5010 Deadline Extended, But Threat Remains, Says AMA

CMS' Office of E-Health Standards and Services (OESS) has announced a 90-day period of "enforcement discretion" for compliance with the new 5010 HIPAA transaction standards, but leading professional organizations say that is not enough.

Expressing serious concerns about the ability of physician practices and payers to make the conversion to the 5010 electronic transaction standards and ICD-10 (a new code set for medical diagnoses) in time, both MGMA and the AMA are calling for change. The two agencies say that the government needs to form a comprehensive contingency plan permitting health plans to adjudicate claims that may not have all the required data content, or the government needs to call an outright halt to the transition.

CMS has extended the 5010 compliance deadline to March 31, 2012. OESS announced that it is delaying compliance enforcement in order to allow more physician practices the opportunity to implement the new billing coding standard without incurring penalties. The 90-day delay did not affect the implementation date for the coding systems, which took effect January 1, 2012 (January 1, 2013, for small health plans).

"Industry feedback played a major role in the decision to push back the compliance date," OESS said. "It was found that many covered entities are still awaiting software updates and were unable to meet the short deadline."

While enforcement action will not be taken through March, OESS will continue to accept complaints associated with compliance with Version 5010, National Council for Prescription Drug Programs (NCPDP) D.0, and NCPDP 3.0 transaction standards during the 90-day period beginning January 1, 2012. If requested by OESS, covered entities that are the subject of complaints (known as "filed-against entities") must produce evidence of either compliance or a good-faith effort to become compliant with the new HIPAA standards during the 90-day period.

MGMA's research suggests that the critical coordination among many practices and their trading partners to attain 5010 compliance has not yet occurred, says Susan Turney, MD, MS, FACP, FACMPE, MGMA president and CEO. "In particular, the study results highlight the fact that external testing with health plans is significantly delayed," Turney says. "It is imperative that HHS take immediate steps to ensure that practice operations are not compromised due to cash flow disruption."

Below are some key findings of the MGMA study: 

• Practice management system software ­vendors. Only about three-quarters (76.8%) of study respondents have heard from the practice management system software vendors regarding the transition to 5010, and only 35% of respondents indicate that internal testing has begun. Almost one-quarter (21.7%) of respondents report that internal testing with their practice management system vendor has not yet been scheduled.
• Health plans. Just 5.7% of respondents indicate that all their major health plans have contacted them, and just 35% of respondents report that some of their major health plans have contacted them. Only 15% of those surveyed report that external testing has started with all of their major health plans, and 15.3% report that testing has started with some of their major health plans. Twenty-seven percent report that external testing has not yet been scheduled.
• Contingency plans. Physician practices were asked about their contingency plans following the January 1 compliance date. A third (33.3%) expect to establish a line of credit at a local financial institution; 35.6% are planning on setting aside cash reserves to sustain operations, and more than half (50.6%) report that they plan to revert to paper claims in an attempt to avoid cash flow issues.
• Current implementation status. Just 4.5% of surveyed practices rate their 5010 ­implementation ­status as fully complete, 50% rate it as between 26% and 99% complete, and 40% report their current implementation status as less than onequarter complete.

"It is unacceptable to expect physician practices to take such drastic action, such as reverting to paper claims, to avoid serious cash flow issues resulting from this mandate," Turney says. "The shift in the industry to electronic transactions in recent years could amplify the problem. Many health plans have transitioned staff away from handling paper claims, and we are concerned that a sudden, large increase in volume could also result in delayed payments."

ICD-10 also is worrying the AMA. Delegates from the AMA during the closing session of its semiannual policymaking meeting voted to "work vigorously to stop implementation of ICD-10." ICD-10 has about 69,000 codes and will replace the 14,000 ICD-9 diagnosis codes currently in use.

"The implementation of ICD-10 will create significant burdens on the practice of medicine with no direct benefit to individual patients' care," says AMA President Peter W. Carmel. "At a time when we are working to get the best value possible for our healthcare dollar, this massive and expensive undertaking will add administrative expense and create unnecessary work flow disruptions. The timing could not be worse as many physicians are working to implement electronic health records into their practices."

Carmel notes that a 2008 study found that a small three-physician practice would need to spend $83,290 to implement ICD-10, and a 10-physician practice would spend $285,195 to make the coding change.