Many Clinical Laboratories, Other Providers Struggle to Transition to 5010; Likely To See Payment Shortfall

Payors also are straining to handle new payment requirements under Form 5010, say intermediaries

Across the nation, providers, including clinical laboratories and pathology groups, are holding their collective breath as they wait to see whether implementation of the electronic claim Form 5010 goes smoothly, becomes a disaster, or ends up somewhere between.

Just two weeks into this national transition, experts are predicting that most providers—including medical labs and pathology groups—are likely to see a drop in revenue collections. Worse yet, it is not until the first claim denial forms are received from payors that clinical labs and pathology groups can learn the reasons why different payors rejected these claims.

UNEXPECTED PROBLEMS

“We expected, with a transition of this magnitude, that the industry would encounter challenges,” said Jackie Griffin, Director, Client Services, Gateway EDI, a bill-paying clearinghouse in St. Louis, Missouri. “But in addition to the problems we expected, we’ve seen a lot of unexpected problems too.”

Gateway EDI serves both small and large practices, but has seen that its clients that are small labs and physician practices of 1 to 5 doctors are experiencing more problems than larger provider organizations because the smaller entities lacked the resources to prepare for 5010, Griffin explained. Providers are likely to see less reimbursement in the coming weeks because many claims are being rejected and going unpaid, she said.

“In 15, 30, or 45 days or so, almost all providers can expect to see a shortfall,” stated Griffin. “But, with some of the issues you may not know the impact or how you will be paid until the payer adjudicates the claim.

“Since the industry is still in the beginning stages of the transition, we are all still learning,” she said. “All providers and payors will experience some level of problems. We recommend practices reach out to their clearinghouses, which should be providing them with tips and advice on how to manage claims during this difficult time.”

Bill Taylor, Chief Marketing Officer, for XIFIN Inc., in San Diego, California, agreed that labs and other providers are likely to see a drop in reimbursement for many claims filed since January 1. And they are likely to have a cash flow shortage as a result, he said.

“We started submitting production 5010 claims back in July,” he explained. “We saw problems then with payors that we were able to correct well before the transition deadline, but now we are seeing problems with payors that were late in testing and transitioning and are still working on helping them through those issues. Many payors are unable to process 5010 files correctly.

“For instance, Medicaid of Minnesota and Blue Shield of Virginia are two of the many payors we know are having problems processing 5010 files for payment,” he said. “Also, early on we saw that any provider submitting a claim with a Post Office box in the facility address was being rejected. While we’ve fixed that for our clients, we’ve heard from a couple of clearinghouses that this is one of the biggest reasons for rejections today. But there are many more problems that providers don’t know about yet, and it takes research to identify these issues.

“But here’s the main problem: If you don’t have the expertise and the actual in-house surveillance tools to monitor your acknowledgement files, you won’t know you’re having these problems,” Taylor explained. “You won’t know until your reimbursement drops. You won’t know why a claim was rejected and you can’t fix it until you know why.

“We’ve seen Medicare Administrative Contractors that accept a claim but reject a procedure on the claim and send an incorrect acknowledgement back that the claim was successful,” he added. “We only found out because we have the surveillance tools to identify these problems.

“It’s great that CMS is not enforcing the penalties for failure to comply with 5010 until the end of March,” Taylor said. “But the biggest penalty for providers is not getting paid, which means an interruption in cash flow. And many labs won’t find that out for 30 to 45 days when it’s going to be too late to do much except resubmit those claims since the timely filing clock is still running.

“Right now, it’s almost impossible even to estimate the extent to which labs will have trouble getting paid,” he added. “It varies from lab to lab, from payer to payer, and it varies based on the mix of payors. For instance, if you have Medicaid of Minnesota as a primary payer (for institutional claims only), your percentage of problem claims will be high. Likewise if you submit to Blue Shield of Virginia, you will have issues.

“We’ve identified problems with those payors and informed our clients in those jurisdictions that we are working to resolve these problems,” he said. “And while the payors have been very receptive to our requests to solve these problems, it will take time to resolve all these issues.”

Prior to the January 1, 2012, deadline, XIFIN had submitted more than 1 million routine lab test claims with specific payors that were ready to make the transition. Any number of unexpected problems surfaced during this time, including the failure to pay claims that had a Post Office box in the facility address, he said.

To help clinical laboratories and pathology groups get a head start on identifying common problems that payors are having with form 5010 processing, DarkDaily.com has arranged an audio conference on the subject. Scheduled for January 18, 2012 from 1-2:30 p.m. Eastern Time, this session will provide you and your lab team with the latest information on what’s going well and what isn’t. You’ll learn about some of the problems that payors are having with the way they accept, process, and issue payments for claims submitted on these new forms. You’ll also find out about the new information that will be required on the 5010 form, helping your lab get its claims reimbursed without delay.

Having processed more than one million routine lab-test claims, our two XIFIN speakers will be able to provide details to help ensure your lab knows how to use the new form and is aware of the potential problems involved in its use. In addition, Gateway EDI will provide its experience with the form from the bill-paying clearinghouse perspective.

Adding to the confusion about how and when to use the new 5010 form is that some payers aren’t ready to accept it. And those that are may not be equipped to handle the number of new forms, which will cause further delays in claims processing and payments. Because your lab is ultimately at risk for claims denials or delays, not knowing the ins and out of the new form and how to use it will pose a serious threat to your bottom line. Which is why I encourage you to register for the latest audio conference from THE DARK REPORT and DarkDaily.com, “HIPAA Form 5010 Implementation: Real-World Solutions to Ease the Transition from 4010 to 5010 and Avoid Reimbursement Delays.”

 

Related Information:

“HIPAA Form 5010 Implementation: Real-World Solutions to Ease the Transition from 4010 to 5010 and Avoid Reimbursement Delays.”