Background
The Department of Health and Human Services (HHS) announced in August 2008 that the health care industry will transition o the version 5010 standard for electronic transactions. The implementation deadline is April 1, 2010. Below are answers to requently asked questions about the 5010 transaction standard.

5010 Transaction Standard Frequently Asked Questions

Q: What is the 5010 transaction standard?
A: HIPAA requires the Secretary of HHS to adopt standards that covered entities are required to use in electronically conducting
certain health care administrative transactions, such as claims,remittance, eligibility, and claims status requests and responses.
Covered entities include health plans, health care clearinghouses,and health care providers.
The current transaction standard is X12 version 4010A1 for healthcare claims, remittance advice, eligibility, claims status, referrals,
and NCPDP version 3.0 for pharmacy claims. The Centers for Medicare & Medicaid Services (CMS) is proposing that the
industry upgrade to X12 version 5010 and NCPDP version D.0.The proposed deadline for this signifi cant change is April 1, 2010.

Q: Why is the industry transitioning to the 5010transaction standard?
A: The 4010A1 version of the X12 standard is quite outdated, and remains unworkable in a number of situations. It also is more
ambiguous than later versions. The 5010 version is a marked improvement on 4010A1 (although not the latest version). In the
Proposed Rule, HHS says, “… operational and technical gaps still exist in Version 4010A. In addition, it has been more than
fi ve years since implementation of the original standards, and business needs have evolved during this time.”
As an example, the 5010 standard is designed to accommodate the Present on Admission (POA) indicator, which is used to
indicate if a patient’s condition was present on admission. CMS is instituting a no-pay policy for a group of hospital-acquired
conditions, and the POA indicator is used to determine Medicare payment or non-payment.Also signifi cant is the fact that the 4010A1 standard cannot
accommodate the much larger ICD-10-CM and PCS code sets. CMS is proposing to implement ICD-10-CM and PCS on Oct. 1,

Q: What are the industry challenges for implementing the 5010 transaction standard?
A: There are two primary challenges:
1. The complexity of the 5010 standard
2. The 5010 implementation deadline occurs shortly before theICD-10 implementation deadline, meaning that all covered entities will be required to prepare for both simultaneously.
• The 5010 modifi cations are signifi cant, and include more than 850 changes.
• The implementation guide for the 837 transaction alone contains 700 pages of details, and every page has a change
from the 4010 implementation guide.
• The 10-month overlap of the 5010 change with the transition to ICD-10 will likely increase claim errors and escalate system
change costs.

Q: How are the transaction standards used?
A: HIPAA requires covered entities to use the transaction standards for electronically conducting certain health care
administrative transactions, such as claims, remittance, eligibility, and claims status requests and responses. Covered entities
include health plans, health care clearinghouses, and certain health care providers. The transaction types are as follows:
• 837 – Health Care Claim
• 835 – Health Care Claim Payment/Remittance Advice
• 834 – Benefi t Enrollment and Disenrollment
• 820 – Health Plan Premium Payments
• 270/271 – Eligibility for a Health Plan Inquiry and Response
• 276/277 – Health Care Claim Status Request and Notifi cation
• 278 – Referral Certifi cation and Authorization