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Charting the Course to ICD-10: Budget Planning


In early 2015, your first tasks to prepare for ICD-10 should be reviewing your budget and effectively communicating the code set change.

The countdown to ICD-10 implementation has begun. Oct. 1, 2015, is quickly approaching and the primary tasks for physician practices beginning in early 2015 are to: review their ICD-10 budget and ramp up their ICD-10 communication plan.

Here's how to do both at your medical practice.


As practices plan their transition to ICD-10, it's important to have a budget in place to cover all anticipated expenses in 2015. Some of the key items to consider in the budget are software upgrades, changes with vendor/payer contracts, staff training, time for documentation improvement, and potential productivity loss.

The cost will depend on the size and complexity of the practice and the amount of outside technical assistance it requires. This is driven by the number of systems, applications, and interfaces that need to be updated or modified. A practice's largest estimated expenses are anticipated to be systems upgrades and education.

1. Process/system impact

A systems inventory is necessary to identify those systems requiring modifications or replacement to process the new coded data, especially if the systems rely on collaboration with external business partners. All processes and systems that pertain to ICD codes need to be analyzed and modified to accommodate the expanded alpha-numeric code structure of ICD-10.

The number of systems involved may be extensive, and hardware and software changes will need to be identified and completed while working with vendors. The transition also may have an impact on business processes, affecting work flow, reports, forms, and policies and procedures. Existing items may require revision and new items may need development.

2. Vendor/payer contractual issues

Part of budget planning is identifying the impact from vendors and payer contracts. Organizations must consider vendor readiness and timelines for upgrading systems and software. The costs and timing of this work requires planning.

Frequent communication is needed with all payers to find out when testing will begin, what issues, if any, are identified, and when testing will be completed. Consideration should be given to the ICD-10 transition during contract renewals with vendors, payers, and providers.

3. Training

Training is a major component of a successful implementation. There are multiple categories of users of healthcare coded data who will require various types and levels of ICD-10 education. A detailed training plan should be created to address the needs of each population of user from those who casually interact with coded data to those who assign the codes or verify the assignment of data codes.

There needs to be practice-wide training regarding ICD-10. Awareness training is probably appropriate for the casual user of coded data to provide an overall framework of the changes in the appearance of coded data as well as how the practice will be impacted during the transition. More intense training regarding the specifics of the new classification system will be required for those who use coded data for the purpose of reimbursement, statistics, and/or research.

Those who apply the new ICD-10 codes will require extensive training. A gap analysis can provide a practice with valuable information regarding the current skill level of the coding staff and what it will take to obtain proficiency with the new code set. One method to perform a gap analysis is to have coders practice assigning ICD-10 codes to current encounters. This activity will quickly reveal the areas that need improved documentation to ensure ICD-10 readiness. Coders who assign diagnosis codes will require training on the guidelines, definitions, and the correct method to assign codes in ICD-10. In addition, coding will be more difficult if the documentation is not available to support the more detailed code set.

4. Documentation improvement

ICD-10 offers much more specificity because of the expansion of codes. While it is still possible to assign nonspecific codes, it is imperative that the most specific code be reported to maximize ICD-10's ability to provide meaningful data on patient care and severity.

Current documentation practices should be assessed and a plan developed to improve health record documentation, thereby minimizing the use of vague or nonspecific codes. A gap analysis can be conducted to examine how the most frequently used ICD-9 codes will translate into ICD-10-CM codes to allow for focused training.

5. Productivity/accuracy issues

During the transition, a decrease in coding productivity and accuracy may be expected; it is necessary for the organization to develop strategies to minimize these risks. The amount and level of preparation and the extent of education, credentials, and knowledge of coding professionals will be an important consideration. The quality of medical record documentation will also contribute to a successful outcome.


A comprehensive communication plan is vital to a successful ICD-10 transition. The development of a practice-wide ICD-10 awareness campaign targeting all key stakeholders is an essential step in the implementation process.

The communication plan should also include regularly scheduled communication between the practice and its business associates to determine their readiness and timelines. Deviations from the original implementation timelines should be communicated immediately to key stakeholders to allow for modifications to the implementation plan.

In every office setting, whether the small, independent physician office setting, or in a large multi-specialty group, a successful transition will require the leadership and vision of a "physician champion." This individual is the resource physician that many offices have, either formally or informally, who provides advice and guidance to his staff on coding and billing issues. This physician will need to be familiar with all aspects of the ICD-10 code set.

The focus in this final year of implementation preparation should be on the coding staff becoming experts in applying ICD-10 codes to encounters. The coders must have an in-depth understanding of the ICD-10 guidelines and conventions. Many practices will be participating in testing (with payers) and dual-coding (i.e., coding in both ICD-9 and ICD-10) during 2015. Any activities that allow the coders to practice assigning ICD-10 codes to real medical records will greatly enhance their readiness for the transition on Oct. 1, 2015, and will minimize losses in productivity.


Now that an ICD-10 budget and a communication plan have been established for 2015, it's time to move on to the next steps. Watch for upcoming articles covering these next steps on the following topics:

• Coding staff education

• Vendor and payer readiness/testing

• Documentation analysis/improvement and quality reporting

• Physician and nursing education

• Forms revision

• General staff education (non-coding, non-clinician)

• Appeals process, reimbursement, monitoring

• Implementation day

• Post-implementation issues


AHIMA ICD-10-CM/PCS Implementation Toolkit

AHIMA. ICD-10 for Physicians and Clinicians

Melanie Endicott, MBA/HCM, RHIA, CDIP, CCS, CCS-P, FAHIMA,is a senior director of health information management practice excellence at the American Health Information Management Association (AHIMA). Email her at melanie.endicott@ahima.org.

© 2015 American Health Information Management Association (AHIMA). Reprinted by permission.This article originally appeared in the January 2015 issue of Physicians Practice.

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