Version 5010 electronic administrative transactions
CMS announced on March 15 that they will delay enforcement yet another 90 days. Read more.
Update on Version 5010 electronic administrative transactions
Some physicians have communicated to us that they are experiencing significant cash flow problems associated with the transition to HIPAA Version 5010. The AMA remains in close contact both Medicare and commercial payers and we are communicating concerns on 5010 to the Centers for Medicare and Medicaid Services (CMS) as we learn of them. If you are a physician who is experiencing claims / cash flow interruptions with Medicare and have been unable to resolve you issues by contacting your Medicare Administrative Contractor (MAC) you may complete our complaint form which we will forward onto Medicare for resolution. Physicians who are experiencing trouble with commercial or other payers may use our "click and complain" process.
January 1, 2012 Compliance Deadline
January 1, 2012 marks the compliance deadline for use of the new version of the standard electronic Health Insurance Portability and Accountability (HIPAA) transactions. Version 4010 has been in use since 2003 and the Centers for Medicare and Medicaid Services (CMS) are requiring all HIPAA "covered entities", which includes physicians who conduct any of the transactions named in HIPAA electronically (i.e. claims or remittance advice), to begin using Version 5010 starting on January 1, 2012.
The AMA has been extremely proactive in educating physicians and continues to make a wealth of easy to understand resources available for free on our website at www.ama-assn.org/go/5010. Despite significant efforts by many in the health care industry, including physicians, there remains a considerable amount of work that needs to be done before everyone will be able to use the new standards. For example, many practices have not had their practice management system software upgraded by their vendor and have not been able to conduct testing with key trading partners. If your PMS vendor has not yet updated your system to accommodate the use of version 5010 you are strongly encouraged to contact them to obtain the necessary software upgrades.
CMS Announces Enforcement Flexibility - Deadline Extended to June 30th
CMS is the federal agency charged with oversight of HIPAA standards. AMA and others advocated to CMS that overall lack of industry readiness should not compromise physician cash flow following the January 1, 2012 compliance date. For this reason, CMS initially announced they would not levy any enforcement actions for the first three months of 2012 while HIPAA covered entities continue to work towards compliance. However, CMS announced on March 15 that they will give physicians and others an additional 90 days until June 30th to come into compliance. What this means is that the HIPAA 5010 compliance date remains January 1, 2012 and all physicians and other HIPAA covered entities should continue to make every effort to comply with the use of the new standards, but that CMS will not take any enforcement action until after June 30.
Medicare’s Plans
Medicare, as the largest insurer that is required to comply with HIPAA requirements, has indicated that they are continuing to work with those who submit claims directly to them (submitters). Every submitter is required to test with Medicare before claims can be processed using the 5010 format. Medicare remains focused on ensuring all submitters have tested successfully and that claims processing is not interrupted. “Submitters” include clearinghouses, third party billers, and physicians who submit claims directly (without the use of a third party or clearinghouse) to Medicare. What this means for physicians:
Direct Submitters: If you are a physician who sends claims directly to Medicare without the use of a billing service or clearinghouse:
- If you HAVE NOT tested by December 31, 2011: You are required to submit a "transition plan" to your Medicare contractor that details your plans for moving to 5010 and when you think you will be able to test with Medicare. There is no prescribed format for transition plan: It can be sent via letter, email, or fax and can be a brief explanation of your transition plans.
- Keep evidence plan was submitted: Submitters are strongly encouraged to retain evidence that a plan was sent (i.e. return receipt email, fax transmission confirmation, copy of an email).
- All submitters must test: Unless submitters have tested with their Medicare contractor, even if you submit compliant 5010 transactions, your claims will be rejected.
- If you HAVE tested successfully by December 31, 2011: You will be contacted by Medicare and told you have 30 days to move over to use of the 5010 standards. Submitters that have not yet tested with Medicare prior to the compliance date will be contacted and asked to submit the transition plan described above.
Physicians who use a clearinghouse or billing service to submit their claims: Physicians who rely on a billing service or clearinghouse to submit their claims to Medicare are NOT required to file a transition plan to Medicare. The entity they use to submit their claims is the submitter and is the one required to submit a transition plan. These physicians should contact their billing services or clearinghouses to determine their ability to generate your claims and other transactions using the Version 5010 format.
