5010 Deadline Brings Y2K Fears

I will always remember the 2000 New Year’s Eve because I was on stand-by for crisis management. I was Director of Public Relations for CIGNA Healthcare of California and like many large corporations, our senior management team was very concerned about 1/1/2000 (better known as Y2K). Fortunately, the IT departments at CIGNA and other large corporations had prepared well and basically nothing happened to any business computers. When we reached 12:01 am ET (9:01 pm PT, thank goodness), everyone breathed a sigh of relief and we could go home.

As 1/1/2012 approaches, some medical group and hospital executives are becoming increasingly worried about the switchover to the ANSI 5010 electronic claims. Here are some of the fears being expressed:

  • many medical groups won’t be ready
  • some vendors won’t be ready
  • health insurers won’t be ready

The switch is complicated and poses challenges because the new ANSI 5010 standards will communicate much more information. They will require the medical group to capture, store and format more patient registration information and more clinical documentation. For example, the authorization and referral transactions will now contain more medical information so that health plans to make more timely and efficient decisions.

In addition, the practice address used for credentialing purposes will now be required on all claims. Some payers have stated they will require both the insurance policyholder’s ID and the treated patient’s ID.

Federal policy makers expect the effort to pay off for both providers and payers. With 5010, more automated processing will be possible for secondary claims. The improved authorization transaction should reduce staff time spent making phone calls to health plans and care managers for treatment approvals. Health plans will be able to populate remittance transactions more accurately and completely, allowing providers to automate the claims payment functions that now are still manual for many provider organizations.

From the cost standpoint, there is good news and bad news. The good news is that the Department of Health and Human Services estimates that the net financial benefits to the healthcare industry for 5010 implementation could reach $38 billion over five years. The bad news: implementation costs will be between $5 and 11 billion.

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