Your practice can’t afford to fall behind in race to beat 5010 conversion deadline

September 14, 2011

Some physician practices may be too slow out of the starting gate when it comes to racing the deadline for conversion to HIPAA version 5010 in just four months. Not only do physicians need to upgrade their practice management systems or ensure that their billing service has made the necessary updates, they will need to collect and report additional information for claims to be processed, and change established billing practices. Not sure of the penalty of failing to get to the finish line on time? Here?s a hint: It involves not getting paid.

Some physician practices may be too slow out of the gate when it comes to meeting the deadline for conversion to Health Information Portability and Accountability Act (HIPAA) version 5010.

Just 29% of respondents to an American College of Physicians (ACP) survey say they have taken action to prepare for conversion to HIPAA version 5010. More than half of the respondents (52%), however, expected their practices to be compliant by the January 1, 2012, deadline.

That expectation may be overly optimistic. Not only do physicians need to upgrade their practice management systems or ensure that their billing service has made the necessary updates, they will need to collect and report additional information for claims to be processed, and change established billing practices.

Respondents who had not started to make the transition cited lack of staff and time, budget constraints, and competing transitions as the primary barriers to undertaking the conversion process.

Practices worried about the cost of converting to 5010 need to make room in their budgets or risk seeing their revenue diminished beginning in 2012. “If you are not ready, your claims will not be paid,” according to the Centers for Medicare and Medicaid Services (CMS) Web site. And it isn’t just Medicare or Medicaid payments that will be affected. The new standards regulate and standardize the electronic transmission of specific healthcare transactions such as eligibility, claims, referrals, and remittances for all health plans, clearinghouses and billing services, and providers.

Some of the new requirements will alter practices’ standard billing procedures. For instance, all practices must provide their street addresses and nine-digit zip codes rather than a post office box, and the “billing provider” can no longer be a billing service or clearinghouse. The new system also expands the number of diagnosis codes that can be reported from eight to 12.

According to the CMS Small Providers Compliance Timeline, practices should now be finalizing testing of their systems with health plans and CMS, making any necessary changes in office procedures, and completing final deployment of new systems. For the 71% of practices that have yet to start the transition, the Medical Group Management Association and the American Medical Association recently developed an online practice management system software directory that identifies vendors who are already 5010 compliant.

The ACP survey was one of five concurrent surveys conducted to assess industry readiness for 5010 and ICD-10 conversions in which 396 individuals participated, mostly coders who work in physician practices. The ACP had 31 physician respondents.

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