5010 Update: Benefits of Implementation

By Angela “Annie” Boynton RHIT, CPC, CCS, CPC-H, CCS-P, CPC-P, CPC-I

Recently, it seems that the health care industry has focused almost entirely on the challenges that we’re all facing with regard to 5010 implementation. To make things worse, many do not fully understand the specific changes or the benefits that will come from the 5010 migration. All HIPAA-covered entities are required to be compliant by January 1, 2012.

The most widely recognized change in the 5010 Electronic Data Interchange (EDI) architecture is the version indicator that allows EDI transactions to differentiate between ICD-9 and ICD-10. This is only a small part of the reason that implementing 5010 is crucial to any organization’s overall ICD-10 plan.

There are over 850 specific changes in 5010; many of these changes correct deficiencies that are found within the current 4010A EDI standard. Additionally, 5010 will be able to aid covered entities by reducing transaction costs, minimizing manual processing, and reduce staffing needs, as well as seeing the introduction of additional features and new functionality. As a result, Gartner Group did a cost benefit analysis stating the industry could see between $11.6 billion and $33.8 billion in increased revenue from the 5010 migration alone. Here are some tangible benefits that migrating to 5010 will offer:

  • Improved clarity in provider loops (or fields)
  • ICD-10 support
  • Clarified National Provider Identifier (NPI) instructions
  • Requirements for guarantor/dependent information on eligibility responses
  • Improved Coordination of Benefit (COB) transactions by telling payers which transactions is primary vs. secondary, enabling correct provider payment on initial submission
  • Reductions in “syntax error”-related denials
  • Improved tracking
  • Multiple identifiers will be allowed
  • Responses will be limited to the claims where an inquiry is made
  • 45 new service type codes will be introduced
  • Greater ease of use for eligibility transactions (specifically the 270 and 271 eligibility responses)

Ease the transition to 5010 by creating a well-designed and high-level supported project plan to guide the implementation team. It is imperative that the project plan allow for the unexpected. Changes of such magnitude typically require more work than we expect. 5010 is largely an IT infrastructure change, and we all know that the unexpected can occur in life, and especially with computer/system changes. Make sure the 5010 project plan has enough room built in for unexpected delays and setbacks that will surely crop up.

5010 is not simply a software update. The effort needed to properly implement 5010 will be considerable; do not make the mistake of thinking that 5010 is only a vendor/software issue. Business processes, business intelligence, budgeting and even staffing changes are only a few areas where additional focus may be required. Organizations that leave their 5010 implementation plans solely in the hands of their vendors will be in trouble in 2012.

Do not expect a regulatory pushback. If you are one of the many organizations waiting with bated breath that the Department of Health and Human Services is going to push back the 5010 implementation deadline, you are going to have a long wait. The biggest evidence of this is that the Centers for Medicare and Medicaid Services (CMS) is about to commence testing in April, 2010 of its 5010 systems. Non-compliance of this HIPAA-mandated change is punishable by fines, minimum $100 per transaction up to $50,000 a year annually, per transaction.

Engage vendors now. Early identification of all vendor systems and a thorough review of all applicable vendor contracts are paramount to the success of 5010 implementation. If vendors are going to charge more for this regulatory update, or if there are any additional fees, organizations need to know sooner rather than later. In addition, if vendors are still saying that they do not have a plan in place, or seem to be stalling, a vendor change may be necessary. The earlier vendors are contacted, the better for the overall success of an organization’s 5010 implementation plan.

5010 is an HIPAA-mandated standard change, and it is vital to the overall success of ICD-10-CM/PCS implementation. Equally important, but less recognized, is the fact that 5010 has the potential to save the health care industry billions of dollars. There are significant challenges, and it will not be easy. But in its own right 5010 will help our country usher in a new era in health care documentation, data exchange and delivery. These will benefits us all.


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5 Responses to “5010 Update: Benefits of Implementation”

  1. Dola M. Thelwell says:

    I found this article very interesting and informative.

    Happy New Year!!!!!!

    Thank you—–Ms A. Boynton

  2. Starla Henry says:

    I got more from this article than anything else I have read. The information was precise and to the point. Thank you

  3. Nancy says:

    My workplace is an outpatient radiology facility and they said that they do not have to comply with the 5010 implementation? Is this true?


  4. Lesley says:

    “5010 is not simply a software update”…this is the best line of the whole article. There is a HUGE misconception about what it takes to be ready, not just compliant, for 5010.

  5. Remy Lanzaderas says:

    Can’t get enough of 5010 information!

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