The CMS Office of E-Health Standards & Services (OESS) is responsible for the policies and enforcement of the Administrative Simplification provisions for transactions and code sets and the National Provider Identifier (NPI) covered under the Health Insurance Portability and Accountability Act (HIPAA). HIPAA 5010 was adopted to replace the current version of the X12 standard that covered entities (health plans, health care clearinghouses, and certain health care providers) must use when conducting electronic transactions. Version 4010 is currently being used under HIPAA standards. Although HIPAA version 5010 gets much less notoriety than ICD-10 it is just as important and practices should already be working with vendors on the version 5010 implementation. Testing with external trading partners will begin in January of 2011. It is important that you test early 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 also adopted certain standard transactions for Electronic Data Interchange (EDI) for the transmission of health care data. These transactions include:

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

Unlike the current 4010 transaction set, version 5010 is much 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 code sets, which may help with dilemmas of billing utilizing the dual code sets.

CMS offers great strategy for preparing for 5010 Implementation:

• Current transaction versions must be upgraded to Version 5010 and D.0. Medicare has performed a side by side comparison of the current 4010A1 and 5010 base formats found at: www.cms.gov/ElectronicBillingEDITrans/18_5010D0.asp The side by sides do not include errata changes and do not replace the TR3s. To purchase TR3s and access Technical QuestionsX12 please go to www.x12.org  or for NCPDP D.0 go to www.ncpdp.org.
• Software must be modified to produce and exchange the new formats (e.g. trading partners must be able to read incoming 277CA transactions sent from Medicare).
• 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. See http://www.cms.gov/ElectronicBillingEDITrans/ under downloads, to find a MFFS contractor in your state, or find your operational MAC on this list. For details on testing requirements see the 5010 National Call presentation on Provider Outreach and Education – Transition Year Activities found at http://www.cms.gov/Versions5010andD0/downloads/OE_National_Presentation_12-8-10.pdf.