A major change is coming. The format of all transmissions of all claims to all payers is about to change. It’s called 5010 and it’s the precursor for ICD‐10.  5010 refers to the electronic transmission of claims sent to insurance payors.  The transition to 5010 will be completed on January 1, 2012, when all claims will be required to use this new format. 

The existing 4010 format is being upgraded to 5010 by government mandate. The 5010 format allows for additional digits needed for the ICD code set on claims. This affects all providers in healthcare. 

Everyone is saying they are prepared.  Medicare, Blue Cross, commercial payers, EDI’s, and billing software vendors are all saying they are ready.  In spite of this, it is common knowledge that software upgrades can have unforeseen problems, especially when they are the size and scale of this one.   This affects everyone, and it’s a massive transition. 

Thinking ahead to the beginning of 2012, reimbursements will continue in January, while simultaneously new claims could be rejected due to unforeseen issues with 5010. By February (typically practices slowest collection month) co‐pays are still being met, resulting in smaller checks from insurance companies. Between reduced reimbursements from applied co-pays and the possibility of rejected claims resulting in delayed payments due to 5010, together this could cause serious cash constraints for any practice. 

Because of this, we are suggesting that everyone either create a reserve fund, open a line of credit from your bank, or reduce spending to help with your cash flow through the beginning portion of this transition. We suggest holding on to enough cash to get your practice by for a couple of weeks or months if problems develop after implementation in the first quarter of 2012. It’s better to have money you don't need rather than to need money you don't have.