[This Transcript is Unedited]
Hubert H. Humphrey Building
Room 705A
200 Independence Avenue, SW
Washington, DC 20201
Agenda Item: Call to Order, Welcome and Introductions - Dr. Cohn
DR. COHN: Okay, good morning, I want to call this meeting to order, this is a one day meeting of the Subcommittee on Standards and Security of the National Committee on Vital and Health Statistics. The national committee is the main public advisory committee to the U.S. Department of Health and Human Services on national health information policy. I'm Simon Cohn, I'm the associate executive director for health information policy for Kaiser Permanente and chair of the committee, I'll be helping Jeff and Harry, Harry are you on the line?
MR. REYNOLDS: Yes, sir.
DR. COHN: Okay, good, in terms of helping to facilitate the meeting today. I obviously want to welcome fellow committee members, HHS staff and others here in person, and also welcome those listening in on the internet and of course as always want to remind everyone to speak clearly and into the microphone.
Now I just want to take a moment even though we'll be hearing from him in just a second but just to welcome Tony Trenkle who's the new director of the Office of HIPAA Standards so welcome and happy to have you join us. As I understand I know you came from Social Security but you actually had a very long involvement at least as I understand in e-government and e-commerce and we obviously look forward to using those applications as you move more into health care, so welcome and we'll look forward to hearing from you in a couple of minutes.
Now for those on the national committee I would ask if you have any conflicts of interest related to any of the issues coming before us today, would you so please publicly indicate during your introductions, and with that let's have introductions around the room. Stan?
DR. HUFF: I'm Stan Huff, I'm with Intermountain Health Care and the University of Utah in Salt Lake City, a member of the committee and member of the subcommittee.
DR. FITZMAURICE: Michael Fitzmaurice, Agency for Healthcare Research and Quality, liaison to the national committee and staff to the subcommittee.
MR. TRENKLE: Tony Trenkle, director, Office of HIPAA Standards.
MR. SMITH: Joseph Smith, vice president and chief information officer for Arkansas Blue Cross and Blue Shield.
MR. TENNANT: Robert Tennant, senior policy advisor for the Medical Group Management Association.
MS. NARCISSI: Jean Narcissi, director of electronic medical systems at the American Medical Association.
MS. PICKETT: Donna Pickett, National Center for Health Statistics, Centers for Disease Control and Prevention and staff to the subcommittee.
MS. GREENBERG: Marjorie Greenberg, National Center for Health Statistics, CDC, and executive secretary to the committee.
DR. WARREN: Judy Warren, University of Kansas School of Nursing, member of the committee and member of the subcommittee, and I'm not aware of any conflicts I have today.
MS. FRIEDMAN: Maria Friedman, CMS, lead staff to the subcommittee.
MR. BLAIR: Jeff Blair, Medical Records Institute, and co-chair of the Subcommittee on Standards and Security.
DR. COHN: And Harry Reynolds?
MR. REYNOLDS: Harry Reynolds, Blue Cross Blue Shield of North Carolina, co-chair of the committee, and although the Blue Cross Association is testifying today I am not aware and have not seen any of that testimony so I don't feel I have any conflicts today.
DR. COHN: And we're obviously glad you can join, you're sounding better on the phone.
MR. REYNOLDS: It's good to sit up, Simon.
MS. GREENBERG: The sniffling executive secretary here, I don't think that is really the factor, whether or not Harry is aware of or has seen the testimony, I think --
MR. REYNOLDS: Well, help me with that, Marjorie.
DR. COHN: Marjorie you need to get closer to the microphone.
MS. GREENBERG: But I think as long as the matters discussed are general and not particular or specific to Blue Cross Blue Shield is not a problem but any, I think any specific position that's taken by Blue Cross Blue Shield Harry should recuse himself from discussion or voting and I don't think we're at a situation --
MS. SQUIRE: Marietta Squire, I'm with CDC and NCHS and I'm staff to the subcommittee
MR. ALFANO: Bill Alfano, I'm policy consultant with Blue Cross and Blue Shield Association.
MS. CHRISTENSON: Susan Christenson with AHRQ.
MR. ARGUS: George Argus, American Hospital Association.
MR. SPIDEL(?): Paul Spidel, American Medical Association.
MR. POLLARD: Michael Pollard, Medco Health Solutions.
DR. ZUBELDIA: Kepa Zubeldia, Claredi.
MS. FRANK: Sheila Frank, Delta Dental Plans Association.
MR. WHICKER: Jim Whicker, representing WEDI with Intermountain Health Care.
MR. MCLAUGHLIN: Mark McLaughlin, McKesson.
MR. SHUPING: Jim Shuping, chief staff executive with WEDI.
MR. ZIRAKOWSKI(?): Art Zirakowski, Center for Devices, FDA.
MS. ZIGMAN-LUKE: Marilyn Zigman-Luke, America's Health Insurance Plans.
DR. COHN: Okay, well good morning everyone and this is Simon Cohn, I have no conflicts of interest either, Marjorie I was going to turn it over to Jeff and Harry but if you'd like to make a comment.
MS. GREENBERG: Okay, I just wondered if we could have a moment of silence in memory of Elliott Stone who was a great friend of all of ours, to the Committee, to WEDI, to Standards and Security, small and large, and he died tragically much too young on Monday night. We'll miss him terribly.
DR. COHN: Let's just take a moment to pause that.
[Moment of silence.]
DR. COHN: Thank you, Marjorie. Jeff, I'm going to hand it over to you and Harry to review the agenda and then we can get started.
MR. BLAIR: Thank you, Simon. Harry Reynolds and I co-chair the Subcommittee on Standards and Security and we sat down to kind of craft the agenda for today at our last meeting when we were at the airport and there's three themes to this particular day. One is for us to get some feedback from the industry on their experience with implementing the HIPAA standards, especially the financial administrative transaction standards, and it was couched in terms of return on investment, it would really be nice if anybody is able to wind up indicating anything specific or definitive in terms of return on investment. However, we're not expecting the discussion to be limited to only something quantitative or financial in terms of return on investment, there might be other experiences that will be helpful for the subcommittee and the full committee to know as we begin to look at implementing e-prescribing and other standards in the future. So that's one theme.
A second theme is going to be the beginning of a major new exploration which will build upon one of the visions that the subcommittee set forth back in the year 2000 when we started to look first at clinical data, at that time we did it under the terminology from the HIPAA law which referred to it as patient medical record information and in the Patient Medical Record Information Report of August 2000 that vision indicated that we're looking for the day when clinical information, patient care information, could be captured once at the point of care with derivatives of that information being available for clinical research and reimbursement and public health. And Stan Huff is going to be leading the discussion for us to explore how we could begin to do that in terms of using the derivatives of clinically specific data captured at the point of care, so that's the second theme of our meeting today.
The third is that we're going to have, well we're going to be hearing on the national patient identifier and the fourth kind of is a bonus and extra and actually I'm going to leave that to Maria to introduce a new major figure within the federal government that will be giving us guidance and leading us in terms of HIPAA standards and clinical data.
So now that I've kind of given you an overview of what our day will be like I'm going to turn it over to Maria and Karen for the first panel. Maybe before I do that, Harry, did you have any other comments or words with respect to our agenda for today?
MR. REYNOLDS: No, I agree totally with what you said, Jeff, I guess I would, since it will be hard to jump in through the phone I guess there's three things that I would really like to hear especially as it relates to ROIs is how can everyone improve the ROI across all participants, what are the arenas to assure cooperation and consensus based on whatever testimony comes out today, and what are the learnings that we need to carry forward as new HIPAA standards are set based on the ROI that has come out of the first bit of information. And then I'll comment on NPI and the other and having been in the hospital for ten days your subject, since the hospital that I was in had an electronic medical record it's very near and dear to my heart now so I will be much more supportive of your discussion today.
MS. GREENBERG: Harry, was it a requirement when you became co-chair that you make a site visit?
MR. REYNOLDS: Yeah, and as usual I stayed longer then my welcome probably.
MS. GREENBERG: We're glad to hear your voice.
MR. REYNOLDS: It's good to be back, thank you.
MR. BLAIR: One last comment that I might say, most of the folks in the room already know that you got a blind guy here --
PARTICIPANT: We don't blindside you.
MR. BLAIR: Exactly. Simon, who is now chair of NCVHS has been kind enough to offer to assist me so as we go forward and people do have questions Simon will wind up identifying you and helping from that standpoint. But let me turn it over to Maria so that you can introduce Tony --
MS. FRIEDMAN: Thank you, Jeff, I think Tony has been introduced but I would like to welcome him again, not only because he's my boss but also because he's going to be an integral part of the work that we do here and I also like to think that the work that we've done here with NCVHS has created a new role for our office which I think Tony is going to talk about a little bit and also Jeff and Harry, Karen is not here this morning, she'll be joining us this afternoon, she had some unavoidable conflict so just for you to know. So anyway, I would like to turn it over to Tony Trenkle.
Agenda Item: CMS Update - Mr. Trenkle
MR. TRENKLE: Thank you, Maria, good morning. I just want to make a couple introductory remarks before I give you an update on some of the areas we've been involved with that we want to keep you current on. First of all I echo what Maria said about the committee, I've been very impressed, I've only been at CMS two weeks now so I'm still getting my feet wet so I beg your indulgence in terms of questions and things of that sort. But what I wanted to say is I've been very impressed with the amount of work, the thoughtful discussions, and the insights that you provided in a number of areas, most recently in the e-prescribe area. I came here from the Social Security Administration and one of the areas we've worked with over the years has been the area of electronic signature so I was very interested in reading the comments that you wrote and I thought you really captured some of the key concerns, issues, and your recommendations I felt were right on target so I appreciate that and look forward to a dialogue with you.
And as Maria mentioned we're expanding our role but what I want to say is while we're expanding our role to deal with standards and services we're not going to abandon the area that we're in, this is an expansion of what we're doing and as Maria has said we think it complements and expands but also strengthens the areas that we've been working in before. So I look forward to working with you, look forward to dialoguing with you, and I also look forward to continuing to have staff support for your activities. I know that Maria and Karen and others have provided a lot of support and I think this is also a two way street, I think we need to provide you with the support in order that you can help provide us with the recommendations and the insights that we need in this complex and diverse area.
I want to spend a couple moment just bringing you up to speed on a few areas that you're familiar with, one is the HIPAA regulations, our claims attachment proposed rule was expected to be published this summer and as you know it proposes to adopt electronic standard for claims attachments and it's now going through the clearance process so I can't give you a date on when it's going to be published because as you all know these clearance processes can take sometimes longer then we anticipate so we'll just say this summer so that will give you a little bit of a timeline there.
Secondly in the HIPAA regulations area the standard unique health plan identifier proposed rule was expected to be published this fall and I believe Karen is going to be talking some more about that later this morning but basically as you know it adopts a national plan ID as a standard identifier for health plans and it will create a federally directed registry to assign an identifier to health plans. And as I said Karen is working very closely in this area and she'll provide you with much more detail later today and as time goes on she'll be keeping you updated on that.
The third thing I wanted to mention to you is the second round of modifications to the transactions code sets is under development, expected to be published by the end of the year, and as you know we've been working very closely with the Designation Standards Maintenance Organizations and hopefully this will provide some streamline at the standards updates process.
The second area I want to mention is the HIPAA enforcement area, last week, I guess now it was the week before last, we published the notice in the Federal Register to basically our procedures for reviewing and investigating complaints, nothing in these procedures is new, basically what we're doing is providing you with a public document to get it out in front of everybody so that people are aware of what these procedures are and can use that as a reference. Of course all of this information is available on our website which I think all of you are aware of, www.cms.hhs.gov/hipaa, so if you want to get more information on that please reference that site.
The enforcement proposed rule is nearing completion, should be published later this spring, it details the policies for violations and actions that the department will take against the violators. And I think one of the things that Karen and others asked me to discuss this morning is just to give you kind of an update on the complaints and where we stand at this point. As of March the 28th we received 325 total complaints, 78 percent were against the private sector entities, 16 percent against Medicaid and six percent against Medicare. And as you know this is a complaint driven process and basically we try to resole these complaints as quickly as possible. But the main reasons are compliant claims rejected, code set violations, and trading partner disputes, and of course none of these are unusual, these types of things as you know if you've worked in the EDI area happen quite a bit.
But I think what I found very enlightening if not pleased is the fact that of the Medicare statistics through March 25th 99.32 percent of national HIPAA claims were compliant which I think is a very good record and most of these complaints as we mentioned are settled fairly quickly and are dealt with in a way that I think has been reflective of the industry working cooperatively with the government in getting the HIPAA regulations and the sets enacted so I'm pleased with that.
I want to mention to you just a moment about the security area, as you know we're going to have the deadline on April 20th 2005 and in 2006 for the small plans area, one of the major areas in this that we're obviously concerned with is the overlap between security and privacy so we're working very closely with the Office of Civil Rights on how we deal with the issues that overlap both areas. And I don't know what the percentages are going to be but I would suspect quite a bit of the security violations will also include a privacy violation and vice versa so one of the things we are developing and have continued to develop with the Civil Rights Office is to streamline procedure to deal with these types of issues to make sure that both sides are working in conjunction with each other so we get them resolved together. And I think we're looking at it from both areas, not only from an intergovernmental or within the agencies type of arrangement also, as a customer service it's imperative that we make this process as seamless and as painless as possible so we've been working very closely with that office and you'll be hearing more about that as we go along.
Let me see if there's anything else in that, well, and of course as you know it's going to be primarily complaint driven as the current process with the transaction code sets is so it will be self reporting and will be dealt with as we've dealt within the other area which I think we've been pretty successful in working in that. Of course when you get into the security and privacy it can get very complex and there can be a lot of new players involved in that so we expect to see a larger number of complaints in this area, much larger then what we've seen in some of the other areas but hopefully once we get through the initial process we'll be developing some ways to deal with that because I'm assuming that most of the disclosure and other types of issues that come up will be ones that we deal with over time so we can develop some standard methods of dealing with these types of issues.
I'm going to then turn now a little bit to e-prescribing and of course sitting here today is the agency expert on that, Maria, so Maria if I misstep, misspeak or miss something I'd appreciate it if you jump in and correct me, I don't mind being corrected --
MS. FRIEDMAN: You know I'm shy.
MR. TRENKLE: I know, and Maria as you all know is very shy and retiring, but I will urge you to speak up.
Basically I think there's two areas that you're interested in, one is the proposed rule and yesterday we closed the comment period for that. We're on a very aggressive schedule, as you know the final rule is schedule to be published no later then September 1st of 2005 so we have a lot of work to do with consolidating the comments and making changes based on the recommendations to incorporate into a final rule and Maria and her team are going to be working very hard over the next few months.
And as I mentioned before I'm very pleased with the two letters that you've sent to us in the e-prescribe area, I think they show a lot of thought and we'll certainly be taking your recommendations as part of the overall considerations as well as you know and of course Maria has worked closely with you on them so obviously she has a vested interest in making sure the recommendations get incorporated as well. I think also this has been very helpful, we've had some discussions with DEA and you're familiar I know with some of the concerns we've had with the PKI area so your comments I think really help address that as well and we will be meeting with OMB and DEA sometime in the next couple of weeks and hopefully we can resolve concerns in that area.
And finally the second area that you're interested in is the e-prescribing pilots and we're basically at the point now of drafting and RFP for pilot participants, we have a number of issues we're dealing with so I can't give you the dates yet but I will say that we're working very hard on that and should be having something to report to you in the near future.
With that I'm finished with the updates, any questions anybody has or comments, in voice or anything else you want to give? Maria, did you want to add something?
MS. FRIEDMAN: In case anybody is wondering I've had several people ask me how many comments we've gotten on the NPRM and we don't know yet because we're still in the process of reviewing them and of course the comment period closed yesterday and I know a lot of people filed comments at 5:00 or close to it so we will report back later on how that process went.
MR. TRENKLE: But we are ready to receive them and have a team put together who's going to go through the process so I think as Maria said we haven't gotten too many yet but we know how these comment periods happen and everybody sends their comments in at the last minute so we anticipate a large volume to come in.
Other questions, comments?
DR. FITZMAURICE: I guess a comment and a question, the comment would be that we've relied very heavily on the good work of Karen and Maria to help advance our issues and agendas at the NCVHS, at AHRQ we also rely on them to help us with our data standards program, while we haven't spent an awful lot of money some of the standards such as for the formulary for electronic prescribing have needed to be advanced and we've relied on their advice to tell us what small amounts of money when spent where can further advance this, we're hoping to get some of these standards ready for the pilot. So the question would be there are six standards under the claims attachment, do you have some additional priorities for what the next sets of claims attachments should be? That may be a little bit early, it may be you might want to think about that for the next time you report to us but it seems to me that we can start picking off needed areas where clinical data needs to be uniform and standardized by adding them to the claims attachment so it's an opportunity.
MR. TRENKLE: I'll take that under consideration and certainly any recommendations you might have would be certainly helpful in this regard.
MS. FRIEDMAN: And of course we will report back once the claims attachment reg is out, we will report to the subcommittee on the substance of it so you'll have a chance to see what we've done with those and make further recommendations.
DR. FITZMAURICE: Thank you, Maria.
DR. COHN: Other questions or comments? Oh, Kepa, why don't you come on, introduce yourself and Kepa for those who don't know is a former member of the NCVHS so please.
DR. ZUBELDIA: Good morning, Kepa Zubeldia with Claredi. Tony, could you give us an update on CMS's contingency plan for the HIPAA transactions and where the plans are to terminate that?
MR. TRENKLE: On the contingency plan --
MS. FRIEDMAN: Contingency plan for Medicare operations, we're still under the contingency, we're still operating under the contingency and I don't have information on where we are with that, I think we will of course report also to the subcommittee at such time when we want to terminate the contingency and talk about what the next steps would be and where we've been on that.
DR. FITZMAURICE: As I remember, Maria, the contingency was that for those who submit claims they would be expected to be paid within I think it was 15 days and those who don't could expect another 15 days delay while it's worked out and then those claims would be paid after 30 days. Is that roughly it?
MS. FRIEDMAN: That's roughly it and as far as I know and I apologize for not having the most current information but as far as I know it's worked very well.
DR. FITZMAURICE: It would seem that if you have 99. something percent compliant claims that the contingencies must be awfully small at this point.
MS. FRIEDMAN: I would also like to note that we're not the only ones who are still operating under contingencies at this point.
DR. FITZMAURICE: I think CMS has led the industry in how to work into the HIPAA standards and how to eventually gain almost 100 percent compliance.
DR. COHN: At least for the claims transactions.
DR. FITZMAURICE: Yes.
DR. COHN: Jeff, do you have a question, comment?
MR. BLAIR: Yes. Tony, I'd like to really welcome you to what I guess a lot of us feel is a very dedicated, committed, and sometimes passionate community of health care informatics standards and they'll be a lot of people I think that will be able to help you and Maria can give you guidance in terms of either documents or individuals or stuff to help you sort out the complexities here a little bit. The question that I have is going, I'm going to put a little bit into the context of a little bit of history and I don't know frankly whether this is too early for you to answer it or not or maybe just an impression. In a lot of ways when the Health Insurance Portability and Accountability Act was. passed the administrative simplification portions of that, that was what many people considered to be the first major step forward in setting forth national standards to be able to transfer from health care into the information age and I suspect that you've probably already looked at a lot of those documents and pretty familiar with that. One portion of that was, had very limited directives and it was called the patient medical record information portion and it was kind of left to the NCVHS in large ways to wind up saying, making recommendations for the adoption of standards for patient medical record information, a lot of folks felt that those were electronic health record standards, a lot of folks felt that those were clinical data standards, Congress used the word patient medical record information and people tended to translate that.
NCVHS made its first report on this huge area because this gets down to the core of health care, this gets down to patient care, and it was very complex and frankly it was more difficult. So in the July/August timeframe of 2000 instead of giving specific recommendations the NCVHS basically set forth a strategy for how we would proceed and in that strategy we wound up setting forth a vision which Stan Huff is going to be pursuing at this stage, it's taken us a number of years to get to that step. It also wound up being virtually like a tutorial on here's where we're starting, here's the major standards organizations, here's the major issues that need to be confronted and with that strategy to go forward it also wound up saying here's the criteria that we would be using to select and recommend standards and we asked CMS and HHS if they felt comfortable with those criteria and they said that they did.
