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Practice Management

Is your practice management system ready?

HIPAA 5010 and ICD-10 have implications for virtually every PM system. By Kevin Weinstein

s the Jan. 1, 2012 deadline for HIPAA 5010 compliance approaches, and with mandatory ICD-10 medical coding standards coming in 2013, every practice management (PM) system administrator faces decisions regarding how to prepare. The course you take depends on the type of PM system you have, its age and your practice’s tolerance for change. If you use a claims clearinghouse, its capabilities will factor in as well. Basically you have four options concerning 5010:


1. Remain non-compliant. Without a doubt the riskiest alternative of all. If you are not compliant with the 5010 transaction standard by next Jan. 1, all of your claims except workers’ compensation will be rejected and your practice will not get paid. Rumors also persist of signifi cant fi nes that may or may not be imposed by CMS.

2. Rely on a clearinghouse or revenue cycle management (RCM) partner to translate your 4010 transactions into the 5010 standard. Most healthcare providers using a HIPAA 5010-compliant clearinghouse or RCM company are insulated from the rule’s direct requirements for now. However, ICD-10 will force the issue in October 2013, since the current 4010 standard cannot accommodate the expanded ICD-10 code sets. A good revenue cycle management partner will buy you time, but you should work with your partner and test your transactions before January 2012 all the same.

3. Upgrade your current PM system now to 5010 standards. For practices with the bandwidth and capital to do this, this is a good choice as long as your PM vendor can perform the upgrade in a timely manner with limited risk to your operations.

4. Switch to a new, 5010-compliant PM system. For a few providers, this may make sense. If you have a homemade PM system, or one from a vendor who has no intention or capability to upgrade to the 5010 standard, this will be your only choice, later if not sooner. Again, a 5010-compliant RCM partner can help delay the inevitable, but as October 2013 approaches, all PM systems will need to handle 5010 transactions. With ICD-10, the challenge is likely to be more one of process than of systems. That’s because PM systems will eventually have to be 5010 compliant to accommodate ICD- 10 code sets. After that, most if not all 5010-compliant PM

26 September 2011

systems are expected to also be ICD-10 compliant by the October 2013 deadline. As you wait for your PM vendor to make the move to 5010 and ICD-10, you should be planning your process changes and looking for ways to educate your staff and physicians. You don’t have to change revenue cycle management companies in order to upgrade or change your PM system. Most can support any industry- standard system on the market – although free or no-support PM systems and RCM ven- dors may cause problems. A top-quality RCM partner can help minimize the risk of a PM system upgrade or install.

Kevin Weinstein, ZirMed, delivers revenue cycle management solutions to healthcare providers. For more information on ZirMed solutions:

Whatever path you choose in preparation for the upcom- ing changes – particularly with 5010 approaching – thorough advance testing is essential. Not only is testing mandatory under U.S. Health and Human Services requirements, but it’s also a prudent approach to safeguarding your income. After all, you don’t want your revenue streams interrupted when the new year arrives and the industry is operating under a new paradigm.

There are strategic advantages to testing, as well. For one, it helps you decide whether or not to migrate to 5010 internally, versus relying on your RCM partner. By testing against 5010 validations, you can assess the risk and make a better business decision for your practice. Another plus is the knowledge you gain about your current system’s performance. It tells you what you need to change, as well as whether your RCM vendor can effectively convert your fi les to the 5010 format without assistance on your part. Finally, testing can affi rm your fi nal choice and give you peace of mind as the deadline approaches. To test your system, simply look to the Web for re- sources. Your clearinghouse or revenue cycle management partner is the best place to start; most have established test beds for clients. Another alternative for information is the Centers for Medicare and Medicaid Services’ 5010 resource page. The bottom line is to get informed, test as early as possible and consult with your practice owners or senior managers to plan the best, most cost-effective PM system strategy possible.


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