Not e-claim compliant? Expect no pay in 2012

On Jan. 1, 2012, if physicians' practice management systems are not up to new standards, they will risk not getting electronic payments from private insurers and Medicare.

Despite that possibility, many physicians have not even begun to see if they are compliant with what are known as HIPAA Version 5010 standards. According to a survey released in March by the Medical Group Management Assn., 56% of practices have not scheduled any internal testing for 5010, and 61% have not scheduled any testing with their major health plans. The survey covered 349 practices with 13,290 doctors.

In January 2009, the Bush administration approved a rule, advocated by the American Medical Association and others, that moved the HIPAA 5010 deadline back from April 1, 2010, to Jan. 1, 2012. But experts say physicians shouldn't expect any more time.

"Those who think that there's going to be a last-minute delay announced in this are engaged in wishful thinking, and I certainly wouldn't put my practice at risk by making a bet on that," said Joe Miller, director of e-business at AmeriHealth Mercy, a Philadelphia-based Medicaid managed care contractor.

But physicians are not yet out of luck if they haven't started making the changeover to 5010 -- as long as they start the process soon.

"Understanding how the move to the newest version of the federal electronic transactions standard will affect a medical practice may seem overwhelming," AMA President Cecil B. Wilson, MD, said in a statement. "But it is important, and not too late, to get started in order to avoid significant disruptions to patient care and claims payments."

What is 5010?

The new data standards come out of the Health Insurance Portability and Accountability Act of 1996. The 4010 set was mandated in 2000 and has been revised since then. However, 4010 was recognized, as CMS put it, as "lacking certain functionality the health care industry needs," and the agency issued a final rule in Jan. 16, 2009, that mandated the eventual use of 5010.

The new standard demands more specificity in what data must be entered and transmitted. The hope is that the claims process will be more efficient, that there will be less need to refile claims because of errors and confusion, and that there will be greater detail about the patient visit.

For example, physicians must submit a nine-digit, rather than a five-digit, ZIP code on all claims submissions and submit a street address rather than a post office box. Also, 5010 allows physicians to distinguish between principal diagnosis, admitting diagnosis, external cause of injury and patient reason for visit codes.

HIPAA 5010 is also a precursor to the Oct. 1, 2013, adoption of ICD-10, the newest and most complex set of International Classification of Disease codes. The 5010 set will allow for the inclusion of ICD-10 codes, which 4010 can't support.

The MGMA survey did not ask physicians why they were not getting ready for 5010. But practice management experts cited two reasons.

One is that many practices are concentrating on another CMS program -- meaningful use of electronic medical records. The program provides for incentive pay of up to $44,000 over five years from Medicare or $63,750 from Medicaid over six years. But physicians could be penalized if they don't meet meaningful use by 2015.

Miller co-wrote a survey by the Healthcare Information and Management Systems Society, released in January, which found that two-thirds of physicians and other health professionals cited efforts to meet federal meaningful use standards as a significant competing effort to 5010. Miller is former chair of the HIMSS Medical Banking and Financial Systems Committee and a participant in the Workshop for Electronic Data Interchange.

Matthew Cowell, president of DNA Computer Consulting, a Fairport, N.Y.-based consulting firm for small medical practices, said meaningful use "is great, but really, you won't be able to bill if you're not up to the 5010 standards. I'd rather bill people than worry about the $44,000 I'm going to get from the government. That's not going to keep me in the business, but being able to bill will." Miller and other experts said practices might be able to incorporate 5010 updates with their meaningful use preparation, particularly if they are buying new systems.

The other issue, experts said, is that many practices assume that their practice management system vendors are taking care of any 5010 upgrades. Vendors -- while crucial for physicians' compliance -- are not covered under the 5010 rule and thus aren't responsible for ensuring that doctors are up to speed, according to CMS. Plenty of practices are contacting their vendors regarding 5010 -- nearly 65%, according to the MGMA survey. But vendors aren't as forward: Only 48% of practices said vendors have contacted them.

Getting ready for 5010

Every office's preparation will be different, but experts recommend that practices focus on early communication with practice management software vendors, claims submission clearinghouses and private insurers.

For a time, physicians could blame their lack of preparation on others -- and they did. In the HIMSS January survey, 67% of physicians said payers not being ready was an obstacle to preparing for 5010. Half said vendors weren't ready, and 47% said clearinghouses weren't ready.

In recent months, however, experts said those entities have improved their readiness, so physicians who need to test their systems, internally and externally, can do so, and physicians who need upgrades can get them.

A coalition including the AMA, WEDI, HIMSS, the Healthcare Billing and Management Assn. and the American Health Information Management Assn. have sponsored the GetReady5010 website compiling resources regarding the transition to 5010, and the AMA offers a series of free physician-specific resources on the 5010 standards on its website. The Centers for Medicare and Medicaid Services also offers a checklist for physicians.

The AMA is advising physicians to prepare for possible cash-flow issues once 5010 begins, not because of a doctor's lack of preparation, but because of possible technical glitches. The AMA said in a fact sheet that physicians should check with their Medicare administrative contractors and commercial payers to see if they have any advance payment policies. Also, the AMA recommends that a practice establish a line of credit with a financial institution and limit spending where possible in the months before Jan. 1, 2012.