Have You Prepared Your ICD-10 Implementation Budget?

For many physicians and hospitals, the fiscal year will close on December 31, 2013.  Budgets should be in place for expected expenditures in 2014.  Remember to include estimated ICD-10 implementation costs in the upcoming budget.  ICD-10 implementation costs can be broken down into four categories: information systems, auditing and monitoring documentation, education and training, and staff and overtime costs.

When preparing the ICD-10 budget, the practice management software vendor and the electronic health record (EHR) vendor should be contacted to obtain the estimated costs.  These costs may include software upgrades and hardware expenses.  The software updates should be sufficient to incorporate ICD-9 and ICD-10 diagnosis code set data.  In addition, include the costs of any code look-up programs or encoders.  Hardware upgrades may be required to support the new software.  Remember, it will be necessary to test the software both internally and with the organization’s vendors.

Ongoing auditing and documentation monitoring is especially important with the introduction of the increased specificity of ICD-10 codes.  If documentation in the medical record does not support the codes submitted to payers, physicians and hospitals will be at increased risk for audits.  Ideally, an ongoing quarterly review of charts combined with physician education and specific feedback is the best approach.  Physicians may not be aware of the increased documentation requirements in their specialty; if these requirements are not met, revenue may be affected.   Incorporate costs for external audits by a certified coder into the budget.  Regular audits should also be reflected in the practice’s compliance plan.

Each organization should identify who in the practice requires training, how many hours will be required, and the most beneficial training method.  Physicians, coders and billers will require more intense training than ancillary staff, who will require knowledge of the new code set as it affects their job functions.   It is estimated that providers may need approximately sixteen to twenty-four hours of training; coders will need forty to sixty hours of training; nurses will need six to ten hours of training; and ancillary staff will also need six to ten hours of training (source:  Plan to train staff beginning in 2014, with code set training for coders and billers beginning in the spring or summer, closer to the ICD-10 implementation date of October 2014.  Anatomy and physiology education, which is helpful to understand the increased detail of the code set, is beneficial and can be started immediately.

Staffing and overtime costs must be included in the budget.  Productivity will be lost while employees train, as they adjust to the upgraded software system, and during the learning curve of implementing the new code set.  Additional time is needed for monitoring the progress of the ICD-10 implementation, monitoring possible denials, and writing appeals, as necessary.  Some practices may want to consider temporary staffing options if the available personnel need assistance. 

Share your implementation plans with us!  Let us know: Where are you in the ICD-10 implementation process?

Nancy Clark is a Manager in the Health Care Services Group. Her expertise focuses on coding and documentation audits, which includes chart review and report compilation.

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