Now fewer than 6 months away, January 1, 2011 is a critical milestone on the avenues to HIPAA 5010 and, subsequently, ICD-10. Whether healthcare organizations will actually achieve Level 1 compliance come the first of next year remains unclear – and that is not good news for the industry.

Level 1 is by no means the day of reckoning, true. Rather, it's a CMS suggestion and the reason it matters is one of timing. If providers meet Level 1 by the deadline, that gives them the recommended full year for external testing with payers and clearinghouses. If not, they'll be running behind the timelines issued by CMS (The Centers for Medicare and Medicaid Services) and industry groups such as WEDI (Workgroup for Electronic Data Interchange). And with ICD-10 lurking on the heels of HIPAA 5010 final compliance, the time crunch will only get more intense.

[Related: Top 3 understated aspects of ICD-10 and 3 of the many ways ICD-10 will permeate your health IT.]

Yet a solid 24 percent of ICD10Watch readers do not believe they'll meet the Level 1 compliance deadline while another 35 percent “cannot say for certain yet,” according to our reader poll. The remaining 41 percent responded that “yes” they will comply with Level 1 by the deadline.

But that means, as of mid-July, almost two-thirds of healthcare organizations might not make it. Even though Level 1 compliance is a suggestion, not a mandate, there are implications to more than half of healthcare organizations not making it on time.

“This could lead to interruptions in provider cash flow, extensive calls to plans by providers, extensive calls to vendor support desks, as 5010 transactions fail in production,” explains Stanley Nachimson, co-chair of WEDI's timeline initiative. “And further delays in implementation of 5010 ready systems may cause delays in the work which must be done for implementing ICD-10 and other requirements for health plans and providers.”

[Recent ICD10Watch poll: Readers respond: Cloud for HIPAA 5010 and ICD-10 compliance, or not?]