New electronic billing standards causing payment woes

Federal officials say initial problems with HIPAA 5010 have been fixed, but physicians want more time to upgrade systems.

By Charles Fiegl amednews staff — Posted Feb. 20, 2012

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The switch to the new standards for electronic transactions under the Health Insurance Portability and Accountability Act, which impact how physicians bill payers for their services, has caused severe payment disruptions at some doctor practices.

Physician offices are seeing shortfalls on their balance sheets after the move to HIPAA Version 5010 on Jan. 1. The Centers for Medicare & Medicaid Services, the agency overseeing the transition, acknowledged initial processing delays and instances of missing claims with the new standards. But those problems have been resolved, CMS said.

Still, physicians and their administrative staff reported having continuing trouble with 5010 heading into February. The American Medical Association and the Medical Group Management Assn. have encouraged CMS to further delay the full enforcement of the new standards until technical problems are addressed. In November 2011, CMS stated it will not enforce 5010 until April 1, when the agency would begin instructing contractors to reject any claims using the old HIPAA version.

"One month since the 5010 standard was put to use, physicians are experiencing very alarming problems that have resulted in significant interruptions in claims processing and cash flow," said AMA President Peter W. Carmel, MD. "It's clear that the problems will not be solved overnight. The AMA fully expects that another extension to the 5010 enforcement deadline will be needed to resolve the emerging issues."

It is difficult to gauge how many physician groups are not getting paid for their services because of the problems, said Robert Tennant, a senior policy adviser for MGMA. But four readiness surveys the association conducted in 2011 showed that the health industry was not prepared for the shift.

Problems stemming from the transition have affected physicians, billing clearinghouses, and public and private insurance payers, Tennant said. Some practices are billing with systems using the older HIPAA 4010 standards, and some health plans are adjudicating those claims. Some clearinghouses are automatically converting 4010 transactions into the 5010 format for payment.

Practices that made the switch to 5010 might believe they are compliant with the standards but are not, Tennant said. For instance, one common error is listing a P.O. box for a practice address instead of a physical street address. Some payers are rejecting such noncompliant submissions, but others have accepted and paid the claims without the practices realizing that they are wrong.

Concerns are growing about health plans that have been flexible in accepting noncompliant claims, Tennant said. If CMS decides to enforce 5010 starting in April as scheduled, physicians sending noncompliant claims might not find out until then that their mistakes no longer will be overlooked. "Are they being told what they're missing?" he asked.

CMS spokesman Joe Kuchler said Feb. 9 that the initial "growing pains" from the transition have been resolved. CMS data show that more than 80% of physician claims using the 5010 format are being sent to Medicare contractors successfully, and all Medicare contractors are meeting claims processing requirements, he said.

However, some practices are still reporting problems.

Physicians at New York Urological Associates in Manhattan began submitting claims using the new HIPAA standards on Dec. 1, 2011, said Janet Bernstein, the practice's manager. The group's billing clearinghouse had passed tests for 5010 processing, but for the first two weeks of December the practice's Medicare claims went unpaid. The practice had little problem with private payers, she said.

Bernstein was told to resend the Medicare claims, but they were rejected as duplicates. The physicians group said it was down $40,000 in revenue by the end of the year because of the interruption.

The office sends claims for physician services in batches three times a week, which typically are paid 14 days later. Since December, some batches have been accepted by the Medicare contractor for New York, but others have been rejected or never went through for processing. The nine-physician group reported that it had about $100,000 in claims that had not been paid as expected by mid-February.

"Fortunately for us, Medicare is only 25% of our receipts," she said.

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The trouble with 5010

The Medical Group Management Assn. and the American Medical Association have called on the Centers for Medicare & Medicaid Services to further delay enforcement of the HIPAA 5010 electronic transaction standards, which is scheduled to start April 1. Physician practices that already have started using the new standards have reported several problems, most commonly:

  • Issues with practice management and billing systems that had shown no problems during the testing.
  • Issues with billing secondary payers.
  • Claims rejections due to issues with billing and practice addresses.
  • Crosswalks for national provider identifiers that are not being recognized.
  • Claims lost by Medicare contractors.
  • Certain "not otherwise specified" claims being denied due to not having descriptions on the claims.
  • Sporadic payment of resubmitted claims.
  • Call hold times of one to two hours when attempting to contact contractors for further explanation of unpaid and rejected claims.
  • Unsuccessful claims processing, with no reasons cited for rejection, despite using submitters that were approved after successful 5010 testing.

Source: Letter from the Medical Group Management Assn. to HHS Secretary Kathleen Sebelius (link)

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