So we then proceeded and in I believe it was February 2000 we recommended the first set of PMRI standards which were a set of message format standards. They included HL7, IEEE-1073, DICOM, and NCPDP Script as a matter of fact at that time and we indicated some were emerging and that although they fell short of what our criteria, NCVHS criteria was for full interoperability many of them had degrees of market acceptance and were valuable and we encouraged their use, we also encouraged that steps be taken to improve the level of interoperability in the future.
Those recommendations in many ways flowed forward into what became the Consolidated Health Informatics Initiative standards and that was a big help. Now with those recommendations NCVHS felt as if now that we're getting down to the core of health care we didn't think it was good to go forward by mandating the use of standards by a particular date as we did with the HIPAA financial administrative transactions and instead we said that there needed to be incentives, an array of different incentives, and among the things was that we felt that the federal government should act as an early adopter.
Now I can't be entirely clear but the Consolidated Healthcare Informatics Initiative basically wound up saying we're going to be early adopters, whether that was because of NCVHS recommendations or for other reasons because of the e-government initiative, which basically I think may have come to the same conclusion independently, nevertheless that has been a major step forward and that's an example to the industry and I think that many vendors and users are looking at those standards as a result to be able to have the industry migrate in an orderly way with the understanding that a lot of those standards are not perfect in terms of interoperability and that's why we're not mandating a use, looking at an evolution.
The NCVHS next set of recommendations was what began as PMRI terminology standards and we looked, we got a lot of testimony on that and it looked as if there's no way to set a full set and we looked at a core with a reference terminology, a set that could be part of that core, and I believe it was September of 2003 when we set forth those recommendations. And you're already familiar with the e-prescribing ones so I don't have to mention that but the reason that I was mentioning this little bit of a history was that the Consolidated Health Informatics group now has a few other entities that it's interfacing with and that's emerging, one is ONCHIT and the other is an entity that appears to be emerging which I've heard referred to as the federal health architecture, so now here comes my question, now it's in context so it will make some sense. To what degree do you feel that your role will interact with the others, which of the clinical standards, terminology standards, and other standards will you be responsible for versus the federal health architecture and what ONCHIT might be doing or what others might be doing, where is the boundaries of your responsibility for either setting, adopting, or mandating standards? And to what degree will you be working with the private sector?
MR. TRENKLE: Well, that was a long question but let me just say a couple things here. One is one of the areas that I really need to work and have started to look at is the way that the different boundaries are in these areas and I prefer not to call them boundaries as much as points of coordination and when you start setting up saying boundaries then you start basically looking like you're declaring a conflict. I don't consider this to be a conflict, I consider the fact that we have some additional players in the area, the federal health architecture grew out of the OMB's e-Gov initiatives, I think it's an important initiative that is going to help not only CMS and the federal government but I think industry as well. ONCHIT as you know has been an evangelist and the office has assumed more responsibilities over the last number of months, they do the program management for the CHI area.
So part of my charge is to determine what makes the most sense for CMS and for my office to take a lead role in where it makes sense for ONCHIT and the federal health architecture to take the lead role in and to be honest with you I'm still sorting those out because it seems like over time they're continuing to evolve. But I think what's important and this is where your second part of your question where you talk about industry is is that we're clear on where we need to go and what the primary priorities are and I think it's important that all of us work together on that. I look at the government as having a number of roles, whether it's us or ONCHIT or the federal health architecture, one is in the standards area and certainly not only setting the overall standards but also for the government to follow those standards themselves, eating your own dog food as they say.
Secondly the government is a big demand side player and in many areas, I was involved in the procurement area years ago when we first began moving into electronic commerce ten years ago and the government working together with the industry, the supply and demand sides coming together to develop what makes the most business sense, not develop a government proprietary system or a number of industry proprietary systems but to come together and work on overall goals and priorities I think makes the most sense.
So to get down to where the rubber meets the road I think it's something that I'm going to need to sort out with the other players over the next few months but I think it's important that we work together as a team because I think as I said a few moments ago setting up boundaries doesn't help, setting responsibilities does help, I mean people have to be responsible for certain areas but I like to hope that we can continue to do that. We've worked closely with ONCHIT, as you know the RFI that they came out with, my office and other parts of CMS worked closely in going through the comments in that area. We've continued to work closely with industry so I think CMS has a role as part of CMS business processes but we also have a role as part of the overall moving the industry and government forward.
So I think in a way I would say it's premature but in another way what I'd like to say is I don't want to set up boundaries but I want to work with your group and take your recommendations and others from industry, the WEDI folks and others, to come up with what makes the most sense. And when I say what makes the most sense something that enhanced our business processes, not something that hurts our business processes, something that provides more efficiency and effectiveness, I mean these are the kinds of things that we can work together on, not to set up something that's going to make business harder or put more processes into place that create more problems.
I've seen a number of initiatives at the federal sector that have done that and I'm not going to get into them but there's a number of them in the past that have set up barriers and we've tried to do the government way of business, well, we got to get away from that, we've got to look more holistically and I think we are and I think one of the roles of your committee is to help us work in that area, to build the partnerships, to get input from industry to make sure that when we go along the roadway here that we're working together with you not at opposite ends and I think that part of this with the federal health architecture and ONCHIT is it's a dual education process, we need to be familiar with what they're doing but we also need to guide them because we have experts such as Maria and Karen and others who have been through these processes before.
So part of our charge is not to shy away from these things but to make sure that they're crafted in a way that helps as many people as possible to come out with something that makes. So that's basically the way I'm going to look at this effort.
MS. FRIEDMAN: I'll just follow-up. I'd like to say that one of the reasons that Tony was brought in is because of his experience across the government in e-Gov and these other initiatives and he will bring those strengths and that experience to our enhanced role of our office in coordinating these types of issues, both within CMS and in the broader arena in HHS and beyond.
DR. COHN: Maria and Tony thank you very much and Jeff, thank you for the background as well as the question. Obviously Tony we're delighted to have you involved in all of this stuff, I was actually as you were talking reflecting on your comments about e-signature and I'm actually delighted that you've had some experience in that area, I think most of us consider that to be a tough discussion that we had with the industry over the last couple of months and we're obviously delighted to hear that you're going to have conversations with the DEA and OMB and all of that because obviously that's, depending on how that plays out it's either a tremendous enabler of both e-prescribing and other electronic initiatives in health care or it could be something that sets the industry back so we appreciate your sensitivity on that.
MR. TRENKLE: And I appreciate your comments on that, I think the e-signature is a perfect example of what I'm talking about as an approach. When you prescribe a solution and not deal with the problem necessarily, you try to shoehorn a solution into a problem you often create more problems and part of the problem in the e-signature area has been a focus in some quarters on a solution as opposed to what is the problems that this solution is trying to solve and I think your response got to the heart of some of that and I think the problem that we run into is a lot of this gets into a risk mitigation type of thing in the e-signature area, what are the risks and problems we're trying to solve here, and what makes the most sense from a, not only from a risk management standpoint but from a usability standpoint.
And part of the problem we run into in the government when we're dealing with issues of security is we adopt the atomic bomb approach when it often makes more sense to adopt another approach and I think the points that you pointed out in your comments in terms of looking at how it's being done today and that it's working today and how that can be adopted as we scale this effort I thought were, that's the type of thinking that needs to be brought into all these areas and that's where I plan to go, whether it's dealing with the federal health architecture or the private sector on some of these issues.
And part of that is relying on your group to come back to us with the reality test basically, a lot of times you can sit in the room and come up with something that sounds great on paper but it needs, you're the people in business and tied to the business area where this actually has to occur to work and you need to tell us when we're on track and off track and it helps to have a continuing dialogue starting at the very beginning and that way you don't go too far down the road and develop solutions that may sound great on paper but don't make a whole lot of sense when you try to bring them out in the real world and scale them up to meet the needs of that area.
DR. COHN: Well, I guess I don't see as many experts joining us today so we will rely heavily on obviously the experts in the public sector, actually in the private sector to help assist us with and keep us honest.
MR. TRENKLE: Absolutely, it's a public and a private sector joint relationship.
MS. FRIEDMAN: I'd just like to remind everybody that one of the recommendations from the last letter was that HHS and DEA continue discussions on some of these issues so we have followed-up on that recommendation.
DR. COHN: Exactly, well thank you. Well I think that this, Tony, obviously thank you very much and we're very appreciative of having you join us as well as we look forward to a close collaboration. I think some of the comments that you made about showing business value are a wonderful transition to our first panel which is really at this point beginning to look at HIPAA and the issues of return on investment and all of that. So assuming it's okay we'll sort of move into panel one and I think Joseph Smith, you're leading off.
Agenda Item: HIPAA ROI: Panel 1 - Mr. Smith
MR. SMITH: Good morning, thank you for the opportunity to share with you information about HIPAA and its return on investments. The slide presentation I'm walking through is a summary of some written information that I'll provide to you this morning. I'm Joseph Smith, vice president of private programs and chief information officer for Arkansas Blue Cross and Blue Shield, I'm speaking to you today on behalf of the Blue Cross Blue Shield Association, it is composed of 40 independent and locally owned plans serving over 91 million Americans, nearly one in every three Americans.
A way of some overview perspective, what I want to cover to you is first we're looking at HIPAA as a continued work in process initiative and talk about some of the activities underway there. Many of the payers including all of the Blue Cross plans are enabled to fully support the present HIPAA suite of transactions that are currently and have been in operation since October of 2003, yet what we are seeing and our experience is that providers are not making full use of all of the transaction sets and I'll give you some very illustrative information about that.
Based on our 17 months of HIPAA experience so far we want to offer four key points to you in terms of that return on investment. First in terms of the administration simplification we have not seen any return on investment as of yet. We are however supportive of the HIPAA initiatives and have done a lot of activities undertaken across the country in our various plans to support that HIPAA compliance working with providers as well as clearinghouses and self funded employers in that regard. We do see that there is potential for some return on investment yet to undertake across the industry if the providers to engage in the full suite of those HIPAA transactions, especially those that are initiated at their particular site or receive back directly at their site in terms of their systems that they support their business on and we'll continue to work with other organizations across the country to make this happen.
First of all in terms of return on investment to date, as I mentioned we've seen none so far, when we reflect back on the original return on investment business case was based on the 1993 WEDI cost/benefit study which projected a $29 billion dollar savings over ten years, it did assume a full implementation of all the transaction sets as of the first 2002 compliance date. There are we believe four factors why we have not seen any return on investment yet, I'll mention just each of these four and then I'll five into each of those a little bit more specifically for you.
First of all the cost to implement HIPAA was far greater then originally estimated. Secondly the benefits to be achieved are lower then what were projected. A third is the continued need for the redundant operations, particularly in health plans, while we're in this contingency window having to operate under both scenarios, providers under one but the health plans have to be in both postures. And then there's some gaps that I want to highlight in terms of readiness of vendor supply and practice management systems.
I'm going to take a look at each, the first one in terms of the substantially higher costs. We can now look back in history and actually see what has occurred over the cost of implementation since that's behind us now and seeing that that's substantially higher then what was originally forecast. In advance of HIPAA the Nolan Group studied a number of the issues in terms of cost to compliance and estimated that it would be at least ten times higher then the original HHS estimates, an average was estimated by Nolan to be about $10 million dollars versus $1 million dollars under the original cost/benefit analysis. What we've seen and many of our plans have reported even several times higher then that $10 million in terms of cost of compliance for the various HIPAA requirements to date.
Provider costs were estimated originally at three times that, we don't have any specific figures to report to you on that, there were no ongoing operating costs included in that original cost/benefit analysis and certainly the incremental compliance costs for additional regulations that we have on the dock right now in terms of the NPI, claim attachments, uniform payer, those were not included at least as we understood that initial study.
In terms of looking at some of the benefits, one of the first ones in terms of value of the ANSI 837 to providers, health plans, and Medicare really did not see a huge incremental value of that and the reason for that is the large EDI rates that we were seeing prior to HIPAA. In the case of the Blue Cross plans we were seeing EMC rates in 90 plus percent on pre-HIPAA for the institutional, for professional we were looking at 60 plus in very high first pass rate payment rates of 50, 60 percent or higher. Without updating that 1993 cost/benefit plan many of the technology advancements that did take place from 1994 through 2003 did not get reflected in that and there was a lot of technology advancements accruing a lot of benefits to the industry throughout that time period. And particularly because of the Y2K issues you remember back in the year 2000 a lot of concern over that, many health plans did implement OCR and imaging capabilities of paper claims at that time and that had a huge advancement of productivity and cost savings there which occurred prior to HIPAA.
The extended contingency plans, in the year 2000 it was apparent that the required changes that needed to take place for all the covered entities was not going to be ready by 2002, the Blue Cross Association of plans working with many others in the industry groups sought an extension to that effort, ultimately one year was granted on that, October of 2003. But before we even got to that October standpoint in July we did see the train wreck coming, financial train wreck, and put in place the contingency window which enabled us to maintain that cash flow to support the covered entities throughout that process. And that window still remains open today and we're well down that, about 99 percent as was indicated earlier today. However that contingency window has driven a great deal of redundant costs that have been incurred by the payers in particular who must run both the old pre-HIPAA systems as well as the new HIPAA compliant systems in this dual window process and continue so we're a couple years now in that dual process, knowing that we're continuing to see great volumes of paper generation, mass mailings, to support the traditional context.
Another area that we're seeing is some, and the reason for why we believe the providers have not seen a great deal of adoption, some of the full suite of the transaction sets is the vendor supply practice management systems in terms of where they're at in their status right now with HIPAA compliance. The potential originally did exist for us to reduce the costs associated with clearinghouse volumes by enabling that direct connections to exist in the HIPAA compliant fashion from payers, from providers directly to payers and back in those standard transaction sets. However, most of the pervasive practice management system vendors have really not updated their systems to generate that full suite of provider related HIPAA transactions, rather they've directed those transactions to their captive clearinghouses for that HIPAA translation thereby prohibiting the use of the free direct connections.
I want to share with you a study we've recently completed on some 27,000 providers who bill Medicare in the states that Arkansas Blue Cross supports and you see out of this 26,000 on a pre-payment basis some 65 percent of the providers were interacting with Medicare on a free direct connection basis and some 35 percent were electing to pay for either a clearinghouse or other billing agents for services to conduct that for them. Because of the issues I've talked about with the practice management systems and so on, in a post-HIPAA environment you've seen that free basis drop off significantly in the amount of physicians paying into clearinghouses or other fees has jumped substantially on this 27,000 providers across these six states. So extrapolate that over a number of other states and you see a significant shift that's taken place there.
Some of the efforts that I mentioned that we have undertaken in Blue Cross plans in terms of HIPAA, we are all have been ready for the HIPAA compliance and the full suite of capabilities since October 13th of 2003 and have undertaken a significant amount of testing with trading partners and offering testing facilities to undertake that with a number of organizations, provided web-based telephone kinds of information sources, to providers, to vendors, and to self funded employers, a lot of individual direct communications within as well. We've worked collectively to provide a free HIPAA toolkit to help providers assist in that HIPAA implementation where they can do that in those contexts where they can control their environment and provide the companion guides to fill the gaps where there were no specific requirements set off in the standards.
Where we do believe there is some future potential for the HIPAA return on investment is in some of the areas other then in the claims areas. Because of the EDI claims we're already at very high levels, there's been very little incremental value seen in transition for those in terms of those categories. However, if you look at the eligibility, the claims status and the electronic remittance advices we believe there are still good potential for some return on investment to be seen there if they are adopted on a wide scale by the provider community and are instituted if you will from that point of provider origin where those transactions could be generated in the HIPAA applied format and take in the response back automatically and post those to their systems. We do expect that you could see some large reductions in the paper printing, handling and mailing costs, obviously the long distance telephone calls that are associated with people calling in. And the automated posting of the 835 to the practice management system with all the attendant balancing capabilities that would help immensely in terms of provider offers in that reconciliation process.
So the real question we think is why there haven't been any return on investments is that providers fundamentally remain focused on the claim transactions and to demonstrate this to you we've gone and looked across our 50 states for all of the 40 Blue Cross plans all of the claims transaction for the year of 2004, which is about 361 million claims that took place for national account business and people who are travelers. Nearly all of those came to us in a HIPAA ANSI 837 format in compliant basis, a significant amount of money at demonstrating the point we've talked about earlier. However, as you can see for the eligibility of the claims status referrals there's just a handful if you will of that, it's about two percent if you look on a summation basis of those transactions have occurred on a national account basis. In other words clearly those capabilities are not being used.
We take a look at this also on a local basis in addition to the national account just within the state of Arkansas and our own business for December and January of this past year, for those two months, we had about 1.8 million claims that we received, almost all of that in the 837 transaction format. However, reflective of what we saw in the national level you can also see just a handful of the eligibility inquiries, claims status and referral authorizations as well as in this case the 835s because that's where it gets delivered or picked up by the provider.
Two important points I would note to you is that most of those eligibility inquiries and claims status occurred in a direct data entry fashion. In Arkansas we have direct data entry capability as well as the other transactions, as you can see nearly all of those that did occur occurred through the direct data entry capability, not coming out of the practice management systems, and in the case of the 835, the second major point is we prepared 835s for all 1.8 million claims but only a handful of those have been actually picked up by the providers. We cannot tell even if they picked them up whether or not they can actually use them and post them but they've not come and picked those up, they're still looking for paper transactions to be generated.
Here's that same set of data displayed a little bit differently in showing you particularly those five transactions. The area in blue is where we see all of those transactions could have been changed or could in terms of return on investment if they did move to ANSI transactions originated from the provider locations, could be driven a lot of value in terms of saving paper cost reduction, saving telephone calls, people costs and so on. So there's an awful lot as you can see in terms of the opportunity, what's in the blue there, to move those to the HIPAA transactions.
The underlying cause of all this we believe is that there's low use on the non-claims transactions due to those practice management systems not being able to generate those other transactions from the point of origin to directly connect from the payer, from the provider locations to the payer. Many of those systems cannot originate those 270s, 276s, use the internet to have a direct connection to the payers and get a response back and automatically post those into their practice management system which in turn could generate cleaner claims when they come out if the eligibility information for example is matched and loaded from the eligibility reply. The same is true in terms of not being able to automatically accept those. Until such time as this is rectified through further adoption we believe the extension for return on investment will be elusive until we can move particularly those transactions in the non-claim fashion.
We as the Blue Cross system of plans will continue to work with various industry sectors and continue to do that, we've worked with the Council on Affordable Health Care to clarify various business rules around eligibility queries, in fact this past December on a nationwide basis we just implemented many system changes regarding the eligibility transaction to give a lot more robust data as well as increased response time available requirements that we can provide that information, continuing to work with other standard designating organizations and clarifying some of the ERA remarks codes. In fact some plans have already implemented supplemental ways to get access to additional information based off the ERAs through direct data entry kinds of transactions, not through the practice management systems, and continue to be very active in roles in helping to move this around.
So on a summation basis in terms of conclusions we want to say we're committed to continuing to improve that in looking to raise and seek that potential for return on investments, the specific areas I've identified for you we believe are ripe for that opportunity. We would urge you as well as the policy making organizations to support the industry working through the various standard designation organizations to work these issues through. Secondly to finish the current requirements before adding new ones and including encouragement to the practice management vendors to make their systems HIPAA compliant to enable these transactions to be initiated and received back, and to pilot test some of those proposed new standards to assess that potential for risk before we actually implement those. And finally to use a national roadmap, if we don't know we're going obviously any road will get us there but if we do have a national roadmap of where we want to go, put that plan in place and begin to follow that.
With that I'd be happy to answer any questions from anyone.
DR. COHN: Joseph, thank you very much and we'll have questions and discussion after everybody has testified. Robert Tennant, you're on next, welcome.
Agenda Item: HIPAA ROI: Panel 1 - Mr. Tennant
MR. TENNANT: Thank you very much, the Medical Group Management Association is pleased to submit our testimony to the subcommittee. My name is Robert Tennant, I'm senior policy advisor for MGMA, also a member of the NUCC, WEDI, and co-chair of WEDI-SNIP. We don't have any definitive data on the ROI but we can certainly talk about some of the potential ROI, some of the challenges, and offer some recommendations. It will be interesting that they'll be quite a bit of overlap between Joe's testimony and ours which is interesting coming from two very different sectors of the health care industry.
