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Roundup: Revenue Cycle Management

Stephen S. Hau, president and CEO, Shareable Ink

The new standards will have a negative impact on practice profitability, if covered entities (such as physicians and hospitals) are non-compliant or unprepared. While this update is important to address limitations in the previous standard (4010A1) and to prepare the industry for ICD-10 code sets, we all know that change is difficult, particularly when it

requires alterations to both behavior and the underlying software.

As an example of behavioral changes, starting on Jan. 1, 2012, “anesthesia time” must be reported in minutes. This may not seem like a major issue, but anesthesia time has been reported in units for decades, and the law of “human nature” tells us that old habits can be very hard to change. Meanwhile, software vendors are not included in the list of covered entities, but their products must comply with HIPAA 5010 to properly support their customers. Physicians and hospitals should conduct a gap analysis with their vendors as soon as possible. Software updates are likely required. Depending on the product and its confi guration (installed versus “software as a service”), signifi cant implementation and training may be required.

Andrew Fitzpatrick, CEO, Washington Publishing Company, the founding publisher of HIPAA implementation guides and code sets

The 5010 mandate and EDI standards do not necessarily have a direct impact on revenue, but the more concerning impact is to cash flow. Specific to revenue cycle management, this means that for any claims- management process involving a clearinghouse or direct payer route, if either isn’t equipped to handle the 5010 standards, the practice or hospital can expect payment delays via pended or rejected claims. I predict many providers’ cash flow will be hit hard early next year as a result of zero or poor testing preparation required for proper compliance. As we arrive at year’s end, hopefully many have already initiated testing with payers and clearinghouses. At this juncture, testing is critical. Fortunately, the financial disruption will be short

term. In the long run, there are opportunities for the 5010 transactions and code sets to positively enhance cash flow and profitability while reducing bad debt or write-offs. For example, the improved 270/271 eligibility/benefits inquiry and response transactions make it easier for providers to know upfront payers’ and patients’ coverage before services are rendered.

Alison Schambach, senior healthcare business consultant, Edifecs

HIPAA 5010 is both an opportunity and a risk to practice profi tability. And like any major project, the devil is in the details. A well-thought-out testing strategy to address both internal and external testing with trading partners is important, with the latter at greatest risk for not getting done.

a A is te in tr th g

Providers may see near-term cash-fl ow problems in Pid

the fi rst half of 2012, as everyone adapts to 5010 and works out the bugs in their systems. There will likely be some payment-processing delays caused by minor format errors. For example, 5010 no longer allows billing providers to use a post offi ce box for claims transactions.

8 November 2011

Providers can avoid bigger issues by proactively communicating and testing with their trading partners, working closely with their practice management system vendors and not just assuming all will be ready on Jan. 1.

HIPAA 5010 can also enhance practice profi tability by enabling greater business process automation. Providers can use the increased granularity of administrative information to cut costs, speed payments and spend less time fi xing errors. Billing, payment posting and eligibility verifi cation are just three of the processes that will benefi t. And, of course, 5010 sets the stage for ICD-10, which has its own set of opportunities and risk. For providers, the business impact of HIPAA 5010 may cause some initial disruption, but they can overcome it. They need to work closely with their vendor to implement 5010 correctly, conduct thorough internal and external testing and always communicate early and often with trading partners.


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