Updated on: March 14, 2016

ICD-10: So, What’s the Cost of Implementation?

Original story posted on: January 24, 2014

Depending on the size of your practice or facility, ICD-10 budgeting requirements and reporting will vary. But one fact still remains: all practices must budget for ICD-10-CM implementation. Most physician-based practices utilize a cash-based accounting system, while larger facilities and hospital-owned clinics utilize accrual-based accounting. Either accounting system will require detailed attention and planning in order to implement ICD-10 successfully.


Many organizations have estimated costs of ICD-10-CM implementation for small to large practices. But the bottom line comes down to this: how much technology do you already have in place, and how many upgrades will you really need? Don’t automatically assume that it will cost you $80,000 for a solo doctor; you have to do the analysis of how that applies to you. Reaching out to your vendors now will give you a good idea of what costs will be. Don’t be overwhelmed by all the studies out there; only you can determine how the costs align with your practice.

With the implementation of ICD-10 only a few short months away, some practices are going to be caught short on budgeting. Looking for free resources can help your bottom line, and there are many resources out there. Coordination with all business partners will be necessary to be successful, so be sure to include all areas of your practice and all vendors.

The cost of implementing ICD-10 can be broken down into four main categories:

  1. Information systems, which includes software and hardware upgrades/updates
    • Hardware and software
    • Implementation and deployment
    • Potential upgrade to an electronic medical record (EMR)
  2. Auditing and monitoring documentation related to ICD-10 implementation
    • Internal or external sources
  3. Education and training
    • Methods of training
    • Internal or external sources
  4. Staffing and overtime costs
    • Staff training
    • Overtime costs
    • Workflow processes

When preparing your ICD-10-CM budget, immediately contact practice management software vendors to obtain estimated costs. Practices using an EMR should contact vendors to find out what update costs will be. Consider many things when budgeting for ICD-10 in order to allow yourself to foresee any cash flow issues that may influence your practice moving forward. In the budget also include other costs that will affect your IT systems, such as code lookup programs or encoders.

If the vendor does not include implementation and deployment of the code sets in the upgrade, additional costs may be incurred. Get this information from the vendor when developing the budget. Not only will the vendor need to upgrade the software and test for consistency, but it will need to test the software end-to-end internally with practice and external vendors such as clearing­houses and health plans.

Holding preliminary meetings with vendors is beneficial in the development of a realistic budget. In addition to vendor costs, also consider overtime and staffing if your practice utilizes IT staff, and if the software must be customized for the organization. Many practices customize vendor software internally to meet specific needs.

Also consider documentation deficiencies and the cost to review your practice’s documenta­tion. Every ICD-10-CM implementation budget should include ongoing auditing and moni­toring costs to ensure that the documentation in the medical record supports the diagnosis code transition.

Every practice must first identify who needs training, how many hours of training will be required, and the most beneficial training method.

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.

Rhonda Buckholtz is the vice president of practice optimization for Eye Care Leaders. She has more than 25 years of experience in healthcare, working in the management, reimbursement, billing, and coding sectors, in addition to being an instructor. She is a past co-chair for the WEDI ICD-10 Implementation Workgroup, Advanced Payment Models Workgroup and has provided testimony ongoing for ICD-10 and standardization of data for NCVHS. Rhonda spends her time on practice optimization for Eye Care Leaders by providing transformational services and revenue integrity for Ophthalmology practices. She was instrumental in developing the Certified Ophthalmology Professional Coder (COPC) exam and curriculum for the AAPC. Rhonda is a member of the ICD10monitor editorial board and makes frequent appearances on Talk Ten Tuesdays.