I'd like to term this section of my testimony the theoretical ROI of HIPAA. There's no question that when they developed the regulation providers were very excited, the opportunities to streamline some very onerous business processes was certainly evident and of course the 837, the claim and COB, the 278, eligibility, remittance advice, all of those had a lot of promise. In particular I think we were excited about the claim, going from 400 plus formats down to one format was certainly going to make the provider's life a lot easier, as with eligibility, technically practices have patients come in, they get treated, and then they check eligibility down the road only to find out services are not covered or the patient has moved on to other insurances which they failed to provide, which means that bad debt piles up in practices and it's a serious financial impediment. To be able to check eligibility electronically for a lot of providers really was the core to ROI with HIPAA. As Joe's graphs quite clearly show we haven't yet reached that end.
I wanted to talk about some of the challenges and the question is always asked well why didn't we achieve the return on investment that many of us expected. And Joe certainly touched on a lot of them and I'm going to touch on those and a few others. One is a very simple reason and that is although Subtitle F of HIPAA was aimed at administrative simplification obviously the legislators were concerned about information flowing electronically and they included privacy and security along with the simplification elements. Unfortunately the industry focused on privacy and that includes the popular media as well mainly because privacy interacted directed with the patient so it impacted potentially all folks in the United States.
But what it did was take the focus of HIPAA and turn it into a compliance perspective so providers were looking at trying to avoid jail time and save civil fines and not focused on trying to achieve the return on investment through the transactions. And I think the industry as a whole has to take some blame here but certainly CMS could have turned their attention more so to educate providers on the opportunities that the transactions provided and again, Joe's graph shows that even now well into the compliance period very, very few providers are taking advantage of all the transactions.
The results of the problem of delayed timing, whenever you delay and protract the release of regulations it sends a signal to the industry, especially to the vendor industry, that they don't want to move too quickly, they don't want to upgrade their software and offer it to their customers until everything is settled and things were very unsettled for many years and I think that certainly added to the uncertainty of the whole process, throw into the mix that there was actually legislation presented in the Senate that would have essentially killed HIPAA. So the message was mixed coming from all sectors yes we're supposed to hurry up but don't hurry up too fast.
Perhaps the most important impediment though and Joe certainly hit on this was the reliance on a non-covered entity for compliance. Providers had to rely on their practice management system and billing system vendors in order to become compliant with the transactions. Many practice management systems upgraded and provided that upgrade to their customers, some did not, some had no intention of upgrading their systems, some upgraded their systems in such a way that they forced providers to go through a proprietary clearinghouse and in fact I got calls from some Blue Cross Blue Shield plans from around the country complaining about vendors who no longer allowed their customers to go direct to the Blues plan or Medicare and I think Joe's graph, I think graphically showed that as well.
And if you extrapolate that it's a very frustrating experience for providers, they have to rely on their vendors but the vendors weren't providing them the systems needed to take advantage of HIPAA. It wasn't possible for most providers to simply throw away their current practice management system and buy another one, these systems are very expensive, it takes a long time to train staff on, and so they were forced to basically do whatever their vendor was suggesting.
In defense of the vendors though you have to remember that with all of the delayed timing, with all of the variations on the 837 for example it wasn't as easy to go direct as we anticipated as the regulations were being developed. So I think they were trying to come up with a solution that met their business needs and trying to get the claims paid.
I think we also have to recognize that there was marginal compliance by some health plans. Dr. Zubeldia is going to tell us this afternoon a little more about the convergent project but it's clear that we went from 400 claim formats to many more formats for the transactions due to variability in terms of what data elements were required from the health plans. So they made the decision to not go with a standard format to make their own companion guides, not develop a single one through the industry, and of course that forces providers to go through a clearinghouse to try to get their claims paid.
MR. BLAIR: Rob, could you just clarify, I didn't quite understand that sentence, you went from many different claims standards and then after that I couldn't follow what you said, could you repeat that?
MR. TENNANT: Again, Kepa is going to go into far more detail on this, what happened was there was a lot of variability in terms of what a health plan could ask for in terms of the data and they published what's called companion guides telling providers how best to fill out the claim and the other transactions and so all that variability was extremely difficult for providers to go direct to their health plans not knowing exactly which data elements were required. So again, yet another barrier I think to providers taking advantage of the transactions.
On the eligibility side, and again this was the transaction that many providers anticipated would be a real money saver, many plans answer yes/no, give the absolute bare minimum information which forces the provider to go back to the phones or faxes and get that information such as co-pays and deductibles. There is some exciting work being done now, I think the new version of the 837, the 5010, hopefully will cut down on the variability and as Joe mentioned the Council for Affordable Quality Health Care has initiated a project to identify operating rules for eligibility and that's a very exciting project that MGMA is involved with and a number of providers. We're hopeful that if this project is successful the private sector can move on in other areas of the transactions and come up with industry solutions and not wait for the government.
In terms of a few recommendations, we're still a little bit concerned about the contingency plan and we think we have to be very careful with ending it, even though Medicare is reporting 99 percent plus compliant claims probably the majority of those are coming in from clearinghouses. And the goal in HIPAA I believe is to cut out the clearinghouse, there's really, that's a wasted transaction, it's money lost from providers, it's time lost, and I think the faster we can get to direct connection between providers and payers the better for everybody. We also want Medicare and the commercial health plans to continue to report missing data so if the contingency plans end we will know exactly what data we need to collect at the point of service to ensure claims are getting through clean.
Obviously CMS should increase its educational outreach, its work with the provider and other stakeholders, we need to ensure that whatever decisions are made at the federal level they're communicated effectively and quickly to providers. We're also very concerned that CMS avoided staggering the compliance dates and that was a problem for providers and for payers, they were aiming at the same date and there wasn't a built in time for testing and therefore we have to have an extension and things didn't go smoothly. We're hoping that as they develop regulations going forward they'll consider staggering the implementation dates to allow health plans to get their systems ready and then allow providers to come in and submit data.
They're also, and it's a sort of a standard recommendation, and that is we need to learn from our mistakes. There were a lot of mistakes made by all stakeholders including the government in the deployment of transactions and code sets, we need to learn from that and not make the same mistakes as we move forward with things like the NPI, claim attachments, electronic prescribing, and hopefully down the road electronic medical records.
In conclusion MGMA is highly supportive of national standards, we're very confident that once everything is moving smoothly there will actually be some ROI. We also look at HIPAA as an excellent foundation including security and privacy, we needed to move forward with HIPAA and certainly with its implications, that's the only way we're going to move forward with electronic prescribing and electronic medical records.
We appreciate the subcommittee's interest in this important topic and we thank you for inviting us.
DR. COHN: Robert, thank you very much. Jean Narcissi from the AMA.
Agenda Item: HIPAA ROI: Panel 1 - Jean Narcissi
MS. NARCISSI: Thank you. My name is Jean Narcissi and I am the director of electronic medical systems for the American Medical Association and it is my pleasure to appear today on behalf of the AMA before the Subcommittee on Standards and Security of the National Committee on Vital and Health Statistics. I would like to thank you for the opportunity to testify. My statement will summarize the views of the AMA on HIPAA transactions and code sets, the following comments will address the questions we have been asked to discuss before the subcommittee, as well as other issues of concern to the AMA.
In response to question number one, describe the ROI results achieved as a result of HIPAA transactions and code sets, the AMA does not have specific information at this time regarding return on investment results from HIPAA transactions and code sets. In fact the AMA believes it may be difficult to gather this information in a survey, it would depend on how return on investment would be defined in order to determine whether or not this data could be collected in a survey.
In addition the AMA has not determined how many of the HIPAA transactions, other then claims, are being implemented by physicians. In a recent AMA and Forester(?) survey entitled Physician's Use of Information Technology physicians indicated on average that 88 percent of their medical practices claims are submitted electronically, however the survey did not specify what percentage of the other HIPAA transactions are being utilized by physicians. Without these kinds of data we simply cannot prove that there has been any return on investment for physician practices stemming from the HIPAA transactions and code sets. Moreover we emphasize that many physician practices face significant costs as a transition to new HIPAA standards. We also believe many practices are currently in the middle of transitioning so it could be some time before they realize any return on investment.
Once physician's practices fully embrace the following transactions a return on investment may be realized. The 270/271 eligibility, these transactions should significantly reduce the amount of staff time used to make phone calls to check the status of eligibility. Automated captured of data could also help to reduce keying errors and allow for more accurate bills to be submitted the first time, again having a potential impact on improving collection and accounts receivable days. However, the AMA believes that the quality of the 271 eligibility responses from health plans needs to be improved in order to provide more information that is relevant and needed by physicians and other health care providers.
In the current HIPAA 270/271 eligibility transaction a health plan may either give detailed benefit information or simply give a yes, this person has coverage, or no, this person does not have coverage. Physicians need more detail then yes/no and they need the information in a more consistent way.
The Workgroup for Electronic Data Interchange and the Council for Affordable Quality Health Care are working together on a project to encourage all health plans to respond to eligibility questions based on business rules established by the industry that are agreed to by health plans in concert with other key stakeholders such as health care providers, vendors, and X12. This effort is just beginning although planning has been going on for some time. The AQH initiated the process in January, the AMA is a participant in this project and recommends that the requirement for better response information be strengthened in accordance with the findings of the WEDI CAQH project.
The 276/277 claims status inquiry, these transactions should provide the ability to query on submitted claims electronically prior to re-submittal of that claim. This could lower costs by reducing duplicate claim submission and telephone inquires for claim status. Secondary billing can be initiated sooner for those claims that have been fully adjudicated thus reducing accounts receivable days for physicians.
The 278 authorization and referrals, this transaction should reduce paperwork for the physician's practices and improve efficiency of the health care system especially for the patient. The administrative task of authorizations and referrals is very burdensome and having an electronic process should improve the efficiency of both the provider and payer's environment as systems, which are largely manual systems, are replaced by more automated processing.
The 835 remittance, when this transaction is fully automated at the physician's practices it should reduce costs by automating payment posting. It should also improve the ability to produce more accurate and faster secondary billing transactions, again leading to better collection and reduced accounts receivable days as well as generate better standardized reports. When using the electronic funds transfer function there should be cost savings to the physicians, the EFT function should also improve cash flow to the physicians, help to reduce accounts receivable days even further.
In response to question number two, define the positive business impacts of HIPAA transactions and code sets. The AMA believes that an unjustifiably high percentage of every health care dollar is spent on administrative overhead. Administrative overhead includes processes for enrolling an individual in a health plan, paying health insurance premiums, checking insurance eligibility, getting an authorization to refer a patient to a specialist, filing a claim for payment for health care that has been delivered, requesting or responding to additional information, coordinating the payment of a claim involving two or more insurance companies, and notifying the provider about the payment of the claim. Prior to HIPAA these processes involved numerous paper forms and telephone calls and many delays in communicating information among different locations creating problems and increased costs for health care providers, plans and insurers alike.
To address these problems the health care industry developed standards for accomplishing these transactions electronically but for physicians it has been difficult to implement all of the transactions in part due to the challenges outlined in the next section of my statement. The AMA believes that once the physician's practices embrace all the transactions the positive impacts of HIPAA should be realized.
In response to question number three, define the business challenges related to HIPAA, the HIPAA regulations still remain a critical issue for the health care industry. Prior to the implementation of HIPAA there were approximately 400 claim formats in use by the payer community in the United States. However, since HIPAA has been implemented standardization still remains a major problem because nearly 1,000 payer companion guides have been identified for the X12 HIPAA transactions. The HIPAA transactions convergence project is in the early stages of development with a goal of providing a means for the industry to converge on a common set of HIPAA transaction requirements. Participating in the initiative are several leading industry Designated Standards Maintenance Organizations and the HIPAA standards development organizations including the National Uniform Billing Committee, the National Uniform Claim Committee, the American Dental Association's Dental Content Committee, and the National Council for Prescription Drug Programs. And Kepa will be going into detail on that project.
The AMA believes that another business challenge for physicians will be the issue of transactions fees. Up until recently many payers were willing to assist with the cost of EDI through clearinghouses to avoid paper claims and their associated costs. The payers would supplement the transaction fees to the clearinghouses and allow for physicians to use the network at a reduced rate or at no cost. However, many of the payers have signed exclusive agreements with one clearinghouse, the result may be that payers will no longer subsidize their fees and other clearinghouses may be forced to raised their fees to make up for the lost revenue. In addition, with payers moving to not subsidize the transaction cost these costs will likely shift to the physicians. The possibility of less competition is also a concern to the AMA.
In a statement to health data management that appeared March 3rd 2005 AMA president John Nelson said the AMA believes that the needs of patients are best served by free market competition and free choice by physicians of the vendors that they may wish to use for electronic transactions in the health care system. The AMA would be concerned if agreements among vendors and health plans foreclose access of physicians to all the potential services offered by vendors in a competitive marketplace.
Another business challenge that physicians encounter is the submission of attachments for claims in order to get paid. The AMA and Forester survey indicated that 76 percent of physicians report that their payers require the medical practice to submit additional documentation attachments in order to have certain claims processed. It was determined that on average for 20 percent of their total claims they need to submit additional documentation. The survey also found that 47 percent of the physician practices typically submit claims attachments by regular mail, 23 percent by fax, six percent by electronic transactions, five percent by messenger and two percent by scanned images. The AMA believes that standardization of formats in electronic exchange should reduce the costs of preparing and submitting attachments and enable physicians and the health care system to realize the full benefits of electronic data interchange in administration simplification.
However physicians should know up front what additional clinical information will be required for specific services so they can either submit it with the claim or when the attachment data or images are available. Furthermore, until standardization is achieved regarding when attachments are required, and not just how they are submitted, the use of any attachment standards should remain optional and based on trading partner agreements between physicians and payers.
Additionally the AMA believes that standard implementation guidelines for code sets are essential for uniform national application of the code sets. If standard guidelines for medical code sets were adopted many attachments would be eliminated. If health plans and physicians are permitted to implement and interpret medical data code sets as they see fit the purpose of administrative simplification will not be achieved. An important part of administrative simplification, a reduced regulatory hassle, certainly includes the simplification of instructions for the coding of health care services. The overwhelming amount of paperwork to which physicians are subject would be significantly reduced if coding guidelines are standardized within electronic transactions.
The AMA believes that the CPT guidelines and instructions should be specified as the national standard for implementing CPT codes. The instructions and guidelines contained in the CPT book are subject to the same rigorous editorial process used to develop CPT codes. The CPT editorial panel and CPT advisors consider CPT section guidelines, specific code level instructions and definitions, and the application of modifiers at the same time the language for CPT code descriptors are developed. Thus, the proper use of CPT codes is based on all of the associated material contained in the CPT book, for example simple, intermediate, and complex repair are defined in the book prior to the actual repair codes so that users understand the circumstances for reporting each. Also, coding conventions such as add on codes are explained in the guidelines. The use of codes and descriptors apart from this information limits the functionality of CPT and its uniform application and contributes to improper coding interpretations which are counter to the purpose of having national standard code sets. Therefore the AMA strongly encourages the subcommittee and the NCVHS to recommend that CPT guidelines and instructions for applying the codes also be included as a national standard.
In response to question four, what can be done to improve the ROI of HIPAA transaction and code sets, as I mentioned previously once physician's practices embrace all of the HIPAA transactions the AMA believes that a return on investment may be realized. In addition the results of the convergence project should identify the differences and similarities among payer companion documents which could provide the basis of information needed by payers to organize their HIPAA transactions requirements into a common set of requirements. This should make the submitting of the necessary data elements for the transactions more consistent for physicians.
The AMA also believes that if physician's practices are directly connected to the payers there would be cost savings on transaction fees for the physicians. The AMA and Forester survey that I mentioned previously indicated the following, 47 percent of physician practices submit claims directly to payers, 41 percent of the physician practices submit claims through a clearinghouse, and 19 percent of physician practices send claims to a billing service which submits them to the practice and six percent of physician's practices do not submit claims, for example the practice is cash based and patients submit the claims themselves.
In response to question number five, what is your adoption percent for the HIPAA transactions and code sets, and I mentioned previously the AMA and Forester survey results indicated that 88 percent of their medical practice's claims are submitted electronically. However, we do not have a breakdown of the implementation percentages for the individual HIPAA transactions. However, we are willing to work with the NCVHS and others to achieve a better understanding of the state of the HIPAA transactions and code set adoption within the industry.
Thank you for this opportunity to present the views of the AMA, I'd be pleased to respond to any questions.
DR. COHN: Okay, I want to thank all three of you for some very interesting testimony. Questions from the subcommittee? Harry, are you there? Do you have any questions that you'd like to pose?
MR. REYNOLDS: Yeah, I do have a question. As you listen to all of the testimony obviously I think the momentum on the 837 is clear and everybody is working towards it. I heard a mention of a number of different initiatives and I understand that Kepa is going to discuss later some things, but does the group, each of the members mentioned some things that could happen but what are the specific things that maybe they would have a consensus on that should happen or that we should even help happen to close some of these gaps that each of them mentioned?
DR. COHN: Okay, each of the presenters maybe comment, Joe do you want to start out?
MR. SMITH: I think one of the commonalities I heard here was the transactions being involved in the non-claim transactions and finding all three of us commented upon that and the ability to see tremendous return on investments as well as the direct connection theme which in many cases could be done for free over the internet in today's world that would help and that would be a very focused effort I would think could be undertaken.
MR. TENNANT: I certainly echo that but I'd also add it certainly falls on the shoulders of CMS to provide more outreach, it's almost like we've passed HIPAA, like we've moved on to other things and I don't think we achieved what we wanted to with HIPAA, I think there should be some continued outreach, not only to providers but also to vendors. WEDI and CMS had a number of forums aimed at vendors bringing them up to speed, I think if they're more engaged in the process they'll be more willing to develop products that will allow the providers to take advantage of the transactions so I think there has to be more of that.
MS. NARCISSI: Well, I agree with both of the comments and I too think that there needs to be more outreach. Perhaps CMS can work with some of the other organizations such as WEDI like they did in the past, the regional efforts I know that WEDI had sponsored along with CMS were quite successful but that was mainly again for the claim but we need to work with the providers on the other transactions.
And the other thing that I think HIPAA really missed the whole point in was this whole area of vendors, they weren't part of the whole equation and I think somehow the vendors need to be pulled in. And I know that there are many of them that probably are ready with all these other transactions but I think maybe there are also a lot that are not.
MR. REYNOLDS: Thank you, Simon.
DR. COHN: Marjorie, Jeff, and then Judy.
MS. GREENBERG: I had just a specific, first of all thank you all for your very informative testimony, we appreciate it, I had a specific question for Jean. In your survey that showed that 88 percent of the claims are being submitted electronically, did that differentiate whether they were being submitted electronically according to the HIPAA standards or could that also be like flat files under the contingency?
MS. NARCISSI: I agree that it's probably different formats because I think they're going through the clearinghouse. So the question didn't get into specifics and if it was HIPAA compliant because actually we pulled the survey questions together quite a while ago and it was just done over the last few months. But I do believe it's any format going out the door, even paper going to a billing service.
MS. GREENBERG: Thank you. And Mr. Smith, again, thank you for your testimony, I wondered if looking down at future benefits the association has, and I know these are hard to quantify, but has thought about or attempted to quantify the benefits that might come from higher quality data, more comparable data for purposes such as coordination of benefits but also for things like quality assurance, pay for performance, etc. I mean from what we know and heard because of the companion guides there isn't as much comparability as originally envisioned although hopefully that will improve over time. But is that something that you've looked at?
MR. SMITH: We have a number of efforts underway studying those initiatives to look at pay for performance and other data contents, I think the notion of the companion guides though while there might be many of them I think we got most of the claims there were 99 percent there so I mean I think we've worked through those issues on that perspective, I think the other transaction sets and helping in the data as I mentioned, we've just added additional data to our eligibility requirements and required all of the plans to provide much more robust information to be responsive as well as on the 835s to provide supplemental access to information to help improve that process.
DR. COHN: Jeff.
