May 2, 2011

Implementing ICD-10 – How Much Will it Cost?

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ICD-10 will provide the U.S. healthcare system with many benefits, including improved public health surveillance, treatment and research data, the means to refine payment systems and pay-for-performance, and new ways to identify fraud and abuse and improve healthcare quality.

The enhanced data provided by ICD-10-CM/PCS will allow for more effective tracking of outcomes than ICD-9-CM permitted, and the additional detail in the expanded code set will facilitate implementation of electronic health records and make their use easier for practitioners.

But despite the wide range of benefits that comes with ICD-10-CM/PCS, the change presents challenges for both healthcare providers and health plans, particularly when it comes to the implementation costs involved.

America’s Health Insurance Plans conducted a survey of 20 health insurance plans’ estimated ICD-10 implementation costs. Overall, the projected incremental cost of ICD-10 implementation for all responding plans was estimated at $1.7 billion, and since the survey didn’t include the entire U.S. health insurance market, the total projected system-wide cost for insurers is estimated to be in the $2-3 billion range.

The projected extra per-member cost of implementing the new coding system ranges from an average of $38 for small health plans to $11 for large plans with more than 5 million members. For health plans covering fewer than 1 million people, the estimated per-member implementation cost ranges from $8 to $68, while the cost for a medium-sized health plan (covering 1-5 million), is expected to range from $4 to $42. Health plans covering more than 5 million individuals estimated their implementation costs to range between $3 and $15 per member.

In a continuing effort to help, CMS recently released some new ICD-10 resources, including the written transcript and recording from its January 12 conference “Preparing for ICD-10 Implementation in 2011."

CMS also posted the ICD-10 MS-DRGs v28 Definitions Manual update, which is based on FY2011 MS-DRGs and is part of the ICD-10 MS-DRG Conversion Project, which uses the General Equivalence Mappings (GEMs) to convert our current CMS Prospective Payment Systems. It is important to note, however, that while CMS is sharing this information, these are not the finalized ICD-10 MS-DRGs.

Information and resources for both ICD-10-CM and ICD-10-PCS can be found on the CMS website at http://www.cms.gov/ICD10.

About the Author


Sarah A. Serling, CCS, CCS-P, CPC, CPC-H, CPC-I, CEMC, ICD-10-CM/PCS Trainer, is a Medical Coding Educator/Developer for Precyse. Sarah is credentialed by the AHIMA as an ICD-10-CM/PCS Trainer, a Certified Coding Specialist (CCS) and Certified Physician-based Coding Specialist (CCS-P). She is also credentialed by the AAPC as a certified coding instructor (CPC-I) and as a certified professional coder of physician (CPC) and hospital services (CPC-H) with specialty certification in coding and auditing Evaluation/Management Services (CEMC).



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