UPDATE: On Nov. 17, the Centers for Medicare & Medicaid Services (CMS) announced that it would not initiate enforcement action until March 31, 2012, with respect to any HIPAA covered entity that is not in compliance with the Version 5010 HIPAA transactions.  Even with its discretionary application of its enforcement authority, the compliance date for use of the Version 5010 transactions remains Jan. 1.  See full article here. 

Physicians who submit claims electronically are at risk of not receiving private insurance and Medicare payments if they are not HIPAA 5010 compliant by Jan. 1, 2012.

According to the American Medical Association, “5010 is the next version of the HIPAA electronic transaction standards. ‘5010’ is the abbreviated way to refer to Version 005010 of the Accredited Standards Committee (ASC) X12 Technical Reports Type 3 (TR3s). The TR3s are the implementation guides for the ASC X12 administrative transactions, some of which are named in HIPAA and are required to be used when conducting the transaction electronically.

Part of the Health Insurance Portability and Accountability Act of 1996, the 5010 standards will replace the currently used 4010 codes, requiring more specific data when submitting claims.  Diagnosis codes will change from three to five, mostly numeric codes to three to seven, alphanumeric codes.  This will result in an increase from 13,000 codes currently in use, to 68,000 codes when 5010 takes effect.  Procedure codes will change from a three or four position numeric code to a seven position alphanumeric code and some sections have been reorganized.  These codes will grow from 4,000 to 87,000.

The 5010 standards are a precursor to the adoption of ICD-10, the newest International Classification of Disease codes.  The 4010 codes were unable to support ICD-10.

Practice Resources

Physician practices are encouraged to learn more about how to become 5010 compliant by visiting http://www.GetReady5010.org – a website offering 5010-related information and free webinars – and the AMA’s online clearinghouse for 5010 issues – www.ama-assn.org/go/5010.

ICD-10 Implementation Guide for Small and Medium Practices

Official CMS industry resources guide for the ICD-10 transition available here. 

Monthly ICD-10 Newsletter from AHMA

Click here to sign up for a free monthly e-newsletter from American Health Management Association.  Each issue offers planning, implementation updates and information for coders, managers and directors.

Getting to 5010: a step-by-step guide

The American Medical Association has suggested that physicians follow these steps in order to submit all claims using HIPAA 5010 standards in time for the Jan. 1, 2012, deadline:

Step 1: Impact analysis

Conduct an internal analysis to determine the impact the change to 5010 will have on your practice. Visit the AMA's and other organizations' websites to learn more.

Step 2: Vendor, payer, billing service and clearinghouse connections

Contact your practice management and electronic medical record vendor for details on the installation of upgrades to your system. Also contact your clearinghouses, billing service and payers to find out when their upgrades will be complete and when they will be ready to accept 5010 transactions.

Step 3: Installation of vendor upgrades

After installation, keep in mind that the timing of the system upgrades will depend on your vendor's readiness, both with respect to product development and scheduling.

Step 4: Internal testing and staff training

Once the upgrades are completed, conduct internal testing of your systems to ensure that you can generate the 5010 transactions. Allow extra time to resolve any issues that may arise and work with your vendor to address these.

You also will need to train staff throughout the process of implementing and testing your system.

Step 5: External testing with clearinghouses, billing service and payers

Contact your clearinghouses, billing service and payers to conduct external testing with them.

Do not assume that your vendor will take care of your testing needs. Talk to your vendor about what testing they will do of your system upgrades.

Talk to your billing service, clearinghouses or payers, depending on how you send and receive your transactions, about their testing processes. Follow their procedures and make certain that your testing is completed.

Be prepared to work with your vendor to fix any problems identified during testing and re-test with your clearinghouses and payers.

Step 6: Making the switch to 5010

After you have completed external testing with some or all of your trading partners, you may switch to using only the 5010 transactions. You are permitted to begin using the 5010 transactions before the compliance date as long as you and the other organizations agree to the early switch.

Step 7: Backup plans

In case your transactions are rejected after the switch for any reason, you should have a plan in place for an interruption in cash flow.

Some suggestions: Submit as many transactions as possible before Jan. 1, 2012. Decrease expenses before Jan. 1, 2012, to increase cash reserves. Consider establishing a line of credit with a financial institution. Research payers' advance payment policies. Consider using manual or paper processes to complete transactions until the electronic transactions are fixed.

Source: "5010 Implementation Steps: Getting the Work Done in Time for the Deadline," American Medical Association (www.ama-assn.org/ama1/pub/upload/mm/399/hipaa-5010-timeline.pdf).