There’s been plenty of debate over the price tag on the ICD-10 transition. In fact, a recent AMA study—cited in this Information Week article—claimed that by the time everything is said and done, the total cost could be three times more than what original estimates predicted, which means small practices could take a hit of around $226,000. While that projection is probably a bit far-fetched, experts do expect there to be more than a few transitional hiccups in the wake of the switch. And a lot of those hiccups are beyond your control as a provider—which means that, as the old sports cliché suggests, your best offense is a good defense.

To combat payment delays and other logistical lags, coding gurus recommend going into the transition with up to a half-year’s worth of revenue on hand. But most small therapy practices barely have enough budgetary wiggle room to purchase a new set of exercise weights—let alone weather one of the biggest changes the healthcare community has seen in several decades. But you don’t have to overcome that financial hurdle on your own; as financial expert Lisa M. Enright explains in this article, your bank can help. If you’re interested in securing a new loan or increasing an existing line of credit, here’s what you need to do:

1. Assess your practice’s financial needs. It’s much easier to do this if you’re working with a bank that has experience serving businesses in the healthcare industry. According to Enright, some banks have units dedicated exclusively to healthcare professionals. “A knowledgeable banking partner who understands the full scope of your industry and operation—from posting and managing your receivables to establishing loans and lines of credit—can design financing plans that anticipate your short- and long-term needs.” A couple of expenditures you should definitely consider in the case of ICD-10 implementation: software upgrades and staff training.

2. Consider the hidden costs. That is, think about the financial setbacks you could suffer by no fault of your own. Even if you enter the transition more-than-adequately prepared—with a fully educated staff, an ICD-10-equipped EMR, and a top-of-the-line billing service—you can’t control whether your payers will be ready to handle the new codes on the go-live date. And if they’re not, it could create a massive traffic jam of claims—and that could delay your payments for who knows how long. So, unless you want to spend weeks—possibly even months—losing sleep over your clinic’s dwindling revenue stream, you’ll definitely want to have some extra cash on hand. As Enright says, “To backstop a longer receivables cycle, you should have access to three to six months of working capital reserves.”

3. Get your paperwork in order. Before you set up a meeting with your bank, create a file with all of your practice’s relevant financial records—including tax returns for the last three years, year-to-date financials, a current personal financial statement, and your most recent accounts receivable aging report. Having these documents ready prior to beginning the loan authorization process will expedite your credit review and will help give your banking rep a more complete picture of your practice’s financial situation.

4. Conserve your cash balance. Now that ICD-10 has been delayed until at least October 1, 2015, you have even more time to build up your cash reserves—but it’s important to start saving sooner rather than later. As we move closer to the transition, you can keep more money in the bank by paying monthly bills with a business credit card. This will stretch out your payments, especially if you have the option of switching to a longer billing cycle (e.g., 50 days instead of 30 days). But be sure to pay off your balance in full each time it comes due—otherwise you’ll be stuck paying interest.

Has your practice considered taking out a loan to help offset the cost of the ICD-10 transition? If not, how do you plan to address the potential payment delays? Share your thoughts in the comments section below.

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