As you may be aware, on November 17, the Centers for Medicare & Medicaid Services’ Office of E-Health Standards and Services (CMS OESS) made an announcement that they will be creating a period of relaxed enforcement following the unchanged January 1, 2012 deadline for transition to the HIPAA 5010 claim format.  With the announcement, CMS OESS has said that they will not fully enforce the 5010 claim format requirement until March 31.  CMS OESS is the entity that oversees enforcement for the entire industry, not just CMS as a payer.

Here are the nuts and bolts of this somewhat confusing announcement:

  • The compliance date remains unchanged – it is still January 1, 2012 for the entire industry, and anyone not submitting in 5010 will be in violation of the regulatory requirement
  • CMS OESS’ announcement states that they will not initiate enforcement action if a HIPAA covered entity is not in compliance with 5010 until March 31, 2012.  However, they will take complaints about these violations beginning on January 1, 2012.
  • If the HIPAA covered entity is the subject of complaints, they may be audited and may be asked to produce evidence of either compliance or a good faith effort to become compliant.  Failure to produce that evidence could result in fines.  It is unclear at this point what type of evidence will be required.
  • Regulatory compliance as enforced by CMS OESS applies to the entire industry, not just CMS as a payer.

Breaking down the technical speak, here is what the announcement means for providers:

  • It is important to know that there is a difference between regulatory compliance and operational realities.  Just because CMS OESS will have this 90 day period of relaxed enforcement, operationally payers are likely to still require claims be in the 5010 format by January 1, 2012.
  • A useful analogy is think of non-compliance as a potential “revenue car wreck”.  If payers still require claims in the 5010 format as of January 1, non-compliant providers could see a major “revenue car wreck” as their claims are not accepted by that payer.  All the CMS OESS announcement means is that CMS OESS (aka “the police” in this analogy) won’t write that provider “a ticket” for such an accident until March 31.  Providers’ “revenue cars” will still be dented and damaged, they just won’t have a ticket to add insult to injury.
  • Two weeks after the announcement, here is what we know about payers plans in light of the announcement:
    • Many/most (but not all) commercial payers will operationally cut-over to 5010 at the deadline as previously planned
    • For the most part, the MACs (Medicare payers) are indicating they will stop accepting 4010 claims at the end of the year
    • Some payers have confirmed they will continue dual use of 4010 and 5010 after the 1/1/12 deadline for a period of time, including Human, IL Medicaid, LA Medicaid, and NY Medicaid
    • A few more of the state Medicaids that have been slow to test and transition to continue in dual use as well.

The bottom line is that providers need to have a 5010 transition plan in place TODAY, whether they do so via an intermediary like ZirMed, or by producing 5010 formatted claims directly from their PM system.  Every day past January 1, 2012 where they are not compliant, is a day for which they risk not getting paid.