By Jennifer Swindle
You can take specific steps to maintain-or even improve-cash flow, but don't delay.
Come Jan. 1, 2012, if you don't transmit electronic claims using the new 5010 transaction standards, they will be rejected. And because 5010 compliance is federally mandated for all HIPAA-covered entities, private payers as well as Medicare and Medicaid must use and enforce its use. All HIPAA-covered transactions-including claims, referrals, coverage inquiries, and remittance advices-among providers, IT vendors, clearinghouses, pharmacies, and medical equipment suppliers also must comply.
If you haven't already figured out-and tested-how your organization will implement 5010, the time to do so is now. Any further delay risks an immediate interruption of the organization's revenue in the new year.
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The bulk of 5010 compliance involves technical IT changes. For most organizations, these will be made by IT vendors, who were required to have 5010 compliant formats available for testing at the beginning of this year. To ensure your organization's compliance, you need to verify that all practice management systems, billing services, clearinghouses, or other health IT (HIT) systems and services you use support both your ability to enter compliant data and your trading partners' ability to receive the data. The best way to do this is to consult with your HIT vendor on what you must do to comply, and to test your ability to transmit compliant files. A similar process should be carried out for any provider, pharmacy, supplier, or payer with which you communicate directly.
However, 5010 also makes significant changes in the content required to file claims and process other transactions. These include ensuring that patient data, such as date of birth, name spelling, and even suffixes such as "Jr." or "III" exactly match Social Security records. Also, you will be required to identify individual providers making referrals rather than using an institutional identifier. Changes in service billing rules may also require changes in how some clinical data are collected and reported.
Although the downsides of failing to fully implement 5010 standards are obvious, there's also significant potential upside. The use of 5010 makes it possible to automate even difficult transactions, including re-filing claims and even payment error recoupment. This ability should allow you to reduce costs associated with manually processing claims and denials, and speed up cash flow by enabling earlier correction and resubmission of rejected claims.
The 5010 also supports coordination of benefits, claim splitting among collaborating providers, and reporting of key clinical data such as diagnoses present at admission-all key elements for administering emerging pay-for-performance, episode-of-care bundled payments, and determining savings by accountable care organizations. The more detailed clinical data allowed by the system will distinguish clinically and administratively important information, such as conditions present on admission, principal and admitting diagnoses, external cause of injury, and patient reason for visits. These distinctions will improve the understanding of clinical data and enable better monitoring of mortality rates for certain illnesses, outcomes for specific treatment options, and hospital length of stay for certain conditions, as well as the clinical reasons for why the patient sought hospital care.
Finally, 5010 protocols support ICD-10 codes, whereas the 4010 standards do not. Although initially the 5010 standards will continue using ICD-9 codes, compliance with 5010 is a prerequisite for transitioning to ICD-10 in October 2013.
As such, 5010 potentially affects the day-to-day activities of everyone in your organization, including physicians and other providers. An organizationwide review to identify which processes must change, and how, is a must.
To find out more about the 5010 transaction standards and how they might affect your organization, visit the the HIPAA section on the Centers for Medicare & Medicaid Services website: www.cms.gov/home/regsguidance.asp. Also check the websites of the Medicare contractors and major insurance carriers you work with. Information specific to medical specialties might be available through medical societies. Your billing service, clearinghouse, or IT system vendor might also have useful information that will help you understand how you need to change your processes.
Ensuring Technical Compliance
As noted above, 5010 compliance involves adoption of a wide range of technical standards. If you work for a large organization, your internal IT staff should have made the required programming changes. For most organizations, though, the technical changes will be made by IT vendors, including practice management/electronic health records vendor, a billing service, a clearinghouse, an eligibility service, or some combination of these. These companies were required to have compliant systems in place at the beginning of this year to allow for testing and fine-tuning throughout 2011.
If you need to update software, determine whether you also need new hardware. When updating your system, be sure to consider what additional capacity or software you will need to switch to ICD-10. You may want to include it now, or at least ensure that your vendor can provide it in a timely fashion. Also, look for open systems that are capable of interacting with any other vendor, clearinghouse, or payer you choose in the future.
