An Introductory Overview of the HIPAA 5010

The Health Insurance Portability and Accountability Act (HIPAA) requires the Secretary of the Department of Health and Human Services (HHS) to adopt standards that covered entities (health plans, health care clearinghouses, and certain health care providers) must use when they electronically conduct certain health care administrative transactions, such as claims, remittance, eligibility, claims status requests and responses, and others. The Transactions and Code Sets used today, 4010/4010A1, is widely recognized as lacking certain functionality that the health care industry needs. On January 16, 2009, HHS announced a final rule that replaces the current Version 4010/4010A with Version 5010. Version 5010 of the HIPAA standards includes improvements in structural, front matter, technical, and data content (such as improved eligibility responses and better search options). It is more specific in requiring the data that is needed, collected, and transmitted in a transaction (such as tightened, clear situational rules, and in misunderstood areas such as corrections and reversals, refund processing, and recoupments). Further, the new claims transaction standard contains significant improvements for the reporting of clinical data, enabling the reporting of ICD-10-CM diagnosis codes.

CMS Progress in Implementing the New Standards

CMS is well into the process of readying its FFS Medicare systems to handle the 5010 standards. All Medicare systems will be ready to handle the new standards by January 1, 2011. Medicare plans for its systems to handle the current 4010A standard and the new 5010 standards for incoming claims and inquiries and for outgoing replies and remittances from January 1, 2011 until January 1, 2012. This will allow providers who are ready to begin using the new standards on January 1, 2011, while providing an additional year for all providers to be ready.

In addition, where possible, CMS will be making system enhancements concurrent with the 5010 changes. These enhancements include capabilities such as:

• Implementing standard acknowledgement and rejection transactions across all jurisdictions (TA1, 999 and 277CA transactions)
• Improving claims receipt, control, and balancing procedures
• Increasing consistency of claims editing and error handling
• Returning claims needing correction earlier in the process
• Assigning claim numbers closer to the time of receipt