Healthcare E-Transaction Change Needs More Time

Some medical practices plan to switch back to paper records because they're not yet ready to implement new electronic insurance claims standards, reports the Medical Group Management Association.

Neil Versel, Contributor

December 21, 2011

3 Min Read

5 Key Elements For Clinical Decision Support Systems

5 Key Elements For Clinical Decision Support Systems

5 Key Elements For Clinical Decision Support Systems (click image for larger view and for slideshow)

After requesting--then receiving--a contingency plan from the federal government so health insurers can pay claims that don't follow the ANSI X12 version 5010 transaction standards after the January 1 compliance deadline, the Medical Group Management Association (MGMA) is asking for more leniency.

The MGMA asked the Centers for Medicare and Medicaid Services (CMS) to double its grace period to six months, citing new data showing that few physician practices are ready for the change. The organization, which represents group physician practices, issued data from a survey of members showing that just 13.9% of respondents consider their 5010 preparations "fully complete." Less than a third said that they had upgraded their practice management systems to produce 5010-compliant transactions and had completed internal testing.

Almost one-quarter of respondents were planning on switching to paper claims so they could continue to get paid after the deadline, ironic considering that the transaction standards are part of the administrative simplification section of the Health Insurance Portability and Accountability Act (HIPAA). Robert Tennant, MGMA government affairs manager, told InformationWeek Healthcare that the survey closed Dec. 16, so the results are fresh.

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

In October, the MGMA joined a number of other organizations calling on CMS to develop a contingency plan for the many providers that will not be ready to submit 5010 transactions by the first of the year. The Medicare agency responded to public concerns last month by saying that it would not enforce the rule until the end of March.

The newest survey shows that not much has changed since October or even November, according to Tennant. "CMS needs to continually track the progress of industry," he said.

Without an extension, even private insurers would not legally be able to pay claims in the old 4010A1 format, beginning January 1. This would potentially freeze cash flow for providers nationwide, even though some of the preparations are out of their control.

Vendors and transaction clearinghouses are not considered covered entities for HIPAA purposes, and some may not feel much urgency to move quickly. "The thing that the government has to recognize is that a provider can want to be compliant, but it's up to the practice management software vendor," Tennant said.

Tennant noted that upgrades are included in many vendor contracts, so there is "no new money going to the vendor," and thus less incentive to move quickly on the practice management side when there is plenty of cash to be made from selling electronic health records right now.

Plus, the current CMS contingency plan says that "submitters" and "receivers" that have not begun testing 5010 transactions with the appropriate Medicare administrative contractor would have to submit transition plans with timetables to CMS. According to Tennant, the Medicare agency has not given any guidance on this provision.

"It's confusing," Tennant said. "Who is a submitter? Is this a clearinghouse? A provider?"

Tennant did indicate that MGMA has heard from CMS that "they don't want to reject claims," suggesting that a further extension is possible. "This is not something we're foreign to. We went through this with 4010," Tennant said. In that case, Congress actually stepped in and postponed the original HIPAA transaction compliance deadline for a year, until October 2002.

When are emerging technologies ready for clinical use? In the new issue of InformationWeek Healthcare, find out how three promising innovations--personalized medicine, clinical analytics, and natural language processing--show the trade-offs. Download the issue now. (Free registration required.)

-- JHtest

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About the Author(s)

Neil Versel


Neil Versel is a journalist specializing in health IT, mobile health, patient safety, quality of care & the business of healthcare. He’s also a board member of @HealtheVillages.

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