Physician Groups Say 5010 Standards Hurt Cash Flow

MGMA Urges HHS to Postpone Enforcement

February 03, 2012

February 3, 2012 — New federal standards designed to streamline electronic insurance claims are instead slowing them down, hurting physician cash flow and pushing some practices into financial distress, the head of the Medical Group Management Association (MGMA) warned February 1.

"Many practices face significantly delayed revenue, operational difficulties, a reduced ability to treat patients, staff layoffs, or even the prospect of closing their practice," said Susan Turney, MD, the president and chief executive officer of the MGMA, in a letter to US Department of Health and Human Services (HHS) Secretary Kathleen Sebelius.

Dr. Turney urged Sebelius to postpone enforcement of the HIPAA Version 5010 standards for electronic claims and other billing transactions such as requests for claims status until at least June 30. In the meantime, physicians and insurers should be allowed to do business electronically based on the earlier Version 4010 standards, said Dr. Turney.

Version 5010 refers to a set of rules governing how computers share healthcare billing data. The standards stem from the Health Insurance Portability and Accountability Act (HIPAA), which aims to give physicians, hospitals, insurers, claims clearinghouses, and other "covered entities" a standardized and easier way to communicate electronically. Only Version 5010 standards incorporate the use of new International Classification of Diseases, 10th Revision, (ICD-10) diagnostic and inpatient procedure codes that become mandatory on October 1, 2013.

Medicare Has Not Paid Some Practices Since Early November

The deadline for converting healthcare software programs to the new standards was January 1, but the Centers for Medicare and Medicaid Services (CMS) announced in November that it would postpone enforcement until March 31 to give covered entities more time.

However, many medical groups that have already made the switch are experiencing claims snafus with private health insurers and Medicare administrative contractors (MACs), which process Medicare claims. According to the MGMA, the most frequently reported problems include the following:

  • practices that successfully tested retooled billing programs find MACs rejecting their Medicare claims now that the testing is over,

  • claims are bouncing back because the address for receiving payment was electronically stripped out somehow, and

  • some Medicare claims are simply getting lost.

Dr. Turney said that when practices have tried to report these and other problems to MACs by telephone, they have ended up on hold for 1 to 2 hours. When they do get through, they often are told that the problem must "lie with your clearinghouse." In turn, clearinghouses blame the MACs for rejected claims, according to Dr. Turney. She also said CMS has advised practices not to submit large numbers of Version 5010 claims at a time, lest they further bog down the system.

Many practices have not been paid by either Medicare or TRICARE since early November, "forcing some to take out lines of credit simply to meet payroll and other expenses," Dr. Turney said. Others are attempting to avoid the Version 5010 logjam by reverting to paper claims, but this only slows things down even more, she said.

In addition to asking HHS to allow medical groups to submit Version 4010 claims until at least June 30, Dr. Turney said clearinghouses and health insurers should be permitted to process imperfect Version 5010 claims that contain enough critical information to make them fit for payment. In addition, HHS should instruct MACs to make advance payments to practices struggling with the Version 5010 mandate, gear up for large batches of Version 5010 claims, and staff their call centers with enough people.

Information on complying with the Version 5010 standards is available on the Web sites of both CMS and the American Medical Association.


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