Medical Groups Ill-Prepared For HIPAA Standards DeadlineMedical Groups Ill-Prepared For HIPAA Standards Deadline

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As the deadline to transition to the new HIPAA Version 5010 electronic transaction standards draws near, a Medical Group Management Association (MGMA) study reveals that 45% of respondents have not started their implementation project, 46% have partially completed implementation, and only 2% reported that they had completed their implementation to Version 5010. Version 5010 is part of the latest federal standards that regulate the electronic transmission of specific healthcare transactions.

The MGMA poll results, which were released Wednesday, relied on interviews with 350 respondents representing approximately 11,000 physicians in medical practice.

Conducted in June, the survey also found that many medical practices have not as yet arranged internal and external testing for the administrative systems that will run Version 5010 transaction standards. More than third (38%) of respondents said that internal testing had not been scheduled and 41% said they planned to start testing between March 2011 and December 2011. Another 2% did not plan to start internal testing until after January 2012 (the deadline for compliance with the new standard), while 9% of respondents have started testing their systems.

"We are growing increasingly concerned regarding the ability of medical group practices to meet the Jan. 1 deadline," William Jessee, MGMA president and CEO, said in a statement. "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.”

The research also shows that nearly half of respondents (49.7%) reported that external testing had yet to be scheduled with major health plans, while only 3% reported that this external testing had already been initiated with all of their major health plans.

Medical practices face additional challenges associated with the cost of implementing 5010 transaction standards.

"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 said. “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."

The research reveals that most groups rely on their practice management system software to conduct the HIPAA electronic transactions, however, only 29% of respondents believed their current practice management system software would allow them to use Version 5010, and 50% of respondents stated that their software would require an update.

Additionally, 4.5% of respondents indicated that their software would need to be replaced, and more than 30% said they had not received any communication from their practice management software vendors to discuss the change to Version 5010.

Medical practices are required to implement Version 5010 in order to electronically conduct certain healthcare administrative transactions, such as claims, remittance, eligibility, and claims status requests and responses. Physicians, alternate site providers, rehabilitation clinics, and hospitals as well as health plans, healthcare clearinghouses, and business associates such as billing and service agents and vendors conduct these electronic transactions.

According to the MGMA, if medical practices don’t implement Version 5010 by Jan. 1, 2012, they may face disruptions in claims processing and other essential administrative transactions.

To prevent this, the association is calling on practice management system software vendors to intensify their rollout of compliant products, and on health plans to schedule testing. The organization is also recommending that the government develop contingency plans should the industry not be ready to meet the compliance deadline.

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