Skip to main content

AMA Seeks to Stop ICD-10, Cites Soaring Costs

 |  By John Commins  
   February 13, 2014

In a letter to HHS Secretary Kathleen Sebelius, the American Medical Association asks her to "strongly" reconsider the ICD-10 medical coding set mandate, which the AMA says will place a "crushing burden" on physicians.

The American Medical Association on Wednesday released a study it sponsored showing that projected physicians' implementation costs for the federally mandated ICD-10 medical coding set will be as much as three times higher than initial estimates.

Couple with the release of the study, AMA President Ardis Dee Hoven, MD, released a copy of the letter she sent to Health and Human Services Secretary Kathleen Sebelius asking her to "strongly" reconsider the ICD-10 mandate, which takes effect Oct. 1.

 

"The markedly higher implementation costs for ICD-10 place a crushing burden on physicians, straining vital resources needed to invest in new health care delivery models and well-developed technology that promotes care coordination with real value to patients," Hoven said in the letter. "Continuing to compel physicians to adopt this new coding structure threatens to disrupt innovations by diverting resources away from areas that are expected to help lower costs and improve the quality of care."

To bolster support Wednesday, the AMA also introduced the #StopICD10 hashtag on Twitter.

A 2008 study by Nachimson Advisors estimated that the cost to implement ICD-10 averaged about $83,000 for a small practice, $285,000 for a mid-sized practice and $2.7 million for a large practice. However, Nachimson Advisors in a follow up study released this week for AMA found huge cost variables for each practice size based on specialty, vendor and software. Small practices costs ranged from $56,600 to $226,000; mid-sized practice costs ranged from $213,000 - $825,500; and large practice costs ranged from $2 million to $8 million.

Nachimson Advisors said that two-thirds of practices will likely fall into the high range of new cost estimates because they are expected to incur major costs for software upgrades to accommodate ICD-10. The study blamed the ballooning 2014 estimates in part on post-implementation costs, including testing and the potential risk of payment disruption. The Centers for Medicare & Medicaid Services has estimated that claims denial rates could increase 100% –200% in the early stages of coding with ICD-10.

In her letter to Sebelius, Hoven reminded the secretary that while the AMA is working however grudgingly toward the implementation, the association's House of Delegates has called for "repealing ICD-10 for the simple reason that it is not expected to improve the care physicians provide their patients and, in fact, could disrupt efforts to transition to new delivery models."

"The transition to ICD-10 represents one of the largest technical, operational, and business implementation in the healthcare industry in the past several decades. Implementing ICD-10 requires physicians and their office staff to contend with 68,000 diagnosis codes—a five-fold increase from the approximately 13,000 diagnosis codes in use today. The broad use of ICD-10 codes for determining reimbursement, coding in all healthcare settings, and healthcare coverage has not been done in other countries, making the U.S. implementation unprecedented," Hoven wrote.

The AMA also notes that software vendors have lagged in preparing for the new code set, which means that practices can't conduct their own tests or implement workflow changes to ensure their new systems work.

As the Oct. 1 implementation date nears, physicians' professional associations have become more strident in voicing their concerns. Last week, the Medical Group Management Association issued a survey of more than 570 practices representing more than 21,000 physicians and found that less than 10% of them had made significant progress when ranking their overall readiness for Oct. 1, up from 4.7% in June, 2013.

MGMA Senior Policy Advisor Robert Tennant says providers, payers, the government, and other players in the ICD-10 movement are not working in a cohesive and coordinated fashion.

"ICD-10 is like a cascade. Things can't happen until other things happen," Tennant says. "What we are finding through research and discussions with our members and industry [is that] the pieces aren't coming together as quickly as the government had expected them to. That includes software vendors, clearinghouses, [and] health plans. Nobody seems to be out front and leading the pack, and that includes the government."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Tagged Under:


Get the latest on healthcare leadership in your inbox.