MR. BLAIR: Two questions, one of the suggestions that I heard was that the compliance date be staggered and I wanted to get a little clarification on that because it sounded to me as if you were saying it should be staggered in terms of a compliance date for a plan and then another one for the completion of internal testing, another one for external testing, another one for overall compliance. But I wasn't sure whether that was what all of you were thinking and then there was another staggering which I wasn't sure about as to whether or not you were saying that the different messages should be staggered, and I'm thinking of this in terms of as we go forward with e-prescribing or other things that may come down in the future, whether we have to stagger compliance for message by message versus a group. Could you clarify what you were thinking of?
MR. TENNANT: It's Robert here. Well, maybe all of the above, the more that you talk about it the more intriguing it becomes when you think about message in the sense of how you're going to get an industry to move from where they are now to where you need them to go, there has to be coordination first of all and that means going to the industry, finding out what are the capabilities, how quickly can a health plan move forward with their compliance, how quickly can providers. And so I think CMS has to be thinking a little more strategically about how they're going to get the message out to the industry, how they're going to convince the stakeholders of the steps they need to take to move forward.
And I'll give you one quick example with the compliance date for security coming up in a couple of weeks, CMS has in the works I think six papers on security, they published one, there's two weeks to go, those should have been out two years ago. So I think we need to get the message out quickly, well before people need to start working on this, build the momentum, but also stagger in terms of allowing some time to test. So rather then everybody cramming for one date including the vendors, because the vendors were telling providers don't worry, we'll get you ready for the compliance date, not that we'll get you ready a year in advance so you can test and make sure when the switch is turned you'll be able to get compliant claims through. So I agree with all of that and maybe we need to take that to heart.
MR. SMITH: A slightly different view on that, I think the nature that Rob is pointing out in terms of the advanced testing and coordination is very important to occur between organizations, we're not necessarily supportive of a staggered dates to occur for the payers versus providers and so on but that advanced work has got to be done and in a coordinated fashion but we believe for more a fixed date. To give you an example, of the 40 Blue Cross Blue Shield plans every year, at least twice a year on certain transactions and others it's sometimes three times, we go through upgrades of our capabilities, new functions just like I cited earlier, and we all go and make that transaction one date but we've backed up in time from a planning perspective and built those items that Rob has mentioned into the implementation plan if you will so that we all can execute on one date and therefore not run redundant systems while we're in that transition phase if you will so we've kind of backed up this process but still working on the one effective date.
MS. NARCISSI: Jeff, I believe that, well it's been several years ago now when we were commenting on HIPAA the AMA suggested phasing in not just individual transaction but certain aspects of HIPAA. For instance they believe that the first should have been privacy and security together, then perhaps the NPI should have been phased in, and then perhaps the transactions and maybe look at the individual transactions on which would be implementable. The claims of course, a lot of electronic claims were being submitted already, so that would have been the first one. But that's how we believed it should have happened, maybe in certain phases with certain portions of HIPAA and clearly it did not happen.
MR. BLAIR: My second question is a number of you have pointed out that one of the things that has impacted your ability to achieve a return on investment was, I think Jean you wound up saying you've gone from 400 to 1,000 companion, 400 separate payer requirements to 1,000 companion guides, I'm not sure that that's a one to one match but in short could you just give me your thoughts as to why there was a need to develop companion guides so that maybe we could understand why has that that has emerged.
MS. NARCISSI: Jeff, I know that Kepa is going to cover this thoroughly in the next panel but the 400 claim formats were prior HIPAA, the companion guides, of the 1,000 companion guides, and those cover all the transactions, I believe over 250 are related to the 837 and that number may have risen since the last time Kepa and I spoke. I do believe there probably is a need for some companion guides based on different benefit plans, on what the plan purchaser has purchased, so there may be different requirements, there may be different pieces of data that are necessary to be reported to the health plan. But I think we need to take a look at them thoroughly, I think there are too many similarities that could be reported in the same way.
MR. TENNANT: If I can just add to that, there's sort of a prior problem as well and that is the X12 process that decides on the data content, at least the first round. There's clearly not enough provider participation at the X12 level and they're always complaining that there aren't enough providers, well, it's expensive, it's difficult for individual providers to foot the expense to go to these meetings, so the obvious solution to that is bring the X12 to the providers, why not have an X12 meeting where the American Academy of Family Physicians is meeting and have some focus groups and get some input from clinicians directly. To my knowledge I don't think they've attempted that but if they're complaining there aren't enough providers well then they need to go to the providers either with drafts, I mean make it clear they need direct in put on the data or else we're going to run into these same problems year after year.
DR. COHN: Joseph?
MR. SMITH: One additional comment on the companion guides too is many of the content of those are related to optional data elements as been stated, there's also some gaps in terms of the standards or individual ways, how to contact and communicate, how to test some technical definitions that are related as to how you interact with those particular organizations and some of the self employed benefits which are very unique in some cases.
DR. COHN: I guess we have Judy, Stan, and Michael, and then we will take a break, we're running a little late as it is. Judy.
DR. WARREN: This is for you, Mr. Smith, you had talked about the contingency plans and the contingency windows and that that cost more money because you were having to maintain both processes, could you help me understand that a little bit more and what you'd like to see come of that?
MR. SMITH: Sure, prior to HIPAA we were generating and let me just use the 835 remittance advice, we were generating paper transmissions or because the providers wanted those in a proprietary formats and they came out of the claim system in a specified proprietary format. With the HIPAA and the 835 particularly we had to move to that type of output for all of our claim transactions to be made available in the 835 format, those are two totally separate processing modules, well because the providers are not picking up those 835s they continue to want the old way. What we're faced with doing through the contingency window is operating both of those modules so we get output from our claim systems, we've got to run the modules that generate all those 835 electronic transactions and we've also got to run the modules to generate all that old format in all that old paper and produce the paper and mail it and make sure that the two come out with the same answers obviously because they look different, they are different, so we're having redundant capabilities that have to operate. And the same is true for the other transactions where you've got multiple ways, you're having to maintain two systems to accommodate that contingency.
DR. WARREN: And if you didn't have the contingency what would you do?
MR. SMITH: We would shut down the old module and move to the 835, but providers continue to ask for the paper and use that and they're not picking up the 835s because we're generating those for all the transactions but we're continuing to have to generate all that paper. We'd like to be able to turn that off and have the savings for that but we understand that providers can't work with the 835s yet so we haven't done that.
DR. WARREN: What would help to move us more to where we didn't need the contingency window?
MR. SMITH: I think on the claim transactions I think we're already there and we may want to, in fact we're looking at right now shutting our window off for the claim transactions, we're the other ones we're going to leave it open for the capabilities. But as we mentioned earlier having the providers be able to initiate and receive back directly at their point of location, point of origin, having the capability with that practice management system, that that would enable all that to take place and then achieve all that area that I had in blue which is really the big potential to generate some savings.
DR. WARREN: So you would agree with Jean that trying to bring the vendors more into this would really help the whole process.
MR. SMITH: Absolutely, I mean that practice management is a major area that has been missed in terms of compliance here and why we're not seeing a lot of it.
DR. COHN: Okay, Stan.
DR. HUFF: Yeah, my thought is very close to Judy's, I mean what I heard basically is that we haven't realized the benefits of standardization because we haven't standardized. I mean we've allowed contingency and combination of two things, basically we've supported the old system and even though there's diminishing volume you have a basically a static overhead for continuing to support the old things and at the same time we have a proliferation of companion guides which means in fact the standard is really not standard and so you don't realize the benefits. And so having said that then I was surprised to see the recommendation from Robert that said please don't, please let us continue to accept proprietary formats and I guess I'm asking the same question really Judy did which is it seems to me that we're never going to recognize the benefits of standardization if we actually don't standardize, but how do we do that in a way that people don't lose revenue, how do we do it in a way that people have in fact a very strong incentive to truly standardize so that we get passed, because what we've really done is just added one more way to do stuff, we didn't eliminate any other ways of doing stuff, we just added one more way, so in fact just looking at it at a macro level you would assume our costs increased because we added one more way to do this instead of eliminating a bunch of ways to do it.
MR. SMITH: That's correct and I believe, and I don't want to speak for Rob but my impression of what he was saying is that the notion of not having a practice management systems be ready to accept all this stuff back in the 835 for example or the 270, they can't react to it in that format so that's why they need the old format, well, I think you're asking that it continues, and the reason for that is if you can't get it in that electronic format and interact with it you've got a bigger problem, for example posting your receivables. If you can't get it in a format that you can automatically post to your practice management system then you've got the traditional and posting by an individual sitting down there and 835s are a very complicated transaction for someone in the billing office to sit down, the system, practice management system ought to be made HIPAA compliant to take that 835, automatically post it to the open receivables and then generate the subsequent 835 coordination of benefit claim for example. But that's not and until it gets there I agree with Rob that providers will be in a tough position if they didn't get the proprietary old fashioned, that's part of the dilemma here.
DR. HUFF: You would have thought that the efficiency of being able to automatically post in those other things would have created a market differential between the systems that could and couldn't and that that would have led to innovation and a market opportunity for vendors. Do you have any insight in why that didn't happen?
MR. SMITH: Sure, it's very expensive to change practice management systems, you've got all your data loaded for your patients in there and it's very costly to do that and go through that migration, you're relying on that, that's a very tough and disruptive process to change practice management systems. I agree with you it is a differentiator, some vendors have done that, I think they got an advantage, but because of that cost barrier it's very difficult for the physician to make that shift over and they've got enough other issues that they're struggling with today in their offices to add on top of that the layer of $150,000 dollar conversion to a new practice management system.
MR. BLAIR: It sounds like you're saying that they'd have to completely replace their system, is that what you're saying?
MR. SMITH: Well, I believe I was answering the question of Dr. Huff here of if you changed, you had a differentiator, if your current vendor, what they should be doing is providing upgrade release that is HIPAA compliant and that would not require a complete replacement, it's an upgrade. But if that's not there you have to shift, if you want to take advantage of some of this automation you'd have to go through that migration and shift to another system.
MR. TENNANT: Just to add to that, Joe's absolutely right, it's not practical for a small group practice to simply switch practice management systems, it's a lot easier for somebody like Intermountain that has the clout and the financial resources to do something like that. But also you've got to say to yourself why didn't the vendors do this, well, because it's a potential money maker, if they are now getting transactions flowing through a clearinghouse and they're getting a piece of that action that's a great business model for them so the motivation perhaps wasn't there. But also a lot of these practice management systems in practices are very small, they're regional sort of mom and pop software and that's not easy to upgrade as well, the vendors didn't have the resources to make a whole scale change.
Again, to reemphasize, I'd love it if we didn't need the contingency plan but we do, unfortunately we don't have providers at the level yet where they're able to accept all the transactions and submit them. Hopefully at some point we will and again, maybe the answer to the claim is the 5010, maybe if X12 would look at the convergence project, learn from that instead of keeping it on the side, maybe we could develop a claim format that payers could agree on and then we wouldn't need a contingency plan.
MS. NARCISSI: I just wanted to comment on the vendors, that that cost is passed back on to the physician of course and it might have been easier for the physician to say well I'm going to send these claims directly through the clearinghouse now instead of going direct to the payer because that cost would be less then perhaps upgrading to a new practice management system. But I also wanted to mention that I believe that there has to be some kind of an effort for this convergence project, perhaps the same way that the WEDI CAQH project is looking at the eligibility, I believe we have to pull the key stakeholders together, the leaders, and look at each individual transaction and try to look at all of the companion guides to see what kind of similarities there are or dissimilarities there are and make some recommendations. I don't believe that this can be done in a standards development organization like X12, X12 is a technical committee and they were tasked with developing the messages for sending the data to the payers, somebody else needs to be responsible for that data content within all the transactions, perhaps the convergence project will help define that.
DR. COHN: Jeff, did you have a final follow-up on that one? Okay, remember we have a second panel on these issues so this is not the only opportunity. Michael, I think you have the final comment.
DR. FITZMAURICE: In the interest I'm time I'm going to skip questions about the use of new technologies such as XML, I will not ask what percentage of Blue Cross claims are compliant with HIPAA standards, I won't ask if the plans have any plans to charge more for claim submissions that are not HIPAA compliant, and I won't ask if conformance or compliance testing is needed for practice management systems.
What I will ask instead is does the market work? Because here we have providers paying clearinghouses for handling transactions, billing services for putting them into the right formats, and sending them to health plans. Health plans have gone through a lot of investment to make sure that they can handle HIPAA compliant claims but on the other side I don't see providers doing it, I don't see vendors helping providers doing it, so I say is the market working. Well, maybe it just costs that much more for providers to become compliant, they have a lot of different health plans and they have to deal with a lot of them, the vendors aren't producing the right system upgrades, providers aren't saying they're willing to buy them, what's a money maker for clearinghouses is a money expense for providers.
So I guess my question will be is there any provider organization that's willing to take up the mantle of providing return on investment for providers for the HIPAA transactions by working with the health plans, the vendors, and the SDOs? Providers are a lot of individuals but added together if it saves each one of them so much money they'd be willing to pay at least half of it I'll bet to an organization that would represent them and get them a return on investment.
The vision of the future was that you'd have your practice management system, it sends things to a directory that then routes that claim right to the health plan and it's in a standard format so that it's received and can be acted upon and once we get the claims right then prior authorization for things like drugs and procedures become a lot easier. The business rules are easy to work through but they can be worked through, as technology changes you need more data elements so maybe Jean is right, maybe you need some other organization to be responsible for the data content of message standards.
But is there any provider organization willing to take up this mantle of looking for the return on investment and trying to make it happen for providers? Do you see one on the horizon? Anybody.
MS. NARCISSI: Well, as we stated in our testimony I think we need to go through a lot more steps before we'll even be able to judge what the return on investment will be with these types of transactions. However, I think that perhaps some kind of a consortium could be formed, maybe with the participants that we see here today and start talking about where do we go from here or can we measure the return on investment, can we do it through a survey, do we have to do it through like a focus group, and maybe that could give us a lot of valuable information. So maybe that's where we need to go, to step back a little bit and work with our partners.
MR. TENNANT: Let me put a little different spin on that, when you think about incentivizing providers to move forward there's certainly a lot of talk in Washington about doing that on electronic health records, so why not think about that in terms of HIPAA transactions, certain Medicare is going to benefit if providers are going to them electronically in all of the transactions. But look at what CMS did, they turned what could have been a positive into a negative by using the stick approach, by saying if you don't submit a compliant claim to us we're going to delay payment. Why not turn that around and say if you submit a compliant transaction we'll pay you in seven days instead of 14 days, what message would that have sent to the providers, they would have been scrambling to try to take advantage of that. Instead, again, HIPAA is seen as a negative, why not add a pay for performance component that would pay providers for utilizing some of these other transactions that are clearly going to save the health plan money, if you go electronic with your eligibility they don't need somebody at the other end of the phone answering the questions. So we need to be thinking more positively and maybe some sort of pay for performance program that incorporates some of these other transactions and not just the clinical side is one approach.
DR. COHN: Well, I want to thank you for starting the conversation here, I think it's a very interesting issue, I'm beginning to feel that we probably are not going to get to the bottom of this by the time the morning is finished but at least it's a start.
We're now running about 35 minutes late on our schedule, we will take a ten minute break and come on back and we'll probably go a little bit into the lunch hour for the second session.
[Brief break.]
DR. COHN: Okay, if everybody would please be seated we're going to get restarted with our second morning session, I do want to apologize to everybody that we're running a little late. The second session starts with Jim Whicker from WEDI, please.
Agenda Item: HIPAA ROI: Panel 2 - Mr. Whicker
MR. WHICKER: Mr. Chairman, members of the subcommittee, I'm Jim Whicker, chair elect of WEDI, the Workgroup for Electronic Data Interchange located in Reston, Virginia. WEDI is an association of over 200 corporate, government and individual members that are representatives of the spectrum of health care industry stakeholders. As you know WEDI also is designated in the HIPAA Act and subsequent enabling regulations as an advisor to the Secretary of Health and Human Services on HIPAA administrative simplification implementation matters. I am here today in my WEDI role to discuss challenges and successes related to those matters. I'm also director of EDI for Intermountain Health Care, ICH, located in Salt Lake City, Utah. In addition to my role with WEDI I serve as EDI liaison for AHEM, an association of provider financial services professionals. On behalf of WEDI I would like to thank you for the opportunity to present testimony today. In order to save time for questions and answers I will discuss summary comments and in my hard copy remarks you will find additional explanatory detail for some of the items discussed.
In general terms some success reported to date by entities seeing value as we've moved to HIPAA transactions payers are reporting increase in volume of claims as well as some volume increases for eligibility and claim payment transactions. We hear reports that more claims move through automated adjudication processes thus reducing cost for payers and payment wait times for providers. Providers are reporting successes through reductions in claim denials and report increases in efficiencies using automated posting, data validation, etc.
Some challenges, the variability of data mapping, code usage, and transaction implementation by both providers and payers is evidenced in the number of companion guides in the industry. Trading partners still must customize the processing of data to and from payers, providers, and clearinghouses in order to move transactions. There's a pressing need to close the transaction loop by adopting standard acknowledgements, this needs to be accomplished as soon as possible for claims.
Speaking today on behalf of WEDI and my bias as that of a provider and one who has the information systems backing of a progressive technology advanced and integrated network of 21 hospitals, over 100 clinics, and more then 550 employed physicians with home health, IAB and DME services. We also have our own health plan. It's no coincidence that Dr. Huff who you all know very well is on your agenda later today. During our HIPAA transactions development our clinical and financial systems interfaces team reported through to Stan. I have attempted to adjust my comments to be reflective of an industry perspective and represent WEDI in what I perceive to be issues that our members would want covered.
To add to your specific questions on percentages of adoption I'll answer for IHC as a provider as well as give additional information I've gleaned from several others who have responded to my request for information. So for IHC as actual implemented transactions in HIPAA formats, 80 to 85 percent of our claims go out in the 837 format, 65 to 70 percent of our payments are received and posted using 835 transactions, 50 percent of our eligibility, we have implemented 50 percent of our payers with eligibility transactions, 40 percent with claims status, and we've implemented 60 percent of our payers with an unsolicited 277 transaction that payers and providers in Utah have implemented. Please note however that the percentage for other providers will be somewhat if not significantly lower for non-claim transactions.
I have the luxury of the support from a company that's committed to technology and a boss who recognizes the benefit automation brings to the finance side of health care. Also some providers report that due to clearinghouse or vendor assistance claim totals for them are at 100 percent. Most entities report that the volume of 835s is beginning to increase as is the volume of eligibility, the data I received show that the numbers are still quite low.
In general providers and payers have not yet realized a return on investment of any significant amount. Some feel that ROI estimates from years ago over estimated the early benefits, under estimated the amount of time that was predicted it would take to get the transactions up and running and under estimated the costs. Covered entities that have spent the time and effort to transform business processes to take advantage of the transaction capabilities are starting to see benefit from using the transactions. Payers and providers who had already automated the majority of their claims pre-HIPAA are not seeing a lot of early returns as most providers have only adopted the claim.
One payer reports that it has offered proprietary claims status and eligibility information for 25 years. For these entities the ROI hasn't been achieved as they have simply moved from one format to another. Some payers are reporting it is much easier to bring new providers on board for EDI as a processes have been standardized and simplified, in UHIN they report an increase of 30 percent in claims volume, mostly due to non-traditional providers, chiropractors, home health, various therapists and so on, who are now able to send claims in standard formats. One payer reports that it has been able to increase first pass adjudication from about 40 percent to 70 percent of their inbound claims.
In IHC as a provider we have a been able to reduce or reassign seven FTEs from our EDI submission process to assist in other areas of the business office. Our accounts receivable days, or AR days, are at the lowest in history for us. Many other providers, however, have not had the same experience. While these are complicated transactions and the systems they interact with are complicated as well there are definite positive business impacts for both payers and providers. Entities who are reporting positive impacts appear to have also made changes in the way their systems operate to incorporate the new functionality into their daily operations. Often especially at smaller provider offices staff do not understand the data or the process involved or don't have the software, IT, or vendor experience required to achieve the vision of true EDI in administrative simplification. Rejected claim information often discusses loops, segments, and qualifiers, all of which mean nothing to the typical office billing staff.
