Medical Providers turning to financing their receivables due to 5010 conversion problems

by on 02/21/12 at 11:16 pm

On January 1, 2012 federal regulations mandated medical providers transition to HIPAA version 5010. This has caused logjams to many medical providers receiving payments from Medicare. Some of the new requirements of version 5010 to look out for are:

Identifiers: Make sure you are using your NPI numbers. EIN and social security numbers are no longer valid identifiers.

Billing address: Now must be a physical address, P.O. boxes are no longer valid in the billing field. If a P.O. box is used for payments, it must be placed in the pay-to-address field.

Zip codes: Nine digit zip codes are now requried.

Drug reporting requirements: Drug quantity and unit of measurement is required now whenever a National Drug Code is listed on the claim.

Both primary and secondary claims MUST have a Medicare Secondary Payer indicator if Medicare is the secondary pay.

Not conforming to the 5010 requirements can cause further delays in payments to your medical practice. Those practices that are conforming are still experiencing  issues are the transition is causing problems nationwide. If your medical practice does not have sufficient cash reserves to ride out this period, which could last until April 2012, a line of credit should be established with a lending institutions. Those practices that cannot obtain traditional financing should seriously consider medical factoring as a viable option.

Medical factoring allows medical providers to monetize their accounts receivable due from third party insurance carriers. More and more providers are turning to medical factoring in today’s difficult credit environment. The 5010 transition is causing extra strain on medical practices that are already squeezed from insurance carriers. Financing, using accounts receivable as collateral can help during this rough stretch to make payroll, pay bills, provide general working capital or expand your business.

Ben Rutkevitz is the managing director at Alleon Capital, a healthcare financing company. He can be reached at benr@alleoncapital.com or 201-340-6346.

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