Oncology Practices Face Higher Implementation Costs Than Estimated for ICD-10

Oncology practices looking to update their electronic health records (EHR) to be ICD-10 compliant are facing an even greater cost than originally estimated. Back in 2008, a widely quoted study by Nachimson Advisors pegged the costs to range from $83,000 for small practices to $2.7 million for large practices.

Those costs have significantly changed according to a new American Medical Association-funded study from Physicians EHR and Nachimson Advisors, especially for practices that must pay for upgrades to their EHRs and practice management systems (PMSs). For a typical small practice, the upgrade is estimated to range from $57,000 to $226,000, medium-sized practices could pay from $213,000 to $825,000, and large practices can expect to pay from $2 million to $8 million.

"These figures indicate that physician practices face significant costs with ICD-10 implementation, especially the risk of payment disruptions," the report's authors say. "A poorly executed ICD-10 implementation effort will increase those risks and expose practices to large costs in 2014 and beyond."

The 2008 cost summary compiled costs for six areas to arrive at its estimated implementation costs: education, process analysis, changes to superbills, IT costs, increased documentation costs, and cash flow disruption.

In this new survey, pre-implementation and post-implementation costs were estimated. Pre-implementation costs included training, assessment, vendor and software upgrades, process remediation, and testing. Post-implementation costs included productivity loss and payment disruption.

Making the transition to ICD-10 will require many practices to purchase new or upgraded software. Practice managers and oncologists will need to ensure that their current systems contain a PMS module that allows for the use of version 2014 certified EHR technology (CEHRT) in order to meet the requirements of the Meaningful Use EHR Program requirements.

According to the report, “many integrated EHR vendors (EHR and PMS supported by the same company) plan to release ICD‐10 compliant systems in the first quarter of 2014 and Version 2014 CEHRT software in early summer 2014.” This will not give practices enough to time to test and adjust to the new technology. The report goes on to say that as a result, physicians will likely be using a hybrid system, “accessing both ICD‐9 content for Meaningful Use, but also using ICD‐10 compliant billing systems, resulting in potential for patient billing errors and problems with Meaningful Use reporting and attestation data.”

The report notes that about one-third of practices will not require a software upgrade. These practices will see costs in the lower ranges. The majority of practices, however, will have such costs, and thus will be incurring much higher overall costs for implementing ICD‐10. Specialty practices, including oncology practices, because of their higher revenues and per hour rates, show the greatest costs, especially for productivity losses and payment disruption.

Cost summary

Typical Small Practice

Typical Medium Practice

Typical Large Practice

2008 Estimated Costs

$83,289

$285,195

$2,728,780

2014 Estimated Costs

$56,639—$226,105

$213,354—$824,735

$2,017,151—$8,018,364

Source: The Cost of Implementing ICD‐10 for Physician Practices—Updating the 2008 Nachimson Advisors Study. A Report to the American Medical Association. Nachimson Advisors LLC. http://www.ama-assn.org/resources/doc/washington/icd-10-costs-for-physician-practices-study.pdf