In January, HHS published final rules dealing with modifications to the HIPAA transaction and code sets. With this, come Jan. 1, 2012, you will no longer be allowed to submit claims using 5.1. For pharmacy claims, the D.0 standard will kick in. And the 4010A version of the 837 and 835 will be replaced with the new 5010 version. Now, you may ask, why is he

writing about something that doesn’t take effect for two and half years?

The answer is, whenever the industry moves to new standards there are problems. Recognizing this, HHS has also established the timelines for what the industry has to do and when, in order to be ready for a hard cutover come compliance day. There will be no “contingency plans” that Medicaid programs will be able to use this time around. And HHS stated it is going to enforce penalties for noncompliance — something we didn’t see with the initial HIPAA standards. Will state Medicaid programs get

the needed funding to convert to the new standards? The comments HHS received from a number of Medicaid programs were that even with the 90% federal matching rates, resource requests would unlikely gain legislative approval. HHS acknowledged “the need to work with states to coordinate their budget requests and implementation activities with legacy system replacement.”

Now back to D.0. There have been a number of changes to this version of the NCPDP standard. New fields have been added in various segments, and the COB segment has been beefed up in order to better handle Part D billing requirements. New code values have been added and some removed. In general, the standard has been tweaked based on experience with 5.1. This will require retraining of pharmacists.

One thing worth noting, however, is that PBMs and Medicaid programs cannot jump the gun and require the new transaction sets before Jan. 1, 2012, unless mutually agreed to by trading partners.

Something else you should know. HHS has established two compliance dates. These are labeled Level 1 and Level 2.

Level 1 is the get-ready period. It is when the HIPAA-covered entity can demonstrate internally that it can create and receive D.0 or 5010-compliant transactions. Covered entities should be prepared to meet Level 1 compliance by Dec. 31, 2010. Compliance with Level 2 is Jan. 1, 2012.

When a covered entity is in compliance with Level 2, it has completed end-to-end testing with each of its trading partners, and is able to operate in production mode. Production mode means that covered entities can send and receive the transactions and process them. However, it is your pharmacy system vendor that does the testing. That said, your system vendor should be underway with the necessary software modifications in the not-too-distant future, if work has not already begun.

It might be a good idea to check with your vendor from time to time on progress being made. Keep in mind that the onus is on covered entities to be ready. Pharmacy is the covered entity, not the system vendor. So recourse will be to the pharmacy, if it’s not in compliance come Jan. 1, 2012. CT

Bill Lockwood, Chairman/Publisher