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Press Releases
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FOR
IMMEDIATE RELEASE
Merit Smith
The Robert E. Nolan Company
972-248-3727 x113
fax 972-733-1427
merit_smith@renolan.com
www.renolan.com
Nolan Study Estimates $6 Billion–$14 Billion Price
Tag to Implement ICD-10-CM and ICD-10-PCS
DALLAS, Texas, November 3 -- A new study evaluates the costs and
implications of replacing the ICD-9-CM diagnostic classification system
with ICD-10-CM and ICD-10-PCS for key segments of the health care
industry.
The study, conducted by the Robert E. Nolan Company, a leading management consulting firm to the
health care industry, concludes that key segments of the health care
industry would incur a significant expenditure of between $6 billion to
$14 billion during a two- to three-year implementation period.
Migration to ICD-10-CM and ICD-10-PCS, the study finds, would require installing new code sets,
re-mapping interfaces and recreating every report used by providers and
payers in clinical, financial, reimbursement and quality analysis processes.
“This conversion would require significant system modifications—affecting virtually every system
providers and payers use,” says Merit Smith, vice president of the
Robert E. Nolan Company and one of the study’s authors. “Extensive
education and outreach would be required, as well as a wide-ranging effort
to train coders, physicians, nurses, and other hospital and payer staff.”
Implications of Converting to ICD-10
 | Short-term “data fog”: The
study reports that because of code disconnects between ICD-9-CM and
ICD-10-CM and ICD-10-PCS, existing medical knowledge could be degraded
significantly for a period of three to five years. While crosswalks have
been or are being attempted between the current and proposed code sets,
they cannot address all of the comparability issues and thus do not solve
the problem of data continuity, the study finds.
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| Likely backlogs and
payment delays: During the initial transition period, the time required
for providers and their coding experts to code claims properly will
increase significantly, according to the study. “This is a clear lesson
learned from virtually every country’s experience. An error by any payer
will affect not only its own transactions but also all others in the
subsequent flow of clinical data and funds,” says Smith.
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These coding
backlogs are likely to result in major payment slowdowns, causing enormous
cash flow problems and gaps in data for payers.” Other consequences of
such a slowdown, according to the study, are increased inquiries from
patients and providers, short-term borrowing costs, and potential under-
and over-payments to providers.
Benefits of ICD-10-CM and ICD-10-PCS
The study finds that the vast majority of benefits asserted by proponents of converting to
ICD-10-CM or ICD-10-PCS cannot be achieved without first implementing a
standard clinical vocabulary.
The study also questions how other benefits ascribed to ICD-10-CM and ICD-10-PCS will be
achieved, such as improved trending abilities, reduced medical review of
claims, improved fraud and abuse detection, improved ability to negotiate
contracts between providers and payers, and patient safety.
To download the complete study, titled
“Replacing ICD-9-CM with ICD-10-CM and ICD-10-PCS: Challenges,
Estimated Costs and Potential Benefits,” visit the Robert E.
Nolan Company Web site at
http://www.renolan.com.
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