HIPAA 5010 Implementation for Medical Billing


HIPAA 5010 adopted to replace the current version of the standard that included entities must use when conducting electronic transactions. Version 4010 is being used currently under HIPAA standards.

Although HIPAA 5010 version is much less attention than the ICD-10 medical codes, it is equally important and physicians, medical practices and other health providers, that are already working with vendors on the 5010 version work.


tested with external trading partners in January 2011. It is very important that you test as soon as you can and often.

Here are some 5010 compliance testing dates is important to be aware of the following:

  • January 1, 2011 Level I compliance-ability to process 5010 transactions for testing and transition with trading partners able
  • January 1, 2012 Level II compliance-all covered entities must start using 5010 transactions

Simply swap transactions involving the transfer of electronic healthcare information between two parties for specific purposes, such as health care provider submitted claims for medical health plan for payment. Insurance Portability Accountability Act 1996 and Health (HIPAA) named some types of organizations as entities involved, including health plans, health care clearinghouses and certain health care providers. HIPAA standard transactions adopted specifically for Electronic Data Interchange (EDI) data transfer for health care, as well. These transactions include, but are not limited to:

  • claims and encounter information
  • payment and send advice
  • claims status
  • qualification
  • enrollment and disenrollment
  • referrals and authorizations

Unlike the 4010 standard current transaction, version 5010 is more specific in the type of data it collects and transfers during the transaction. 5010 has a clear situational rules built where it will help improve understanding of corrections claim, inversions, recovery of payments and processing refunds.

For example, HIPAA 5010 will increase the diagnostic field size to accommodate the increase in size of the ICD-10 codes. Some other changes include:

  • indicator version ICD-9 that distinguishes and ICD-10 codes
  • format changes that will increase the number of diagnosis codes allowed claim

Interestingly, the format of 5010 requires the use of ICD-10 codes. However, it will be able to recognize and distinguish between the ICD and ICD-9-10 medical code sets, which may help in future with the dilemma of dual code sets use billing.

All health providers must establish steps for preparing for the 5010 Action could include the following:


  • Software can be customized to produce and exchange the new formats (eg trading partners must be able to read incoming transactions 277CA).
  • Reviewing business processes to ensure that changes are necessary to collect additional data elements previously not needed (eg effect of patient enrollment, billing, claims and conciliation).
  • Contact your vendor and / or clearinghouse to ensure products and processes are updated (eg license include regulatory updates, and upgrades will include acknowledgment transactions 277A and 999).
  • Trading Partners contact their Medicare contractor-Fee-For-Service locally (MAC) for specific testing schedules.