The Health Insurance Portability and Accountability Act (HIPAA) has been such a pervasive part of the healthcare industry for the last 10+ years, it’s hard to remember a time when it didn’t exist. Despite the huge efforts since 1996 undertaken to meet compliance, few would disagree that we are better off today than we were pre-HIPAA.

This is not to say that “all things HIPAA” have been accomplished without challenges. To the contrary, it has often been described as lacking efficiencies that would minimize the administration efforts required to stay compliant. These deficiencies, in fact, are the catalyst for the new standards — HIPAA X12 Version 5010.

HIPAA X12 5010 transaction standards address electronic exchange of administrative and financial information among healthcare providers, health plans, and their clearinghouses for patient care services. This sounds like a mouthful, and it is. As your IT partner, Siemens understands the potential provider benefits associated with X12 5010, and we are committed to providing education and solutions that will assist customers in achieving those benefits.

In January 2009, the Department of Health and Human Services (DHHS) issued a final rule that laid out the industry expectations for both HIPAA X12 5010 and ICD-10-CM/PCS (a coding classification system designed by the World Health Organization to track and report morbidity and mortality).

Although ICD-10-CM/PCS grabbed early headlines due to the potential scope and magnitude of its impact across all hospitals and providers, X12 5010 is actually first in line when it comes to priorities. The final rule established an X12 5010 effective date of March 17, 2009, as well as three compliance deadlines. According to DHHS:

1. Level I Compliance: Level I compliance means that a covered entity can demonstrably create and receive compliant transactions, resulting from the compliance of all design/build activities and internal testing. Level I compliance is due by Dec. 31, 2010.
2. Level II Compliance: Level II compliance means that a covered entity has completed end-to-end testing with each of its trading partners and is able to operate in production mode with the new versions of the standards. Level II compliance is due by Dec. 31, 2011.
3. Full Compliance: All HIPAA covered entities have to be fully compliant on Jan. 1, 2012.

Given its looming compliance deadlines, it is important to start with a firm understanding of what X12 5010 is and what to expect. There are two primary drivers: correcting deficiencies and new functionality and features.

The HIPAA 4010 transaction standards that were established in 2000 are unable to support the ICD-10-CM/PCS code set. As such, all transactions need to be updated to X12 5010, which will support the ICD-10-CM/PCS codes, improve functionality of the transactions, and correct problems related to HIPAA 4010.

Since implementing 4010, the Accredited Standards Committee — the governing standards body — received over 500 change requests from the industry. The new standard will reflect most of these requests. For example:

• eliminating the need for providers to maintain multiple NPI enumeration strategies based on individual health plan requirements
• enhancing COB functions
• expanding eligibility responses and remittance information, which will make automation of these transactions more useful

Based on industry requests, new features were added that will enhance the value and consistency of electronic transactions that are exchanged among providers, payers, and clearinghouses. An example of this includes the alternate search options that will be allowed for eligibility queries sent by providers using the X12 5010 version of the HIPAA 270 transaction.

When the HIPAA X12 5010 transactions were submitted in 2007 to the National Committee on Vital and Health Statistics for adoption by the Secretary of DHHS, they included all the changes requested by the industry as well as support for new regulations, such as more complete Present on Admission indicators, that had occurred since 4010 was initially implemented,.

Although many organizations understand the role of X12 5010 as a necessary requirement for ICD-10-CM/PCS compliance, few realize the potential of X12 5010 to drive business value on its own accord.

“We expect that the X12 5010 transactions will better support the changing business requirements and challenges of healthcare providers,” says Bechtel, “Specifically, the expansion of healthcare benefit information supported by the X12 5010 version of the 270/271 transactions will directly contribute to providers achieving greater levels of plan coverage and benefits transparency within their patient financial responsibility and counseling activities.”

“We also believe that with the improvements to the 835 remittance transactions, we will be able to provide more automated updates to accounts receivable from many more payers once the transactions are implemented,” he continues.

In February 2009, Healthcare Information and Management Systems Society (HIMSS) commissioned and released an executive brief based on the findings of a Gartner Group cost-benefit analysis of the HIPAA X12 5010 implementation. Gartner found the industry could realize a net benefit between $11.6 billion to $33.8 billion by migrating to the new X12 5010 standards — citing decreased transaction costs, reduced staffing requirements, and minimized manual processes as three primary benefits.

