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Are You Ready? Productivity, Cash Flow to be Hardest Hit by ICD-10

Are You Ready? Productivity, Cash Flow to be Hardest Hit by ICD-10

On Oct.1, the U.S. Centers for Medicare and Medicaid Services will require all Health Insurance Portability and Accountability Act-compliant healthcare providers to transition to the 10th version of the International Classification of Diseases. The first update to the coding systems in more than three decades, ICD-10 includes 68,000 codes – roughly 50,000 more than its predecessor – and has been adopted by more than two dozen countries around the globe.

Whether or not to implement ICD-10 here in the United States has been the subject of a lively public discourse. Its champions argue that ICD-10’s enhanced granularity will be a boon for public health; its detractors claim it’s a costly transition at a time when the U.S. healthcare system is already undergoing tremendous upheaval.

To be sure, there’s no shortage of passionate voices on either side of the ICD-10 debate. What’s also certain is that ICD-10 implementation poses serious operational and financial challenges for ASCs and other specialized facilities that typically have less access to resources than hospitals and other large providers. And with the deadline now less than three months away, another delay seems less and less likely with each passing day.

Support staff productivity is expected to plummet after Oct. 1 – and the reality could be far worse than widely published industry reports suggest. According to a recent time study published in the journal Perspectives in Health Information Management, “The prevailing estimate of productivity loss is typically somewhere between 30 and 50 percent. However, preliminary results of this time study overall were much higher, with ICD-10-CM/PCS coding taking 69 percent longer overall and, at best, 54.4 percent longer when performed by the participants with the most training in ICD-10-CM/PCS.”

As a result, cash flow is expected to be a direct casualty of a post-Oct. 1 drop in productivity. Unfortunately, many providers appear unaware of this connection. In 2014, KPMG published a survey indicating that roughly half of the physicians interviewed had not assessed exactly how ICD-10 implementation could disrupt their practice’s cash flow. That’s a potentially dangerous oversight, as the Healthcare Information and Management Systems Society has recommended that healthcare practices have at least six months of cash flow on hand to safely get through the transition.

A 2014 American Medical Association-commissioned report also estimates that ICD-10-related cash flow disruptions will cost practices between $19,500 and $650,000, depending on the size. Other costs, too, will add to a practice’s final ICD-10 price tag, including additional documentation costs ($44,000 to $1.79 million), information technology ($7,500 to $100,000) and process analysis expenses ($6,900 to $48,000).

ASCs face a number of risks while transitioning to ICD-10, but preparation and smart investments can mitigate most of the potential pitfalls. While the implementation deadline is fast approaching, it’s not too late to start planning. The following is a step-by-step breakdown of how ICD-10 will affect each aspect of a facility’s revenue cycle process and what decision-makers can do today to avoid an expensive slowdown come Oct. 1:

Information technology

Software and other IT tools provide the foundation for properly managing a facility’s revenue cycle process. But as the old saying goes: garbage in, garbage out. That is, if IT systems are not up-to-date and tested well before Oct. 1, productivity and cash flow could suffer as a result.

In many cases, script updates, workarounds and other simple fixes can eliminate several of the issues involved with the transition. Small facilities, too, may not have a large enough dedicated IT staff internally to handle all of the upgrades, so outside resources might need to be secured.

Prior to the procedure, business office staff must incorporate codes into pre-authorization, scheduling and other requisite steps to prevent reimbursement issues on the back end. ICD-10 implementation will have an effect on this process. Staff should understand how ICD-10 coding changes interact with individual insurance policies, including any role they may play in authorization and medical necessity. Forms also may need to be updated and outside sources contacted to make sure the most current requirements are being met.


Continuing physician education is a critical component to any successful ICD-10 implementation effort. Medical staff must be cognizant that coding will be much more specific, which will require far more extensive documentation than was necessary in the past. In addition to documentation, AHIMA recommends that physicians understand how the ICD-10 transition will affect electronic health records and superbills within their practices. EHR systems are updating their software to include prompts that ask the physicians more detailed questions when they’re entering patient information through the interface. Software providers, too, are offering ICD-10 training sessions for physicians, which can preempt implementation issues after Oct. 1.


For many professional coders, ICD-9 has been the prevailing system for their entire careers. They’ve memorized common –and frequently not-so-common –diagnosis codes through their many years of practice. After Oct. 1, those days will be over. With 50,000 additional codes to sift through, the coding department will be the epicenter of the post-ICD-10 slowdown. Still, there are a variety of resources available to lessen the blow on Oct. 1, including online courses, boot camps, conferences and other continuing education opportunities.

Unspecified ICD-10 codes may prove to be a particularly thorny issue for coders during implementation. Currently, unspecified ICD-9 codes are widely accepted. That could change, however, as many carriers are expected to adjust their policies after Oct. 1.

Claims and charge posting

ICD-10-related inefficiencies also will take a toll in the claims and charge posting step of the revenue cycle process. And for good reason: ICD-9 codes are between three and five digits, while ICD-10 codes are between three and seven digits. In some situations, that’s an instantaneous 40 percent increase in keystroke volume overnight, which may contribute to hours of additional labor, considering some facilities process thousands of charges per day.

Facilities should inventory their payers to determine when they are accepting the new codes. While all HIPAA-compliant ASCs must use ICD-10 after Oct. 1, some workers’ compensation cases may fall under the old system for an indeterminate length of time. It’s also important for ASCs to initiate contact with their clearinghouses as early as possible, so that their specific processes are understood and any new processes are tested and implemented by Oct. 1.

Accounts receivable

A/R managers are expected to shoulder the brunt of external ICD-10-related challenges after Oct. 1, as they’ll facilitate frontline communication with payers and the claims department to refine processes and head off future roadblocks.

Unfortunately, A/R teams also will face many unknowns heading into the deadline, as they can only predict potential payer denials and other nuances of the switchover. Unspecific codes are expected to play a lead role in this confusion. While the U.S. Centers for Medicare and Medicaid Services has indicated that unspecified codes will still be accepted in many cases, it’s too early to say definitively how all private payers will address them.

A well-designed ICD-10 implementation plan that includes contingencies, defined responsibilities and the allocation of appropriate resources can mitigate most post-Oct. 1 challenges. With so much at stake before, during and after implementation, delays must be avoided at all costs. And keep in mind: The World Health Organization is already developing ICD-11.

Written by Jessica Edmiston, National Medical Billing Services, senior vice president, performance review, BS, CPC, CASCC, AHIMA-approved ICD-10-CM trainer

Ref. Becker’s Healthcare

This post was first published July 14, 2015 and was updated July 29, 2020.



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