ICD-10 Costs for Small Practices Lower Than Prior Estimates

New data suggests that the estimated costs, time and resources required by small physician offices to convert to ICD-10 are “dramatically lower” than initially estimated.


New data suggests that the estimated costs, time and resources required by small physician offices to convert to ICD-10 are “dramatically lower” than initially estimated.

The data, published online in the Journal of AHIMA, also indicates that physicians and their office staff, vendors and health plans have made considerable progress on ICD-10 implementation with fewer resources than previously estimated.

A 2014 update of a widely referenced 2008 report by Nachimson Advisors to the American Medical Association estimated the cost for a small practice to implement ICD-10 was in the range of $22,560 to $105,506. However, the AHIMA article estimates that the ICD-10 conversion costs for a small practice are significantly lower—in the range of $1,900 to $5,900.

“There are a number of reasons why the cost estimates reported in this article are lower,” state the authors. “The costs related to EHR adoption and other healthcare initiatives, like meaningful use are not directly related to the ICD-10 conversion although these costs were sometimes included in ICD-10 conversion cost estimates. The coding industry is much more knowledgeable and ready for ICD-10 now than previously reported. Furthermore, the activities necessary to be ready for ICD-10 have become available at very low cost.”

The latest estimates are based on results from recent surveys, published reports and ICD-10 conversion experience with hospitals and physicians. In the study, a small practice is defined as three physicians and two impacted staff members such as coders and/or office personnel.

However, results of a separate AHIMA ICD-10 survey released in June, that included 101 clinics/physician practices, found that nearly 42 percent of respondents spent less than $100,000 on the code transition and almost 15 percent have spent between $100,000 and $500,000 to date. But, that survey also concluded that the one-year delay in the ICD-10 compliance deadline is expected to cost healthcare organizations more money to get ready for the code switchover.

When it comes to the additional costs associated with the ICD-10 extension, almost 31 percent of respondents to that AHIMA survey projected that they will spend less than $100,000, while a little more than 12 percent anticipate spending between $100,000 and $500,000 to be ready by the new ICD-10 compliance date of October 1, 2015.

Still, there are also other ICD-10 implementation challenges faced by small practices. According to a separate survey released earlier this month by AHIMA and eHealth Initiative, smaller healthcare organizations—such as physician practices—appear less equipped for ICD-10 testing. In addition, they are not aware of when their business partners will be prepared to conduct new code testing.

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