A good first step toward ensuring technical compliance is to determine how many IT partners you are using, and what kinds of transactions you send to and receive from each. Make a list, including all IT vendors, clearinghouses, or other claims intermediaries, as well as any other providers, pharmacies, medical equipment companies, or insurance carriers with which you have direct transactions. Also list the types of transactions you have with each, including pertinent information for each type of transaction.Ask your partners if they have any instructions or requirements for 5010 transactions. Then for each partner, prepare a test file that includes all the types of transactions you typically conduct with that partner. How complicated these test files will be depends on your organization. A small single-specialty physician practice may need to test just a few transactions. A hospital, health system, or multispecialty practice that also infuses drugs or provides other complex services may need to test a wide range of claims, referrals, and specialized pharmacy and durable medical equipment reports, as well as claims splitting.
The next step is to schedule tests with your trading partners. They should be able to verify whether your file preparation is adequate, and point out areas where it is not. The test also verifies that your partners have implemented 5010 themselves. If your trading partners include billing services, clearinghouses, or other intermediaries, also make sure they can document that they have tested their system with the payers and other entities you contact through them. Ask to see the results of these tests, or, if they have not all been conducted, a schedule for when they will be done.
Keep in mind that testing may take time. You may need to schedule a test time with vendors and payers in advance. If you haven't already completed or arranged for it, you should do so as soon as possible. If you wait until November, you could get caught in a last-minute rush that could delay your tests. You also may not have time to fix any problems uncovered in a test before the Jan. 1 deadline. Leave yourself 30 to 60 days to make corrections and retest systems if necessary.
Changing Processes and Preparing Staff
Once you know what information you need to successfully file 5010 claims, you may need to change some processes to ensure that you capture and forward the necessary data to your coding and billing personnel. As mentioned above, scrubbing your existing patient data files to ensure the information you submit exactly matches Social Security records will help avoid claims rejections under 5010. This may require you to collect and add information that you did not previously, especially name suffixes. Insurance policy numbers must also match. If you don't already have a system in place to verify and correct demographic information provided by new patients, put one in place to avoid future claim rejections. This may be especially challenging for emergency department and walk-in facilities. An online service may be necessary.
Changes in recordkeeping and reporting for some services may also be needed. For example, anesthesia must now be reported in minutes rather than with base service codes. The 5010 protocols also include 45 new service category codes that must be filed. Make sure that your coders are trained for this and that medical records provide necessary information to categorize services. Information on primary and admitting diagnoses, existing conditions at admission, and external injuries must also be captured. It may be useful to develop new medical record forms or electronic templates that ensure that such information is collected and provided.
You must also individually identify referring providers rather than use only an institutional national provider identifier (NPI). You will also be required to use NPI subpart identifiers if you use or bill services provided by an autonomous billing entity within a system, such as a home health agency or medical practice plan.
Transactions such as claims rejections, payment audits, and recoupments will also be automated under 5010. You may want to change your claims examination and refiling practices to take advantage of potentially quicker turnaround. Also, when eligibility inquiries are made, payers are required to inform you of what information is needed to file a viable claim. This additional information from eligibility checks could speed cash flow if you are prepared to correct potential coverage or eligibility errors before claims are filed. Providers may now deny a claim only if they do not recognize the patient.
Staff also should be trained to collect and file information in the new formats. Stress the importance of the data for maintaining practice revenues, but also its utility for assessing and improving quality. Once staff are trained, test the system again to make sure it is consistently generating the right information in the right formats. Here again, the sooner you identify any weaknesses in the system, the sooner you can correct them, and the less chance you'll experience an avalanche of rejected claims.
As with any major system change, no matter how carefully you prepare, the level of performance will become known only after the system starts running. Therefore, it is essential to monitor outcomes after 5010 goes live. Compare figures for claim rejection and denial rates, revenue collected per claim, and the accuracy of projected versus received payments. Slippage in any of these areas may indicate a problem with the 5010 implementation, either on your side or the payers' side.
Over time, 5010 will enable providers to reduce transaction costs because it significantly reduces ambiguity and enables more automation. But it will take preparation-and rigorous testing-to prevent a cash flow freeze in January. The sooner you start, the better off you'll be.
Jennifer Swindle, RHIT, CCS-P, CPC, CPMA, is vice president, coding and compliance, Pivot Health LLC, Nashville, Tenn. (firstname.lastname@example.org).
View a fact sheet with information and a compliance time line for the transition to Version 5010 by Jan. 1, 2012.
Publication Date: Friday, July 01, 2011