Background on Version 5010
If you electronically submit administrative transactions, such as checking a patient’s eligibility, filing a claim, or receiving a remittance advice, either directly to a health insurance payer or through a clearinghouse, the version of the transactions currently in use will be updated. On January 16, 2009, the Department of Health and Human Services (HHS) announced that updated versions of the HIPAA transactions will be required for use by physicians and others on January 1, 2012. The Centers for Medicare and Medicaid Services (CMS), is the agency within HHS charged with overseeing compliance with the standards.
See the educational resources tab below for information on preparing your practice for the January 1, 2012 deadline for compliance with the new version of HIPAA standards - 5010.
The version of the transactions named in HIPAA is Version 004010 (4010) and its subsequent addenda, 004010A1 (4010A1), are collectively referred to as “4010A1.” The 4010 transactions were completed by Accredited Standards Committee X12 in 2000. The 4010A1 changes were completed in 2002. Since then, many technical issues identified in the transactions were corrected and changes were made to accommodate new business needs. ASC X12 continuously works on updating its standards and implementation guides for the transactions to better meet the needs of the health care industry. Work was completed between 2006 and 2007 on a newer version of each transaction, Version 005010, commonly called “5010.”
Because the 4010A1 version of the transactions is named in a federal rule, the regulatory process must be followed to upgrade to the 5010 version. In 2007, a request was made to the Secretary of HHS to modify HIPAA to replace version 4010A1 with version 5010. The Final Rule was published on January 16, 2009 and makes the 5010 transactions mandatory on January 1, 2012. The Final Rule allows for the use of the 5010 transactions prior to the compliance date to facilitate the migration to the updated transactions and prevent the need to convert overnight.
In addition, a Final Rule adopting ICD-10 as the new code set to replace ICD-9 –CM, Volumes 1 & 2 – something that cannot occur prior to moving to use of the 5010 transactions – has been issued. The use of the ICD-10 code set will be mandatory as of October 1, 2013. Because of the need to convert to ICD-10 so soon after complying with 5010, it is imperative that practices begin their transition work to 5010 as early as possible. The Final Rule does not allows for the use of ICD-10 codes prior to the compliance date.
Improvements in the 5010 transactions include clearer instructions, reduced ambiguity among common data elements used in different transactions, and elimination of redundant and unnecessary data elements.
The updated version of the transactions has data reporting requirements that differ somewhat from the current transactions. These changes may require you to collect additional data or report data in a different format. For example, in the 4010A1 version of the professional claim transaction, anesthesia services may be reported in actual minutes or in units of time. In the 5010 version, only actual minutes may be reported. Another example of a difference in the professional claim transaction is the reporting of the billing provider address. In 5010, the address can no longer be a PO Box or lockbox address.
Understanding these changes and how they will affect your practice will prepare you for a smoother transition to the updated transactions.
The biggest concern for practices will be complete implementation and full functionality of the 5010 transactions at or before the compliance deadline to avoid transaction rejections and subsequent payment delays. Practices can begin now to prepare for this upcoming effort by developing their own implementation plan. The following are various tasks to include in an implementation plan.
- Talk to your current practice management system vendor.
- Talk to your clearinghouses or billing service, if you use either one, and health insurance payers.
- Identify changes to data reporting requirements.
- Identify potential changes to existing practice work flow and business processes.
- Identify staff training needs.
- Test with your trading partners, e.g., payers and clearinghouses.
- Budget for implementation costs, including expenses for system changes, resource materials, consultants, and training.
The following are additional resources for you to use when implementing the 5010 transactions:
What is “5010”?
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.
Do I have to upgrade to 5010?
Yes. Providers, including physicians, are HIPAA “covered entities”, which means that you must comply with the HIPAA requirements when conducting the named transactions electronically. If you currently send and receive HIPAA transactions and plan to continue doing so, then you will be required to upgrade to 5010.
Who else has to upgrade to 5010?
Health care clearinghouses and payers are also HIPAA covered entities, so they will need to upgrade to 5010 as well.
