5010 FAQs

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5010 FAQs

What transactions does the "Version 5010" Final Rule (CMS-0009-F) for HIPAA standards include?

The Version 5010 final rule (CMS-0009-F) at 45 CFR Part 162, adopts new versions of the X12 and NCPDP standards for HIPAA transactions. Respectively, the rule adopts Version 5010 to replace Version 4010/4010A, and Version D.0 to replace Version 5.1 The transactions include: claims (professional-837P, institutional-837I and dental-837D), claims status requests and responses-276/277, payment to providers-835, eligibility requests and responses-270/271, referral requests and responses-278, enrollment and disenrollment in a health plan-834, premium payments-830., and Coordination of Benefits. The NCPDP standard for pharmacy transactions include: claims, eligibility requests and responses, referral certification and authorization and Coordination of Benefits.

The Version 5010 rule also adopts a new NCPDP standard for Medicaid pharmacy subrogation. This standard will allow State Medicaid agencies to conduct pharmacy subrogation transactions with certain payers to more efficiently recoup funds for payments that they have made for Medicaid recipients, in cases where another third party payer has primary financial responsibility. Without a standard, Medicaid agencies and their trading partners have been using proprietary transactions, without the benefit of standardization.


Why is the Version 5010/D.0 (CMS-0009-F) final rule important at this time?

The updated X12 Version 5010 and NCPDP Version D.0 of the HIPAA transaction standards represent substantial technical and operational improvements that respond to industry business needs and requests. With Versions 5010 and D.0, the industry will be better equipped to move toward an electronic health information environment via the increased and improved use of electronic data interchange (EDI).

Versions 5010 and D.0 of the HIPAA standards also support use of the ICD-10-CM (Clinical Modification) for diagnoses and  ICD-10-PCS (Procedure Coding System) for inpatient hospital procedures code sets that have been adopted in a separate regulation (CMS-0013-F). In addition to 5010 and D.0, adopting the Version 3.0 standard for Medicaid pharmacy subrogation increases efficiencies and reduces costs in the Medicaid sector, and can potentially yield significant cost savings to States.


Who Needs to Prepare for the Transition to Versions 5010 and D.0?

HIPAA-covered entities affected by the transition to Versions 5010 and D.0 include the following:
  • Providers, such as physicians, alternate site providers, rehabilitation clinics, and hospitals
  • Health plans
  • Clearinghouses
  • Business associates that use the affected transactions, such as billing/service agents


What is Level I Testing and Compliance?

Level I testing is the period when covered entities perform all of their internal readiness activities to prepare for testing the new versions of the standards with their trading partners.  Level I compliance means a covered entity can create and receive compliant transactions that result from the completion of all internal activities and testing. Covered entities should be prepared to meet Level I compliance by December 31, 2010.


What is Level II Testing and Compliance?

Level II testing activities involves external testing with trading partners and should begin by January 1, 2011. However, covered entities must be compliant with Level I activities before they can engage in Level II testing.  Level II compliance means that a covered entity has completed end-to-end testing with each of its trading partners, and is able to operate in production mode with Versions 5010 and D.0. Covered entities must be Level II compliant by January 2012.


What are some of the key changes between Version 4010/4010A and Version 5010?

The changes in Version 5010 include structural, front matter, technical and data content improvements. The changes enhance the usability and usefulness of the standards, in that they better address the data needed, collected and transmitted, and reduce ambiguities in their use. They represent requests from users that surfaced after implementation of 4010/4010A and address a host of business needs that have been identified by all sectors of the industry during the past five years.

Also, Version 5010 accommodates use of the ICD-10 code sets, which Version 4010/4010A does not support. Details on these changes are available on the Designated Standards Maintenance Organization (DSMO) Web site at www.hipaa-dsmo.org. For assistance with the standards themselves, contact X12 directly, at www.x12.org.


What is the compliance date for Versions 5010, D.0 and 3.0 under the final Modifications rule for the HIPAA standard transactions?

