Prepare for HIPAA 5010, ICD-10 simultaneously

January 1, 2011

Analysts and experts have written a lot about ICD-10 and the significant changes it will bring to health plan operations.

The Department of Health and Human Services has required the use of HIPAA version 5010 transaction sets for all covered entities by January 1, 2012. In addition to this, however, is this month's deadline to begin testing the 5010 transactions.

Since a sound 5010 compliance strategy establishes the foundation for ICD-10 and ultimately healthcare reform, it is a mistake to delay upgrading claims processing systems that will fulfill these objectives.

TWO STRATEGIES

For most plans, complying with 5010 mandates can be costly and require systemwide improvements. Many are remediating their outdated legacy systems to handle the new transactions, neutralizing the new transactions with a stepped strategy that translates transaction data from their trading partners as a temporary solution, or replacing their systems entirely with next-generation technology.

The short-term strategy of neutralizing 5010 codes simply delays the inevitable need to upgrade and causes a domino effect on the a payer's overall ICD-10 compliance strategy, resulting in increased cost and effort to perform the work.

According to TriZetto research, 68% of health plans are planning to upgrade or replace their core administration systems to support 5010 and ICD-10 compliance efforts.

Accepting HIPAA 5010 transactions is a baseline requirement for ICD-10. Therefore, it is a good choice to prepare for 5010 and ICD-10 compliance at the same time. Without properly upgrading, payers may not be able to accept native 5010 transactions after January 2012, which means they may not be able to accept native ICD-10 codes either. This, in turn, may put a payer's ability to leverage ICD-10 codes to drive more sophisticated care and incentive management programs at risk.

The stepped approach gives payers a temporary solution. Usually including a tool to translate 4010 EDI data to 5010 transaction data and back again outside the core administration platform, along with an on-demand testing environment to prove readiness and accept transactions if needed, this stepped approach minimizes rework and keeps the payer moving forward in the meantime.

Organizations that adopt an enterprise core administration system that is proven, flexible, easily configurable, and 5010/ICD-10 ready, are likely to transition smoothly. They can capitalize on the rich data traveling through their systems, realize administrative efficiencies, and easily introduce new value-based solutions to market and increase performance and profits.

By combining 5010 and ICD-10 strategies and capitalizing on healthcare reform opportunities, payers can create a consistent competitive advantage.

Robert Luckner is director, services product management for the TriZetto Group.