To eliminate the problems with claim implementation the payment status and eligibility transaction must be implemented in concert as well as standard acknowledgements for claims which is not currently a HIPAA standard that reports clearly and in standard fashion what happened with each submitted claim. By implementing all of these transactions many are starting to se positive results.
Additional areas that IHC has been able to realize function improvement as a result of HIPAA, we have centralized and automated the cash posting function for electronic payment, we provide workless(?) where staff attention is needed, and can send COB claim transactions to secondary payers with little manual intervention. Payment data are utilized for many research and statistical purposes. IHC providers have generated almost a million eligibility transactions in the 12 months since the 270/271 was implemented with four large payers, including the Blue Cross Blue Shield Association and their national network. An eligibility request in ICH takes two key strokes, negative eligibility responses are routed to appropriate staff automatically.
When received data content allows comparisons systems are validating at the proper plan selected at registration, the correct member ID is on file as reported by the payer, and comparisons of patient and subscriber name can be made between the payer and the provider data. Systems are then updated accordingly.
Reports from a large national, excuse me, a large regional provider organization indicates they have experienced an average 45 percent decrease in claim denials due to eligibility related issues for the payers they have implemented. With claim status they have experienced a 43 percent decrease in the dollar amount in aging categories between 90 and 120 days. By automating the 835 for posting they have been able to reduce two FTEs per payer implemented.
Moving beyond claims creates a seamless automated way to communicate with payers and reduce costs. Providers who have implemented all the core transactions have reduced claim denials and are better able to collect patient co-pays at the time of service. They are better able to track revenue by payer or contract and reflect payment data for the correct payer. Those who take advantage of the EFT capability in the 835 has streamlined the balancing of data and the data reconciliation process and reduced their costs by not having to handle an account for paper checks.
Entities that have been active in industry groups such as WEDI, X12, ESDLs and so on appear to have more transaction activity and have had an easier implementation experience. Active provider outreach, education and communication are helping to increase volumes.
So what challenges remain? Some payers have extended a lot of time and resources developing internet capability that provides claims status, eligibility, claim entry, payment information, etc. Often these capabilities offer much more timely response and richer data content then the corresponding HIPAA transaction. For both payers and providers the ROI of HIPAA is in the ability to automate transactions, speed of responses, and eliminate manual intervention. While internet access accomplishes this for the payer and some low volume providers it may not be appropriate for high volume providers. The effect of web based transaction has not been investigated to see if this is a cause as to why ROI and HIPAA has not been realized. Bringing EDI transactions on par with or perhaps superior to web application might encourage more provider adoption, however, to accomplish this in the most effective manner practice management systems must integrate at a minimum the 270/271, the 837, the 276/277 and 835 transactions.
So what can be done to improve the ROI? The number one issue is the variability from payer to payer and from provider to provider must be reduced as much as possible. Over 1,000 companion guides have been identified, companion guides currently are necessary to avoid confusion and help clarify processes not covered by HIPAA. But those issues that create the need for the companion guide need to be addressed and mitigated whenever possible. There is no standard for acknowledgement of a claim that indicates acceptance or rejection and why, this often results in significant efforts to track down what happened to specific items. WEDI is working in concert with X12 to develop recommendations that promote the initial voluntary industry wide adoption, a specific X12 acknowledgement transactions, and recommends that NCVHS support that effort. For claims this must happen as soon as possible.
We need cross industry support using the standard development organizations to resolve and clarify content and usage issues, as well as to identify ways to better communicate information to all parties involved. While we support recommending moving forward with clinical applications we must remember that we have not fully implemented the administrative transactions, we must take time to finish the roll out of current HIPAA transactions before adding additional complexity to the industry, even in the administrative arena.
When new transactions are promulgated they must first be taken through a proof of concept process where a true pilot of the transactions and communication process identifies or resolves issues prior to general adoption. Any national information technology standard for health care should use the same road map to simplify implementation of the standard. Communication of changes, clarifications, timelines and adjustments to the standards should be communicated in the same way regardless of whether they are clinical or administrative in nature. Emphasis on resolving lingering issues with the payment eligibility and claims status transaction will greatly enhance the ROI now that the claim transaction has been widely adopted.
Adoption of the national payer ID would simplify the communication of information in all transactions. Simplification of set up and communication, speed of response to transactions for real time and batch claims status and eligibility transactions as well as the richness and the quality of data in the response and quality of mapping those codes by both payer and provider would encourage more providers to adopt additional capability. Contingency plans for an unanticipated development in HIPAA, they have added cost and implementation delay to the project.
There is no standard definition of what constitutes an institutional claim versus a professional claim, this must be addressed and standardized. WEDI is working on this issue through its health care claim encounter format selection task group. Some practice management systems have not integrated the functionality of the 835 and its automation into their systems. When they do they find that 835s often do not balance, they don't pass validation for basic X12 and implementation guide requirements, or they contain data content issues that make them difficult if not impossible to implement.
Lack of a national payer ID or standard data content requirements for payer or plan identification in the 835 makes it difficult for a provider to properly post payment data. Vendors and providers report that they must customize the 835 for every payer they have in production.
There is evidence that at least some payers have implemented the claims status using only a minimum level of response indicating that the claim has been accepted or paid and denied. A more robust response to indicate the status between acceptance and payment would be more useful to providers. There is a wide disparity in the quality of content from payer to payer for eligibility responses reported, the result is the provider often has to make a follow-up phone call to gather additional information, needed information. X12N is working on enhancing future versions of the eligibility transaction and WEDI is also working with the Council for Affordable Quality Health Care to create operating rules for eligibility and benefits and help solve this problem in today's environment.
It's too early to determine the ROI for NPI and attachments, WEDI is working with New York Empire, Blue Cross Blue Shield, X12N, HL7 and two New York providers on a claims attachment demonstration project and tests are being measured. Current work is being done to evaluate issues related to the NPI.
Overall HIPAA implementation is progressing, the support of NCVHS and HHS in removing the obstacles surrounding the implementation of remaining HIPAA transactions will help the industry achieve the ROI that is truly possible. WEDI looks forward to continuing working with NCVHS and HHS to improve the ROI in health care administrative transactions.
Mr. Chairman and members of the subcommittee, thank you for the opportunity to testify, this concludes my statement.
DR. COHN: Well, thank you. Mark McLaughlin, you're our next presenter. And actually Jim, let me apologize, I think you looked at a little funny as I was introducing you, when I saw Jim I was expecting your executive director and the last name sort of threw me there so my apologies.
Agenda Item: HIPAA ROI: Panel 2 - Mr. McLaughlin
MR. MCLAUGHLIN: Mr. Chairman and members of the subcommittee, good morning. My name is Mark McLaughlin and I'm a regulatory policy analyst in the regulatory affairs department at McKesson Provider Technologies which is a wholly owned subsidiary of McKesson Corporation. McKesson is a Fortune 15 Corporation, the world's largest supply management and health care information technology company. McKesson provides supply solutions and information solutions across the entire continuum of health care including market leading businesses in pharmaceutical and medical surgical distribution, automation, information technology, and outsourcing services for health care providers and payers. McKesson Provider Technology software applications include enterprise wide patient care, clinical, financial, and strategic management of software, as well as internet based and networking technologies, electronic commerce, outsourcing, and other services to health care organizations throughout the world.
Regarding return on investment results achieved, McKesson Provider Technologies, hereinafter referred to as McKesson, is deeply committed to providing our customers with the most efficient and cost effective solutions possible. In order to establish that value to our customer base McKesson committed the time and resources necessary to enhance the applications and services to enable our covered entity customers to be compliant with the final regulations of the Health Insurance Portability and Accountability Act of 1996, or HIPAA. The McKesson Clearinghouse alone invested 110 person years of effort in the project needed to update the computer programs necessary to process HIPAA transactions. This equates approximately to an $11 million dollar investment for computer program development alone and does not include any support services required to assist customers in resolving issues surrounding the implementation of each business partner.
To this point we have seen little or no return on this investment but rather are treating this initiative as the cost of doing business in this market space. To date we have not seen much improvement in processing efficiency for the transactions being traded. Under the umbrella of McKesson Provider Technologies as a business unit which creates applications that handle pharmacy transactions the McKesson Automation Business Unit noted that the use of electronic real time prescription claim billing has been in industry wide use using a previous version of the NCPDP standards. Because of this prior use there were no discernable positive impacts on ROI from the software development perspective, further the NCPDP 5.1 version has added considerable complexity to the existing process without improving payer responsiveness, claim processing accuracy or speed of payment to providers.
This additional complexity resulted from two principle factors, the first being migration to a variable claims standard form from a standard that combined both fixed and variable components, and inconsistent implementation of standard concepts by different business partners. The new standard also added operational costs to the pharmacies by virtue of requiring major software upgrades, in some cases such upgrades required new hardware in order to accommodate the size of required applications. Additional collection and entry of new data elements that had not been previously required or captured by those applications have added complexity to the pharmacy operations.
Defining the positive business impacts of HIPAA transactions and code sets, in general business partners are diligently trying to address discrepancies in interpretation related to the implementation guides. There appears to be more of a cooperative spirit among business partners to implement the transactions in a manner that moves the industry toward the goals of administrative simplification.
Positive business impacts which have been experienced by the McKesson Clearinghouse include the implementation of additional process improvements related to HIPAA that will allow for more efficient system maintenance. Reduction in sales cycle time, this has occurred because preliminary research related to the viability of clearinghouse capabilities regarding the handling of proprietary transaction formats no longer needs to be conducted. Its created a common language between all trading partners so we're all speaking the same language, the terminology related to fields or data elements has allowed for more efficient communication between trading partners. Prior to using the ASC X12N implementation guides the terminology was often as proprietary as the transaction formats. The HIPAA implementation guides have created a level ground for business partner discussions.
Reduction in documentation, McKesson's internal library containing proprietary business partner requirements has become smaller and more efficient due to two factors, the first being the size of the documents containing the business partner requirements has been reduced, and the second being many business partners have taken the opportunity to move their business requirements documentation to their websites so the number of physician documents that need to be printed, or physical documents, excuse me, that need to be printed and stored in a library had been reduced.
The McKesson Automation Business Unit noted that while they have not experienced any significant positive business impact at this point in time it's possible that the new infrastructure will generate positive benefits in the future. The newly available capabilities advanced as a result of standardization and transactions and data elements have not been explored to date, however as a result of the Medicare Modernization Act where the NCPDP e-prescribing transactions will be used it's anticipated that there will be a shared benefit in being able to use the eligibility data between pharmacies and prescription drug plans because of the standardization provided under HIPAA's administrative simplification.
In defining business challenges related to HIPAA transactions and code sets we believe there are several challenges yes to be conquered and below is a discussion of those challenges. Regarding standardized electronic acknowledgements, while the health care industry has moved forward with exchanging claim, remittance, and eligibility transactions a key component of that exchange is still lacking. The communication between business partners related to the health and integrity of the exchange of information is often insufficient or absent altogether. The communication is often a one way communication from the health plan or the payer to the provider, a provider often may not communicate discovered data or file problems using a standard electronic acknowledgement techniques because two way communication was never part of the infrastructure in the past.
Insufficient two way communication continues to be an issue and providers are left with little recourse other then to pick up a telephone and verbally report the issue. The McKesson Clearinghouse experience has been that more then 90 percent of health plans are returning some form of electronic acknowledgment to validate the syntax and integrity of the sent file. Those acknowledgements come in the form of ASC X12 997 transactions. While the majority of health plans are using the 997 transaction this transaction often varies in content due to the variations in the in bound claim batching scheme.
The batching scheme is defined by the health plan, in addition the 997 transaction provides for a very high level assessment of the overall syntax of the file but does not include a detailed assessment of the validity of the data element and the contents within a file. For example, in the case of a claim, the assessment may be accomplished by returning an unsolicited ASC X12 277 acknowledgement transaction, currently the unsolicited 277 acknowledgement transaction does not have widespread use of as the 977 transaction does, further the current acknowledgement methodology which uses an electronic print image or actual paper reports is proprietary and inefficient. Additional standard electronic acknowledgements may provide added benefit.
WEDI is currently working on this issue with the acknowledgments task group, McKesson recommends that the NCVHS support the WEDI recommendations when final and that the NCVHS make recommendations to HHS that the Centers for Medicare and Medicaid Services implement the recommendations completely and in accordance with the timeline identified by WEDI.
Related to claim rejection issues, file or batch level rejections based upon claim level errors which was a large issue more then a year ago, well this issue has improved somewhat over the past year, there are still business partners that are enforcing a file level reject based on a claim level error. This problem is troubling to national clearinghouses because batch files often contain more then one single provider's data. One errant claim from one provider may cause all provider's claims within the batch to be rejected which can cause potential cash flow issues for all providers who have claims in the rejected batch. While there are software programming solutions around this situation, such as changing how claims are batched, this work around solution is very inefficient for all business partners and creates more processing overhead and ultimately more cost to the healthcare industry.
Sometimes valid claims are also rejected simply because the business partner does not want to use the data being sent. An example of such a situation is the use of the reference identification, or ref segment, within the ASC X12 837 transactions. The ref segment may occur multiple times within a claim and may be used to provide the billing provider's secondary identification numbers. A provider may have several of these numbers depending on how many payers to whom they are sending the claims. Even if the claim may be sent to several payers via coordination of benefits it may be necessary for the provider to include several reg segments within a single claim transactions. Rather then continuing to look at subsequent ref segments for the number they need some payers are rejecting the claim if the very first identifier within the ref segment isn't the one that they are looking for. McKesson recommends that the NCVHS request the Department of Health and Human Services to issue guidance on the appropriate rejection methodology so that the industry can move forward with a single efficient solution.
Related to code sets, code sets used in the HIPAA transactions today are ubiquitous and are managed by various entities. It's because many code sets are managed by various entities that there is no single point of truth for what codes are valid and when the codes go into effect. Some code sets are effective the day that they are published while others may depend on service date within the transaction itself. This variance causes unnecessary and constant system updates that can hinder provider productivity. Due to the copyright and royalty issues it may not be feasible to have a single maintainer/distributor of all code sets, however, having a single effective date for all code sets would be a positive impact to the industry overall. A single effective date, whether it be quarterly, semi-annually or annually could make system updates more predictable and scheduled accordingly.
Local codes are still being required by some business partners. Although the local code issue is supposed to be eliminated with HIPAA there are still some business partners that are requiring codes that are not within the valid code lists as defined under the regulations. McKesson recommendations that the local code issue be investigated and continued usage of such codes be removed as an obstacles.
What can be done to improve ROI over transactions and code sets? In addition to the recommendations listed above convergence of requirements of the claim transaction is necessary to reduce the programming maintenance required to support HIPAA transactions. The McKesson Clearinghouse is one of the nation's largest clearinghouses processing hundreds of millions of transactions per year. The statistics below have been provided by McKesson's Clearinghouse to illuminate the issues surrounding the use of companion guides.
More then 300 separate computer programs are needed to produce properly formatted claim files to the 500 direct payer connections maintained by the clearinghouse. The clearinghouse may send several health plan's claims to a single payer. Each computer program has more then 1,000 lines of computer programming code that needs to be maintained by clearinghouse personnel. In addition to basic HIPAA implementation guides that are standard across all payers there are more then 1,200 additional payer specific edits that are programmed and maintained by clearinghouse personnel. These edit programs are separate from the formatting programs mentioned above.
The McKesson Clearinghouse's New Development Unit is responsible for creating new formatting and editing programs, its been noted that companion guides vary in length from one page to more then 600 pages. Because of this diversity of information contained in these guides resources are required to analyze, interpret, and code separate programs to adhere to the varying business rules required by business partners. WEDI is currently working on this issue through the convergence task group and McKesson urges HHS and CMS participation in the WEDI convergence task group.
What is your adoption percentage for HIPAA transaction and code sets? The McKesson Clearinghouse adoption rates are as follows, 97 percent of the claims outbound to payers are in the 837 transaction format. Those not being sent in the 837 transaction format are not in the HIPAA format due to the inability of the business partner to handle the transaction accurately, consequently there are still, we are still using proprietary formats in those instances. 60 percent of claims inbound to the clearinghouse from providers are received in an 837 transaction format, the remaining 40 percent are received in proprietary format that contain all of the necessary data elements for converting to an 837 outbound transaction. 97 percent of remittances inbound to the clearinghouse are received in an 835 transaction format, 100 percent of all eligibility transactions are sent and received in the 270/271 transaction format, and 100 percent of the pharmacy transactions that are used in the NCPDP version 5.1. The McKesson Clearinghouse has not yet implemented other HIPAA transactions primarily due to lack of customer demand.
Summary, in general HIPAA has brought business partners together and given a common language on which to base discussions. Organizations such as WEDI continue to bring together disparate health care stakeholders to illuminate issues and drive toward resolution. There is still opportunities for realizing ROI through convergence of standards and voluntary adoption of non-regulated transactions such as acknowledgement responses.
Of the HIPAA transactions that McKesson Clearinghouse has implemented the usage percentages relative to HIPAA standards are closing in on 100 percent. We believe the health care industry has a unique opportunity to learn from the implementation efforts of HIPAA and apply the lessons learned to future initiatives such as e-prescribing, electronic health records, and other efforts as outlined in HHS's Framework for Strategic Action.
Lessons learned from HIPAA include pilot testing, implementation of standards that have been fully vetted through the pilot test among all relevant industry stakeholders, phased implementation schedule, to give consideration to the order in which stakeholders must implement to aid in a smooth transition to new standards and processes, standards version control when implementing standards to allow for efficient methodology by which subsequent versions may be quickly implement, and finally related to standards requirements, reduce the ambiguities between all stakeholders to enhance the success of implementation.
On behalf of McKesson Provider Technologies I would like to thank the subcommittee for this opportunity to present our comments.
DR. COHN: Okay, Mark, thank you. Kepa.
Agenda Item: HIPAA ROI: Panel 2 - Dr. Zubeldia
DR. ZUBELDIA: Thank you. It's a pleasure to be back here with the NCVHS and trying to shed some light on a topic that is near and dear to my heart. The topic is, I've labeled it From HIPAA to Interoperability, there's a difference between HIPAA compliance and actual real interoperability of these transactions.
Let me take you back a little bit through history, going back almost seven years ago, May 17, 1998, the NPRM for transaction and code set said among other things that currently there are about 400 formats for electronic health care claims being used in the United States, that was in '98. In the final rule, August 17 of 2000 there was a comment on the ability to have mutually agreed requirements and the final rule preamble said we disagree with the commenters that we should add a new usage statement that says not required unless specified by a contractual agreement in the implementation guide, we believe that a usage statement would have the same effect as allowing trading partners to negotiate which conditional data elements would be used in a standard transaction. Each health plan could then include different data requirements in their contracts with their health care providers, health care providers would then be required to use a variety of guidelines to submit transactions to different health plans, this would defeat the purpose of standardization.
So whoever wrote this gets my kudos.
The final rule itself species requirements for trading partner agreements and says that you cannot change the definition, the data condition, or the use of any data element or segment in a standard. And any data element or segments cannot be added to the maximum defined dataset or you cannot change the requirements from not used to using them and change the meaning or intent of the standard implementation specification.
So we have very high expectations from HIPAA, the HIPAA standard transactions should be acceptable to all covered entities, payers, providers, and clearinghouses. And the expectation was that if a provider or clearinghouses sends a claim that meets the HIPAA standard implementation guide then the payer is required to accept it without imposing additional requirements, that was the expectation. The reality today is that there's many additional requirements imposed by the payers and clearinghouses, some of them are contractual requirements, some of them are because of other laws and regulations, telecommunication requirements, implementation restrictions, data formatting requirements and data content requirements. Most of these requirements are reasonable and let me emphasize that, most of them are reasonable, they're specifying requirements that were left unspecified in the HIPAA guides and because they were left unspecified most of them have to be specified in order to conduct business.
Examples of these requirements, for instance some trading partners are specifying segments that are either required in all cases or segments that are not used, perhaps they have not implemented that specific functionality and they'll say don't send this segment because we haven't implemented it. There are some data formatting requirements, some of the companion guides will specify that names and addresses cannot have punctuation in them, that's very common, so all those O'Malley's and O'Leary's and hyphenated last names have to be changed. Some of them will specify a maximum of so many bytes in the provider names, so if your practice has a long name you have to cut it off or abbreviate it or change it. There's more on that.
