That’s a very interesting question with an easy answer and a hard answer. The department of Health and Human Services (HHS) gives us the easy answer — in the final rule delaying ICD-10 until 2015, HHS states that “We estimate the cost of a 1-year delay to HIPAA covered entities will be $1.1 to $6.8 billion.” Unfortunately, the size of the range –$5.7 billion – means that this easy answer is unhelpful.

The more difficult answer, unfortunately, is that the costs vary widely from one hospital to another depending on the particular strategies employed and what activities were completed prior to the delay.

Here are major costs that our clients have encountered:

• Lost education: Any time spent training specifically in ICD-10 that will go unused for more than a year is likely to be wasted. While most organizations had not started general workforce training, many had started the extensive (and expensive) coder training. If you stopped their training, you will probably need to start again at the beginning, and the early training will be lost.
• Ongoing training: If you allowed your coders to complete their training, you will now need to provide them with time to use their training – practice coding – or they will remember little of what they’ve learned by October 2015.
• Retained higher staffing: Many facilities added staff to cover for training time and meet the productivity impacts of ICD-10, particularly in coding areas. Since most facilities have chosen not to reduce staffing during the delay, that has become an added cost. This impact can be controlled by finding productive work for these extra coders.
• A year of fees: Many facilities purchased software, such as a computer assisted coding package, as part of their ICD-10 solution. Those facilities will now incur an extra year of costs for using and maintaining that software. Similarly, organizations contracted for computer-based training, will need to extend the contract period another year and will incur the per month costs.

If you are looking at the total cost impact, it’s important to realize that there are some areas where costs may be lowered as well. One example is lower IT staffing costs. Many hospitals were heavily using consultants and contract employees to meet the demands of ICD-10 upgrades. Cost savings might occur if that work was shifted back to internal resources.

It’s important for the success of ICD-10 and the health of your organization that you manage these costs. Strategies for managing these costs were provided in our “Re-strategizing for ICD-10” webinar. Check out the recording of the webinar for more guidance.