White Paper Contents:

Executive Summary
ICD-10 History
ICD-9-CM Limitations
ICD-10 Specifics
ICD-10 Documentation
Impact of ICD-10
Successful ICD-10 Transition

WHITE PAPER

It is not a secret that January 1, 2012 will usher in a huge change to healthcare. Once HIPAA Version 5010 is fully enacted throughout the industry, practices will need to ensure their claims are delivered to payers based on the new transaction standards—or risk losing proper reimbursement for services rendered. Although a majority of the necessary changes associated with HIPAA 5010 will be handled by technology vendors, a few major updates to claims submission must be handled directly by each medical practice in the nation. Specifically, practices will have to ensure they are prepared for the new billing provider address and zip code requirements.

As the deadline for 5010 looms near, more and more medical practices are beginning to review exactly what these two changes mean to their claims submission processes. Here is a clarification, plus some suggestions to help practices prepare: 

• Billing Provider Address: Once HIPAA 5010 is implemented with a payer, each medical practice must report a physical street address in the Provider Billing address field. Medical practices that wish to have payments delivered to a PO Box (or any address other than the Provider Billing address) can report that address in the Pay-To address field. While a PO Box address cannot be used as the practice’s street address, the PO Box may still be used for other claim addresses, such as a payer or patient address.

• Nine-Digit Zip Codes: Once HIPAA 5010 is implemented, a nine-digit zip code must be reported in the practice’s Billing Provider and Service Facility Location address fields. You can continue to use a five-digit zip code for the practice’s Pay-To Address, the Subscriber, the Patient, the Payer and all other addresses on the claim. To be prepared, review the zip code values you currently have set up for your practice street and all service facility addresses to be sure they are valid nine-digit zip codes. If you are unsure what your nine-digit zip is, verify with the USPS at www.usps.com.

Although there are a number of changes that will occur with the transition, these two will impact most medical practices and cannot be handled exclusively by technology vendors. Don’t leave your revenue to chance – make sure your practice prepares for these changes long before HIPAA 5010 is enacted. 

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By Ken Bradley, Vice President of Strategic Planning, Navicure in Atlanta

An important step in preparing for the transition to HIPAA Version 5010 is understanding the purpose behind the new standard. For years, the healthcare industry has engaged in claims filing, payment posting, eligibility verification and other vital revenue-cycle management functions with a less-than-perfect standard “language” of communication. This has yielded inefficient processes and a lack of consistency among healthcare organizations. Version 5010 offers an improved standard language with the intent of supporting effective and efficient communication among healthcare entities.

Before the benefits of this improved standardization can be realized, however, the entire healthcare industry —including payers and providers — must adopt the new standard on Jan. 1, 2012. While the journey to Version 5010 implementation will be different for every practice, there are some common activities in which all practices should engage in to support an effective transition:

• Creating an implementation planWorking with health information technology (HIT) vendors, billing services and clearinghouses to determine what steps need to be taken to make the transition to Version 5010
• Obtaining testing schedules from all HIT vendors and devoting staff time and resources to testing efforts
• Updating all necessary HIT software to recognize Version 5010
• Training staff on the transition to Version 5010, with special emphasis on billing staff
• Testing internal procedures and troubleshooting
• Communicating with major payers directly about their Version 5010 plans
• Testing your Version 5010 transactions with Medicare and your other major payers
• Monitoring operational data files to ensure solutions are working properly

A key component on this checklist is ensuring that your practice management and billing system software will be Version 5010 compliant by the implementation date. Practices that do not do this could experience claim rejections and significant disruptions in their cash flow. Practices can verify that their HIT vendors are prepared for the transition by asking:

• When will you be ready to transition to Version 5010?
• Will you be able to handle both Version 4010 and Version 5010 transactions?
• Will there be any software updates? If so, will there be a cost associated with them?
• When can my practice participate in testing with clearinghouses and payors?
• What tools and services will you offer to ensure no interruption to cash flow during the transition period?

In addition to increased standardization, Version 5010 also serves as a critical step in preparing for the transition to ICD-10, which is scheduled to occur in October 2013. Without a successful Version 5010 conversion, practices will not be able to move to ICD-10 because Version 4010 will not support the new codes. This underscores the importance of a systematic Version 5010 preparation process that involves both HIT vendors and payers.

Note: MGMA does not endorse any solutions put forth in this column. We encourage readers to explore all Version 5010/ICD-10 requirements and recommendations.

AAP’s Practice Management Online (membership required)
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Ohio Chapter of the AAP
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Indiana Chapter of the AAP
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