The truth about ANSI 5010 / HIPAA 5010 and Medisoft

The truth about ANSI 5010 / HIPAA 5010 and Medisoft

An upgrade to the latest practice management release is required to extract patient-specific and other data needed to create an ANSI 5010 (a.k.a. HIPAA 5010) compliant claim. These data fields do not exist in previous software releases.

Industry organizations including the American Medical Association (AMA) and Medical Group Management Association (MGMA) say physician practices need to upgrade to a 5010-compliant software release.


“As the date for compliance with the government’s updated standard for electronic claims transaction rapidly approaches, physicians need to have practice management software in place that meets those standards,” said AMA President Cecil B. Wilson, M.D., in a joint statement released April 28, 2011 with MGMA.


“In order to avoid cash flow disruption associated with the transition to the 5010 standard, it is critical for physician practices to convert their administrative systems and test their readiness well in advance of the compliance date,” added MGMA President and CEO William F. Jessee, M.D.

Some clearinghouses say an upgrade isn’t necessary and that they can convert legacy data to a 5010-compliant claim. However, that’s only half the story. When pushed, clearinghouses have acknowledged that when the clearinghouse up-converts legacy data to a 5010 claim the following could happen:

  • The practice will need to manually intervene and review/augment every claim sent to payers to ensure claims meet the payer’s new edits.
  • The practice’s claims could either be stopped by the clearinghouse or reject at the payer.
  • The practice may experience an increase in claim rejections, a decrease in worker productivity and an impact on cash flow.

Clearinghouses promised to take care of their customers with the 4010 and NPI conversions, yet many practices that relied on clearinghouses for these conversions experienced a significant decrease or delay in their cash flow.

Customers should ask the following questions to clearinghouses that claim they don’t need an upgrade:

  • How exactly do you plan to up-convert the data?
  • Will you hard-code patient-specific information that isn’t the same for all patients?
  • If yes, how will incorrect hard-coded data affect the ability of my claims to be paid by the payers?
  • Will you map data to fields that aren’t used today?
  • What happens if a payer decides to use those fields in the future?
  • What work will I have to do at my practice to either provide you the data you need and/or review converted claims for accuracy? Will this work be manual?

At the end of the day, is it worth risking cash flow? If a practice submits $500,000 in claims each year:

  • A 1% increase in claim rejections means $5,000 in lost revenue to your practice.
  • A 5% increase in rejections is $25,000 in lost revenue!
  • Contrast the potential lost or delayed revenue with the cost of an upgrade:
  • The MSRP on a new Medisoft Advanced license is $1,299. MSRP on a new Medisoft Network Professional is $3,599. Upgrades from one or two versions old are much less.
  • The MSRP on a new Lytec Single User license is $3,361. MSRP on a new Lytec Professional is $4,820. Upgrades from one or two versions old are much less.

Finally, don’t wait to upgrade. Research released by MGMA following the June 15, 2011 national 5010 testing day indicated:

  • Only 29 percent of respondents believed their current practice management system software would permit them to use Version 5010
  • 50.3 percent of respondents stated that their software would require an update
  • 4.5 percent of respondents indicated that their software would need to be replaced
  • If everyone waits until the last minute – or until their claims begin to be rejected in January 2010 – there won’t be enough resources to upgrade everyone.