Healthcare industry not ready for 5010; MGMA calls for 6-month contingency plan

ENGLEWOOD, Colo. Dec 19, 2011 - The latest research from the Medical Group Management Association (MGMA) on the transition to the new HIPAA Version 5010 electronic transaction standards highlights the need for the Department of Health and Human Services (HHS) to immediately issue an expanded contingency plan. Many state Medicaid plans will be unable to accept Version 5010 claims, and MGMA research clearly indicates that the software upgrades and health plan testing have not yet occurred for a significant number of practices. The new contingency measures should go beyond what HHS announced on Dec. 14 and should permit health plans to continue accepting HIPAA Version 4010 transactions and adjudicate Version 5010 claims that lack all the required data. This contingency plan should last for a minimum of six months.

HHS recently announced that in December, practices and plans that have tested and been approved for Version 5010 will be notified that they have 30 days to transition to the new claims format. In addition, physician practices and others that have not yet tested with their Medicare Administrative Contractor (MAC) will be notified that they must submit their "transition plan and timeline" to their MAC in 30 days.

"We have been tracking the Version 5010 coordination between physician practices and their key trading partners throughout 2011 and it is clear that a significant number of these stakeholders are not ready to meet the January 1 compliance date," said Susan Turney, MD, MS, FACP, FACMPE, MGMA-ACMPE president and CEO. "Our main concern is that the failure to implement Version 5010 by the compliance date will impact payment to practices for the services they provide. We oppose requiring the submission of a transition plan and timeline as a needless bureaucratic exercise that adds to the workload of the providers who have to produce them and the government employees who have to review them. HHS should immediately allow physician practices to continue submitting Version 4010 transactions."

Key findings of the MGMA study:

Internal testing -Only 32 percent of study respondents reported that their organizations' practice management system software has been upgraded to the HIPAA Version 5010 standards and that internal testing was complete. Nearly 25 percent indicated that either their software has not yet been upgraded or that testing is not even scheduled.

Medicare contractor -Just 32 percent of respondents said that testing is complete with their Medicare contractors. Additionally, almost one quarter (22 percent) reported they have not scheduled testing with their Medicare contractors.

Medicaid plan -Less than a quarter (17.9 percent) of respondents said they have completed testing with their Medicaid plans. More than 30 percent indicated that testing is not scheduled or their Medicaid plans are not yet accepting test claims.

Major commercial health plans -An overwhelming 79 percent of study respondents indicated that testing with all major commercial health plans remains incomplete. Almost one quarter (23.5 percent) reported that testing is still not scheduled with any major commercial health plans (nearly identical results to Medicare contractor testing).

Current implementation status -Just two weeks away from the Jan. 1 deadline, only 13.9 percent of respondents rate their 5010 implementation status as fully complete. More than 56 percent rate it as between 0 and 75 percent complete.

Contingency plans - Study respondents were asked about their contingency plans following the Jan. 1 compliance date. Almost one quarter (23 percent) reported that they plan to revert to paper claims in an attempt to avoid cash flow issues.

"We are very concerned that at least seven state Medicaid plans, including California, have announced that they will be unable to meet the mandated January 1 deadline," Turney continued. "With the large number of practices reporting that they will revert back to paper claims, we are concerned about the potential delay in adjudicating the large volume of paper claims. Further, the serious challenges in meeting the Version 5010 mandate and the need for a comprehensive contingency plan from HHS call in to question the ability of the industry to transition to ICD-10 by the Oct. 1, 2013, compliance deadline."


MGMA-ACMPE is the premier association for professional administrators and leaders of medical group practices. In 2011, members of the Medical Group Management Association (MGMA), and its standard-setting body, the American College of Medical Practice Executives (ACMPE) voted to merge to form a new association. Since 1926, the association has delivered networking, professional education and resources, political advocacy and certification for medical practice professionals. The association represents 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-ACMPE's mission is to continually improve the performance of medical group practice professionals and the organizations they represent, helping medical practices provide efficient, safe, patient-focused and affordable care. MGMA-ACMPE is headquartered in Englewood, Colo., and maintains a government affairs office in Washington, D.C. Please visit

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