Some of them will specify that for instance dollar amounts have to have a trailing zero zero, never mind that that's against X12 syntax, that's what they need. Some of them will say in their data content requirements that identifiers they need for the providers and that's a legitimate requirement that is required to do business, if you're Medicare you want the provider's Medicare ID number, you don't want the Medicaid ID number or the Tax ID number, you what the Medicare ID number. That's supposed to go away with the NPI. Another typical requirement is whether for anesthesia claims you have to do the billing in minutes or units and for ambulance claims whether you have to specify the miles of the ambulance trip or you have to specify the zip code of origin or zip code of destination, things like that.
There are some payers that require the provider spelling, the name of the provider spelling to match the name of the provider spelling in the payer's system. And if it doesn't match the claim doesn't get accepted into the system at all, rejected in the front end, never mind that the provider's spelling is spelled incorrectly in the payer system. And there's other unique code set restrictions, payer specific modifiers, Jean Narcissi mentioned how the coding guidelines need to go along with the code sets, there's a good number of payers that will say we want these modifiers used in these circumstances to mean these different things and that changes from payer to payer, not only is it very difficult for the providers to keep track of what each payer wants in terms of modifiers but also makes coordination of benefits impossible.
So where are all these requirements? Some of them are in HIPAA companion guides or the NCPDP equivalent called payer sheets. Some of them are in provider bulletins and newsletters. Some of them are in instructions for filing different types of claims, DME, anesthesia, home health, ambulance, all of these have requirements in instructions and newsletters. Some of them are in Joe's head, some of them are codified in legacy computer systems and nobody has access to the code anymore but that's where they are. And in some cases people are scratching their and saying why do we require this again and nobody knows.
So how many sets of requirements do we have? Before HIPAA there were 400 formats in use, that's for the NPRM reports. After HIPAA there's one standard format for the claim, the X12, and one in NCPDP, the reality today is that yeah, we have one standard format, but we have companion guides, we have identified as of last week 1,082 companion guides for the X12 HIPAA transactions and the number keeps growing. We're still working on identifying the NCPDP payer sheets, so far we know of about 200 of them and the number keeps growing too.
In September of last year, September 1st, we looked at a distribution of these companion guides and we found for the 837 professional 262 guides, 837 institutional 223 guides, 837 dental 76 guides, 835 12 guides, for the 270 46 guides, for 271 36 guides, for the 276 51 guides, for the 277 42 guides, for the 278 request 22 guides, for 278 response 12 guides, for the 834 13 guides and for the 820 12 guides. Now why is there discrepancy between the number of guides of the request and the response? Something that's still puzzling.
We took another inventory last week, as of April 1st 837 professional 292, 837 institutional 252 guides, 837 dental 88 guides, 835 28 guides, 270 85 guides, 271 63 guides, 276 63 guides, 277 62 guides, 278 request 41 guides, 278 response 25 guides, 834 34 guides, 820 23 guides. So we compared September to April we see an increase in the number of companion guides for the 837 around 12 to 14 percent increase in the number of guides, for the 835 there's an increase of 133 percent in the number of companion guides. On the 270/271 an increase between 85 and 75 percent in the number of companion guides. On the 276/277 increases between 24 and 48 percent of the number of guides. 278 request has increased by 86 percent, the 278 response by 109 percent in the number of companion guides. The 834 has increased by 162 percent. We still only have 34 guides but that's an increase of 162 percent. And the 820 has increased by 92 percent.
So let me make some editorial comments on this, it seems like the increase of companion guides for the 837 transactions is settling down, down to 12, 14 percent, which seems to indicate that there is about maybe 300 payers that are accepting these transactions directly and therefore they're publishing companion guides. You can kind of equate the number of companion guides with the number of entities that receive the transactions directly so there is about 300 that are taking them directly.
There is only 28 guides for the 835 and I've heard some rumors that there are some providers that are going to start issuing 835 guides saying this is what I want instead of just trying to take whatever the payer is sending. So there may be a further increase in that number.
The other thing is that I would venture to guess that most likely if a payer is accepting transactions electronically they have a companion guide for it. I don't know offhand of any payer that accepts transactions electronically without having a companion guide for them so this kind of reflects the number of payers and clearinghouses, but mostly payers, the number of payers that are taking transactions directly for the different HIPAA transactions. It's not scientific but it's pretty close and you can see how many are taking 834s, 820s, 270, 276, 278, as opposed to taking claims directly.
So Claredi has put together a website, a page with links to all of these companion guides we have identified and in the website we list, you can see the list is with small print, Jeff don't worry, they can't see it either, it's too small print, it's a very small print, it's a very long list that has a lot of links to the websites and we link to each companion guide or to the page of that payer site where the guide is available. This is updated on a weekly basis, at least on a weekly basis, we have built an internet robot that goes to all of these sites and see any changes in the guides and compares today's version of the guide with yesterday's version of the guide and if there's a change we get notified, we update the site, we update our systems with the new guides and so on so this is totally automated.
This is a free companion guide portal, it's a free resource on the internet, list of all the companion guides we've identified with links to the guide themselves, however, only about 60 percent of the guides, 65 percent of the guides are available through the internet. Some guides are restricted distribution, some guides you have to sign an NDA to get the guide. The next task is to get the NCPDP payer sheets and the NCPDP, the American Society for Automation of Pharmacy and the National Association of Chain Drug Stores are cooperating to try to get together the payer sheets and do the same thing for NCPDP payer sheets as X12 companion guides.
We will also work on attachment templates because I foresee a great variety of attachment templates that will come out as soon as the attachment NPRM hits the street, all the payers will do the same thing that they've done for the companion guides this time for attachments, it will be a lot more fun. And eventually they'll be a CCR template website, that's also in the cards, we expect CCR to have the same kind of variability from implementation to implementation so we'll try to do the same thing.
So how do help in converging all of this into common requirements? We started about a year ago the HIPAA Transactions Convergence Project. Clearly this convergence project is to help the health care industry converge on a manageable set of requirements for the HIPAA transactions, to identify divergent requirements, to automate the identification of the requirements in machine processable format, and to provide a convergence model that will be useful for other transactions, like those in the NHII, and it's a free project open to the entire industry. Hopefully we'll see how convergence will lead to interoperability and that's the goal.
We're looking at what we call data content profiles and the data content profiles for different types of transactions, and I'll go into a lot more detail on this, are driven by the NUBC, NUCC, the ADA Dental Content Committee, NCPDP, NDEDIC, National Dental EDI Council, CAQH, ASAP, American Society for Automation of Pharmacy, and others. We believe that the industry should adopt this data content profiles as reference point, or what we call target for convergence. It provides the site, the convergence site provides a feedback mechanism to compare transaction requirement profiles among the different participants, we can see deviations defined from the requirements defined by the data content committees and others against your own requirements. You can see deviations of requirements among the same payer, multiple payers, you can just compare different sets of requirements.
There's two different kinds of convergence profiles in the site, there's some general convergence profiles and then there's trading partner specific convergence profiles. In the general convergence profiles define common requirements as a target for convergence, for instance NUCC is defining bill type, I'm sorry, claim type convergence profiles, what are the requirements for an ambulance claim, what are the requirements for a home health professional claim, what are the requirements for a lab claim. And you can see how an ambulance requirement or a chiropractic claim or an anesthesiology claim will have different data requirements. Implementation guides specifies general requirements for all claims but once you go to identify maybe by specialty on the different requirements you see different subsets of data that can and cannot be used or must or must not be used. For instance on an anesthesiology claim it would be pretty useless to have podiatry information but on a podiatry claim it would be required to have podiatry information. So it's those different convergence profiles for the type of claim.
The NUBC is doing the same thing for the bill types and for each one of the bill types specifying what's required for an outpatient hospital stay, what's for an inpatient hospital stay with interim billing, an inpatient hospital stay with a discharge patient and so on. So that specifies the targets for convergence and we expect these profiles defined by the NUBC, NUCC, ADCC, NCPDP, NDEDIC, CAQH to be usable by the entire industry as their target for convergence.
Then the payers and the clearinghouses and the vendors can define their own profile and the profile can be for instance these are my capabilities as a vendor, this is what I can produce, or as a specific payer they could say this is what I need for this specific plan, in some cases some of the employer driven plans have very specific requirements and they can say for this plan this is what I need. And it allows you to compare the profiles, one to another. We can also keep the profiles private so you can open a Claredi account to do this, your own private Claredi account, you can keep your own private profiles and compare your private profiles against the profiles that have been published by the standards setting organizations.
This doesn't replace companion guides, it supplements the companion guides. Eventually all of these private profiles should go away, now let me qualify the term should, we're talking about HIPAA right, so the term should means that they will never go away but they should go away, the probability of them to go away is practically zero.
This is some images of the convergence project website, you have lists that have been published already and Claredi has been trying to extract information out of the payer's companion guides that we have, those over 1,000 companion guides, we're going through the guides and kind of identifying requirements, we're kind of trying to seed the directory so people can find a use for it immediately before they jump in and define their own guides.
So for instance this is the list on the screen that shows some companion, some profiles, convergence profiles, defined for different bill types of the UB92. For 11X hospital inpatient discharge Medicare non-PPS, another 11X hospital inpatient discharge Medicare PPS, another 11X hospital inpatient discharge non-Medicare, another 11x hospital inpatient no discharge Medicare non-PPS, another one hospital inpatient no discharge Medicare PPS, and so on. We expect to have about 80 to 100 different bill types for the UB92, maybe 60 or so different claim types for the 837 professional.
CAQH is going to be defining standards for the 271 requirements for the data content, NDEDIC, National Dental EDI Council, is defining requirements for the 270/271 for dental transactions. ASAP is gathering the requirements for the different pharmacy transactions. So we have also gone through some of the payer specific guides and publishing them on the site and the idea is that you can see from this site a summary of the data content requirements, more then defining the transaction because the transaction is defining the implementation guide, this is data content requirements. For instance, and I picked out an example, I don't know if anybody here is from Blue Cross Blue Shield of Florida, Blue Cross Blue Shield of Florida says if you're going to send me a transaction the payer primary identifier has to be me, has to be Blue Cross Blue Shield of Florida, and therefore has to be equal to 590, that's my payer ID. That's a very legitimate requirement but people need to know about it so this is a way to publish that.
They also say for claim submission/resubmission code the only code I accept is one, which is original submission, if you send me a resubmission or a correction to a previous claim or something like that electronically that may be a legitimate HIPAA code but it's not implemented to the specific plan. The billing provider additional identifier has to be that billing provider additional identifier 1-B which means Blue Shield code and it has to have a length of five bytes, exactly five bytes. In some cases they provide a template, what it's supposed to look like, three alpha and two numeric or whatever the code is, so all of that can be done with this convergence template.
They also say we require the principle diagnosis code and you can see that the claim attachment report type of the paperwork segment, essentially attachments sent along with the claim are not used. It doesn't say don't send them, it's telling the provider we won't use them if you send them. Which is a very legitimate function for the provider to know what to expect when they do transactions with its trading partner.
This list can be downloaded electronically as either XML or comma separated values, or you can view it on the web with HTML. And we support all of the HIPAA transactions, X12 and NCPDP transactions. We have the addenda version and the pre-addenda version, just in case somebody is still on the pre-addenda. This is kind of how you define there's a series of data elements that follow the implementation guide for the transaction set, you choose which are the ones they are going to define in your profile, and then you define for your data elements with a very simple web based interface with buttons and selection boxes and so on, what is it that you're going to require, not require, not use, not allow, and let me talk about the not allow, there are some data elements that are allowed by the HIPAA implementation guide that don't make any sense for a specific transaction.
For instance this is bill type 11X, hospital inpatient not-discharged, that bill type you would not allow the claim discharge hour because by definition it's a patient that has not been discharged. So that kind of clarifies how this use of allow/not allow, and this is defined said data content profile, not the format but a data content profile of what's required for the different bill types, for different claim types, for the different business cases, for the different payers, for different transactions.
You can also put comments along with the list to guide the person that is looking at the list as to what is it that you actually are looking for, and the best part of the project is when you go to compare the requirements list. There's a long list of profiles, you can select the profiles that you want to compare and you just clicking on the compare button at the bottom of the screen, put those profiles side by side and have the computer compare the requirements. In this case I'm using a very simple example, comparing the requirements between bill types 11X, 12X, 13X, and 14X. You could compare the requirements from one payer to another payer, you could compare the requirements on two different bill types from the same payer, you could compare the requirements from one payer against the equivalent requirements from NUBC, or compare the requirements against NUBC and maybe eight or nine payers side by side and it will tell you what is the difference.
Let's say that you're a provider and you've already implemented Medicare, now you're going to implement Medicaid in your state. You could compare the requirements between Medicare and Medicaid and know what it is that you need to do different. All of these comparisons appear visually on the screen, if the requirements are the same they appear in green, if the requirements are opposite to each other, contrary to each other, they appear in red, in this case you can see in one column it says require the presence of the element, in the other bill types it says not allowed. If the requirements are different but still compatible, like an element may be required in one case and in the other case is silent about it then they appear yellow. And so it produced a beautiful colorful display of the comparison of the requirements but it's very easy to read what are the differences between this specific profile and another profile that perhaps I've implemented already or perhaps I'm going to implement.
And we support both NCPDP transactions and X12 comparisons, this is for instance shows the comparison between compound drugs and non-compound drugs and the NCPDP claims. It also has a little bit of statistical information where it shows how many of these guides are listed in the website, this is an old slide, at this point we have implemented, we have entered, kind of seeded the site, about 250 837 guides from 250 payers, so there's 837 professional, 837 institution, 837 dental, and that kind of seeds the site and gives people a feel for what to do with it.
You can also see what elements are used and not used, for instance we can see that on the billing provider identifiers a lot of the implementation guides that we've entered are requiring the specific provider ID, either the Medicare ID or the Medicaid ID or the Blue ID or Champus ID or whatever it is that the guide corresponds. But if there are elements that nobody is using you will see the statistics so you will see this element is used 98 percent of the time or this element is used only one percent of the time, and this hopefully will help X12 refine the requirements for 5010 where they can see what are the elements in 5010 that really nobody cares about, that nobody has defined any use for them in the companion guide, or what are the elements that everybody is requiring and you can come here and see that everybody is requiring specific data elements and identified that as a candidate for being a required element for everybody instead of having left it up to companion guides. So --
DR. FITZMAURICE: Excuse me, Kepa, by 98 percent of the time do you mean 98 percent of their written requirements required or 98 percent of the transactions have it on it?
DR. ZUBELDIA: In this case it will be 98 percent of the profiles that have been entered into the project, so it's neither, and at this point we've only entered about 250 837 profiles, 837 professional, institutional and dental sets so we're not there yet and I would like to see the payers entering their own profiles because they know exactly what they require and sometimes this is changing dynamically, even more rapidly then the companion guides change. The idea is that this will be published by NUBC, NUCC, ADA, ADCC, CAQH, NDEDIC, and NCPDP.
The HIPAA covered entities should published their own specific profiles that clearly provides the infrastructure, this is free, each publisher maintains some profiles and we're entering an initial set of payer specific profiles as part of our implementations to seed the directory but it's just a directory seed. We've entered over 250 to date, we expect to see if each payer breaks down maybe by ten bill types and ten different types of claims, we're talking about thousands of these profiles.
We made the machine readable and downloaded so the practice management vendors will be able to go there and download those profiles and built it into the practice management systems so when they collect the data that they're going to send to a specific payer they will know within the practice management system what is it that this payer needs because they were able to retrieve it from this site. Ideally we would like to have convergence so until we have convergence we have a web portal where the companion guides can be referenced, we have downloadable in machine readable format these requirement profiles, this list of requirements, they're easy to compare, this doesn't replace the companion guides, the ultimate goal is convergence.
Now the probability, if I was working for government I would say the probability of convergence is zero, but until we get there there's an easy way to automate the divergence measurements. It's free to the industry, I want to extend again an open invitation to participate to anybody that is listening on the internet and anybody in this room, and if you have any questions don't send me an email, the convergence project url is www.claredi.com/convergence and just try it, it's free, and enjoy it. Then we welcome feedback, positive feedback especially.
Thank you for the opportunity to make this presentation and now it's open for questions.
DR. COHN: Well, thank you all for some very interesting testimony. Kepa, I guess as you enter your middle age I notice a little bit of cynicism or skepticism here about the probably --
DR. ZUBELDIA: It hasn't changed.
DR. COHN: It hasn't changed, huh, this probably equality zero, so you think this will be a tool, let me just ask as we move forward, I mean do you anticipate in whatever the ANSI version 6030 or 6050 there might rather then be an institutional and provider there may be really ten or 15 different subsets with implementation guides out of all this?
DR. ZUBELDIA: That's a very intriguing thought, right now it's divided into three claims, professional, institutional and dental, there's two subsets in the institutional, inpatient and outpatient, and I can see how if those subsets are still being limited to two subsets in the institutional and then professional and dental, if they had been defined as maybe 15 or 20 different subsets for the professional and maybe 60 to 80 subsets for the institutional we would probably have been better off. There's a lot of variability now because while what you interpret as outpatient I may interpret as inpatient requirements and what you interpret as a chiropractic maybe I don't interpret as chiropractic requirements and it's just there's all kinds of variability for that reason and maybe that could be narrowed down.
DR. COHN: Just a question. I do want to remind everybody that we're running about 45 minutes late now, any questions from the subcommittee?
MR. BLAIR: Kepa, you've provided what appears to be an extremely valuable helpful tool to promote convergence and from what you were saying a number of organizations appear to be interested in working with this tool. Is the motivation of these organizations, the motivations of the payers and the providers and the vendors sufficient to give us good convergence over the next few years? Or is something else needed as an incentive or some other entity needed to be able to be a catalyst to promote convergence?
DR. ZUBELDIA: Everybody that is participating in the convergence project believes that it will help guide the industry towards convergence. Everybody is trying to do the right thing, there is a lot of pressures, external pressures, other competing projects, if there is a catalyst it will go faster, that's what catalysts tend to do. At this point the process is probably going to take ten to 15 years and probably one or two more iterations of the HIPAA guides before we achieve something that is in line with the original goal of being able to send the same transaction to multiple trading partners without having to go like McKesson through 300 different programs that provide validation of the data content for 500 payers. And the problem is a serious problem but it's a slow process, the payers have to change their systems, clearinghouses have to change their systems. If you're thinking about regulation I would be very hesitant to mandate through regulation a second time what was not fully achieved the first time.
MR. WHICKER: I might also mention that with WEDI at our conference in May we have a pre-conference workshop, I believe it's four hours of information gathering and trying to get those who are there to participate, payers and providers and so on to start working on getting additional work going on this convergence project.
DR. COHN: I have one other question, obviously I want to thank you all, Kepa we do appreciate your effort on this one, I know you've tried to figure out how to do this somehow for the last, for as long as I've known you, this obviously is probably a softer way of encouraging convergence then many we've considered over the years. As I've listened and I'm trying to think of how to put together this panel and the last panel I'm hearing some sort of key issues around return on investment and I just want to sort of reflect on them and make sure I got them right.
Now what I hear number one is sort of this, the issues around return on investment number one have to do with increased use of the non-claims transactions and that seems to me to be the, of all the things that's sort of like the big number one here. And of course it also, and a piece of that is somehow encouraging practice management systems to fully implement all the transactions, maybe CMS outreach related to some of that, but think about how maybe to do that becomes sort of those particular pieces.
I hear there being some angst relating to this issue about the, I guess the inability or problems with providers being able to directly connect with payers, but I think Kepa and the convergence project bring up sort of the issues of well, there's so much variability it becomes sort of hard to figure out how you would directly connect with payers in this environment though I think that's yet another issue.
And then I think there's sort of the third one which is maybe really the second piece is this issue of trying to reasonably reduce unnecessary variability in the 837 which we're already seeing and I think Kepa made the interesting observation that the reason we haven't seen too much variability in the rest of them is that they aren't implemented too far yet. And that if really these other transactions were implemented we'd have 300 to 500 of these other companion guides.
Am I missing something here? I mean it all sort of sounds like this issue of getting these things, they're the things being used as well as figure out ways to be, to sort of softly begin to sort of move us more towards more convergence.
