3 Red Flags Behind the 5010 Enforcement Delay. More than a Format Change; Guidance Required on Comments and Edits

by Lâle White

It is not surprising that CMS had to delay enforcement of 5010 compliance in light of the fact that even the small payor community, including a number of MACs and Medicaids, were unable to test and implement 5010 files in production timely; let alone the thousands of providers primarily relying on unprepared clearinghouses and software vendors. A number of payors had announced delays in advance of CMS that they would not meet the deadline, such as Medi-Cal of California which had announced it would not be ready until 2013.

As expected, providers and clearinghouses underestimated the complexity and effort. Many providers, clearinghouses and software vendors treated the 5010 conversion as a simple formatting change announcing they were 5010 compliant even as early as 2009 and failed to recognize the extent and intent of the changes and the manner in which they would be utilized by payors to tighten up claims adjudication processes. Yet the changes to claims adjudication are significant and even as 5010 formats pass testing and go into production without much fanfare, the fallout on the back end with rejections and denials resulting from changes in payor editing and adjudication protocols is considerable.

For example, CMS rolled out a common edit module in conjunction with the 5010 upgrade with new edits causing not only delays in testing, but a significant amount of post-testing production fall out. The new edit module requires a comment in the SV101-7 segment at the procedure code level for CPT codes containing descriptions including verbiage of unspecified procedures or analytes. A missing comment for designated CPT codes results in a front end rejection, while an unacceptable comment causes a back end denial. While a provider can pass testing, once they go live with the 5010 format, the increase in rejections and denials can be significant for certain specialties.

A number of MACs lacked information on the nature and cause of these rejections and were unable to provide guidance to providers attempting to get acceptance of their electronic submissions. Others, like WPS, had the list of CPT codes and the comment requirement defined by CMS on their website, but still lacked guidance on the detail of the needed comment. Still other private payors like UHC, which embraced the CPT specific comment edit, applied it to 4010 claims in advance of the conversion utilizing the NTE segment and requiring a 4010 programming change or, in its absence, significant manual processing; even as they delayed 5010 testing to the end of December.

It is easy to see how clearinghouses and providers, not privy to payor adjudication rule changes, would be caught off guard and scrambling to comply with new rules lacking any visibility, advance notice or guidance enabling them to prepare or comply with new requirements for getting claims paid. For labs, the need to ease into production payor by payor in order to discover claims submission changes and avoid disruptions in reimbursement has been amplified by the payor communities’ clandestine effort to tighten up claims processing. We recommend providers use the additional timeline wisely and not lose any momentum in testing and going to full 5010 production as payors will allow in order to determine procedural changes that need to be made to secure timely payment.