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When 5010 Implementation Delays Surgery Center Payment: 4 Ways to Respond

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In March, CMS extended the enforcement deadline for HIPAA 5010 compliance to July 1 — a small relief for practices, but one that does little to alleviate the financial problems caused by medical claim denials. Facilities continue to report that reimbursements are being delayed without much help from the payors rejecting the claims.

Whether surgery centers have transitioned to 5010 or not, experts estimate they are facing an increased number of rejections. Laurie Simon, administrator of Western Reserve Surgery Center in Kent, Ohio, collection rates at her ASC are down from 126 percent of net charges in the first quarter of 2011 to 74 percent of net charges in the first quarter of 2012. "We are pounding the pavement to get money in the door on things we have no control over," she says.

How is 5010 causing problems for ASCs?

According to Phil Warenick, CIO of Abeo Management, issues with 5010 are taking three common forms:

1. File acknowledgment reports. Because HIPAA 5010 changes the way claims are formatted, it also changes the format of the reports that payors send to practices and surgery centers regarding the status of their submitted claims. For example, 5010 has altered the format of the file acknowledgment report (999) that notifies a surgery center when a payor has accepted or rejected a claim. According to Mr. Warenik, surgery centers are seeing claim files rejected at the 999 level due to unrecognized provider identifiers and invalid member IDs, resulting in payment and processing delays.

2. Inability to upconvert or downconvert files. For surgery centers who use a clearinghouse to process claims, they may run into problems when clearinghouses are unable to upconvert 4010 claims to 5010 claims or vice versa. "The data is somewhat different," he says. While most clearinghouses have the ability to convert claims to either format, missing data can cause problems during the conversion, he says.

For example, when NPI was implemented several years ago, CMS decided that providers could not longer send secondary ID (Medicare/Medicaid) numbers, which caused problems for intermediaries since their systems were designed to use secondary numbers.

With the implementation of 5010, CMS has eliminated some payor ID numbers, creating a similar problem. "5010 came out and eliminated numbers for TriCare, Blue Cross, Blue Shield — there's no place to send those numbers anymore," he says. "So if you're sending a 5010 file and the clearinghouse is trying to downconvert to 4010 and you didn't send them a Blue Shield number to start with, they can't downconvert."

3. Payor readiness. Payors are in varying states of 5010 implementation, meaning that some have transitioned to the new system, while others are still operating completely on 4010. "At this point, there are still quite a few payors that are still on the 4010 version," Mr. Warenik says. He says claim rejections or delays have slowed down considerably since the beginning of January, but problems still persist for surgery centers dealing with several payors on different systems. He says in many cases, surgery centers are forced to submit the 4010 version of claims because they'd prefer to receive payment than deal with significant delays.

How can surgery centers respond?

Mr. Warenik recommends the following steps for surgery centers to handle payment delays due to 5010:

1. Replace automated processes with people. Mr. Warenik recommends asking staff members to verify processes that used to be automated. "We're putting people in the middle of it where we didn't used to have people, to make sure claims are being transmitted and received and acknowledged," he says. While most ASC leaders will balk at the idea of adding new staff, he says the alternative could be a serious cash flow problem.

For example, he says there have been problems with acknowledgment and claims status reports due to automation changes. If your surgery center is used to receiving a report that says the payor received or rejected your claim, you may lose track of the claim if that report doesn't come through. For the time being, assign a staff member to call each payor and check on the status of your claims to ensure payment.

2. Enlist the help of a clearinghouse. Mr. Warenik says a clearinghouse helps to establish connections with payors without requiring the surgery center to keep up those connections by itself. "It allows us to have electronic connectivity to far more payors than we could implement on our own," he says. "For the per-claim fee the clearinghouse charges, it's well worth the cost of gaining extra connectivity and having that support." He says clearinghouses can ease the transition to 5010 because they'll handle problems with up and downconverting with the payor.

3. Drop back to 4010 when necessary. If payors aren't accepting 5010 and their downconvert process isn't working properly, you may have to submit claims with 4010. Mr. Warenik says while this solution won't work long-term, it's currently preferable to not receiving payment on a 5010 claim.

4. Use the lessons from 5010 to prepare for ICD-10. Mr. Warenik says problems with 5010 should encourage surgery center administrators to prepare early for ICD-10, which will also be a significant undertaking. "I think every time they make a big changes to the industry, we forget about the last time," he says. "It's important to just get on it sooner and get your testing done." He says ICD-10 will be a clinical documentation change rather than a technical change, but it will still require significant training and preparation, so surgery centers should start examining how it affects their processes as soon as possible.

Related Articles on Coding, Billing & Collections:
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4 Tactics Payors Use to Drive Surgery Centers In-Network -- And How to Respond

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