Health Information Management

Know the HIM director's role in shift to HIPAA 5010

JustCoding News: Inpatient, September 30, 2009

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Editor’s note: This article is the second of a two-part series about HIPAA 5010. Part one provided an overview of the timeline. Part two explains the role of the HIM director during the transition.

A hospital’s information technology project list is likely exponential.

Convert to an electronic health record (EHR), transition to HIPAA 5010, coordinate vendor and health plan testing, train staff members on new technology, prove meaningful use, and qualify for incentive payments under the American Recovery and Reinvestment Act of 2009 (ARRA).

It’s enough to make anyone’s head spin.

“Institutions are being forced to downsize and limit their scope in today’s economy. Never has so much needed to be done with so few resources,” says Dan Rode, MBA, CHPS, FHFMA, vice president of policy and government relations at the American Health Information Management Association (AHIMA) in Washington, DC.

The transition to HIPAA 5010 is perhaps the most pressing issue, because its compliance deadline is less than 18 months away. Providers must be ready to submit claims electronically using the upgraded HIPAA standards by January 1, 2012, preceding the ICD-10 deadline of October 1, 2013 by nearly two years. There is no contingency period for HIPAA 5010. Providers who don’t make the transition risk significant delays in claims payment.

Access ICD-10 Watch to learn more about this monumental transition.

“These new standards provide a uniform set of procedures that allow you to take information from an applications program in your institution and send it as a transaction to another institution—referred to as a trading partner,” Rode says.

Most trading partner activity occurs between providers and health plans, he says. Examples of these transactions include claims, remittance advices, and eligibility inquiries.

The X12 Version 5010 and the National Council for Prescription Drug Programs Version D.0 standards will incorporate more than 500 change requests, resolve ambiguities in situational rules, and provide more consistency across transactions, said Kyle Miller, health insurance specialist at the Office of E-Health Standards Services of CMS, during a June 9 national provider education call.

During the call, the agency provided an overview of the updated national standard for billing software and answered questions posed by providers, vendors, and other HIM technology professionals.

In some cases, Version 5010 will also include new data element requirements, said Chris Stahlecker, director of CMS’ Division of Medicare Billing Procedures, during the call.

“Everyone should realize that the software used today to produce the [electronic data interchange] transactions must be modified to exchange the new formats,” Stahlecker said. “In addition, you may discover that your business processes may need to be changed.”

CMS has compared the current and new formats hospitals can use to perform a gap analysis and evaluate the effect on routine operations. Access this comparison.

Medicare administrative contractors (MAC) must be ready to use 5010 by January 1, 2011, Stahlecker said, noting that this gives providers a full year to coordinate testing efforts.

The Medicare fee for service implementation of 5010 will include:

  • Improved claims receipt, control, and balancing procedures
  • Increased consistency of claims editing and error handling
  • Improved efficiency for returning claims needing correction earlier in the process
  • Improved assignment of claim numbers closer to the time of receipt

Implementation will increase field size for ICD-10 codes from five to seven bytes. It also will add a one-digit version indicator to the ICD code to differentiate between versions 9 and 10. Finally, it increases the number of diagnosis codes allowed on a claim from eight to 12 for professional claims (837-P), Stahlecker said.

What is the HIM director’s role in this process? Raise awareness at the C-suite level now—particularly with respect to budgeting and the relationship between HIPAA 5010 and ICD-10, says Elaine Lips, RHIA, president and CEO of ELIPSe, Inc., in Los Angeles. HIPAA 5010 and ICD-10 may challenge a hospital’s financial and resource allocation priorities for ARRA qualification, Lips says.

Hospitals researching EHR incentive funds available pursuant to the ARRA must remember that systems purchased now must be capable of supporting HIPAA 5010 and ICD-10 when they become effective, says Stanley Nachimson, principal of Nachimson Advisors in Reisterstown, MD.

“Any new software purchase must meet 5010 and ICD-10 requirements according to the deadlines that have been established,” Rode adds. “Nobody should be buying a product from a vendor that cannot do this.” Directors should incorporate HIPAA 5010 and ICD-10 into any EHR vendor requests for proposals, he says.

