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07/27/2010

Transaction Standard – Version 5010 – Will Your Software Vendor and Clearinghouse be Ready?

By Joy Newby, LPN, CPC, PCS, Newby Consulting, Inc.

CMS is in the process of implementing the next version of the Health Insurance Portability and Accountability Act (HIPAA) transactions. Pertinent to physicians, the Secretary of the Department of Health and Human Services (DHHS) has adopted Accredited Standards Committee (ASC) X12 Version 5010 as the next HIPAA transaction standards for covered entities to exchange HIPAA transactions. The final rule was published on January 16, 2009. Some of the important dates in the implementation process are:

• Level I compliance means “that a covered entity can demonstrate that it could create and receive compliant transactions, resulting from the compliance of all design/build activities and internal testing.”
• Level II compliance means “that a covered entity has completed end-to-end testing with each of its trading partners, and is able to operate in production mode with the new versions of the standards.”

Completing Level I compliancy by December 31, 2010 and Level II compliancy by December 31, 2011, CMS will be fully compliant on January 1, 2012. The transition period when both versions will be allowed in production mode for Medicare will be from January 1, 2011 through December 31, 2011. The 835v4010A1 and the current Standard Paper Remittance (SPR) should not be sent on or after January 1, 2012, irrespective of the date of receipt or date of service reported on the electronic or paper claim.

This change affects all clearinghouses acting on behalf of either the providers or a health plan and any billing service agent who is performing electronic data interchange (EDI) transactions on behalf of providers or health plans or engaged in the workflow.

Everyone should realize that the software that’s used today to produce these EDI transactions must be modified to produce and exchange the new formats. And in addition, you may discover that your business processes may need to be changed, especially if there is a requirement to capture the new required additional data elements. So you may have business processes that are required to be modified.

CMS is encouraging all providers to inquire when your system vendor is planning to upgrade your individual system and then to assess that response to find out where you are in the pecking order or where the deployment activity falls in the calendar from your vendor’s perspective - what your vendor is planning for deployment to figure out where you stand, how confident you feel with your implementation, to make sure that you’re going to be ready and not have any negative effects to your business or your transaction flow knowing that Medicare needs to cut off the current format on January 1, 2012.

The first recommended deadline for a successful transition to Version 5010 is only five months away. By December 31, 2010, providers should complete their internal testing, and be ready to test with external partners beginning in January 2011.

Now is a great time for providers to check in with your vendors about their transition preparations. Not only is it important for you to make sure that you can count on them during the transition, but they are a great resource to provide you with details about what you need to do to comply with version 5010 standards and ICD-10.

Questions for vendors include, but are not limited to,

• Does my vendor contract include an update to the 5010 standards or will I be required to pay for this upgrade? If so, how much will it cost?
• When will my system be upgraded with the 5010 standards?
• Will I need to purchase any new hardware?
• Will this require any additional training by my staff? If so, where can I obtain this training?