HIPAA 5010 backup plan chant grows louder

By Tom Sullivan
08:57 AM
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All apologies if this makes your long Independence Day holiday weekend hangover even worse, but now that July is here, the health IT realm is officially within the six-month countdown to HIPAA 5010.

It’s no surprise that the state of the HIPAA 5010 transition is something of a mess. The potential for slowed or even stopped claims reimbursements is understood. And the inevitable ripple effects on health IT are not so clear.

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What with that increasingly louder clock ticking in the back of the healthcare industry’s collective head, a question: As the Jan. 1, 2012 compliance deadline approaches, should providers and the federal government devise contingency plans for HIPAA 5010?

“As much as I like deadlines and people being held accountable, I think it would be a dereliction of duty for (the Centers for Medicare & Medicaid Services) to not come up with some sort of contingency plan for HIPAA 5010,” said Steve Sisko, an analyst and technology consultant focused on payers and ICD-10.

Sisko is hardly alone in thinking that a backup plan will be necessary. Testifying late last month before the National Committee on Vital Health Statistics, the Medical Group Management Association said that “as of early June, very few practices have instituted external testing, and this could lead to a backlog of test requests in the last few months of the year.”

Such crunch-time chaos, MGMA explained in its testimony, “could also result in practices going live with their Version 5010 transactions without having the ability to submit test transactions with their health plans.”

Stanley Nachimson, a principal of Nachimson Advisors and co-chairman of the WEDI’s Timeline Initiative, expects “considerable confusion” come January 2012.

“If not every plan is ready, providers will be unsure what version of the transactions to submit to each plan. If providers are not ready, some plans will reject the old versions of the transactions and some will not, “ he said. “Given the confusion, there will be revenue disruptions.”

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Citing a recent member survey, MGMA leaders recommended that “CMS should, based on survey data and results from national testing days, develop, at a minimum, a data content-based contingency plan. The focus of this contingency plan should be on permitting health plans to accept claims that do not contain all of the required Version 5010 data content.”

Some health entities are already conjuring contingency efforts of their own. “When it comes to a backup plan, I have one,” said Oregon Health Network Executive Director Kim Lamb. “That’s just good business.”

Indeed, Sisko said several of his large payer clients are struggling with the 5010 conversion, and some are even moving forward with ‘step up/step down’ style workarounds – meaning they use a utility to reformat 5010 claims so they can process those in their current 4010 systems, then reformat those claims again to 5010 prior to sending everything out.

The MGMA, in its testimony, outlined other contingency options: Contract with a billing service for all claims; use a clearinghouse; set aside cash reserves to sustain operations until payment is received; establish a line of credit to sustain operations until payments can be received; or revert to paper-based claims.

Sisko suggested that CMS offer some style of “waiver for certain types of entities with sanctions/penalties if they don’t get their act together within a grace period of six to 12 months.”

Ultimately, the longer the HIPAA 5010 conversion reigns over healthcare IT shops, Nachimson and Sisko said, the more it cuts into the next and far more complex unfunded mandate: ICD-10, a new coding set that also has some industry experts calling for delays and altternative plans.

“What really concerns me is that the WEDI surveys indicate the industry is falling behind the recommended ICD-10 timelines, and it will be very difficult for providers and plans to catch up,” Nachimson said. “We should be concerning ourselves with getting the industry to move on ICD-10 before we face a major problem a year or so from now, and to prevent any need for (an ICD-10) contingency plan.”