Challenges persist for medical groups trying to meet HIPAA Version 5010 compliance date

ENGLEWOOD, Colo. June 15, 2011-Follow-up research conducted by the Medical Group Management Association (MGMA) on the transition to the new HIPAA Version 5010 electronic transactions standards indicates that a majority of medical groups have not completed critical software upgrades and testing with health plans has not been scheduled.

Medical practices face disruptions in claims processing and other essential administrative transactions if they don't successfully implement Version 5010 by the Jan. 1, 2012, compliance date. To assist physician practices with the transition, MGMA is calling on practice management system software vendors to intensify their rollout of compliant products, and on health plans to schedule testing. MGMA has also called on the government to develop contingency plans should the industry not be ready to meet the compliance date.

Most groups rely on their practice management system software to conduct the HIPAA electronic transactions. Only 29 percent of respondents believed their current practice management system software would permit them to use Version 5010, and 50.3 percent of respondents stated that their software would require an update. Additionally, 4.5 percent of respondents indicated that their software would need to be replaced. More than 30 percent of respondents indicated that they had not received any communication from their practice management software vendors regarding the change to Version 5010.

"We are growing increasingly concerned regarding the ability of medical group practices to meet the Jan. 1 deadline," said William F. Jessee, MD, FACMPE, MGMA president and CEO. "Our research indicates a significant number of practices have been forced to wait for their practice management system software vendors to make the required modifications before they can begin to test with clearinghouses and health plans.

"Respondents who have already upgraded or replaced their software have incurred more than $16,000 per physician in expenses, which includes the cost of software, hardware and staff training," Jessee continued. "This is a significant expense for a medical practice in this challenging economy. It is critical that vendors communicate their readiness status and the expected transition costs to groups quickly to permit practices to appropriately budget and plan."

MGMA's research also found:

  • Implementation - Many respondents (45.2 percent) stated that they have not started their implementation of Version 5010; 45.9 percent have partially completed implementation, and only 2 percent reported that they had completed implementation.
  • Testing - Nearly 40 percent of respondents (38.2) indicated that internal testing had not yet been scheduled; 40.8 percent said they planned to start testing between March 2011 and December 2011. Another 2 percent did not plan to start internal testing until after January 2012 (the deadline for compliance with the new standard), while 9.2 percent of respondents had started to test.

A large number of respondents (49.7 percent) reported that external testing had yet to be scheduled with major health plans; only 2.7 percent reported that this external testing had already been initiated with all of their major health plans.

"As only six months remain before the compliance date, the Centers for Medicare & Medicaid Services must aggressively augment its outreach to both physician practices and practice management system vendors. MGMA urges the government to institute an appropriate contingency plan to avoid widespread cash flow disruption in the industry, should dramatic improvements in the implementation status of providers not be observed in the next few months," Jessee stated.

MGMA is committed to helping medical groups succeed in the transition to Version 5010 and avoid payment disruptions. MGMA and American Medical Association have jointly developed several tools to help practices meet the new requirements, such as the Selecting a Practice Management System Toolkit and the Practice Management System Software Directory.

About MGMA
MGMA is the premier membership association for professional administrators and leaders of medical group practices. Since 1926, MGMA has delivered networking, professional education and resources, and political advocacy for medical practice management. Today, MGMA serves 22,500 members who lead 13,600 organizations nationwide in which some 280,000 physicians provide more than 40 percent of the healthcare services delivered in the United States.

MGMA's mission is to continually improve the performance of medical group practice professionals and the organizations they represent. MGMA promotes the group practice model as the optimal framework for healthcare delivery, assisting group practices in providing efficient, safe, patient-focused and affordable care. MGMA is headquartered in Englewood, Colo., and maintains a government affairs office in Washington, D.C.

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