HIPAA Version 5010: Enforcement Date Delayed Again

HIPAA 5010 Transition: What You Need To Know (A Lawyer's Perspective) 

         As lawyers for hospitals, physician practices, and health plans, we are often unfamiliar with the intricate details of the standards for sending electronic health care transactions (patient claims).  There are specific items which must be submitted in a particular order by providers through clearinghouses to the health plans/payors, items which have drastically changed in 2012.  Many providers are struggling to make sense of the change, and a number of physicians have found themselves without revenue at the beginning of this tumultuous year for the healthcare industry. 

           Next month, June 30, 2012, the Centers for Medicare & Medicaid Services (CMS) is scheduled to enforce compliance with HIPAA 5010 (the third delay of the enforcement date so far this year).  If you are unfamiliar with 5010, it is a version of electronic transaction standards set by CMS.  CMS published its 5010 standards in January, 2009, modifying the HIPAA Electronic Transaction Standards Final Rule and replacing version 4010A1.  These standards regulate the transmission of patient claims for covered entities (i.e., hospitals, clearinghouses, physicians, and health plans).  According to CMS, the change was necessary for purposes of uniformity and streamlining reimbursement transactions.  Additionally, with the upcoming expansion of diagnosis codes under the medical coding system ICD-10, CMS stressed the importance of this uniformity to avoid confusion.

            In November, 2011, CMS recognized the industry was not prepared, and it delayed enforcement until March 31, 2012.  Since November, the entire industry has struggled, resulting in delayed revenue for physician practices, operational difficulties, and even the possibility of closing practices due to the complications.  Recognizing these issues, on March 15, 2012, the Medical Group Management Association (MGMA) was successful in its efforts to encourage another delay.  Consequently, the new deadline has been set for June 30, 2012; if covered entities are not compliant by that date, they will face penalties.

            As counsel for clients in the healthcare industry, you can help your clients avoid delayed payments and possible penalties.  Contact your clients to ensure they are aware of the 5010 deadlines and are working towards compliance, if they have not already done so.  Encourage them to contact their vendors, particularly clearinghouses, billing services, and payors to discuss when they will be able to accept 5010 transactions and in what format.  Ensure vendors have installed any necessary 5010 upgrades.  Make sure internal systems are checked and tested to generate 5010 transactions, allowing for ample time to resolve issues which may arise (and, trust me, issues will arise).  Make sure external systems are also checked and tested to ensure they receive transactions properly. 

            Proactive involvement with your healthcare clients will help avoid penalties as of the enforcement deadline—whenever CMS sets it in stone.  It is more critical than ever for lawyers to work with their healthcare clients to ensure they are abiding by laws and regulations set in place for the industry to lessen the impact of threatened fee cuts to hospitals and providers, as well as PPACA affecting health plans.

           Please see CMS' official statement regarding the new enforcement date here: http://www.cms.gov/ICD10/Downloads/EnforcementDiscretionAnnouncement.pdf

Jessica S. Cohen, Esquire is in-house counsel for Physicians Independent Management Services, Inc. She specializes in health law and negotiates managed care contracts, employment agreements, and other pathologist and laboratory specific matters. She can be contacted at cohenj@pims-inc.com or (813) 490-7206.


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