The healthcare industry’s implementation of HIPAA 4010 was the first time it attempted to standardize transactions between providers and payers. And there were a lot of lessons to be learned. CMS has corrected some of the issues, and as a result, HIPAA 5010 implementation has been smoother.
This time around, large provider organizations are much more engaged in planning and preparing for the migration. They’re attending industry forums such as WEDI and participating in government-sponsored webinars. As a result, even though testing was and still is a bit of a challenge, most larger provider organizations are ready to go forward with 5010.
As a general rule however, smaller group practices haven’t been as involved. They’ve been slower to initiate a conversation with their trading partners, and in many cases, they aren’t even close to being ready to test billing through HIPAA 5010 formats.
CMS is now offering free HIPAA 5010 Medicare billing software to help providers — especially small and mid-sized organizations with fewer resources — achieve HIPAA 5010 compliance. While Medicare claims make up approximately 28 percent of all health insurance payments, and comprise a significant amount for many providers, there remains a gaping hole with regard to Medicaid and private commercial payers.
CMS has responded by granting payers and providers a 90-day grace period before it starts enforcing penalties. CMS is also planning to host its 13th National Education Call regarding Medicare Fee-For-Service, a call geared toward HIPAA 5010 contingency planning. This in itself speaks to the speed at which the industry is able to tackle the transition, as well as the overall process and resource deficiencies.
The “always-provide-a-contingency-plan” mindset is working against the ideal of achieving HIPAA 5010 on time. This type of thinking can be abused by both payers and providers. Case in point: More than six years after the 4010 transition deadline, we still see organizations operating from their contingency plans. No deadlines were enforced back then, and — as we approach 5010 — the same attitude could create the same problem.
As the industry works to reduce costs and take advantage of administrative simplification that is possible through new EDI mandates, it makes no sense to risk the same predicament.
Current contingency plans call for dual 4010 and 5010 processing for both payers and providers: one to process live claims (4010); the other (5010) to process transactions for testing and analytics.
While this may mitigate severe repercussions, such as large-scale drops to paper-based transactions and financially damaging payment and processing delays, it will cost the industry dearly in other ways and shouldn’t be tolerated as an ongoing standard operating procedure.
The sheer cost of supporting both processing systems from a system upgrade and maintenance standpoint is high. And for those who become accustomed to a dual system and needn’t fear an enforced deadline, the sense of urgency around finally migrating to 5010 is incredibly low.
That’s not to say there shouldn’t be exceptions. If payers and providers know they aren't ready to process HIPAA 5010 claims, they need to talk with their trading partners as soon as possible. Trading partners can collectively determine the best option for continuing to process claims electronically. And if the most reasonable solution is to implement a dual processing strategy in the short term, fine. Providers should voice their concern and make that appeal now, so requests can be granted — but only if the provider has a finite timeline for transitioning fully to 5010.
For those who adopt such a strategy, they will likely require a full six-month period of dual processing. The first month would be a beta period to allow providers their first opportunity to test their data with trading partners.
After the test period, there must be a definitive 5010 cutover date enforced by CMS as part of monitoring progress and contingency transitions. CMS should also play a larger role in helping small and mid-size providers determine next steps for achieving compliance throughout their respective contingency periods.
If this doesn’t happen, the industry is setting itself up to deal with the same problems it faced during the HIPAA 4010 transition. The entire industry — CMS, providers and payers — needs to collectively acknowledge that by operating on contingency plans long-term and avoiding penalties for non-compliance after defined grace periods, we will continue to plod along in ruts of our own making. And we’ll continue to suffer from increasingly unbearable administrative burdens, making the concept of regulatory migration worthless.
Now is the time for a new (dare I say it?) healthier mindset. HIPAA upgrades will not end with 5010. Under the Affordable Care Act, we can expect updates every two years. It’s in the best interests of both payers and providers to seize what’s left of the 5010 transition and recognize it as an opportunity to establish long-standing positive habits that will make transitions and the system as a whole stronger. HIPAA was designed to support administrative simplification — and continuing to accept long-running contingency plans as the status quo defeats the whole purpose and eliminates the value.