MR. REYNOLDS: Simon, this is Harry, another one I think that came up is this whole code set process.
DR. COHN: That's right, and your comment was is that the variability of the timing of implementation.
MR. REYNOLDS: Right, that was one of the comments that came up also.
MR. MCLAUGHLIN: I would also recommend that we take a look at the non-regulated HIPAA transactions, those as I mentioned being the acknowledgement transactions that would allow for a more complete communication between business partners, that's something that's not currently regulated by HIPAA but would certainly help providers understand what transactions are being rejected by the payers that being by providing an unsolicited 277 back to the providers that would tell them what was accepted and what was rejected among other transactions such as the TA1 which communicates whether the communication itself was successful and the 999 which is actually going to work as a replacement to the 997 to give syntax type of information related to the transactions being passed. And as I mentioned WEDI also has an effort working on that and recommendations will be coming forth to this committee as well.
MR. WHICKER: And I just had a comment also, the more specific that my trading partners are, speaking as a provider here implementing, the more specific the requirements are the less likely I am to be able to implement, I'll drop that payer or that trading partner to the bottom of the list and implement someone else who has less specific requirements, things that they reject the transaction because of content. And it reflects back to the things that Kepa showed on his slides, if a payer expects this ref segments but won't allow this other ref segment that is an appropriate qualifier and value I'm less likely to be able to bring up my transaction with that payer.
DR. ZUBELDIA: There is a challenge in flexibility, evidently if all the payers were capable of accepting all the transactions and all the versions of the 837, if I could produce an 837 that is acceptable to all payers without changes that would require the payers to have the flexibility to accommodate my peculiar implementation of the 837 as opposed to Jim's peculiar implementation of the 837. So if the payers build in that flexibility to accept the transactions without very rigid requirements, which is something very desirable, we end up also with what they call interpretations and they will say well, there's enough flexibility in HIPAA for me to interpret that when it says must I interpret that as should or as may and that flexibility of interpretation helps in some cases and hurts in other cases.
And there is not a good process to resolve those issues, there are several processes to resolve those issues, one is the ask HIPAA process, there's another one through the DSMOs, there's another one through WEDI, there's another one through X12, there's not a definite process to resolve some of the issues. For instance what's an inpatient claim and what's an outpatient claim, and if there was a way to say that definition comes from the NUBC and somehow delegate the authority and somewhere say this flexibility in interpretations are authoritatively defined or resolved by some entity. And there's not one entity that does that today but if we could have some entity that says this is the definite resolution on different topics it would help the entire industry convergence into common interpretations.
DR. COHN: Well I guess as I listen to all of this stuff I think of some things as first steps and some things as maybe it's the 8030 version of the HIPAA implementation guides --
DR. ZUBELDIA: It was 6030 a minute ago.
DR. COHN: No, yours I was referring to as the 8030 actually, only because I think, I mean I think that that may actually take a little more work since that's a lot more standardization of the industry which I think is what you're reflecting on and it's that delicate balance between business processes versus transmission of standards. I don't know but I agree with you, these are, I mean I think we're all trying to take steps in the direction of increasing the value, increasing the level of standardization and I think it's been a reminder that you don't get there overnight and I think back in 1996 we though if we turned the switch and go from 400 NSF formats and UB92s down to zero by the year 2000 and clearly that's not happening. Stan, Michael, and then we have a question about next steps in this area and then we will take a lunch break.
DR. HUFF: So being mostly in the clinical I can ask the naïve questions and then you guys won't laugh too hard. I would have naturally thought that the authority for this would have been somebody in the government and does that exist and I guess to what extent for instance is that role of being interpreter of the law and the standards muddled with the government's role as a payer? Is that a distinct, are there distinct separate responsibilities somewhere that reside in the government to adjudicate the interpretation of the HIPAA standards versus the role of the government as a payer and what they'll accept as a payer?
DR. COHN: Well, I don't know if they can answer, I'll try and then maybe Karen but there's an Office of HIPAA Standards, they are separate from the payment aspects of CMS, I don't know if that answers your question --
DR. HUFF: Yeah, that's basically the question.
DR. COHN: Okay, Karen, do you want to --
MS. TRUDEL: The reason that there is a separate Office of HIPAA Standards is to separate primarily the regulatory and enforcement functions of HIPAA which had been delegated to CMS by the Secretary from the covered entity parts of CMS, like Medicare fee for service and managed care, etc. And we do maintain that what we call a fire wall rather rigorously and I think where you find our interpretation coming into play primarily is when there's a question that relates to an enforcement process to a complaint where someone says is this transaction HIPAA compliant or not, we are the ones who need to make that decision. And we do it with a great deal of expert input but I think your question was fundamentally at the end of the day it's an inherently federal role. And it is kept very separate from the covered entity parts of CMS.
DR. COHN: Stan, are you okay with that?
DR. HUFF: Yeah, I guess then in the Office of HIPAA Standards, I mean are you doing work similar to what Kepa is doing there at the volunteer, I mean are you working towards, I mean from the way you described it it sounds like if people ask you a question you'll provide an answer --
MS. TRUDEL: Yes.
DR. HUFF: Are you doing prospective things to say could we reduce the 300, 500 implementation guides to one standard implementation guide? Is that in the purview or do you even have the mandate to do that from the legislation?
MS. TRUDEL: I don't know that we have a specific legislative mandate but we certainly do have a responsibility to work with industry organizations to enhance the implementation of HIPAA wherever we can and we very often do that in just voluntary venues like the CAQH process that has to do with the eligibility of the 270/271, there's no requirement that anyone participate in that, there won't be any requirement at the end that the results of that project must be adhered to but we certainly encourage it and have been actively working with CAQH to get the ball rolling and we have an ongoing relationship with WEDI as well. So I would say that we're pretty well linked into some of these things that are going on.
DR. COHN: Michael.
DR. FITZMAURICE: Well Stan raises something interesting, as did Karen, that is I don't know that we've heard from the business operations side of CMS, we've heard from Blue Cross, other health plans, but we've not heard from the Medicare program as a health plan, are they having the same kinds of problems with these code sets, when they deal with coordination of benefits, different health plans have different requirements and different meanings for a code set, does that cause the Medicare program any problem and there are probably a bunch of things that I couldn't think of but we just haven't heard from probably the largest health plan in the United States. So that was just my comment on what Stan raised.
But I have a more specific question for Kepa and that is what you're doing in the, I've forgotten the name of it, the process whereby you're listing all of the requirements for the HIPAA transactions, that's a fantastic tool, it's absolutely amazing, it's something I would expect to be a public good and a clamor for government funding, I've not heard a clamor for government funding. It's amazing to me that the private sector has come forth with this initiative and so like Simon sometimes you get a little, you squinch your eyes and say well what is the business model for this because it's obviously good publicity and it's something that's very well needed. So Kepa what's the business model for this?
DR. ZUBELDIA: If you want to write a check I'll tell you where to send it. The business model is none, this is a strictly voluntary effort because I believe it's necessary, in fact I've been fighting some people within my own company that are saying well why are we doing this, what do we get out of it, and I said well maybe we don't get anything out of it but we need to do it. We collect the HIPAA companion guides, not because they're pretty but because we implement those in our products, so in our product we have in excess of 8,000 edits that apply directly to HIPAA companion guides. We have about 3,500 edits just for HIPAA requirements plus 8,000 edits for HIPAA companion guides. We get those out of the HIPAA companion guides that we get so we have a repository both electronic and paper of HIPAA companion guides and we have people that go through them and go through all the updates when they get updated weekly or more frequently then that and make sure that our systems are kept up to date with all those edits. And because we have it we might as well just with a minimal incremental effort publish it, it took us a while to develop the tool and to make it look user friendly and put the security there to let people create their account in our system and all that, but that's a one time development and it's done, we have a website, we have a directory, we have a repository, it's just minimal incremental additional costs that is just practically nil on an ongoing basis.
DR. FITZMAURICE: Well, I was just going to say that this appears to be an extremely valuable tool and not are you and Claredi to be congratulated but also the people who partner with you that give you their information and that eventually may voluntarily update this website, it would be invaluable for a practice management system or somebody else needing to move information around to find out what those requirements are, also invaluable for somebody who wants to mush them more and more together as is possible, like was done with the state cooperation with the local code sets, this is another example that private sector can work to harmonize things.
DR. ZUBELDIA: And we're offering the downloads that you saw, XML or CSV, so the practice management systems can in fact download this automatically and build those requirements in their system and if they need a complete table of everything that we've got we'll provide them with that. There was a comment by one of the WEDI convergence chairs that said this is great if it achieves convergence, but if it doesn't achieve convergence the fact that I can download these requirements automatically and built it into a practice management system makes the non-convergence irrelevant because now I can have all of that automated in the system anyway. So one way or the other I hope that we can help in getting these HIPAA transactions better.
DR. COHN: Karen and then I want to make a comment and then we'll break for lunch.
MR. REYNOLDS: Simon, can I make one comment?
DR. COHN: Oh, sure, you can make a comment before I do then. Karen first.
MS. TRUDEL: I think one of the most valuable things I'm taking away from this whole discussion this morning is that there's more to companion guides then meets the eye and we've all heard people say well we used to have 400 now we have 1,000, this is terrible, the sky is falling and what it seems that I'm taking away from this discussion is that more companion guides aren't necessarily a bad thing because if someone doesn't have a companion guide for a transaction there's a chance that they haven't implemented it at all and that there are valuable and not particularly supportable real reasons for having different interpretations and different ways of doing things among different plans and that what we need to concentrate on is defining those and getting rid of the extraneous requirements that are just there because they've been there before.
DR. ZUBELDIA: Let me make a comment on that because in one of the slides I say that most of the requirements in the companion guides are very reasonable and they're absolutely necessary, when they talk about telecommunications, acknowledgements, provider ID numbers and what to use and what types of claims they accept and what business they're not in that business, very, very important things. And like you said if they don't have a companion guide most likely they have not implemented the transaction.
Now when we find through this process, we take the companion guides we have on the list and go through the guides and build the edits in our system, in that process when we find something that is against the HIPAA requirements our experience has been that we'll contact the payer and say hey, this companion guide you have a requirement that is odd, we'll implement the way you have it described but we believe that if we implement it that way there may be a little bit of a conflict with HIPAA, we try to be soft about it. And 99 percent or 100 percent of the time they'll come back and say well you know you're right, let's either clarify the language or that's not what we meant or let's remove that requirement, let's fix it, we're finding very good cooperation from the payers in cleaning it up. And it's very rare the case where we'll find somebody that says I don't care about HIPAA, I want this, 99 percent of the time we find very good cooperation, they revise the guides.
The other day during the HL7 meeting a payer came to me and said Kepa how come Claredi has this requirement that specifies that we cannot accept this, I said well it's in your guide, and he goes really? We looked at the guide and it was there, it was in the guide. So that's the kind of feedback process that helps the entire industry, kind of having a third view of the guides by a third party and kind of help convergence. And hopefully, it will take a long time but hopefully we'll get there.
DR. COHN: Harry.
MR. REYNOLDS: Yes, Simon, as Jeff and I were setting up this panel and I wanted to say this before if any of the speakers have to leave at lunch, our goal was that people would come in and take a short look back but really try to look at how to make things better going forward and I'd like to commend to the speakers, not being able to see body language or anything sometimes you just hear the basic message, I feel that the tenor, the quality, and the focus of the presenters has been outstanding and exactly what I know we were trying to get to so I'd like to thank everyone that testified because I think it really gave us some good things to take forward.
DR. COHN: Well thank you, well I was wondering if you had a question or not.
MR. REYNOLDS: No, I know we're behind and I'm getting good information.
DR. COHN: I appreciate that, and I guess the comments I would make just in terms of closing, I think this is an issue, this is a topic I think we want to sort of move through the year so this is not, this is sort of session two of probably four or five sessions around all of this.
I am sort of struck as we talk about all of this that there's, we'll probably need to get some of the practice management system vendors in to talk to them about how we can help and the issues, are they really able to put in all the transactions, are there barriers, what issues are they experiencing, I mean what is their perspective on it because I think certainly we heard some today that makes one think that they are a group, they're important to all of this and we need to find out their view. I do think that also hearing potentially from CAQH and the eligibility work, I know they're doing it with WEDI and others, but I believe they're leading that effort so maybe getting an update from them about what's happening.
Once again as we move into this issue of these other transactions and really making them all work, the other piece of course also taking a slightly longer look is that the claims attachments I know we're at some point going to see the proposed rule but as claims attachments come down the way I think Kepa is probably right that there will probably be HIPAA compliant attachments and then there will be everything else and we probably need to think through that a little more as we go forward. And I may be off on that one but I think that's something we should at least think about as we move forward, just along the lines of something else that adds value to the ROI here.
And once again I'm just sort of trying to think of all of this before I, I'm sure we'll sort of forget as we move into the afternoon but anyway I think these are some very useful conversations.
We are now running an hour and a five minutes behind our schedule, what I am going to suggest is if possible can we take a 45 minute break and then we'll come back shortly after 1:30 and start up again so thank you.
[Whereupon at 12:50 p.m. the meeting was recessed, to reconvene at 1:43 p.m., the same afternoon, April 6, 2005.]
DR. COHN: Okay, we are going to get started with the afternoon session, now we're changing around the agenda a little bit, we're changing around the agenda a bit and we're going to now spend a little time talking about subcommittee discussion on secondary uses of clinical care data. We'll talk about the NPI implementation following. Stan, do you want to lead off this conversation?
Agenda Item: Subcommittee Discussion on Secondary Use of Clinical Care Data - Dr. Huff
DR. HUFF: Okay, what I'd planned to do is just talk about the idea a little bit and then talk about what the opportunities are and then how we would change sort of this list of things into a work plan to discuss this item and then any issues that come up we could put on an issue list and make those topics for the work plan as well.
DR. COHN: Stan, should we check is Harry on the phone?
MR. BLAIR: Harry, can you hear us?
MR. REYNOLDS: Yes, I can hear fine.
DR. HUFF: What I've done Harry and Jeff as well, I'm just projecting sort of an outline of things and I'll kind of fix this as we go along.
So the idea again of this idea, and it's not original with me at all, it's been expressed by other testifiers as well as our own documents as Jeff pointed out, but Chris Shute(?) has been a particular advocate of this activity. The idea is that you would collect clinical care data encoded in using standards shared data models and standard coded terminology and the kind of data that you would collect would include orders and results and text documents and clinical assessments from nurses and respiratory therapists and physical therapists, all of the data that you could collect you would collect and that data collection would happen according to what's needed to take care of the patient, what you need to record to take care of the patient.
And then that data would then serve as the basis for algorithmically assigning and doing other tasks and the kinds of tasks, try to make a good list below, you could basically apply a program to that data and the program would algorithmically assign the appropriate morbidity and mortality codes for that stay or that visit, or it would assign the appropriate billing codes or it would do automated creation of HEDIS reports for quality on that, those kind of things. And so that would be the, what you're trying to do is accomplish in an automated way things that are happening now by a lot of manual chart review and other kinds of review.
The algorithms would be standardized also and basically would constitute rules for standard classification or derivation and so a lot of the kinds of things that are now written down in paragraphs and pages of descriptions to people would become instructions that are executable by programs in assigning those kinds of codes.
So that's sort of the general idea and maybe I'd stop there and ask if there are comments or questions about sort of the idea or whether it's even a good idea. If you prefer we can through more and then, okay, so the second thing then is to try and get, do a little brainstorming here with the group in terms of the list of things that might be done and I think this should include things that people know are already going on and/or things where there's an opportunity and nobody is doing anything yet so it should include both things.
The list of things that I have for Jeff and Harry, I have automated assignment of morbidity and mortality codes, automated assignment of billing codes, automated creation of HEDIS reports, evaluation of adherence to best clinical practice, QOI which I'll need help from this but the idea is that you could use this in fact to assess quality directly from the primary care data as opposed to the peer review sorts of activities that are going, used to go on, and I may be behind the times there. Automated response for clinical data to support claims, so basically the automation of claims attachments is conceivably possible based on primary data.
Assignment of nursing acuity codes, derivation of some population statistics and the example for instance would be that if we were interested in heights and weights and what are happening to heights and weights of people, in fact Intermountain Health Care has thousands of those and actually are chronological over time and we have probably some people from birth to a certain age and nobody is looking at that data or doing anything particularly with it but it might in fact inform some kinds of population statistics. If you apply these things in real time then you could do bio surveillance so that's something that's already being done.
So those are the sets of things that I could think of.
MR. BLAIR: Is Michael here to hear this?
DR. FITZMAURICE: Yes, I'm here Jeff.
DR. HUFF: So that's a list and we can come back and try and add to that list.
And then for each of those opportunities, so for each of those things that we listed potentially we can say is anybody working on that, who's working on it, what's been done, what's the potential pay back or the business, what would drive in fact people to do that, what's the incentive to do that, and then what could be done to encourage the activity which probably comes down to the recommendations this committee might make is are there specific recommendations that we could recommend funding or research or general moral support that would cause these things to happen that would result in more efficiencies within medicine.
And a fourth category was just looking at are there activities or standards that are common to the process and of course an obvious thing is standard coded vocabularies, not quite so obvious is the need for standard shared data models that need to be coupled to those terminologies, and then standards for representing the actual logic, the rules that are executed that cause these classifications to occur within software.
MR. BLAIR: Could you elaborate a little bit about either examples of what you're thinking of when you say data models?
DR. HUFF: Yes, and actually I have a small slide set just in the case somebody asked that question so I'm glad you asked that question. So the idea is that there are lots of ways to say the same thing even if you're using standard coded terminologies so on this slide we're talking about deep tendon reflexes and the things that are in red essentially represent one code and the things that are in blue represent the value of that evaluation so the first statement says left patellar deep tendon reflex intensity and that would all be represented as one, could be represented as a single pre-coordinated code and then have a value of two plus. On the other hand it could have been done as patellar deep tendon reflex intensity as two plus and laterality as left and so that would have been actually two codes with two values associated with it. Or you could be even more atomic and more post-coordinated by saying the deep tendon reflex intensity is two plus and the body part, if we were particular we would say it was the patellar tendon and the laterality is left. And so those are all ways that you can decompose the same thing and if you're not careful you get unrecognized synonymy within a database because you choose those representations.
Now there's even a simpler example, if you're doing weights, you have the patient's weight and then you have all of these other kind of qualifiers people attached to weights to say this is the patient's weight at birth, this is their ideal body weight, this was their admission weight, this was their post-op weight, this is their whatever kind of weight. And you can pre-coordinate all of those so that you have different codes for weight at birth, ideal body weight, that sort of stuff, or you can do it as a post coordination where you have a single code for weight and you have weight circumstance or some other qualifier or weight qualifier that says at birth, with clothes, without clothes, lean body weight, all of that sort of stuff.
So the whole point is that if you think about those two different models, just continuing this weight example, if you wanted to calculate the weight gain during a hospital stay it's very different to do it if you have a single code for weight with associated qualifier then it is if you have a single pre-coordinated code to represent that same information. The actual things that a computer would do to calculate the weight are quite different based on each of those models.
Now a lot of the models are interchangeable and so you're not really necessarily forcing people to use one or the other of those models but you want to recognize the synonymy that exists between those models so that in fact you can do automatic transformation of those models and especially what you want to do though is even though you're not forcing individual systems to do one model or the other those models become the basis for stating rules. So if you're going to state a rule that says has the patient's weight increased this amount from birth until a certain period of time until their first birth date or something, that rule to be executable has to be stated against some assumptions about the data model, not just the standard codes that are used in the data. So those are the kind of standards that I mean about data models, you have to have a way of saying am I going to do this pre-coordinated or post-coordinated, recognize the synonymy between those two things but use a given base model for the statement of rules that have to do with that kind of data. So those are the kind of shared models I was talking about.
Other questions about that?
Okay, so again the activities, the things that may be standard or activities or standards that are common to all of these processes are the standard coded vocabularies, standards for shared data models, and then standards for representing the logic, aggregation logics as Chris Shute describes them, which again they're candidates for how you might represent that logic.
MR. BLAIR: Standards for aggregation logic, please explain that to us a little bit.
