The 5010 and D.0 transition will be a key indicator of how the ICD-10 transition will go.

A new era in the processing of billions of Medicaid claims is just around the corner, and it will affect healthcare providers and government agencies all across the country.

Jan. 1 marks the first phase for providers and states to comply with guidelines for the eventual transition to ICD-10 (a revision of code sets for reporting medical diagnoses). It also marks the deadline for providers and states to accept the ASC X12 Version 5010 Technical Reports and the NCPDP Telecommunication Standard Version D.0, designed to support the Health Insurance Portability and Accountability Act (HIPAA).

The changes are aimed at increasing standardization and automation to improve the speed and accuracy of electronic interactions between government and providers.

The first requirement of the new code structure involves updating the rules used for healthcare claims. Transitioning from the previous transaction sets (versions 4010 and 5.1) to a more comprehensive set of transaction sets (versions 5010 and D.0) will be the first step in adapting the new ICD-10 code structure designed to provide a new level of detail needed to handle today's medical reporting needs.

Why move from 4010 to 5010 now?
Quite simply, current transaction rules, though only about a decade old, already are out of date. Designed to support HIPAA, which was passed in 1996, version 4010 was adopted in 2000. Since 4010's adoption, several modifications have been added to the transaction rules. Hundreds of industry requests to further amend those initial rules were filed, and nearly 500 were added in one form or another, such as adding the capability to bill additional services. These changes improved the functionality of the transactions and corrected many problems in the initial transaction sets that could not be resolved due to limitations of 4010.

However, because some areas of the implementation specifications were not specific enough for the initial set of standards, providers to this day must rely on supplemental companion guides. The industry realized that it needed an updated set of rules to satisfy the changing needs of the industry.

The new 5010 and D.0 standards are intended to improve data content while eliminating the need for additional resources and workarounds. Changes include technical improvements, data field clarity, Medicare enhancements and improvements in the coordination of benefits. These changes are necessary to ensure that the eligibility and claims processes comply with the ICD-10 transition.

What does the move mean for providers and states?
Upgrading to 5010 and D.0 means providers and states will now be able to provide more clearly defined details, eliminating the need for workarounds and reliance on companion guides. Under 4010 and Version 5.1, providers have to use workarounds when dealing with prior authorizations for medicines or multiple methods of submitting compounded drugs. Having these workarounds eliminated in the 5010 and D.0 transactions frees providers to focus more on patients and less on billing issues.

What should providers be doing now?
Communicating with vendors and clearinghouses should be a top priority. Understanding the changes and their effects will better prepare providers for the transition. Talking to health plans and payers will also ensure that both sides are on the same page for the transition. By now, providers should have tested their 5010 and D.0 transactions to ensure they will be compliant with the Jan. 1. deadline.

However, the reality is that some payers and providers will not be ready to process 5010 and D.0 transactions on time. Because of this risk, all providers and payers should develop risk-mitigation plans in conjunction with their trading partners.

The transition to 5010 and D.0 transactions seems like a daunting task to many in the provider and payer communities. To ensure a smooth transition, it will require that providers, payers and vendors work closely to ensure systems are tested and operational well before the deadline. Although we're a couple of years away from the transition to ICD-10 in 2013, the 5010 and D.0 transition will be a key indicator of how the ICD-10 transition will go.

For more information, visit the CMS website at

About the author
Susan Arthur is vice president, U.S. Health & Life Sciences Industry, HP Enterprise Services. For more information on HP Enterprise Services: