Practices unprepared for HIPAA electronic update

Where does your group stand in transitioning to the new Health Insurance Portability and Accountability Act (HIPAA) Version 5010 electronic standards? If you’re like the majority of respondents to a recent Medical Group Management Association (MGMA) survey, it’s facing significant challenges in this effort.

A majority of respondents to the survey said they have not made critical software upgrades and have not scheduled testing with health plans. Groups face potential interruption of claims processing and other essential administrative transactions if they don’t successfully implement Version 5010 by January 1.

Most groups rely on their practice management system software to conduct the HIPAA electronic transactions. About half (48.6%) of respondents said that their software would require an upgrade to enable the transactions, 22.6% said they didn’t know what needed to be done with their software, 22.3% said they believe that their current software would permit them to use Version 5010, and 5.8% said that their software would need to be replaced. Less than half (47.7%) of survey participants said that they had received any communication from their practice management software vendors 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,” says William F. Jessee, MD, FACMPE, MGMA president and chief executive officer. “Our research suggests, however, that these medical groups face significant hurdles before they will have the ability to successfully transmit these revised standards.”

Other survey findings:

• Testing-8.3% of participants said they have started internal testing, 56.3% said they have not scheduled such testing; and 11.5% said they plan to start testing between March and June, 12.8% between July and September, and 9.4% between October and December. One percent said they did not plan to start internal testing until after the compliance deadline.

A majority of respondents (61.4%) reported that they have not scheduled testing with major health plans, and 3.6% reported that external testing already has been initiated with some of their major health plans.

• Implementation-59.8% of participants stated that they have not started to implement Version 5010; 26% said they are 1% to 25% complete, 6% said they are 26% to 50% complete, 4.6% said they are 51% to 75% complete, 1.8% said they are 76% to 99% complete, and 0.4% said that they have completed their implementation efforts.

• Trading partner readiness-When asked what their confidence level is that their trading partners will be ready to meet the January 1 compliance date, 56.6% of survey participants said that they are extremely confident or confident that their practice management system software vendors will be ready; another 12.1% of respondents said that they are not confident that their vendors will be ready. Additionally, 31% of participants said that they were extremely confident or confident that major health plans will be ready, and 22.8% said they were not confident that the plans will be ready.

“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 says.