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HIPAA 5010 is One Small, But Necessary Step Toward ICD-10

Lisa Eramo, for HealthLeaders Media, May 22, 2009

By now, most hospitals know of the impending 2013 implementation deadline for ICD-10. What they may not know, however, is that there is an even earlier compliance deadline necessary to make the transition possible.

January 1, 2012: This is the date by which providers must be ready to submit claims electronically using HIPAA Version 5010—an updated national code standard for billing software that replaces Version 4010 and that can accommodate the longer and more detailed ICD-10 codes. As with 4010, the new version applies to transactions with all payers—not just with fee-for-service Medicare.

Even though ICD-10 seems to be stealing the spotlight these days, the transition to 5010 will surely begin to take center stages as hospitals realize that it is a necessary prerequisite for helping to ensure a seamless transition.

Aside from being able to accommodate ICD-10, other benefits of 5010 include:

  • Improvements for the reporting of administrative and clinical data

  • The ability to distinguish between principal diagnosis, admitting diagnosis, external cause of injury, and patient reason for visit codes

The reasons for moving to 5010 are many, but perhaps the most important one is that delayed compliance could affect a hospital's bottom line. If hospitals don't start planning now, they could see delayed payments, or—worse yet—no payments once the compliance deadline rolls around, says Pam Matthews, CPHIMS, FHIMSS, senior director, Healthcare Information Systems for HIMSS in Atlanta.

More than 99% of Medicare Part A claims and more than 95% of Medicare Part B claims are received electronically, according to CMS. Version 5010 will enable payment for these claims to occur once the industry moves to ICD-10.

CMS released special edition Medlearn Matters article SE0904 that provides an introductory overview of HIPAA 5010 and states, "The implementation will require changes to the software, systems, and perhaps procedures that you use for billing Medicare and other payers. So it is extremely important that you are aware of these HIPAA changes and plan for their implementation."

HIPAA requires HHS to adopt standards that covered entities (e.g., health plans, healthcare clearinghouses, and certain healthcare providers) must use when they electronically conduct certain healthcare administrative transactions, such as claims, remittance, eligibility, claims status requests and responses, and others. The Transactions and Code Sets final rule published on August 17, 2000 adopted standards for the statutorily identified transactions, some of which were modified in a subsequent final rule published on February 20, 2003. The industry has been using Version 4010 for healthcare transactions since then; however, HHS announced a final rule on January 16 that requires a transition to Version 5010.

One of the most important steps a hospital can take now to ensure compliance is to initiate conversations about 5010 with billing or EMR vendors as well as larger payers. Failure to comply with the 2012 deadline could result in a major data flow disruption regardless of whether the noncompliance stems from the payer, software clearinghouse, billing vendor, or software vendor because they each play an important role in the overall payment process, Matthews says.


Lisa Eramo, CPC is a senior managing editor in the health information management division of HCPro, Inc. She is located in Rhode Island and writes content for the company's flagship newsletter, Medical Records Briefing. Contact her at leramo@hcpro.com.

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