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American Academy of Family Physicians
Monday Oct 17, 2011

5010 and 2012: Time for a backup plan?

As we near the end of 2011, you may notice a lot of fuss about the transition to the HIPAA version 5010 electronic transactions. The reason is that your claims must reach your payers in the 5010 format beginning on Jan. 1, 2012, or they will be rejected. As the deadline approaches, it may again be time to assess your practice's readiness to submit and receive electronic claims and other transactions in the HIPAA 5010 format. Has your vendor upgraded your claims software, and have you begun testing with your clearinghouse and payers? If not, what is the vendor's message to you about having this work completed before the deadline? How confident are you that you will be able to send and receive claims data to keep payments coming in after the first of the year? If your confidence isn't high, it is probably time to consider a backup plan. Here are some options for those practices whose software vendors are not showing promise:

1. Contact the clearinghouse through which your claims are submitted to find out if it will offer conversion services. Most clearinghouses will be able to receive claims in the current 4010A format and convert them to the 5010 format before relaying the data to the payers. Likewise, when the payers send back acknowledgements or claims reports in 5010, the clearinghouse may convert that data back to 4010A before delivering it to your practice. (They will likely be doing the reverse for payers that are not ready for 5010.)

2. If your software vendor is requiring a costly upgrade, consider whether it is time to look at other options. (This may be especially relevant if an EHR is in your near future. You may want evaluate how EHRs integrate with practice management systems.)

3. Use free software from your Medicare contractor to submit your Medicare claims. This will keep at least that portion of your cash flow intact. Though the software is free, using it will likely require extra data entry work, since the software does not connect to your billing system.

4. If your vendor is planning a last-minute upgrade and you have some level of confidence that any delay beyond the first of the year will be short, you may want to hold your billing for that time and let other claims be applied to patient deductibles. Your billing staff can use the time to work with the software vendor and clearinghouse and also do some intensive follow-up on this year's unpaid balances. (This could result in a better-than-typical January cash flow.)

Some have recommended that physicians secure a line of credit just in case of a disastrous transition. This may not be needed and is probably easier said than done; however, a line of credit is always a good idea and could be needed for many other reasons (e.g., a severe reduction in the Medicare fee schedule, RAC audits, and other disasters like flooding). If you have the credit and banking relationship to secure a line of credit, it might be worth discussing with your banker.

Many of you have survived Y2K, the first HIPAA transition, the introduction of the national provider identifier (NPI), and the Medicare enrollment process. I am confident that you will get past 5010 as well. I think the doomsday authors are wrong about the world ending on Jan. 1, 2012. Even if they are right, 5010 won't be to blame. Let's save the paranoia for the real scary stuff, like Congress in session and arsenic in apple juice.

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