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Preparing Your Anesthesia Practice for the 5010 Electronic Transactions Standard

PREPARING YOUR ANESTHESIA PRACTICE FOR THE 5010 ELETRONIC TRANSACTIONS STANDARD

April 18, 2011

Billing managers and IT staff for anesthesia practices should be in the middle phases of testing their systems’ ability to process claims under the new “5010” electronic transaction standard – as we are at ABC. This Alert is for readers who need a basic familiarity with the 5010, in time for the compliance deadline, i.e., January 1, 2012.

Pursuant to the “Administrative Simplification” section of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, the Centers for Medicare and Medicaid Services (CMS) adopted versions 4010 and 4010A of the Accredited Standards Committee X12 standard for certain health care transactions conducted electronically. Further HIPAA regulations, published on January 16, 2009, replaced the current versions of the standards with Version 5010. This change requires updates and upgrades to the following HIPAA-mandated formats:

  • Professional Claims (837)
  • Remittance Advice (835)
  • Claims Status Inquiry/Response (276/277), and
  • Eligibility Inquiry/Response (270/271).

Three additional formats for “Transaction,” “Functional” and “Claims” acknowledgements will also become mandatory on January 1st.

Anticipated Benefits of the 5010

Since the introduction of the 4010 in 2000, the ASC X12 Committee has been at work identifying technical issues, accommodating new business needs and removing inconsistencies in the standard. The new standard is intended to implement these improvements, to reduce the number of ambiguities in the implementation guides and to remove unused content from the 4010 format.

Particularly important are the modifications required by the 5010 that are a prerequisite to the move from ICD-9 to ICD-10 coding.

Transition to ICD-10

A second regulation published by CMS on January 16, 2009 replaced the ICD-9-CM (Clinical Modification) code set with the expanded ICD-10-CM and ICD-10-PCS (Procedural Coding System). Beginning on October 1, 2013, anesthesiologists and other providers will need to report diagnoses using ICD-10-CM.

ICD-10-PCS will affect anesthesiologists only indirectly. While hospitals will transition to ICD-10-PCS from the procedure coding system in ICD-9-CM Volume 3, physicians will continue to report their professional services using CPT® (Current Procedural Terminology) codes.

ICD-10-CM will allow greater accuracy and specificity in coding diagnoses. The number of diagnosis codes will increase from about 13,000 to 68,000 codes, 3 to 7 characters in length, with the flexibility to add even more codes. In addition to laterality, it will be possible to indicate such detail as family relationships, screening test results, lifestyle issues and ambulatory care conditions using the ICD-10-CM diagnosis codes.

Adjusting to this greater level of detail will require some updating of business and workflow processes, but overall physicians and administrative staff will follow the same approach as they do now in determining the appropriate diagnoses codes to assign. The American Society of Anesthesiologists and other organizations plan to publish extensive information on the changes needed as we get closer to the ICD-10 implementation date,

Steps to Take Now

ABC is continuing to analyze and test our systems that submit claims, receive remittances and handle claim status or eligibility inquiries to determine what modifications Version 5010 will require. We recommend that all anesthesia practices do likewise, in-house or through their billing companies. Data collection and other workflow processes should be reviewed to ensure that new information mandated by the 5010, such as a street address and not just a post office box for the billing provider, will be available.

For most anesthesia groups, the key task will be to work with your billing company or billing system software vendor to make sure that they will be fully compliant with the 5010 standard by January 1, 2012. ABC is engaged in this process with clients and will be ready before the deadline. Others should know by now whether your current software requires updating, and if so, whether there will be additional costs. Ultimate readiness assumes satisfactory testing of claims submission between your billing system and/or service, your Medicare Administrative Contractor (MAC) or fiscal intermediary, your clearinghouse and your major health plans. When will the testing happen, and when will it be complete?

There is a great deal of information available on the 5010. A good place to check is with your MAC, which should be engaged in physician outreach and education. The CMS website contains the authoritative documents and guidance (https://www.cms.gov/Versions5010andD0/ ), and the American Medical Association has posted numerous well-organized resources on its site www.ama-assn.org/go/5010 .

The varied needs and characteristics of our 10,000-plus readers preclude us from setting forth an implementation plan with sufficient detail to be useful to any but our own clients. We urge everyone to formulate a workable implementation program and timetable that includes training and a contingency plan in case there is a disruption in cash flow early next year. We hope that there will not be any such cash flow or other disruptions. Send us your questions, as we advance toward the cutover date, and we will try to give you the answers that will ensure a smooth transition.

With best wishes,

Tony Mira
President and CEO