5010 Payment Claims Rejected? Clearinghouse Official Reveals Possible Reasons Why

February 15, 2012 04:30 pm Sheri Porter

On Jan. 16, Sarah Lipscomb, office manager of a solo family medicine practice in Eufaula, Ala., received 54 pages of rejected claims. By mid-February, Lipscomb was looking at $11,000 in outstanding open claims for the practice, which is owned by family physician Rajesh Patel, D.O.

"It was a huge shock to see that many claims get denied, especially for a small practice, a rural clinic," said Lipscomb in an interview with AAFP News Now. "Our (payment) return was cut in half during that time."

Hello, 5010 transaction standards.

Lipscomb's rejected claims all involved address or zip code issues where claims information didn't match information the insurance companies had on file. The problem likely stemmed from a practice location change two years earlier. Lipscomb encountered a nightmare of paperwork at that time as she worked to notify all of the practice's business partners about the new address. To avoid such a time-consuming task in the future, the practice subsequently set up a post office box number.

However, rules on the use of P.O. boxes changed with the implementation of 5010. "I had to go back and redo it all, and that's where most of our glitches came from," said Lipscomb.

story highlights

  • Jan. 1 marked the deadline for physician practices to begin using the 5010 transaction standards.
  • Since implementation, the claims rejection rate has spiked 10 percent.
  • A representative from Emdeon, the nation's largest administrative claims clearinghouse, lists the top reasons for claim rejections.

Patel's practice, like many physician practices across the country, was dealing with the 5010 transaction codes sets for the transfer of electronic health information data. The 5010 version replaces the 4010/4010A1 transaction standards and was mandated by a provision of the Health Insurance Portability and Accountability Act (HIPAA). Jan. 1 marked the deadline for practices to begin using the 5010 transaction standards.

Fortunately for Lipscomb, the address issues have been resolved. "We're seeing it (revenue) come back in now; we're catching up," she said.

AAFP News Now wanted to know how the health care industry overall was faring in the wake of implementation of the 5010 standards and turned to Emdeon, the nation's largest administrative claims clearinghouse, for answers. Emdeon processes half of all U.S. commercial claims, as well as Medicare and Medicaid claims.

According to Deborah Meisner, Emdeon's vice president of regulatory compliance strategy, 5010 has caused a spike in rejections. "With 5010 implementation ramping up, we've seen an increase of about 10 percent in the overall claims rejection rate," she said.

For example -- as Lipscomb discovered -- practices can't use a post office box as a billing address. This error alone has accounted for a good portion of claims rejections, said Meisner.

However, the item causing the highest number of rejections involves the linkage between the physician and the clearinghouse -- such as Emdeon -- in the Medicare administrative contractor (MAC) system. "One of the policies now being strictly enforced is checking to ensure that the provider has registered with the MAC to submit through a clearinghouse/vendor," said Meisner.

Resolving this issue may require a physician to complete and submit paperwork to each MAC to whom he or she submits claims, said Meisner.

Based on Emdeon reports, Meisner offered a short list of trouble spots that reportedly are causing physician claims to be rejected. Get these things right, said Meisner, and claims most likely will sail through the system.

  • Enter service facility location information only when the location of the health care service provided is different from that of the billing provider address.
  • Submit the patient's address for the service facility location information for health care services provided in a residence, such as during a home visit.
  • Include an admission date on claims for inpatient visits.
  • Indicate that the patient has signed the "release of information" form required by HIPAA.
  • Provide a description in free-form text when using "not otherwise specified" procedure codes.

"We've seen a high level of rejections around this last one because health plans do not always use the same list of codes defined as unclassified," said Meisner.

During the next few months, "Physicians should be diligent about rejection reports and make sure that that they are clear on the cause for the rejections so they can correct them and get the claims sent back in," Meisner said.

"Don't be shy about calling the clearinghouse or the payer," she added. "Be direct, and ask 'What is the status of this claim?'"

The single most important thing physicians can do is to keep a close eye on their cash flow and watch for variances in receivables. If monthly receivables drop from $100,000 to $50,000, that's a red flag, said Meisner.

Looking ahead, Meisner predicted that anxiety about 5010 soon will be forgotten. "I think as the industry gets used to the new rules under 5010 -- and as physicians get more accustomed to the requirements -- we'll see this all eventually work its way out.

"We're going to start seeing people focus on ICD-10 and put 5010 behind them."