New Medical Group Management Association (MGMA) research indicates that medical groups face significant challenges as they seek to transition to the new HIPAA Version 5010 electronic standards.

A majority of respondents to an MGMA questionnaire stated that critical software upgrades have not been made and testing with health plans has not been scheduled.  Groups face potential interruption of claims processing and other essential administrative transactions should they not successfully implement Version 5010 by the Jan. 1, 2012, compliance date.

Most groups rely on their practice management system software to conduct the HIPAA electronic transactions. Only 22.3 percent of respondents believed their current software would permit them to use Version 5010, with 48.6 percent stating that their software would require an upgrade and 5.8 percent indicating that their software would need replacement. 

An alarming number of respondents (22.6 percent) stated that they did not know what needed to be done with their software.  As an additional challenge, fewer than half (47.7 percent) of respondents indicated that they had received any communication from their practice management software vendor regarding the change to Version 5010.

"We are hopeful that vendors, health plans and other trading partners will work with their medical group partners to prepare for this significant transition well in advance of the compliance date," said William F. Jessee, MD, FACMPE, MGMA president and CEO.  "Our research suggests, however, that these medical groups face significant hurdles before they will have the ability to successfully transmit these revised standards."

"Practice management system vendors provide the foundation for the groups' ability to meet this latest government mandate," Jessee continued. "We strongly encourage these vendors to promptly reach out to their physician practice customers to communicate what upgrades and replacements are necessary, the timing for these modifications and the costs practices need to budget for."

MGMA's research also found:
• Testing – More than half of respondents (56.3 percent) indicated that internal testing had not yet been scheduled; 11.5 percent planned to start testing between March and June, 2011, 12.8 percent between July and September, 2011, and 9.4 percent between October and December, 2011; 1 percent did not plan to start internal testing until after January 2012 (the deadline for compliance with the new standard), while 8.3 percent of respondents had started to test.
A majority of respondents (61.4 percent) reported that testing had yet to be scheduled with major health plans, with only 3.6 percent reporting that external testing had already been initiated with some of their major health plans.
• Implementation – A majority of respondents (59.8 percent) stated that they have not started their implementation of Version 5010; 26 percent are 1 to25 percent complete, 6 percent are 26 to 50 percent complete, 4.6 percent are 51 to 75 percent complete, 1.8 percent are 76 to99 percent complete, and just 0.4 percent report that their implementation efforts are fully complete.
• Trading partner readiness – When asked what their confidence level is that their trading partners will be ready to meet the Jan. 1, 2012, compliance date, 56.6 percent responded that they were extremely confident or confident that their practice management system software vendor would be ready; another 12.1 percent stated that they were not confident that their vendor would be ready.  Respondents were somewhat less confident when it came to the readiness of their major health plans, with 31 percent indicating that they were extremely confident or confident and 22.8 percent saying they were not confident.

"We urge the government to closely monitor each sector of the industry and take all appropriate action to ensure that the transition to Version 5010 does not result in widespread cash flow disruption for medical groups," Jessee stated.