• Contact Us


combined cert


Healthcare Reform


Healthcare Reform
Healthcare Reform
Healthcare Reform

"Paragon devised a schedule tracking tool, geared to the unique CMS environment, to monitor the activities performed by each of the systems to ensure they meet the key milestones and deliverables."


As the largest health care purchaser in the world, the Centers for Medicare and Medicaid Services (CMS) is expected to provide leadership in achieving the goals of reducing cost, improving health outcomes and increasing access to care. CMS, along with its state partners, provides health insurance for more than 100 million Americans, with outlays estimated at nearly $840 billion in 2011. Because its programs fund so much health care, its role reaches far beyond simply paying bills. CMS establishes payment methods, quality measures and certification requirements, coverage policies, research priorities, and direction for innovation in health care delivery.


When the United States Department of Health and Human Services (HHS) updated electronic healthcare policies, health plan providers, health care clearinghouses and certain health care providers, including CMS, had to respond quickly and accordingly to meet new standards [updated X 12 standard, Version 5010, and updated version of the National Prescription Drug Programs NCPDP standard, Version D.0]. Transactions affected include professional and institutional claims, claims status requests and responses, payment to providers, eligibility requests and responses, and coordination of benefits.

While these new regulations accelerate the widespread adoption of health information technology, more than 40 Medicare Fee-for-Service (FFS) systems were impacted by the data structure changes.

Other factors complicated the initiative, such as software delivery cycles, budget processes and the geographic spread of Medicare contractors, each with their own data center.

CMS employed Paragon to orchestrate the various efforts to meet the mandated implementation milestones effectively and efficiently.


Paragon has worked with Medicare on the Health Insurance Portability and Accountability Act (HIPAA) 5010/D.0 Project for the past four years. During that time, Paragon has been involved in all aspects of the project, including:

  • Gap analysis between 4010 and 5010
  • System impact analysis
  • Change requests creation and tracking
  • Software development and testing oversight
  • Budgeting
  • Industry outreach
  • System implementation into production

Early in the project, Paragon worked with Medicare to identify the EDI (electronic data interchange) Gaps between the 4010 and 5010 HIPAA standards and the impact on the FFS related systems to ensure gaps were addressed and implemented.

Paragon recognized that the systems should be addressed as three categories used to process claims and house various data for research, fraud detection, and clinical standards/quality: Medicare Administrative Contractor (MAC) Front End Systems, Core FFS Adjudication Systems, and Medicare Downstream Systems.

Paragon devised a schedule tracking tool, geared to the unique CMS environment, to monitor the activities performed by each of the systems to ensure they meet the key milestones and deliverables. This tool accommodated the various delivery cycles used by each of the three categories of systems.

Some of Medicare's providers were located in jurisdictions that were not going to have MAC contracts awarded before the 5010/D.0 compliance enforcement deadline. Paragon assisted Medicare in devising an alternate MAC Front End Implementation to pair legacy contractors with those MACs to provide 5010 connectivity. Paragon helped devise technical solutions, worked to vet the proposed technical solutions with selected MACs, provided cost analysis, assembled lists of pros and cons, and devised a high-level schedule to drive the project. Paragon worked with CMS to gain final approval from the CMS IT Governance Council.

Paragon became familiar with the Medicare funding processes and budget cycles for the three systems categories and used that knowledge to ensure that appropriate funding was in place for each project to avoid work stoppages or delays. Paragon created a budget tracking mechanism that used detailed entries and provided high-level rollups and graphs.

One of the most important activities of the project is to monitor the progress of the transition from 4010/5.1 to 5010/D.0. Paragon saw a need for more detailed reporting than what CMS was receiving while monitoring the 4010/5.1 to 5010/D.O transition. Paragon used raw reporting data to create a series of reports with rollups, trend analysis, projections, progress graphs and other information that offered a clearer way to track transition progress and to make needed corrections with more confidence.

Paragon also worked with CMS to develop, coordinate and oversee the CMS MAC Certification Program. Paragon developed a suite of nearly 15,000 test cases the MACs used to demonstrate their ability to process 5010 transactions. The tests exercised all electronic transactions sent and received by CMS. Paragon also served as subject matter experts to resolve deviations from expected test results.

Paragon also assisted Medicare with several industry outreach activities. The client relied on us to help prepare numerous presentations used in outreach calls and conferences for WEDI, HIMMS, MAC Contractor Executives, FFS Operations Board, and CMS technical review boards.


CMS successfully implemented 5010/D.0 and is now processing transactions with its trading partners. The deadline for all transactions used by industry to be in the 5010/D.0 format is June 30, 2012. For the week of April 2-6, 2012, 91 percent of institutional claims and 95 percent of professional claims were being submitted to Medicare in the 5010 format. This is a testament to the success of Medicare's technical implementation of the project as well as the successful communication to submitters regarding their need to migrate to 5010. Paragon held a significant part in this success by providing the expertise and experience for the program and project management necessary on this complex, large-scale initiative.

1VOSB sm

Copyright © Paragon Technology Group, Inc. All Rights Reserved.