New HIPAA Billing Rule Goes Live at Start of 2012

Physicians who use electronic billing will need to convert to new standards—known as HIPAA 5010—by January 1, 2012, or risk not receiving payments from Medicare and private insurers.

Standards for electronic billing were mandated as part of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, but the original standards—known as the 4010 set—have since been deemed deficient. In January 2009, the federal Centers for Medicare and Medicaid Services (CMS) issued a rule that mandated the eventual use of the new 5010 standards.

The new standards demand more specificity in what data must be entered and transmitted and should make the claims process more efficient and reduce the need to refile claims because of errors and confusion.

In January 2009, the Bush administration approved a rule, advocated by the AMA and others, that moved the HIPAA 5010 effective date from April 1, 2010, to January 1, 2012.

AMA President Cecil Wilson, M.D., urged physicians who use electronic billing to prepare for the transition to the new standards. "Understanding how the move to the newest version of the federal electronic transactions standards will affect a medical practice may seem overwhelming," he said in a prepared statement. "But it is important, and not too late, to get started in order to avoid significant disruptions to patient care and claims payments."

CMS has issued a checklist that physicians can use to transition to the new standards that includes questions that they will need to ask vendors, clearinghouses, billing services, and payers. Included in the checklist are the following items for physicians to consider:

• Engage vendors early. Software vendors are not responsible for compliance, but they are critical to provider compliance.

• Communicate with clearinghouses and payers. Contact clearinghouses, billing services, and insurance payers early to learn about their plans for implementation.

• Identify changes in requirements for data reporting. Such changes may require collection of additional information or reporting it in a different format. For example, under the new standards, the billing physician can no longer be reported as a P.O. box or lock-box address.

• Identify possible changes to workflow and business practices. Once data-reporting changes have been identified, workflow modifications may be necessary.

• Train staff. Training staff ensures that transactions will be submitted, received, interpreted, and responded to correctly.

• Testing with partners. The final step for a physician going "live" with the new standards will be to complete testing with his or her trading partners. Trading partners are the organizations physicians use to exchange transactions.

The complete checklist is posted at <www.cms.gov/Versions5010andD0/downloads/w5010PvdrActionChklst.pdf>.