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Smoothing 5010 Implementation with HIPAA Hindsight

On Jan. 1, 2012, healthcare claims must be received by payers using Version 5010 of the electronic transaction standards. Designed to standardize claim content and enable consistent business “conversations” among all practices and payers, Version 5010 will support improved claims filing, payment posting, eligibility verification, and other vital revenue cycle management (RCM) functions.

The transition to Version 5010 is the next evolution from Version 4010 established by the Health Insurance Portability and Accountability Act (HIPAA) of 1996. Both efforts deal with a shift in technology and threaten significant cash flow disruptions for practices that fail to ensure compliance by the implementation deadline.

While the road to implementing HIPAA’s Version 4010 was not always smooth, it provides some valuable lessons to help inform the current 5010 transition. Here’s a brief look at a few of these learning opportunities.

Insight #1: Communicate
Throughout the course of HIPAA implementation, practices were encouraged to talk with payers and vendors to discuss necessary steps to reach compliance. That advice holds true today—and is perhaps even more essential now. Since most major healthcare business transactions are affected by 5010, practices must assess the 5010 readiness of business partners, including all vendors involved with claims, ERA, eligibility, premium payments, referral authorization, or plan enrollment.

Take the time to ask vendors about available customer support. Understanding your vendor’s anticipated timing for standards implementation, transaction testing, and any necessary system upgrades is equally as important. Ask for firm testing and delivery dates, especially from clearinghouses and practice management systems. In addition, determine whether your vendors can support both 4010 and 5010 transactions during the switch—and for how long.

Insight #2: Plan
When Health and Human Services published its final HIPAA Rule in December 2000, the implementation date for the new standards was set for October 16, 2003, but non-compliant claims continued to be processed until October 1, 2005. Practices not fully compliant in 2003 simply were advised to document “good faith” steps toward compliance.

This time around, consider documenting your progress toward implementation timelines. It may help you stay on track with 5010 implementation, as well as plan beyond the 5010 effort for work on the next big compliance project: the ICD-10 conversion. Development of 5010 and ICD-10 implementation timelines—and periodically tracking and documenting progress against them—can help you ensure compliance by the required dates.

Insight #3: Protect
With HIPAA’s 4010 implementation, practices were advised to develop written contingency plans to prevent interruption of claims submission in the event of unexpected problems. They were advised to keep some cash on reserve, and to establish emergency lines of credit.

You also will need to work to avoid cash flow problems during the 5010 implementation. While one way is to have extra cash on hand, a more efficient approach is to proactively anticipate problems through comprehensive testing. Work with your system vendors and clearinghouses to ensure that 5010 transactions can be sent and received appropriately, verifying that claims will flow without disruption. Make sure that you—and your vendors—can continue to support the 4010 format for as long as necessary.

It is a commonly-accepted truth that major transitions like the 5010 conversion are never easy. A little retrospection, however, can go a long way toward easing the road to the future.