The Consequences of Not Already Being 5010-Ready

January 11, 2012

If you’re among the bulk of practices still sending in medical claims via Version 4010 don’t be surprised if you see an uptick in claims rejections.

If you’re among the bulk of practices still sending in medical claims via Version 4010 even though the Jan. 1 deadline for transitioning to HIPAA 5010 has passed, don’t be surprised if you see an uptick in claims rejections. 

That’s just one of the reported consequences practices that are not submitting 5010 claims have been facing from payers.

And just because CMS cut practices some slack when it said it would not enforce penalties until March 31 doesn’t mean that you can sit on your laurels while the government bides its time. Healthcare providers that have not begun testing are required to submit a letter to CMS outlining their transition plans within 30 days of receiving a letter from the federal agency informing them that they have to send a transition plan.

But while CMS has been pretty clear as to its expectations, multiple regulatory sources told Physicians Practice many major payers have been unclear on their policies for accepting 4010 claims over the next several months.

“It’s a little fuzzy,” said Robert Tennant, senior policy adviser for government affairs at the Medical Group Management Association (MGMA), referring to how CMS and commercial payers will handle 4010 claims. “It appears as though the [Medicare Administrative Contractor] will continue to accept 4010 claims. But once they approve submitter transition plans, it’s unclear for how long they’ll continue to accept 4010 claims. It’s also fuzzy what’s required by the submitter to include in these transition plans. In addition, we remain concerned about the willingness and ability of commercial payers to accept the old claim format.”

In a December survey of 200 MGMA-member practices, just 32 percent of study respondents reported that their organizations’ practice management systems was upgraded to the HIPAA Version 5010 standards and internal testing was completed. One out of four respondents indicated that either their software had not yet been upgraded or that testing hadn’t even been scheduled. What’s more, a whopping 79 percent of study respondents indicated that testing with all major commercial health plans remained incomplete.

Despite this lack of completion, Cynthia Hughes, a coding and compliance specialist for the American Academy of Family Physicians (AAFP), told Physicians Practice that she hasn’t been hearing of too many difficulties from practices on the topic of submitting claims. Most practices use clearinghouses to send claims to Medicare and other payers, and most clearinghouses have willingly transformed 4010 claims to 5010 claims so they may be processed, she said.

“As long as the clearinghouse is offering that service, [delays are] pretty much invisible,” said Hughes, before warning that “clearinghouses aren’t going to do that forever. At some point it’s going to be cut off because it is extra work for the conversion.”

But Ken Bradley, vice president of strategic planning at Navicure, a medical claims clearinghouse, said that although his clearinghouse is transforming 4010 claims so they are submitted as 5010, rejections are still happening across the industry because translations must frequently be based on sometimes vague or missing payer guidance. One example of a rejected claim Bradley is seeing: If the rendering provider information is the same as the billing level information, the 5010 specification, which is embedded into payers’ computer systems, translates that as redundant information and rejects the claim.

“Unfortunately, a lot of practices are experiencing some problems,” Bradley told Physicians Practice. “Navicure is seeing that in a lot of the rejection data we’re getting today.”

Navicure is also getting a lot of calls from concerned providers, he added.

“If practices are used to having a fairly low rejection rate before January 1, I would recommend practices really look at their rejection and denial rates right now to make sure they’re okay,” said Bradley. “Verify everything is working as planned. Most payers today are now expecting to get 5010 transactions. Like it or now, there’s no going back. We’re in the 5010 world.”