Who Will Finance The Conversion To ICD-10?

Posted on September 10, 2009 by Ilana Sable

After reading a recent article posted by Angela Boynton, a frequent and informative writer with the American Academy of Professional Coders, titled "The Cost of ICD-10 Implementation," I am left wondering who will, realistically, finance the cost of conversion to ICD-10.  In the article, Angela cites a study conducted by the The Medical Group Management Association which predicts astronomical ICD-10 implementations costs.  The study found that, on average, it would cost :

  • $84,000.00 for the average small physician practice to upgrade to ICD-10;
  • $3,000,000.00 for large practice implementation;
  • $500,000.00 - $14,000,000.00 for health plans, depending on size.

While the article does not go into details regarding the scope and time frame for the projected costs (i.e. Are these "lifetime" costs or one-time conversion costs?  Do these costs include new equipment, software, technical support, training and so forth?), it is clear that the health care industry will be addressing more than the burden associated with training and education.

However, I am not sure that these figures are accurate, nor that they will be paid by the health care providers.  For instance, if a small physician practice is currently leasing billing software, or working with a medical billing company, wouldn't these service providers absorb most of the conversion costs?  

My assumption is that current ICD-9 billing and coding software can easily be converted to, or updated for, ICD-10 functionality and compatibility.  And even if my "easily converted" assumption is wrong, isn't it in the service providers' best interest to keep the costs to the end users - like small physician practices - as low as possible so that they can retain  their client base?

As for those practices that use in-house billing and coding software that they own, it is probably best to hold off and buy a comprehensive software that incorporates ICD-10 billing and coding, and a certified electronic health records system ("EHR").  Most practices will be expending money for the EHR software no matter what happens with ICD-10, so waiting for one unified system will likely be the most cost effective approach.  The problem for these practices is that they will be pressed to purchase the EHR software much sooner than ICD-10 will be in use.

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Conversion from ICD-9-CM to ICD-10-CM/PCS

Posted on April 15, 2009 by Ilana Sable

Recently I have been getting an increasing number of questions regarding the conversion from ICD-9-CM to ICD-10-CM/PCS. I think it is important to have a general understanding of the educational and financial burden that the health care industry is about to tackle, so I put together the following overview in an effort to inform those of you that have not had a chance to research this subject further.

  • The compliance date for conversion to the new coding system is October 1, 2013.
  • The number of diagnoses codes will escalate from 14,025 (ICD-9) to 68, 069 (ICD-10). Yes, you read that right; there is going to be a 54,044 increase in the number of diagnoses codes under the new coding system.
  • The number of procedure codes will escalate from 3,824 (ICD-9) to 72,589 (ICD-10); an increase of 68,765 in the number of procedure codes.
  • Structural differences will include an increase from 3-5 digits in diagnoses codes (ICD-9) to 3-7 digits in diagnoses codes (ICD-10), and all ICD-10 codes will be alpha-numeric
  • ICD-10-CM will replace ICD-9-CM Diagnoses and ICD-10-PCS will replace ICD-9-CM Procedures.

If you are wondering why the coding system is going through this exhaustive conversion, the answer is actually quite simple. ICD-9 is over thirty years old and it did not keep up with the evolution of the health care industry. ICD-9 is not exact enough to identify diagnoses and procedures precisely, and it is not flexible enough to incorporate emerging diagnoses and procedures.

CMS offers the following example in a CMS overview presentation on ICD-10 (pdf) to help illustrate the concept:

Example – fracture of wrist
Patient fractures left wrist. A month later, fractures right wrist.


ICD-9-CM does not identify left versus right.

However, ICD-10-CM describes:

  • Left versus right
  • Initial encounter, subsequent encounter
  • Routine healing, delayed healing, nonunion, or malunion


While the road to conversion will likely be rough (I am recalling my first few experiences with Microsoft Vista), the result will be an accurate, accountable and measurable coding system that increases productivity, while decreasing audits, the need for supporting documentation and the delay in receiving reimbursement from health insurance companies.

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