Why is the current version of the transactions being replaced?
Just like other software applications you use, the versions become outdated and need to be updated. Version 004010 (“4010”) of the transactions was completed in 2000. Later changes, known as Version 004010A1 (“4010A1”), were completed in 2002. Since then, many technical issues were found in the transactions and new business needs were identified that could not be accommodated. ASC X12 developed version 5010 to correct these issues.
When do I have to upgrade to 5010?
The compliance deadline for using only the 5010 transactions is January 1, 2012. The necessary software and system changes need to be in place by the compliance date in order for you to continue sending and receiving HIPAA electronic transactions.
What if I’m not ready by the compliance deadline?
Any 4010/4010A1 transactions sent on or after January 1, 2012 will be rejected as non-compliant and will not be processed. You will have disruptions in your transactions being processed and receipt of your payments. If you will not be ready by the compliance deadline, you will need to talk to your trading partners, e.g., payers, clearinghouses, and billing service, to determine what actions you can take to continue to have your transactions processed and receive payments.
Deadlines for other HIPAA requirements have been delayed. Will the compliance date for 5010 be delayed?
Do not expect there to be a delay in the compliance deadline. The Centers for Medicare & Medicaid Services (CMS) is responsible for oversight of compliance with the HIPAA administrative transactions requirements. CMS has made it clear that there will be no extension of the deadline for 5010. Work within Medicare to upgrade to the 5010 transactions is on target and they expect to be ready on time.
What do I need to do now to prepare for the upgrade to 5010?
There are several steps you need to take to prepare for the conversion to 5010.
- Begin by talking to your practice management or software vendor. Determine when they will have your software updates available and when they will be installed in your system. Your conversion to 5010 will be heavily dependent on when your vendor has the upgrades completed and when they can be installed in your system.
- Talk to your clearinghouses, billing service, and payers. Determine when they will have their upgrades completed and when you can begin testing with them.
- Identify any workflow changes that you need to make in your practice to accommodate the changes in 5010. You may need to collect new data or report data differently than you do in the current version.
- Identify staff training needs and complete the necessary training.
- Conduct internal testing to make sure you can generate in 5010 the transactions you send.
- Conduct external testing with your clearinghouses and payers to make sure you can send and receive the 5010 transactions.
If I finish all of this work before the compliance deadline, can I start to use the 5010 transactions?
Yes. If you are prepared to send and receive 5010 transactions and any of your clearinghouses or payers are ready as well, you can begin to use the 5010 transactions with them if you mutually agree to this. No one is required to begin using the transactions prior to the compliance deadline. Using the transactions before the deadline will give you the ability to see that the transactions are working smoothly and are continuing to be processed. If any issues are identified, you can solve them before the compliance deadline.
How does upgrading to 5010 relate to ICD-10?
ICD-10 is the upgraded version of ICD-9. The ICD-10 codes have a different format and length than the ICD-9 codes. The new format of the ICD-10 codes cannot be reported in the current version of the HIPAA transactions. So, the upgrade to 5010 needs to be completed before the ICD-10 codes can be reported in the HIPAA transactions. Additionally, ICD-10 codes cannot be used in HIPAA transactions prior to the October 1, 2013 compliance date. Learn more on the ICD-10 resource page.
5010 and ICD-10: What They Are and How to Prepare for Them Watch this archived webinar that provides an overview on implementing the HIPAA 5010 transactions and ICD-10.
4010 to 5010 Claim Data Reporting Comparison
5010 Project Plan Template - Helping Practices Prepare for the New HIPAA Standards
7 Steps Practices Can Take Now to Prepare for 5010
5010 Fact Sheet Series
- #1 HIPAA 101: How it Started and What's New
- #2 5010 Timeline: Getting the Work Done in Time for the Deadline
- #3 HIPAA Terminology
- #4 What's Different in the 5010 Transactions
- #5 Testing Your Readiness for the 5010 Transactions
- #6 Complying with the HIPAA Transactions and Code Sets
- #7 "Errata": What It Is and What It Means for Practices
- #8 Preventing Cash Flow Interruptions during Transition to 5010
- #9 Using the Acknowledgements Transactions
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