Why the Majority of Practices Are Falling Behind on 5010

June 23, 2011

If your practice hasn’t started (or finished) testing for HIPAA Version 5010 of the electronic data transactions standard, to go into effect Jan. 1, 2012, you’re in good company. But why are so many practices and their partners behind schedule?

In just six months and, roughly, nine days, healthcare organizations will have to start using HIPAA Version 5010 of the electronic data transactions standard for all data transactions (not just the new ICD-10 codes, which go into effect Oct. 13, 2013).

To help healthcare organizations and their business partners prepare for this transition, CMS has posted a timeline with recommended 5010 and ICD-10 testing and mandatory compliance dates. By the looks of the timelines, practices are expected to have completed (or near completed) their first rounds of testing for 5010.

But if your practice hasn’t started (or finished) testing for 5010, which goes effect Jan. 1, 2012, you’re in good company.

Last week the Medical Group Management Association (MGMA) released results for its survey of 359 physician practices on 5010 readiness. Even though most medical groups rely on their practice management system software to conduct HIPAA electronic transactions, just 29 percent of respondents believed their current practice management system would allow them to use Version 5010; 50.3 percent of respondents stated that their software would require an update.
Almost half (45.2 percent) of respondents said they hadn’t even started implementation.

But is that the only reason practices and their business partners - vendors, data clearinghouses, payers - are behind schedule?

Robert Tennant, a senior policy advisor for the MGMA, enlightened us.

“There are a number of issues here beyond even what we’ve been discussing in terms of partner readiness,” Tennant told Physicians Practice.

The first, he says, is historical: 5010’s predecessor, Version 4010, was part of the original 1996 HIPAA law. However, it took a few years before its use was mandatory for covered entities as the standards had to go through a protracted regulatory process that included compliance date extensions and lengthy contingency periods.

“There were set compliance dates for Version 4010 and the [National Provider Identifier]. However, once we got closer to those compliance dates, they were moved,” said Tennant. “What that has done is allowed some in the industry to say ‘there’s no rush for 5010. The government is going to just move the deadline anyway.’ I’ve countered that by saying ‘one major reason the compliance dates were moved was because the government itself wasn’t ready.’ With 5010, the government was ready a year in advance so we can’t fall back on the argument.”

Another reason for a lack of 5010 readiness might be the costs associated with upgrades.

According to the MGMA, survey respondents who have already upgraded or replaced their software have indicated they have incurred more than $16,000 per physician in expenses. That includes the cost of software, hardware, and staff training.

“This is a significant expense for a medical practice in this challenging economy,” said William Jessee, MGMA president and CEO, in a press statement.

That may be why vendors, clearinghouses, and payers might be dragging their feet.

“There’s no proven ROI with 5010 and ICD-10,” said Tennant.

However, if practices don’t do something, there will be a disruption in cash flow, as 4010 claims will no longer be accepted.

“The first thing a practice needs to do is contact its vendor and say ‘Will you be upgrading your software? What will the cost be, and will I be requiring any additional hardware to support that upgrade?’” said Tennant. “Practices should be contacting their clearinghouse, to say ‘when can I send a test claim to you?’ If they don’t have a clearinghouse, they should send a test claim to each of their partners. The volume of testing and demand on vendors is going to increase exponentially the closer we get to January 1. So if you wait until December to talk to your vendor or your clearinghouse, you have the chance of not being up and running by the compliance date.”