Countdown: Two Months to Implementation of 5010 Electronic Transaction Standards

Consider Having a Backup Plan Ready to Avoid Cash Flow Interruptions

October 25, 2011 05:25 pm Sheri Porter

Oct. 31 is almost here, and that means family physicians have only about two months to assess the ability of their practices to submit and receive electronic claims and other electronic transactions in the new 5010 transaction format. That's according to an Academy expert who's been tracking software vendor progress on dealing with 5010 transaction code sets for the transfer of electronic health information data.

The 5010 transaction standards are mandated by a provision of the Health Insurance Portability and Accountability Act, or HIPAA.

"As we approach the last two months before the deadline for submitting electronic transactions in version 5010, which is the next step in the evolution of HIPAA standards, I am not hearing good things about electronic health record and practice management software vendor readiness," said Cynthia Hughes, C.P.C., an AAFP coding and compliance specialist.

"Family physicians may need some ideas for working with clearinghouses and other sources to keep their claims moving after the Jan. 1, 2012, deadline passes," Hughes told AAFP News Now.

In an Oct. 17 entry to Family Practice Management's "Getting Paid" blog titled "5010 and 2012: Time for a Backup Plan?" Hughes suggested that practices begin now to develop a contingency plan in the event they are not able to send and receive claims in the new format. If physicians can't transmit items, such as patient claims and patient eligibility inquiries, there's a good chance their practices will experience cash flow problems, Hughes said.

story highlights

  • The deadline for compliance with the 5010 electronic transaction standards is Jan. 1, 2012.
  • Many physician practices report that they are not ready for the conversion and may suffer cash flow difficulties.
  • Family physicians may wish to begin work now on a backup plan in the event software vendors and clearinghouses have not completed testing to ensure that their systems are ready.
  • New data released by the Medical Group Management Association show that just 4.5 percent of practices surveyed describe their 5010 implementation status as "fully complete."

To decrease the chances for such disruptions, Hughes urged physicians to, among other things,

  • contact their claims clearinghouse and ask specifically if it will be able to receive claims in the current 4010 A format and then convert those claims to the new 5010 format for transmittal to payers;
  • consider other options, such as the purchase of new billing software or an Internet-based product if their current vendor offers only a costly upgrade;
  • hold billings for a short time beginning on Jan. 1, and let other claims be applied to patient deductibles; and
  • use free software offered by Medicare contractors to submit Medicare claims.

The last option, according to Hughes, "will keep at least that (Medicare) portion of your cash flow intact." However, use of the free software is more time-intensive because data have to be entered manually, she noted.

Hughes told AAFP News Now that private payers also may offer online portals for direct claims submissions.

The AAFP is not the only professional organization worried about the health care community's readiness to comply with the looming deadline for implementing the 5010 electronic transaction standards.

In an Oct. 24 press release(, the Medical Group Management Association, or MGMA, called on HHS to issue a contingency plan that would allow health plans to adjudicate claims that may not have all the required data content.

MGMA pointed to its own research to show that many practices and their trading partners have not yet taken the steps necessary to successfully implement version 5010 and ensure a seamless flow of data by the Jan. 1 compliance date.

According to MGMA survey data,

  • about 77 percent of respondents had been contacted by their practice management system software vendors regarding the transition to 5010;
  • about 35 percent had begun internal testing;
  • nearly 22 percent said internal testing with their practice management vendor had not even been scheduled; and
  • only about 6 percent said all of their major health plans had contacted them regarding conversion to the 5010 standards.

Overall, just 4.5 percent of survey respondents rated their 5010 implementation status as "fully complete."

"It is clear that a significant number of medical groups will not have the ability to transmit claims and other electronic transactions using the version 5010 format by the Jan. 1 deadline," said MGMA President and CEO Susan Turney, M.D., in the release. Moreover, she added, "the study results highlight the fact that external testing with health plans is significantly delayed.

"It is imperative that HHS take immediate steps to ensure that practice operations are not compromised due to cash flow disruption."

Regarding contingency plans, about one-third of physician practices said they would establish a line of credit at a local financial institution to sustain practice operations, nearly 36 percent planned to set up cash reserves, and more than half of survey respondents planned to revert to paper claims if they are unable to electronically transfer claims data in the new format as of Jan. 1.