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11/22/2011
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Medicare Delays HIPAA 5010 Enforcement

Doctor offices and hospitals will now have until the end of March to get up to speed with new electronic transaction set for processing insurance claims.

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The Centers for Medicare and Medicaid Services (CMS) has announced that it will delay enforcement of the 5010 electronic transaction set by 90 days, from January 1, 2012 to the end of March.

CMS' Office of eHealth Standards and Services (OESS) will not take any 5010-related enforcement actions before the end of March, it said in a statement. However, it will accept complaints about non-compliance with the rule before then, and it could require covered entities to show evidence of a good-faith effort to comply.

Explaining its decision, CMS said, "OESS made the decision for a discretionary enforcement period based on industry feedback revealing that ... testing between some covered entities and their trading partners has not yet reached a threshold whereby a majority of covered entities would be able to be in compliance by January 1. Feedback indicates that the number of submitters, the volume of transactions, and other testing data used as indicators of the industry's readiness to comply with the new standards have been low across some industry sectors. OESS has also received reports that many covered entities are still awaiting software upgrades."

It is physician groups, rather than hospitals, that are lagging in preparedness for the 5010 transition, which is a prerequisite to the much larger and more complex migration to the ICD-10 diagnostic codeset in 2013. According to Mike Davis, managing director of research and insights, for the Advisory Board., "Most of the hospitals I've talked to have either tested or are completing testing in December."

[ For background on e-prescribing tools, see 6 E-Prescribing Vendors To Watch. ]

The majority of physician groups, however, haven't even begun testing the 5010 format for claims submission and claims-related transactions with their payers. In a recent survey by the Medical Group Management Association (MGMA), just 35% of MGMA members said they'd begun internal testing, and 27% said that they hadn't yet scheduled testing with any of their payers.

Davis attributed the greater preparedness of hospitals partly to the fact that 10 hospital information system vendors own more than 90% of the market, and those vendors have been proactive in upgrading their customers' systems. In contrast, he said, hundreds of practice management system vendors serve physician practices; many of those have not provided software upgrades yet.

Robert Tennant, senior advisor to MGMA, agreed with this assessment. "We've heard reports from members that even some of the larger vendors have not been able to upgrade the software in time to begin the testing process," he told InformationWeek Healthcare.

Many payers are also not ready to accept claims in the 5010 format, Tennant said. While Medicare carriers and the larger commercial plans are, some Medicaid programs (including California's MediCal) and smaller payers are not. Very small insurers have until Jan. 1, 2013 to comply, but Tennant said some private plans that are supposed to be ready might not be.

What this means, Tennant and Davis said, is that, in the short term, physician groups and hospitals might have to file some claims in the 5010 format and some in the current 4010 format, unless clearinghouses can translate 5010 claims into 4010 claims. Some practice management software can generate claims in either format, but that's not true of all applications, Tennant noted.

MGMA, which recently called for CMS to develop a contingency plan for 5010 implementation, believes that the agency's enforcement delay "is a step in the right direction," Tennant said. "They have listened to MGMA and others, they've seen the research, and they've come to the conclusion that practices--and potentially hospitals--may not be ready."

But MGMA would like to see CMS go further than it has in avoiding cash flow disruptions during the transition process, he continued. "We're looking for additional flexibility being given to providers and their trading partners--including health plans and clearinghouses--to allow them to take in claims that have enough information on them to adjudicate them successfully, but may not meet the letter of the law in terms of their data content."

Medicare carriers should adopt the same policy, he added, and CMS should keep close tabs on the evolving readiness of all stakeholders in the process.

"We don't want to see a full-scale rejection of claims ... forcing providers to scramble to see what was wrong with the claim, fix that, and resubmit it. That would clearly cause an undue burden on practices."

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