Level I testing is the period when covered entities perform all of their internal readiness activities to prepare for testing the new versions of the standards with their trading partners. Level I compliance means a covered entity can create and receive compliant transactions that result from the completion of all internal activities and testing. Covered entities should be prepared to meet Level I compliance by December 31, 2010.
Level II testing activities involves external testing with trading partners and should begin by January 1, 2011. However, covered entities must be compliant with Level I activities before they can prepare for Level II testing. Level II compliance means that a covered entity has completed end-to-end testing with each of its trading partners, and is able to operate in production mode with Versions 5010 and D.0. Covered entities must be Level II compliant by January 2012.
The 4010A1 version of the X12 standard is outdated and remains unworkable in a number of situations. The 5010 version is a marked improvement on 4010A1. There are operational and technical gaps that still exist in Version 4010A. In addition, it has been more than five years since implementation of the original standards, and business needs have evolved during this time. Also significant 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, 2013.
The new 5010 standards will have greater accuracy and efficiency of EDI transactions, eligibility, billing, claims processing, reimbursement, many administrative functions and accommodate the larger set of ICD-10 codes.
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: