Medicare Extends 5010 Implementation for a Second Time, Effective July 1, 2012

FACED WITH THE FACT that many payers were not ready to implement the 5010 standard under the Health Insurance Portability and Affordability Act (HIPAA), on March 15, the federal Centers for Medicare & Medicaid Services (CMS) announced a second delay in enforcement of the standard. The extension is until June 30.

As of March 15, CMS stated that Medicare payers were successfully processing about 70% of all Part A claims and 90% of all Part B claims in the 5010 format. But that meant 30% of Part A claims and 10% of Part B claims were going unpaid.

Cash Flow Problems

“5010 implementation is a significant development,” noted Matt Warner, Associate Vice President, Operations, at XIFIN, Inc., a San Diego-based provider of SaaS billing and revenue cycle management solutions. “This second extension makes it more complicated for labs.

“Some payers now have an excuse to delay accepting 5010 claims,” said Warner. “However, the enforcement delay doesn’t necessarily change the 5010 transition date for a given payer. Several payers are proceeding forward with their own timelines, independent of the delay, partly because they see no value in further delay.

“We see the 5010 as a much-needed improvement in the industry because it greatly reduces the number of conflicting interpretations of the specs governing the formats,” he continued. “That translates into reduced complexity and labor savings by reducing per-payer, one-off variations. Providers are much closer to the time when they can send the exact same format to every payer.

“From a practical viewpoint, the extension means labs must continue to simultaeously handle two formats for a longer period of time: one for payers using 5010 and one for those payers still using the legacy 4010 format,” he added. “Worse, some payer’s backend systems are already implementing 5010-related changes even as they continue to accept 4010.”

Issues with the 5010 format caused problems for clinical laboratories and pathology groups. PSA, LLC–A MED3000 Company is a billing service provider in Florence, South Carolina. It saw that many pathology labs experienced revenue declines due to payment delays from January through February. In most cases, problems associated with 5010 implementation were resolved by the end of March and income returned to normal levels.

“In January and February, things were brutal because so many 5010 claims became lost at the payers,” noted Vandy Tibbets, Vice President, Implementation, Billing Support at PSA. “We would get an acceptance notification of the 5010 claim, but then the labs weren’t paid. We’d call the payers and all they could tell us was to refile the claim.”

Both Warner and Tibbetts recommend that labs diligently review every claim filed to ensure that each one is paid in full. In researching this situation, THE DARK REPORT learned that most private health insurance plans were ready to accept claims submitted on the 5010 forms. That was not the case with many carriers handling claims for the different state Medicaid programs.


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