5010: Managing in a Hybrid Environment

Technology advancements and government mandates such as 5010 and ICD-10 are contributing to the evolution of systems and processes for payers, providers and their vendors.

Covered entities have no choice but to upgrade systems to enable the processing of transactions in hybrid environments to support the latest electronic and paper formats.

Payers and providers both benefit from processing transactions in the latest electronic formats, but if you are struggling with how to migrate from 4010 to 5010 and operate in a hybrid environment, you are not alone. Many payers and providers alike are faced with the challenge of exchanging transactions with trading partners that are early technology adopters and already have compliant electronic files, while at the same time working with late technology adopters that still may have paper in use or trade with older electronic formats.

For payers choosing to convert from paper to compliant electronic transactions, this will make a positive difference in their processing environments, from creating new efficiencies to fostering reduced costs. However, even in the face of regulatory change and a mandate to move to an electronic format, there’s no denying that paper still will exist, requiring organizations to find ways to operate in a hybrid environment (or to convert paper functions to electronic in order to eliminate the need for hybrid processes wherever possible).

Challenges of a Hybrid Environment

Payers and providers are encouraged to modify processes and move to electronic formats in an effort to reduce costs and provide better management of care. By Jan. 1, 2012 all covered entities will be required to convert electronic HIPAA transactions executed between covered entities to HIPAA 5010 standards (5010 standards will not apply to those operating in a non-HIPAA paper environment).

Many vendors and payers scan paper claims and convert them to electronic transactions, thereby allowing providers to bypass the 5010 requirement – a provision that could prove useful if those providers are not ready by the January 2012 deadline. Payers and providers also are engaging with vendors to provide clearinghouse services for paper and non-compliant electronic transmissions as a stopgap measure while upgrading systems to 5010.

Many organizations have automated transactional processes covering items such as reviews, approvals and payments, but benefiting from these automated processes requires data to be electronic. Despite a mass migration to electronic systems, paper-based workflows continue to be required for a variety of processes. Working in a hybrid environment creates challenges such as coping with different legislative requirements, dual processes and other inefficiencies. For payers and providers to be comfortable in their electronic environments, a strategy for hybrid management is an absolute necessity.

As mentioned previously, when paper is used for correspondence, claims submission or other transactions, many organizations are converting that paper to digital images, enabling them to eliminate time delays and avoid losing data (a common occurrence with shuffling paper).

Providers also are looking for creative methods to reduce time to payment. Automation to create and validate clean claim transactions, whether submitted on paper or electronically, will get claims processed and paid faster. Finding a way to manage paper and electronic transactions simultaneously – especially in claims processing and accounts management – will improve processes, create efficiencies and facilitate compliance with new standards.

Thriving in a Hybrid Environment

Converting paper documents such as claims to electronic formats allows payer organizations to take advantage of the efficiencies created by operating in a single electronic environment, and this also acts as a way to process claims and manage inquires such as phone calls, status checks or requests for additional information more efficiently.

Part of the Patient Protection and Affordable Care Act of 2010 (PPACA) requires health insurers to spend 80 to 85 percent of consumers’ premiums on medical care and healthcare quality improvement (rather than on administrative costs), starting in 2011. While paper may be the starting point for some processes, accurately converting paper to electronic transactions as soon as possible in the claims lifecycle can help organizations achieve that mandate and ensure that a greater portion of each healthcare dollar is allocated towards care.

Moving to an electronic environment also offers an effective, automated approach to the process of adjudication and sending payment back to hospitals and providers, creating additional efficiencies, increased accuracy and, potentially, quicker payment. Many payers are working with vendors to convert paper to electronic in an effort to avoid the inefficiencies of hybrid environments.