HIPAA 5010 Implementation for Medical Billing

HIPAA 5010 was adopted to replace the current version of the standard that covered entities must use when conducting electronic transactions. Version 4010 is currently being used under HIPAA standards.

Although HIPAA version 5010 gets much less attention than ICD-10 medical codes,it is just as important and physicians, medical practices and other health providers, should already be working with vendors on the version 5010 implementation.

Testing with external trading partners began in January of 2011. It is very important that you test as early as you can and often.

Here are some important 5010 compliance testing dates to be aware of:

  • January 1, 2011 Level I compliance-ability to process 5010 transactions for testing and transition with able trading partners
  • January 1, 2012 Level II compliance-all covered entities must begin using 5010 transactions

Simply put, transactions are electronics exchanges involving the transfer of health care information between two parties for specific purposes, such as a health care provider submitting medical claims to a health plan for payment. The Health Insurance Portability & Accountability Act of 1996 (HIPAA) named certain types of organizations as covered entities, including health plans, health care clearinghouses and certain health care providers. HIPAA adopted certain standard transactions for Electronic Data Interchange (EDI) for the transmission of health care data, as well. These transactions include, but not limited to:

  • claims and encounter information
  • payment and remittance advice
  • claims status
  • eligibility
  • enrollment and disenrollment
  • referrals and authorizations

Unlike the current 4010 transaction standard, version 5010 is more specific in the type of data it collects and transmits over the course of a transaction. 5010 also has clear situational rules built in which will help enhance the understanding of claim corrections, reversals, recoupment of payments and the processing of refunds.

For example, HIPAA 5010 will increase the diagnostic field size to accommodate the increased size of ICD-10 codes. Some other changes include:

  • a version indicator that distinguishes between ICD-9 and ICD-10 codes
  • format changes that will increase the number of diagnosis codes allowed on a claim

Interestingly, the 5010 format does not require the use of ICD-10 codes. However, it will be able to recognize and distinguish between the ICD-9 and ICD-10 medical code sets, which may help in a future with dilemmas of billing utilizing the dual code sets.

All health providers have to establish steps for preparing for 5010 Implementation and it might include the following:

  • Software must be modified to produce and exchange the new formats (e.g. trading partners must be able to read incoming 277CA transactions).
  • Review business processes to ensure changes are not necessary to capture additional data elements not previously required (e.g. Impact of patient registration, billing, and claim reconciliation).
  • Contact your vendor and/or clearinghouse to ensure products and processes are updated (e.g. license includes regulation updates, and will the upgrade include acknowledgement transactions 277A & 999).
  • Trading Partners should contact their local Medicare-Fee-For-Service contractor (MAC) for specific testing schedules.