Knowing what needs to be done and how it will benefit your organization are the easy parts. Effectively implementing the solution is where the challenge resides. These challenges, however, can be minimized with experience. The more you know about potential pitfalls and how they can be circumvented, the faster and smoother the deployment will be.

Fortunately, this is the not the first time the industry has experienced a HIPAA mandate and there are a number of lessons-learned that Siemens brings to the table for its customers. So, as your organization prepares for the migration from HIPAA 4010 to the 5010 standards, here are three underlying themes that should be considered as you move forward with your planning.

1. Allow enough time for the unexpected. Typically, projects of this size and scope are often subjected to the effects of unexpected variables and consequences. Implementations or updates of this magnitude always involve more work and take longer than you think they should. Understanding and accounting for this during the creation of your project plan can result in a more realistic and achievable timeline for completing your X12 5010 project tasks and deliverables. According to the NCHICA-WEDI Timeline Initiative providers or their vendors should be well into their development and implementation plans, beginning with the analysis of the final rule and ending with full compliance on January 1, 2012.

2. Do not minimize the effort required. There are some who mistakenly believe that the migration to X12 5010 is as simple as a solution or software update. This could not be further from the truth. As learned from the 4010 standard implementation, there are processes that will also need updating in order to take full advantage of the HIPAA 5010.

“There is no time to waste and there are things that can be done now to keep advancing the initiative while all of the other variables fall into place,” says Bechtel. “We suggest that all providers communicate early and frequently with their vendors, clearinghouses, and payers. Your project plans should reflect these regular points of coordination throughout both Level I and Level II compliance efforts. Your state of readiness could ultimately hinge upon how effectively you engage with your business partners. Siemens is committed to facilitating this type of dialogue through a number of product-level communications and customer outreach events starting in January 2010 and continuing through the Level II compliance date.

3. Expect No Leniency. When HIPAA 4010 standards were first to be implemented in 2002, everything was new and everyone was learning at the same time — both DHHS and the industry. The industry had so many issues that Congress passed Administrative Simplification Compliance Act (ASCA) to give the industry an additional year to reach compliance by October 2003. As such, DHHS was fairly lenient when it came to imposing fines for non-compliance, and since then enforcement has been limited.

“This has changed. DHHS isn’t going to allow as much latitude this time around,” says Bechtel. “A good faith effort won’t be enough. DHHS wants the industry to meet its timetable and this should be taken seriously.”

The penalty for non-compliance is $100 per transaction — up to $50,000 annually per transaction. When you consider the number of transactions that are affected by HIPAA X12 5010, the penalties can certainly add up for organizations that continue a pattern of non-compliance.

As your trusted IT partner, Siemens is doing our part to ensure you stay informed and to ensure our solution updates meet HIPAA X12 5010 compliance. As the deadline approaches and you work toward finalizing your action plans, here are some important dates to remember:

• 3Q 2010 — Customer validation and pilot testing will begin
• 4Q 2010 — Release changes and upgrades expected
• January 2011 —Customers begin testing for 2012 deadline

These dates are applicable to any organization that operates one of the following Siemens products affected by the X12 5010 compliance mandate:

• Eagle2000®
• HDX
• INVISION®
• MedSeries4®
• SIGNATURE®
• Soarian®
• UNITY®
• Siemens Pharmacy — will actually adhere to the National Council for Prescription Drug Programs (NCPDP) standards, not X12 5010

Siemens intent is to provide you with cross-application planning information early in the New Year. Ongoing education and customer outreach activities will be supported by such resources as product report cards, FAQ documents, and customer planning memos.

Starting in 2010, Siemens will expand upon the webcast Understanding and Preparing for X12 5010 and ICD-10-CM/PCS, which was delivered in October, 2009. Several educational webcasts are also planned to provide product-specific updates, migration plans, and instructions related to X12 5010. These will be complimentary sessions hosted by Siemens experts who will be available to answer your questions.

As you expand your knowledge on X12 5010, we encourage you to bookmark the Siemens Customer World website as one of your go-to resources. Efforts are underway to consolidate and streamline navigation to a wealth of information on X12 5010, as well as other regulatory mandates on the horizon.

CMS Crosswalk
TR3 Implementation Guides
Final Rule for X12 5010
Accredited Standards Committee (ASC X12)
WEDI