by: Lauren C. Williams Published May 14, 2012

You have less than two months until your private payers and CMS stop accepting non-compliant HIPAA 5010 claims. Maintain cash flow and prove your practice is 5010-ready by the June 30 enforcement deadline with documented communication from your payers and clearinghouses.

While you could face fines up to $100,000 a year for failing to send claims in the 5010 format by June 30, the real penalty to providers would be not getting paid for several months, says Robert Tennant, senior policy advisor for the Medical Group Management Association in Washington, D.C.

CMS has shown little interest thus far in going after HIPAA-covered entities – payers, clearinghouses and providers – but all providers must be prepared to present evidence that they took steps to switch to 5010. Use these tips to document your practice’s steps in converting to 5010:

Have letters from payers approving you for 5010 production. Gather communication from your payers, vendors and clearinghouses that says you have passed testing and are approved for production, says Stanley Nachimson, a former CMS technology expert who now runs a consulting firm in Reisterstown, Md.

Compile notes about practice management system (PMS) vendor issues that keep your practice from sending 5010 claims by June 30. That includes notes from phone conversations with your vendor and email and mail notifications showing the vendor or software-based issues inhibiting compliance, Nachimson says. Be thorough because you could be penalized if those documents don’t justify to CMS a “significant effort” – not waiting until the last minute – to switch to 5010.

Use your PMS vendor certification letter to prove that you can send claims in 5010, even if your clearinghouse can’t. You’re in the clear as long as you can send claims to your clearinghouses and payers in the 5010 format even though the discretionary delay allows them to accept and send paper and 4010 claims, Nachimson says. Figure out what they can accept and send claims in that format, even paper, if necessary, Tennant says. However, you should not contract with a clearinghouse that is downgrading claims come July 1, Nachimson advises.

Document a decision to change clearinghouses or PMS vendors and the corrective action taken. Switching from vendors or clearinghouses that aren’t 5010-ready is a way to ensure your practice gets paid after June 30, if you’re sure that those entities caused the problem, experts say. Collect communication between your practice and the faulty clearinghouse, such as 277CA and 999 claims status responses, that pinpoint its inability to comply with 5010, Tennant says. Note all steps your practice took to switch vendors or clearinghouses, including any dated communication in which you ended the contract and started a new one. File a complaint against a clearinghouse, vendor or payer if you find the issues lay with them but only after you’ve investigated the problem holding up your 5010 claims, Tennant says.

Ask your clearinghouse and payers whether you’re sending non-compliant claims that aren’t getting rejected, and then document the response.Your payer is required by law to reject claims that don’t comply with 5010 standards after June 30, Tennant says. But because payers want to get claims paid quickly, they accept non-compliant claims during the discretionary enforcement period, possibly leading you to believe falsely that your claims are compliant. But, no set of standardized 5010 edits exists for all payers, and there’s no guarantee each payer will accept the same claim, he says. For example, your state’s Medicaid carrier may reject substandard 5010 claims that your private payers accepted, which is especially common when CMS is a secondary payer.

Reestablish a line of credit with your bank just in case. With an industry-wide switch to 5010 on July 1, some claims may be rejected or not paid on time because of stricter edits, experts say. Pull out a line of credit to minimize cash flow disruption after June 30 (PBN 3/12/12).

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