November 17, 2014

Cost of Physician I-10 Conversion Study Challenged

By Stanley Nachimson

EDITOR’S NOTE: Healthcare consultant Stanley Nachimson, founder and principal of Nachimson Advisors, responds to an article recently published in the Journal of AHIMA, “Cost of Converting Small Physician Offices to ICD-10 Much Lower than Previously Reported.”

While I welcome attempts to refine and improve the estimates produced by the recently released 2014 Nachimson Advisors study, the American Health Information Management Association (AHIMA) journal article unfortunately contains several misstatements and invalid assumptions that render its conclusions misleading at best. I will point out several of these to show that the title and conclusion should be disregarded.

First, I note that my study includes costs for all of the tasks that should be undertaken in any ICD-10 implementation process. These tasks have been described in many guides about ICD-10 implementation; in fact the Centers for Medicare & Medicaid Services (CMS) website “Road to I-10,” which provides guidance targeted to small providers, lists these steps in its action plans. These tasks include planning and assessments, training, updating processes, engaging vendors and plans, and internal and external testing.

The AHIMA paper omits any mention of planning and assessment, as well as internal testing. These are critical steps practices must take to ensure that their ICD-10 implementation is done correctly and that there will be little or no revenue impact post-Oct. 1, 2015. 

The AHIMA article also alleges that the productivity reductions cited in the Nachimson Advisors study are based on inpatient hospital experiences. In fact, I was careful to point out that the hospital figures indicate a 50-percent drop in coder productivity but that the physician side (diagnosis-only) coding indicated about a 10-percent drop, according to knowledgeable coding experts. I also carefully explained that physicians will increase their time spent with documentation by about 15 percent, again based on actual studies and information from consultants.

Perhaps most misleading in the article is the statement that “however, the billing, EMR (electronic medical record) and clearinghouse vendors have the primary responsibility for testing.” This statement is a direct contradiction to what ICD-10 implementation in a physician office is all about, and it shows the author’s lack of knowledge of the process. Physician offices cannot rely on vendors and others to perform testing, as the documentation and choice of code is the practice’s responsibility, not the vendor’s. If a practice lets vendors perform the testing, the practice will have no idea how accurate their documentation and coding is, nor will they know how health plans process their claims under ICD-10.

There is a clear distinction between testing software to ensure that it can carry a random ICD-10 code (acknowledgement testing) and testing end-to-end to ensure that all of the process changes identified in assessment and process management have been updated correctly and produce the correct ICD-10 code for patients. Practices must test to ensure that their coding is accurate, and they also must look at the results of end-to-end testing with health plans to discover what the claim processing results will be. They cannot depend on their vendors for these tasks. Quotes from several experts and reports in the Nachimson Advisors study support this; as well as several guidance papers on the AHIMA web site. (e.g.

The Nachimson Advisors study did not examine nor comment on the benefits and value of ICD-10, and I will not comment on the AHIMA article’s discussion of that topic. It is a completely separate issue.

Now, there is nothing to prevent practices from “shortcutting” the implementation process to save money, but this increases the risks of revenue shortfalls in ICD-10. The survey that the AHIMA article refers to may have spoken to practices that have not followed recommended steps. This is analogous to skimping on automobile maintenance. You can certainly wait 15,000 miles to change oil rather than the recommended 7,500 or so, but you run the risk damaging critical engine parts and increasing repair costs at a later date. 

In summary, the AHIMA article omits and/or minimizes several critical tasks for practices, misstates the sources of the Nachimson Advisors estimates used for productivity losses, and minimizes the efforts that practices must undertake to ensure a successful implementation. I urge the authors to reread my paper. The AHIMA article does not invalidate any of the figures or conclusions of the Nachimson Advisors study.

About the Author

Stanley Nachimson is the founder and principal of Nachimson Advisors, LLC.

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Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.