5010 Logjam Means No Pay for Physicians

A strange thing is happening as physician practices transition toward HIPAA version 5010 electronic transactions.

Docs aren't getting paid.

Physicians are flooding their advocacy groups with complaints and questions about "cash flow problems." One physician broke down in tears about his inability to pay his staff.

"We haven't seen anything like this before," said Robert Tennant, MA, senior policy advisory at MGMA, referring to the emails from distraught doctors.

The problems have intensified over the past month. Since the mandated transition to HIPAA Version 5010 began Jan. 1, data disruptions, unforeseen rejections of claims, and improper mailings because of address issues have stopped docs from getting paid.  

Beyond that, communication snafus with clearinghouses and secondary payers have been a problem. The bottom line: These issues and more are resulting in payments not making it to physician offices, according to MGMA.

While the number of physicians impacted, has not been specified, it is likely in the thousands. A flurry of meetings and emails between the Centers for Medicare & Medicaid Services and physician groups is underway, but authorities don't expect any resolution to the issues for weeks.

Problems have been reported with both Medicare administrative contracts and commercial plans.  Some physicians have resorted to taking out lines of credit simply to meet payroll and other expenses. No one seems to be able to pinpoint specific reasons for the cash flow problems.

American Medical Association President Peter W. Carmel tells HealthLeaders Media that over the five weeks since the 5010 standard was implemented, physicians have been "experiencing very alarming problems that have resulted in significant interruptions in claims processing and cash flow."  As a result, more postponements should be made for any enforcement deadline of the HIPAA Version 5010, he says.

Recently, CMS's Office of E-Health Standards and Services (OESS) announced a 90-day period of "enforcement discretion" for compliance with the new 5010 HIPAA transaction standards. CMS extended the 5010 compliance deadline to March 2012 to allow more physician practices the opportunity to implement the new billing-coding standard without incurring penalties.

When asked about the payment issues and the CMS 5010 enforcement deadline, Carmel says: "The AMA fully expects that another extension to the 5010 enforcement deadline will be needed to resolve the emerging issues. We are reviewing timeline recommendations for an extension, but it is clear that no enforcement action should be taken until the vast majority of physicians are being paid in a timely manner under the 5010 standard."

"These problems are particularly troubling since cash-strapped physicians are burdened with meeting several other government requirements, including quality reporting, e-prescribing, meaningful use, and of course, ICD-10," Carmel adds.

Specifically, MGMA has called for an extension of the enforcement delay from March 1, 2012 to June 1, 2012.  In a letter to HHS Secretary Kathleen Sebelius, MGMA has recommended to instruct MACs (Medicare Administrative Contractors) to "immediately" provide advance payments for physician practices that are struggling to meet the Version 5010.

Moreover, HHS was asked to permit clearinghouses and health plans to accept and adjudicate Version 5010 claims that do not have all the required data content, and instruct the MACs to expeditiously adjudicate all outstanding claims.

Physician groups say that the government needs to take prompt action because physician practices may eventually face delayed revenue and operational difficulties, reduced ability to treat patients, or even the prospect of closing practices. MGMA officials have not specified any specific impacts from the situation.

The situation highlights the delicate balance of uncertainties between government mandates and private physician groups.  It spotlights the issue of the fragile, and possibly tentative steps needed to enforce new deadlines. Physician groups also raise concerns about the moves toward ICD-10, considering that the magnitude of that mandate is even greater than Version 5010's reach.

"It's clear that problems will not be resolved overnight," Carmel said this week.

Many physicians report not having been paid by Medicare or TRICARE since November 2011, as a result of the Version 5010 issues, according to the letter sent by MGMA President and CEO Susan Turney, MD, MS, FACP, FACMPE, to Sebelius.

As for CMS, it has little to say publicly on the issue. "HHS has a correspondence response process and CMS will be contributing to development of HHS's response," says Joe Kuchler, a spokesman for CMS, referring to a letter from MGMA. "In the meantime, MGMA's letter is considered open correspondence and we can't comment on specific issues."

While practices have contacted their MACs to receive clarification on the reason for rejected claims, they are provided with little to no information beyond a vague explanation that problems must "lie with your clearinghouse," according to Turney's letter.

Oddly enough, some practices are taking drastic action to try to circumvent the cash flow problems with electronic records. They are reverting to paper claims, Tennant says. "If they have to drop back to paper, we don't recommend it, but if that's the only way to get paid, they may have to take that step," he says. Eventually, however, paperwork may eventually lead to a further backlog of claims, and potential delays in payment.

Tennant says MGMA is recommending that physicians take their cases, if necessary, directly to CMS. "The more complaints CMS hears, the more chance they will take action," he says.