HIM directors should use the following tips to ensure a smooth transition:

Ask your vendor to articulate its plans for HIPAA 5010 implementation. Send each vendor a letter that requests an explanation of its implementation plans, Lips says.

“There are lots of vendors out there, and some of them probably aren’t going to make it through this change,” Rode says.

Request a specific timeline. “Assess the response to find out where you are in the pecking order and where the deployment activity falls in the calendar from your vendor’s perspective,” Stahlecker said.

Contact systems vendors immediately and specifically inquire whether your licensing agreement includes regulatory updates, Stahlecker said. “If it does, you may have a shorter path toward your implementation, but if it does not, you may have a longer procurement path to follow,” she said.

Providers should also inquire whether any potential upgrades include acknowledgement transactions 277CA and 999 and a ‘readable’ error report produced by those transactions, Stahlecker said.

Consider all systems that rely on HIM databases. You must update and test coding and abstracting systems during the HIPAA 5010 compliance phase, Lips says. Do the same for other clinical databases, reporting systems, and decision support systems that currently rely on ICD-9 code information from HIM databases, she says.

Begin external testing as soon as possible. “Hospitals can deal with 50–75, or even 100, health plans easily, so they need to test with each plan to make sure it’s working correctly,” Nachimson says.

If Medicare isn’t your primary payer, begin the testing process with the primary payer for your organization, Stahlecker advised.

Lobby your state HIM association and healthcare trade associations to advocate for coordinated testing between providers, payers, and health plans, Rode says.

Begin internal testing as soon as possible. Note interdepartmental transactions during which ICD-9 codes move back and forth between databases, Lips says. Testing must include these transactions and ensure that codes are correctly placed on the claim, she explains.

Establish a testing time frame. This will depend largely on the number of software vendors and interfaces your organization uses, Lips says. Allow sufficient time for internal and external trading partners. “I’m sure the larger vendors may be ready, but if you have disparate systems, how are you going to coordinate all of this?” she says.

Coordinating the simultaneous implementation of HIPAA 5010 and an EHR may be challenging, and some hospitals may place greater emphasis on the latter to qualify for incentives as soon as possible, Rode says. “The HIM director is going to have to work with other members of the institutional staff to coordinate all of these programs and still meet the deadlines,” he says.

Delegate responsibilities. Establishing a readiness team consisting of smaller groups assigned to perform specific tasks is essential, Lips says. These subgroups should address managed care contracting, integration, budgeting, education, training, and any other areas identified during gap analysis, she says. For example, you might include upgrades and proposal requests. This is necessary regardless of whether EHR and ICD-10 implementation occur simultaneously.

Determine potential effect of HIPAA 5010 on work flow. The new transaction code set will facilitate greater administrative efficiency automation, so staff members may have time for additional responsibilities, Nachimson says.

For example, payment reconciliation will be automatic with HIPAA 5010, and the eligibility transaction set will provide more detailed eligibility information. This will make determining an individual’s eligibility for a health plan or specific procedures easier, Nachimson says.

“By using the eligibility standards, we’ll be able to make the whole claims process smoother, and I think quite frankly, it will make life easier on the HIM department,” Rode says. Business offices and patient accounting departments will certainly feel the effects, adds Rode.

Understand the MAC certification process. MACs must undergo a certification process with CMS-developed criteria by December 31, 2010, to accommodate the 2011 compliance deadline, Stahlecker said.

“Although we have multiple MACs with individual systems, we want each one to perform as if it were a virtual single system,” she said. “No matter which MAC you are exchanging transactions with, you should experience very similar processing results with limited local variation.”

CMS will post a list of vendors who have completed 5010 format testing on every MAC Web site.

HIPAA 5010 resources

CMS and the ASC X12 Accredited Standards Committee offer several resources to assist with HIPAA 5010 implementation:

Editor’s note: This story was published in the September issue of Medical Records Briefing.



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