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5010: What to Expect on July 1

As Yogi Berra once said, “It’s déjà vu all over again.” Only this time the discussion isn’t about baseball; it’s about Version 5010 of the electronic transaction standards.

Starting on July 1, the Centers for Medicare and Medicaid Services (CMS) finally will begin to enforce the 5010 requirements that healthcare organizations were supposed to have implemented as of January 1, 2012. (As you’ll no doubt recall, the original 90-day enforcement delay to April 1 was further extended.) As burdensome as the word “enforcement” sounds, however, the arrival of July 1 is actually a good thing for physician practices. Life should be getting easier.

On the claims side, it appears that the claims most practices are submitting are being successfully processed by payers in the 5010 format. Even the CMS statement made three months ago announcing the second enforcement delay noted that “…the Medicare Fee-for-Service (FFS) program is currently reporting successful receipt and processing of…over 90 percent of all Part B claims in the Version 5010 format.”

It is possible that some payers will continue to require the older 4010 version, but I believe the greater risk may be issues involving remit information. Remember that 5010 is more than a tool for claims submission; it affects every aspect of the revenue cycle including remittance, payer responses and eligibility verification. There are two particular remittance items you may want to monitor closely starting July 1: 1) denial change value 4 and 2) correction reversals.

As explained in an earlier blog post on the ICD-10 Hub blog, 5010 changes the way claims status code value 4 is defined in remittance advice. Rather than meaning a claim was “denied,” 5010 uses this status code to mean that a subscriber or patient is “unknown to the payer.” Without understanding the change—and whether your payers and practice management systems have taken it into account—your claims denials reports may be skewed.

Version 5010 also eliminates the claim adjustment group code known as “correction reversal” or CR. Instead, payers should first repeat the original transaction using the exact codes that describe the types of adjustments made—such as contractual obligation (CO), payer-initiated reduction (PI), patient responsibility (PR) or other adjustment (OA). The original transaction’s values are the same except that payers are supposed to reverse whether the value is positive or negative so that your systems can automatically counterbalance the original claim and then the new transaction can be reported as if the original didn’t exist. The idea, of course, is to reduce the number of manual readjustments necessary.

You’ve heard it before: Continue to monitor and respond to rejections and denials after July 1 just as you did after the January 1 5010 implementation deadline. They’re clear warning signs of potential trouble-spots that need your immediate attention. Keep the lines of communication open with your clearinghouse and/or payers. The sooner short-term challenges are overcome, the faster you can begin to reap the benefits of 5010 standardization.