A seemingly smaller but inevitably important milestone – HIPAA 5010 – stands between healthcare entities and ICD-10, both on the calendar and in IT back offices. And that deadline promises to measure the industry’s progress, or lack thereof, toward the forthcoming code sets.

“The proof will be Jan. 1, 2012,” said Robert Tennant, senior policy advisor for the Medical Group Management Association.

That’s when payers, providers and clearinghouses are mandated to comply with HIPAA 5010, seen as something of an EDI precursor to ICD-10.

“We’re watching HIPAA 5010 unfold and trying to gauge where that is,” said George Arges, senior director of the health data management group at the American Hospital Association. “With respect to that implementation timeline, that is the key to whether or not our members will be ready for ICD-10 or whether the industry will be ready by the Oct. 1, 2013 deadline.”

[Cover story: ICD-10's ten-year reign of fear.]

Indeed, if the HIPAA 5010 transition is not smooth, that turbulence will have an inevitable ripple effect on ICD-10 implementation and compliance. Resources that should be dedicated to the forthcoming code sets will be otherwise tied up with HIPAA 5010 while healthcare providers figure out how to comply, collect on claims and keep cash flow alive long enough to get back on track.

“If 5010 does not get the kind of testing and does not reach a successful critical exchange on Jan. 1, 2012 in a way that it should, and if people are still struggling to get their 5010 transactions up and running one or two months after that deadline,” Arges added, “that’s going to be a problem.”

Should that happen, Tennant said, “at a minimum, (the Center for Medicare & Medicaid Services) should offer a contingency plan.”

[HIPAA 5010: A procrastinator's guide to making the January 1, 2012 deadline.]

Contingency plans, however, are rarely a sustainable option. Stanley Nachimson, co-chair of WEDI’s Timeline Initiative, a former senior technical advisor at CMS and principal at Nachimson Advisors, said that, instead, particularly given that WEDI surveys indicate the healthcare industry is falling behind recommended timelines for ICD-10, the government should be focusing on leading the healthcare sector toward ICD-10 in a manner that will avoid such temporary and costly backup plans.

The alternative?

“We hate to say this because we’ve really been proponents of ICD-10, and the sooner the better, but we’re also realists in understanding that you operate in a bigger environment because you have to work with your health plans and they need to be ready,” Arges said. “But if things are not progressing as well as they should with 5010, if things are slowing down, it might be best to think about the possibility of extending the timeline for ICD-10 at least another year."