HealthDay News -- If the federal government has its way, a new era in medical diagnosis coding is coming to the nation's healthcare community, and many physicians and payers are expressing concern that the costs and administrative changes in store will pose an undue burden.

Last August, the U.S. Department of Health and Human Services proposed replacing the existing ICD-9 coding system used to assign codes to diagnoses and inpatient procedures with a more detailed system -- the ICD-10 -- effective Oct. 1, 2011.

While the ICD-10 has been discussed for years, few solo practitioners or physician groups have immersed themselves in the specifics of adopting the new system.

Physician organizations are mainly concerned about the portion of the coding system, known as the ICD-10-CM, used to assign codes to diagnoses.

In comments on the proposed rule, Dr. Yul Ejnes, chair of the American College of Physicians' Medical Service Committee, urged the Centers for Medicare & Medicaid Services to suspend plans to adopt the new coding system. "Adoption of this diagnosis code set in the ambulatory setting is unwarranted as the collective costs far outweigh the benefits," he wrote.

A recent study conducted by Nachimson Advisors for ACP and several other large provider groups concludes that the move to ICD-10 would be costly, ranging from $83,000 for a three-physician practice to $2.7 million for a 100-physician practice.

A 10-physician practice would have to spend more than $285,000 to make the conversion, the study found. The estimates assume that physicians would incur costs for training, new software and upgrades and increased documentation, among other expenses, and experience cash flow disruptions during the transition.

"A lot of the physicians I talk to don't even know what ICD-10 is," said Deborah Grider, an Indianapolis-based consultant and president of the American Academy of Professional Coders' national advisory board. "Now they're wondering, 'Okay, now what do I do? How do I get there?'"

Grider, whose group endorses an extension of the implementation deadline, agrees that the move to ICD-10 could be very costly for physicians. She advises them to start planning their budgets now.

America's Health Insurance Plans, citing the massive effort to move from 24,000 to 207,000 codes, seeks an extension of the deadline to 2012. AHIP, however, said its member plans are committed to moving ahead.

ICD-10 advocates cite many benefits. For one, the new coding system is expected to spur adoption of electronic medical records, which most stakeholders agree is the wave of the future because it is expected to drive efficiencies in healthcare delivery. "ICD-9 is not robust enough to provide the level of specificity that's going to be required," said Anita Johnson, director of the western region of Hayes Management Consulting in Huntington Beach, Calif.

Johnson adds that providers, in the long run, will be in a far better position using ICD-10 because it will eliminate any vagueness about patients' diagnoses that could result in underpayments to physicians. "They will be adequately paid, finally, for the services that they provide to their patients because they will have the diagnosis specificity that is necessary," she said.