A report devised by a Nachimson Advisors Study revealed that on average, the costs of transitioning to ICD-10 were as follows:

Small practice (3-9 physicians) = $83,000
Medium practice (10-99 physicians) = $285,000
Large practice (100+ physicians) = $2.7 million

Regardless of size, these costs are big detriments to a company’s bottom line. Since the ICD-10 standards reflect an entire overhaul of the way health care organizations identify, categorize, and catalogue information on diseases, injuries, and infections, gains in efficiencies will not be realized until ICD-10 is implemented and taught to all health professionals.

With that said, short-term costs are one of the biggest concerns of health care providers today. To alleviate some of the uncertainty and costs involved with the transition, Sue Bowman, director of coding policy and compliance at the American Health Information Management Association, says that the best way to prepare is to “get a head start on new transitions”. The following are some of the most important short-term cost considerations to keep in mind while making the transition to ICD-10:

• Although the Nachimson Advisors study outlined earlier provided estimates for the costs of implementing ICD-10, figuring out the exact costs remain the primary concern for health care administrators. As of August, 2011, 49% of respondents in an iHealthBeat survey had yet to complete an initial readiness assessment, which overviews the costs involved. On top of the variable costs that differing organizations may incur, many health administrators are worried about their short term cash flows, which will take a significant hit during the implementation process. In order to account for the true costs and benefits of the transition, administrators should devise a long term plan on how ICD-10 will affect the organization.
• Cost of training existing staff is another main concern for health administrators. In addition to installing systems and training staff, laborious tasks in themselves, the entire training process involves troubleshooting initial issues and maintaining the upkeep on employee training services while transitioning.
• Given the sheer amount of information ICD-10 includes over ICD-9, data management will be a hurdle for health care organizations to cross. A study conducted by the American Health Information Management Association reveals several differences between ICD-9 and ICD-10:
  • ICD-10-CM codes are alphanumeric and include all letters except “U,” thus providing a greater pool of code numbers.
  • ICD-9-CM’s V and E codes are incorporated into the main classification in ICD-10-CM.
  • The length of codes in ICD-10-CM can be a maximum of seven characters (digits and letters) as opposed to ICD-9-CM’s five digits.
  • ICD-10-CM offers the addition of information relative to ambulatory and managed care encounters.
  • Conditions that are new or that were not uniquely identified in ICD-9-CM have been assigned code numbers in ICD-10-CM.
  • In ICD-10-CM, some three-character categories are not used in order to allow for revisions and future expansion.
  • Instead of grouping by categories of injury or type of wound, ICD-10-CM groups injuries by site of the injury and then the type.
  • Excludes notes were expanded in order to provide guidance on the hierarchy of the chapters and to clarify priority of code assignment.
  • Some conditions with a new treatment protocol or perhaps a recently discovered or new etiology have been listed in a more appropriate chapter.
  • Combination codes are used for both symptom and diagnosis, and etiology and manifestations—for example K50.03 Crohn’s disease of small intestine with fistula.
  • Codes for postoperative complications have been expanded. Also a distinction has been made between intraoperative complications and post-procedural disorders—for example, K91 Intraoperative and postprocedural complications and disorders of digestive system, NEC.

Given the differences in coding and categorizing techniques, costs of data management is another uncertainty which will be best revealed as new data in implemented.

• Replacing existing IT hardware and hiring new employees rounds out the top-five concerns for health administrators. With new systems, processes, and information flowing into health care organizations, it makes sense that maintaining a functioning organization and facilitating a smooth flow of information will trump the integration of new hardware and employees. If we haven’t drilled the point down enough, here it is again: devise an initial readiness assessment to forecast your costs to help plan for these changes as soon as possible.