5010 Planning and Implementation: The Time for Action Is Now

Health care payers and providers contemplating their approach to phasing in ASC X12 5010 standards as required by the Health Insurance Portability and Accountability Act (HIPAA) may think that they have plenty of time between now and the Jan. 1, 2012, compliance date. However, they may be in for a rude awakening, according to Larry Watkins, managing consultant at Ingenix Consulting.

“There is a misconception that the 2012 date is what payers and providers should focus on,” Watkins said. "While the implementation deadline seems distant, these organizations can’t be complacent. Their first 5010 deadline is much earlier,” he said, referring to benchmarks that must be met in 2010 and 2011.

“By Dec. 31, 2010, payers and providers must have completed the first level of testing,” he explained. “To meet this deadline, payers and providers really must begin their 5010 design build today and conduct internal testing throughout 2010. Once these organizations realize that Level Two testing must be completed by the end of 2011, the final compliance dates don’t appear to be so far away.”

Many in the industry also may be somewhat confused about the actual scope of the 5010 transition and what plans will be required to ensure a smooth transition, Watkins noted. “Those who view the 5010 transition as a simple mapping change or upgrade are underestimating the requirements and could be blindsided when they see what really needs to be done,” he said.

Efforts to get the 5010 transition wheels in motion also should take into account another deadline – the Oct. 1, 2013, compliance date for ICD-10 codes – so that payers’ and providers’ overall strategies for both implementations are efficient and eliminate redundancies and re-work.

Uncertainty is a barrier to 5010 transition

A number of market barriers may be contributing to the industry’s slowness to take action on the 5010 standards, Watkins suggested. These barriers include:

• Other regulatory initiatives such as ICD-10
• Pending health care reform legislation
• A difficult economy
• Uncertainty about enforcement
• Questions about their trading partners implementation activities

“Stakeholders need to understand that compliance with 5010 is not a stand-alone regulatory matter. Implementing 5010 standards is essential for much of what the federal government seeks to accomplish in health care.” Watkins said. Specifically, the 5010 standards automate labor- and cost-intensive activities, such as eligibility, claims status, referral authorizations and remittance advice, and save billions of dollars over a period of years.

Further, it appears increasingly likely that the Centers for Medicare & Medicaid Services will implement stricter enforcement of the standards to promote both compliance with the 5010 standards and overall program savings. “Indeed, the Senate bill includes language about ‘tightening up’ HIPAA standards, which indicates that there’s a desire in Washington to see enhanced compliance with these standards,” Watkins asserted.

Another sign that the federal government may step-up enforcement is the current level of 5010 preparedness within the Medicare program. “Medicare has been meeting its own internal deadlines for 5010 compliance. If Medicare is ready, industry really has no excuse to be unprepared,” he said.

Providers and payers may be reluctant to develop a 5010 implementation plan either because they are looking to their vendors to handle the issue for them or because they do not want to make significant investments in the 5010 standards transition if their trading partners are not making similar investments. However, “in this climate and with these time constraints, providers and payers really can’t wait to act until they see what their trading partners are doing,” he added.

Preparing for 5010: A step-by-step approach

In a white paper issued six months ago, the Health Care Information and Management Systems Society (HIMSS) stated, “organizations should begin immediately in planning for Version 5010 implementation in order to facilitate a positive impact of this initiative.”¹

According to Watson, the first phase of implementation – business readiness development – should involve the following action steps:

• Understand
• The status of electronic data interchange (EDI) and internal weaknesses
• Who the key players are
• What the need is for 5010 training across the organization

• Identify
• Impacted processes
• Systems
• Roles and plans of vendors

• Plan
• Develop a strategic plan for implementing the transition.

“Organizations really must have their strategic plan in place by the end of this year, and certainly no later than the first quarter of 2010,” he indicated. “Understanding the business impacts is significant, not only because doing so helps entities to lay out their plans, but also because that step helps make executives aware that the initiative is not just an IT issue, that it is broad in scope and that it will take planning and resources to achieve implementation goals.”

The program implementation phase will involve upgrading systems and building necessary process changes; testing the system and various transactions to ensure that what works for 5010 does not break another process; migrating with trading partners to the new standards on an established schedule; and validating each possible scenario. After these tasks are completed, monitoring compliance and controlling changes also are important, Watkins added.

Organizations can make up lost time with external help

Providers and payers that have not yet started their 5010 transition planning or that are having trouble developing their strategies should look to outside experts to help them “make up for lost time,” said Watkins.

Ingenix Consulting can help organizations complete a full assessment of 5010 business impacts and can offer solutions to facilitate compliance. These include Ingenix Claredi® Classic, the industry-leading 5010 testing and certification solution; Faciledi®, a flexible in-stream validation and routing system for all HIPAA X12 health care transactions; and Transaction Manager and Connectivity Director, which optimize direct transaction exchange for providers and payers respectively.

These services – in addition to Ingenix staff expertise and the company’s first-hand experience in electronically handling high-volume coding and billions of transactions – can help organizations to jump-start their 5010 efforts and dovetail those efforts with ICD-10 plans. To support all health care entities with the 5010 implementation, the company – which has made 5010 solutions available for more than a year – also has created a dedicated resource Web site: www.5010prepared.com.

“Both 5010 and ICD-10 are opportunities for the industry to embrace standards that will serve as the backbone for other electronic initiatives that will advance health care. Approaching them with an integrated strategy makes sense for multiple reasons,” Watkins concluded. “Because Ingenix understands the standards’ details inside and out and can customize a strategy for an individual environment, it can help organizations do the job once and do it right.”  

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