5 Ways ICD-10 Will Dig Into Your Hospital's Budget

When hospital CFOs confront ICD-10, one of the biggest questions that arises is: What will the price tag be for the hospital to convert to ICD-10?

There is no silver bullet for this answer, as the costs will vary from hospital to hospital, depending on size, staff and other variable factors. Wendy Coplan-Gould, founder and president of coding consulting firm HRS, has conducted readiness assessments at several hospitals across the country, and she can give one certain answer: It will be expensive.

The costs of ICD-10 can range from $1 million for health information management upgrades alone to upwards of $42 million for a complete rollout. "These are the extremes," Ms. Coplan-Gould says. "But if I were a hospital CFO, I have to find the minutiae in terms of gathering data. Who's going to be affected, and who needs training? It's an arduous process."

Here, Ms. Coplan-Gould outlines five areas of ICD-10 implementation that will impact a hospital's budget.

1. IT changes.
This is the biggest and most obvious cost for hospitals. Switching over to new IT systems involves millions of dollars in hardware and software costs, but Ms. Coplan-Gould says this area is deeper than meets the eye. Hospitals must have a plan for testing ICD-10 with their IT vendors. If hospitals are not compliant by the Oct. 1, 2014, deadline, that will lead to compliance issues and, consequently, lost revenue.

"You have to have a plan for testing with your vendor," Ms. Coplan-Gould says. "For example, how is your vendor crosswalking codes between ICD-9 and ICD-10?"

2. Staff training. Several groups require new levels of training for ICD-10, which costs both time and money, and Ms. Coplan-Gould says the "big C" coders are usually pegged as the typical group that needs the most training. "Big C" coders are the easily identified credentialed coders that work in HIM, clinical documentation improvement or physician settings.

However, an equally big cost will come from the "little C" coders, who are staff members who touch codes but are not the credentialed coders. "This can include people that work the frontline, patient financial services, scheduling, pre-authorization — all the way to clinicians and radiology technicians," Ms. Coplan-Gould says. "This whole segment tends to get overlooked. They need to be identified and trained."

3. Physician training. Although most hospital executives wish physicians would not have to devote any time to the ICD-10 transition, the reality is physicians are the cornerstones of ICD-10 success. Last September, Tom Ormondroyd, vice president of consulting and educational services for HIM firm Precyse said, "We can train staff to be the best coders of ICD-10 and completely fluent, but [physician] documentation specificity holds a far more important role for the success of ICD-10."

Ms. Coplan-Gould agrees, saying that physicians have to have the right specificity in their documentation today so there will be nothing lost in translation between physician and coder in the future. Unfortunately, this again involves more time and money.

4. Clinical documentation improvement programs. One of the most common ways to deal with physician training on ICD-10 is for hospitals to implement a CDI program. CDI programs essentially help physicians in real time on where their documentation skills could use some improvement. "Through repetition, you're teaching physicians what needs to be done in ICD-10," Ms. Coplan-Gould says. "This is a passive way of teaching them instead putting them in a classroom."

CDI programs come at a cost — anywhere from $90,000 to $600,000 — but Ms. Coplan-Gould says the upfront price now will save hospitals millions in the long run. "We did a CDI review of 250 charts [at a sample hospital]," Ms. Coplan-Gould says. "Our findings were that the hospital's current documentation wasn't specific enough to support a specific code in ICD-10. Assigning a nonspecific code or being unable to even select a code will likely result in a loss of revenue under ICD-10."

5. Updating of forms. Just as hospital executives may not realize how many "little C" coders there, there are just as many, if not more, types of coding forms and cheat sheets. As a hospital transitions to ICD-10, all of those ICD-9 resources will become obsolete, forcing a hospital to spend money on new forms and resources. A hospital CFO that understands this and the other challenges can at least prepare the next year's budget for the impending storm.

"There are lots of forms floating around — cheat sheets, charge capture forms that contain ICD-9 codes, etc. Just getting a log of those into a registry and revising their formats so they can be used for ICD-10 will come at a cost," Ms. Coplan-Gould says.

More Articles on ICD-10:

ICD-10: A Bad Moon Rising?

HHS Finalizes One-Year Delay of ICD-10 to 2014

How Should Small Hospitals Prepare for ICD-10?

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