a smooth transition and cannot be rushed."