The mandatory compliance date for Versions 5010, D.0 and 3.0 of the HIPAA standard transactions is January 1, 2012. For small health plans using Version 3.0, the compliance date is January 1, 2013.


What can covered entities do now to prepare for implementation of Versions 5010, D.0 and 3.0?

Covered entities can prepare for implementation of Versions 5010, D.0, and 3.0 by developing a strategy that includes, but is not limited to a situational analysis followed by implementation planning. In particular, entities should identify their internal and external stakeholders and trading partners for planning, communication and testing.

Software vendors and clearinghouses should be engaged in the planning process, and deadlines should be set for completion of internal programming changes and scheduled testing. Implementation planning should include an estimate of the financial impact of technical and business changes on the organization so that appropriate and sufficient financial and personnel support can be acquired. The project team should develop metrics and measurement tools to track project status, and prepare a full- scale testing strategy and schedule.

Many professional organizations and associations have resources available to help with planning for, and implementing Versions 5010, D.0 and 3.0. Contact your local association to ask for information, advice and to identify any opportunities for collaboration.


What are the business and technical impacts to covered entities of converting to Versions 5010 and D.0 and implementing the new standard 3.0?

Covered entities transitioning to the use of Version 5010 and Version D.0 for HIPAA transactions, and implementing the new Medicaid subrogation transaction standard, will experience both technical and business changes. The modified standards may require programming and business process changes across the organization.

Each entity should conduct a gap analysis to determine the full impact and scope of the changes to systems and various business processes in order to create a detailed project plan, timeline and communication strategy.


What organizations should be planning to implement Versions 5010, D.0 and 3.0 for HIPAA transactions?

All HIPAA-covered entities should be planning for implementation of Versions 5010, D.0, and 3.0. In particular, clearinghouses and software vendors should start developing compliant products so that they will be available for the industry to test and implement. Vendors are critical in terms of providing the software and applications to make the transactions possible, and to allow for early testing between trading partners.

The rule requires that internal testing be completed by December 31, 2010. This means that software and hardware changes in all systems must be in place as soon as possible in order to fully test each entity's ability to send, receive and process the standard transactions.


Aside from local associations, what other resources are available to assist covered entities as they implement Versions 5010, D.O and 3.0?

Ongoing education and implementation assistance for 5010, D.O and 3.0 implementation may be available to some extent from the following organizations:

  • The Workgroup for Electronic Data Interchange (WEDI)- www.wedi.org
  • The American Standards Committee (ASC X12)- www.x12.org
  • The National Council for Prescription Drug Programs (NCPDP)- www.ncpdp.org
  • The Blue Cross and Blue Shield Association- www.bcbs.com
  • The American Medical Association - www.ama-assn.org
  • The America's Health Insurance Plans - www.ahip.org


What Challenges May Health Plans (Payers) Experience During the Transition to Versions 5010 and D.0?

  • Payers utilizing “direct connect” EDI, where providers submit claims directly to the payer, will need to upgrade their front-end validation and translation systems to accommodate the new standards
  • Managed Medicare and Medicaid, as well as Medicare Advantage payers, will need to upgrade their claims adjudication and EDI systems in order to send compliant transactions to Medicare and Medicaid
  • Coordination of Benefits (COB) claims must be accepted electronically
  • Complete eligibility responses will be required instead of a simple “Yes” or “No”
  • The remittance advice will require implementation of a web page with Health Care Medical Policy explanations
  • The claims EDI adjudication system may need to be revamped


What is the Role of Clearinghouses in the Transition to Versions 5010 and D.0?

The role of most clearinghouses is to receive non-compliant claims from providers and translate them into compliant formats to send the transactions to payers. The change to Versions 5010 and D.0 will add another layer, requiring clearinghouses to translate from Version 4010A1 to 5010 and Version 5.1 to D.0.

Clearinghouses will need to upgrade their EDI infrastructure, including mapping, editing, validation, and translation systems.


Will there be a cost assoicated with the conversion to 5010?

No - There are no customer costs anticipated with the 5010 conversion.