DR. HUFF: Well, that's just the term that Chris Shute uses to mean the set of rules that allow you to calculate from the primary data that was charted to whatever this derivative code is, whether it's a classification code or a billing code or a quality code or whatever it is.
MR. BLAIR: If I were to use the phrase that these are the rules that would be the criteria for translating --
DR. HUFF: Yes, that's the same way as I'm using this term.
DR. FITZMAURICE: Stan, could I ask, would aggregation of logic include here is a something, a broken leg, how much should I pay for it, the aggregation logic would move from the coded here is a broken leg to a payment schedule to writing the check. Is that an example?
DR. HUFF: Yes. Usually it would go through a different step, usually that is, your rule wouldn't be specific enough that you could, you would base billing directly on primary data, you'd usually go from the primary data to a billing code and then say what, how much am I paying for that today. But yeah, that's exactly the same kind of logic.
DR. COHN: Marjorie had a question and then Maria and then Jeff. Marjorie?
MS. GREENBERG: Well, first of all I want to thank Stan for bringing this before the group because I think it's really very interesting and stimulating and important and also I really like the fact that you've posed it as a series of questions that probably require a research agenda because obviously it is, that's what it would be and the possibility of helping I would say probably the Office of the National Coordinator and others, the National Library of Medicine, etc., develop a research agenda that ideally could be taken forward. Now you're waiting for the but, right? I think that's all great.
I did have some questions because particularly around not surprisingly the idea of being able to in an automated way assign mortality or morbidity codes. Right now when we talk about mapping we, well first of all mortality is codes about, I don't know, 90 percent or something are applied in an automated way but from the death certificate because they require and that the physician or the certifier go through these international rules and determine, you know, I mean I'm sure you've filled out death certificates. But the precipitating all the way down to the underlying cause which may not even be in the record or may not certainly be in the record for that episode or that encounter.
And then NCHS over a period of about 30 years or so has developed automated systems that take what the doctor wrote and then assign the appropriate code, the appropriate ICD code, in this case now ICD-10, and also selects the what of those codes which one should be the underlying cause. So that's done in an automated way but the source document is the death certificate.
So I'm wondering in that case if you're thinking that you could skip the death certificate and this process by which the whoever certifies the death has to actually make those judgment calls by just applying all sorts of algorithms to the information in the record and I would say I can't even really imagine a research project that could resolve, that could lead to that, I just don't think that's practical, I mean for a lot of reasons.
So I'm just saying that in that case I don't even see, although I congratulate the idea of doing research to me that would, and so I think when you put something like that up there people think oh we could do it. So that's my statement on that and we can talk about that later or in the future. And I don't know if that's what you had in mind, just skipping the certification.
But the other is with the morbidity, I know you're trying to cut me off, Simon, but I really --
DR. COHN: Well, I just wanted to sort of comment that I don't think we're necessarily trying to answer all the questions --
MS. GREENBERG: No, but I mean the question is would we even want to pursue a research agenda on some of these things and some of them might be, have more potential then others. With morbidity, what we're talking about with mapping obviously is going from the SNOMED codes, assuming that that's what's used, to the correct ICD codes, and there's a lot of work going on with that as you know and this committee of course has recommended that. But as I understand it you are going considerably beyond that and saying that it's not just if the physician has written down that the person has this condition in the SNOMED codes, that then you would map it to the right ICD codes, but you're talking about actually applying algorithms that would look at all the tests and the lab work and various other things as well. Am I correct about that?
DR. HUFF: Yes.
MS. GREENBERG: Okay, so that is clearly completely unlike coding is now done because the coder to the extent coders are used do not diagnose the patient from information in the record. I mean they could query the physician because of information they saw in the record, so that would also be, it's very different from this mapping activity because it's really, and I was wondering if you were still thinking, just because I'm sure, I know you've thought about this a lot, whether it still would require the physician to say that the person had a health condition or alternatively that the algorithms might question the physician having said the person had the health condition because the labs don't match up with it. So that's just some of the questions that I have.
DR. HUFF: I think that, well, so let me respond. So I put things on the list knowing that there are smarter people then me that knew the details of this and I would tend to agree with you, I don't, I think that the mortality coding could be done but the honest situation as you described it is that the data is never encoded in the medical record right now at least in any of the systems I'm familiar with so that you have the primary, there is no primary, usually you have all of the data up until they die and then it's all written down on death certificates or other things so there's no data.
Morbidity on the other hand is very different and you're exactly right, in these other things what I'm saying is that you could have a rule that would basically look at a person's blood pressures over time which is a different thing then a code mapping, it's an algorithm that says okay, if I see blood pressure from this person over the last six months where everyone of them is elevated I'm going to say they have hypertension regardless, or I'm going to assert that. And likewise if it's renal failure or something I'm going to say okay, I'm going to look at serum creatinines, I'm going to look at renal biopsies, I'm going to look at other things and algorithmically say this person has chronic renal failure based on the evidence, the primary data that's in the record. And so that's why it's different then coding although there could be some, well it's different then simple coding from one coding system to another coding system.
The kind of mappings that we're doing, people already recognize this is in the mappings we're doing because to go appropriately from SNOMED to certain ICD-9 codes you need to know the patient's age and so it's not, you have to actually look, what you need to do is look in the patient's record to get the patient's age and associate that with the appropriate code to make the appropriate mapping and so you're already starting to get into algorithmic things as opposed to sort of pure mapping things and there are lots of other situations like that in going from SNOMED to ICD-9 for purposes of billing.
MS. GREENBERG: Whether the person is pregnant or something like that.
DR. HUFF: Pregnant, yeah, is this gestational diabetes as opposed to, anyway, so all of those issues.
DR. COHN: Well, I want to let Maria, Jeff, and then I had a comment and question also.
MS. FRIEDMAN: I think you really hit on a very important topic and it relates to work that a lot of us have been doing over the years and that's mining large datasets and trying to make them talk to each other, it's been mostly done on the administrative side but I think backing into it from the clinical side is very important because we need those linkages and I think anything that we can do to get it automated is way cool.
One of the things that we found as we pursued this stuff over the years is if you think the variability in claims forms is great wait until you see the variability in databases and the administrative reporting and just classification of all kinds of things. So I'm not saying not to do it, I was just wondering if it's possible if this could be pursued in the context of other research agendas, I don't know if anybody else is working on this but trying to figure out how to deal with the variation within and across databases as well as prospectively defining a set of standards or algorithms that the computer could do its thing with and then applying that retrospectively is going to be an even bigger challenge.
DR. COHN: Jeff, it's your turn.
MR. BLAIR: I'm a fairly transparent person so you know that I'm very excited this concept. So I'm starting to think how it would be implemented and I know that as I start to mention a few things that might go into a work plan that you might bring back to us next time or something, Stan, I know that I'll only hit it at a high level and there may be several steps before each of these steps that I'm mentioning could be done but maybe this is in part like a concept or high level strategy.
What it would take, if we sort of look at our objectives one of them was to be able to map patient care data to supporting the reimbursement process, another one was to support the ability, you said to HEDIS but maybe other measures of quality which may support pay for performance and those two don't get separated anymore because the mapping to reimbursement and mapping to quality indicators down the pike are going, if we're going to have pay for performance I would think this is going to be a the core of something that could support that. Other things are research agendas in public health and they may turn out to be some derivatives of the first two and so that's the reason why I feel like we both have to analyze, have a research agenda for each of these separately but then to look at it all together because we may find out that we save an awful lot of time and money if this is somehow integrated and that it's not completely in isolation.
Now the reality may be that once we've done that we have an integrated research agenda with all of those major pieces and then we take a look at that and then we wind up saying well we can't do it all at once but as we go down and we pursue what we always refer to as the low hanging fruit which might be reimbursement or quality or both of those or something like that and that's the low hanging fruit or a subset of each of those, but that we do it in a way where we don't create more stovepipes. We do it in a way where the mapping projects can be as synergistic as possible and that can support the expansion and where there's dual uses for mappings.
That probably requires a work plan that would set forth as Marjorie said a research agenda and so the other piece is the inventory you mentioned, Stan, the inventory of what's out there now and that may have to come after this, all of the pieces that have to be there to be able to do these mappings, and then you have to wind up looking at those and saying well what already exists or what projects are in development that we can draw upon and that may reduce our costs or that may bring us closer to answers on a near term. And then the third thing I tend to think of is for the missing pieces and the gaps, who are the special interests that will benefit that might be able to fund filling in the gaps.
DR. COHN: I guess I'll put my two cents in now, Jeff I thought you made some very good points. First of all I worry when we start talking at the onset of things as a research agenda because I actually don't think it's the role of this committee to have a research agenda per se though we can certainly add bullets to a NCVHS research agenda. We may at the end of the day come out with certain things that need a research agenda associated with them but as I look at this I'm sort of going, to me it's sort of the fundamental first question is getting a little more familiarity with the area, just because I don't feel like I have enough to know what's research and what's not at this point.
And I'm sort of going geez, if I wanted to know more about what was really there versus more was I think as Jeff described sort of things that were not low hanging fruit might have Chris Shute come and tell us about his ideas and thoughts. I know NLM is doing a piece of this and certainly talking to them and hearing their piece which is mapping but also recognizing that there's other pieces that may need to be in place and their views of what else would need to be there might be very informative. I suspect talking to people like AHIMA might be very useful and I mention that primarily because a lot of the work that's manual that Marjorie was commenting on is all done by coders, not all but 90 percent of it is that isn't done by physicians and there's a nationwide coder shortage and it's not likely to get any better any time soon.
So the question is is are there technologies, tools, approaches, people that are as smart as we are and maybe smarter that are actually developing products that might help move us in this direction. And I think that that might be a very interesting just sort of beginning as we look into this area as opposed to I think getting exhaustive on exactly all of the business cases for all the particular pieces which I think begin to sort of fall out as we sort of move further. That's just sort of my thought and I think, since I mentioned AHIMA and we have somebody in the audience, I haven't even talked to you about this --
MS. BOWMAN: Sue Bowman from AHIMA and this is a topic that is very exciting to us and a very considerable interest both to our organization and to our members and we have actually been doing and exploring quite a bit of, maybe not official bona fide formal research but more of an exploration on some of these related topics, maybe not as far as Dr. Huff has been going, more in the mapping arena, but we have prepared, we did have a workgroup that was across industry, not just HIM professionals but across industry group including technology vendors that looked at the issue of computer assisted coding, which is our sort of coined term for the process of going from the clinical data captured at the point of care to all of the secondary data uses. And that group has prepared a 16 page brief on the topic which we would be more then happy to share with the subcommittee.
We've also been involved in some of the --
MR. BLAIR: If Dana Carvey was here he'd say how convenient --
[Laughter.]
MS. BOWMAN: We've also been participating in some of the mapping work, both with the National Library of Medicine and with CAPP(?) and we're also in the process of hopefully what will the final stages of a long in process white paper on the role of SNOMED and ICD-10 in the EHR and how they coordinate together and tie into the National Health Information Network and interoperability and so forth and hopefully we'll have that paper finished in the near future. So we have already really been focusing a lot of work and are continuing to look at all of these issues related to classifications and terminologies and how they will all work together in the future.
DR. COHN: Well, thank you Sue, that's very useful additional information. So anyway, obviously I tend to sort of jump from these things to sort of like well what do we deem to do next to understand more and I am reminded that I am not a professor of medical informatics as we talk about this. Michael?
DR. FITZMAURICE: Simon, you said a lot of the things that I was thinking in terms of the role of NCVHS in research agendas, it would seem to me that what we do is we make recommendations to the Secretary and in doing that we hear from the private sector as well as from the professional expertise around the table about what are the things that are needed. It's natural for anybody in this business to look for low hanging fruit, that is to look for a real world application as opposed to an academic exercise and I think NCVHS is known for real world applications and bringing in the academic to guide the setting of priorities in what we do to make sure that it's grounded.
And so I like the ideas that Stan has brought forward, I would like to see some sense of priority setting and the need for certain vocabulary translations to see if that can be made more efficient, I'd like to see what does the private sector think are the low hanging fruit, LHF, I guess we can make that an acronym, and move in this direction. I think it's a positive direction, I just want to urge us to be applied minded and sensitive to the needs of the private sector as well as the public sector as we move ahead but this find a lot of favor.
DR. COHN: Other comments? Jeff?
MR. BLAIR: Modification of terms, research can be thought of in many different ways, one of the ways that NCVHS could move forward on this is not necessarily, it may be that in time there's portions of this that we may ask to be a separate independent research activity that the RAND Corporation does or someone else and we ask for funding for that, on the other hand we have hired consultants to help us on you might say information gathering instead of research, information gathering in a structured manner that over a period of six, nine, 12, 15 months where we've come out with a good set of recommendations, for example on the core set of PMRI terminology, or other consultants like Margaret has helped us pull information together. So there may be a good part of this that we may be able to do with an appropriate one or two consultants, or three consultants that we could contract with, but as opposed to what some people may think of as "a research agenda", it's still, some parts of it may be a RAND Corporation study or something.
DR. HUFF: So cognizant that we're behind on our agenda today it would seem that what we'd like to talk about is next steps, I tend to agree that what, the first thing that I would like to do is say what are people already doing, get some perspective from AHIMA and some others, there may be lots of other things that are going on within CMS that Maria knows about, I don't know who we ask, but it would seem maybe the next thing would be in fact to line up some folks that could speak to things that are already in motion and that does keep us applied minded because if people are already spending money to do it we know that there's probably a need out there and maybe there's some way we could augment or facilitate that. So being new at sort of tying to tend the work plan for this kind of thing I need some help I guess to know what we do next, if we talk to Maria and we try and figure out some people that would be interesting to get some education from at a next session or how we move forward.
MR. REYNOLDS: Simon? Jeff and I had talked about this some and going along with what Stan just had to say, the possibility of Stan coordinating with Maria one of our next sessions whenever that is scheduled to be, that not only could include everything that Stan already said but I'd love to also have the first part of that include some kind of a primmer on the subject in general because a lot of you are a lot further along, I know as I sit and listen to this I can, I understand what you're saying but I can't put it in the whole context.
And the other thing that's exciting about this kind of discussion is as we go forward these are the kinds of things that with all the decisions whether we make on HIPAA, electronic medical records, e-prescribing and everything else, kind of all work towards, and all the coding, all kind of work towards the end game of really tying all this stuff together to make a major different in the end, both as we said in some of the tracking for the bio issues or just in general administrative stuff through setting the codes.
That's one of the things that Jeff and I had talked about and I think hearing it today and hearing that there's more going on maybe then even we knew about, that might be a good way to approach it from a next step standpoint.
DR. FERRER: I would add that at CMS you probably want to get the Office of Clinical Standards and Quality, NORDI, we're working very closely with OCSQ and actually gathering quality indicators from electronic medical records at the point of care so it's submitted to a clinical data warehouse for them to consider potential pay for performances, so they have a lot of already mature initiatives underway and Maria is one side of the shop but that's really OCSQ NORDI and I think under the leadership of Dr. Bill Rollow(?) and OCSQ and the Krimperman(?) Group with the 8th Scope of Work coming out of that, out of the agency, they have a very large agenda that touches on all these topics and it would be very good to sit and actually hear what they're doing because as you know once CMS moves the industry tends to listen and it's not uncommon for them to set sort of the research agenda whether we like it or not so I would strongly encourage them to come here.
DR. COHN: Okay, good. I think Harry makes a good point and as I said I obviously, I'm as conversant as anyone on this and yet I feel like I have big holes in my knowledge, for example I don't fully understand exactly the rules and I think Marjorie was beginning to reflect on them about morbidity, mortality data and all of that stuff and I'm not suggesting that we spend four hours talking about all the rules of how you identify the principle reason for death or whatever but I think hearing from a variety of people and I'm trying to think of whether there's anybody who jumps out in mind is somebody who could really give a primer but AHIMA may be able to give part of it, NLM may be able to give part of it, CMS might be able to give a perspective on this one --
MR. BLAIR: Part of that also, I think Michael because with all of the things that he's doing to try to fund the missing gaps in standards I think he could add quite a bit to this.
DR. FITZMAURICE: I could say what we're doing but as far as being an expert on vocabulary that's probably outside of my bailiwick, vocabulary terminology, I'm a learner like most of the rest of us around the table, I might turn to the National Library of Medicine to draw some of that expertise for such a primer.
DR. COHN: I was sort of thinking like Betsy Humphreys if she's available or, I mean obviously I'm looking at Vivian as we say all of this but it's one of those things of, I mean I think many of us are involved in these sort of mapping activities but the question is well what else to really make all of this useful, which becomes really part of the question and discussion to have with NLM. I agree with you, Mike, they are sort of the ones responsible for this particular piece of the puzzle.
MS. AULD: I would just add that several of you know little pieces of what we're doing and I don't think many of you know the entire picture of the actual activities, nor is everybody aware of our long term plans, a lot of it fits directly into this. So if we could give you that overview I think it would help to explain from our perspective where it would go.
DR. COHN: I was going to make one comment and then we'll let Judy, which is I think we probably also need to hear from NCHS to understand what sort of tools and approaches you're doing around all of this because I think that's a really important piece of the puzzle here.
MS. GREENBERG: Well, particularly with mortality data, the other work we're doing with NLM and AHIMA for morbidity data. But we'll talk about it, yeah.
DR. WARREN: I guess I'm getting, when Stan first started talking, I mean this is why I went into informatics is Stan's list, in fact Stan and I have been at meetings together over the last years of talking about these things, it's why we approved the PMRI so that we would have the tools to do every one of these things that's on this list. But as I'm listening more to the conversation I keep hearing mapping coming out as a key thing and that's only one piece of it, part of it is modeling this data in ways that we can share it and that's a different activity then mapping between terminologies. So I just want to be sure that we get that kind of in there too and that may be something that this committee can give a message to or put into our tutorial about the different ways you can take data and aggregate it up, it could be through algorithms, it could be through data models, it could be through a lot of different things right now. But I mean this is, to me this is the gold in the ROI because a lot of this stuff right now is being done manually and you can save a lot of FTEs on your budget if we could ever get it automated.
DR. HUFF: So I think we need to get to action items here.
DR. FERRER: Let's not forget ONCHIT, the request for information and under sub workgroups quite a bit of overlap in the sub workgroups of Mike and a host of other characters have participated have also a lot of the standard type derivatives off of the RFIs, I would imagine that you'd probably want to hear from ONCHIT on what that analysis is and where they're headed because that strategic framework is coming out of a lot of those RFIs that have already been evaluated.
MR. BLAIR: Stan, with your list, there's an amalgam that I think I'd also like to add to your list, you've got reimbursement and you've got some measures for quality, I think you also ought to list in that list the amalgam of both which is identified as pay for performance.
DR. HUFF: Okay.
DR. COHN: Marjorie?
MS. GREENBERG: I just realized sitting here and of course it goes along with what you said, Simon, if there were recommendations for a research agenda that would come out of the committee ultimately, like any recommendations, but at the same time just if you look at the breadth of what Stan is putting forward you would I'd say sooner rather then later want to include the Quality Workgroup because everything that Jorge is talking about is very relevant to the Quality Workgroup and in fact under, they are now doing some agenda planning and they're particularly interested in how they can align what they're doing and their work plan with other priorities within the committee which of course includes standards and electronic records and all of that. So I would say there's a direct fit there and then of course there also has a lot of relevance for Population Subcommittee because we talked about mortality data, we talked about the morbidity data as well from surveys and also I think you had disease surveillance up there, so I would say this is definitely cuts across all of the committees. And of course the NHII too.
DR. COHN: -- actually let me say this a different way, when I interviewed a lot of the committee members what I heard is is a desire to sort of start, sort of combining efforts and start looking at problems from multiple different views and so this is certainly one cut. I tend to think that the cut is actually probably on that's uniquely Standards and Security but I think we need to bring it to the Executive Subcommittee and discuss it because there may be, they may want to attend some of these meetings which is what I think you're bringing up, they'll certainly want to know some of the output relatively rapidly.
MS. GREENBERG: And I'm wondering if we're going to have some kind of tutorial or overview presentations whether that shouldn't be either at the full committee or maybe, either at the full committee because of the crosscutting issues or it could be as you said a session more of this subcommittee in which people are invited from the other workgroups or subcommittees.
DR. COHN: Okay, well I think that's an agenda planning exercise so let's take that on, I saw Stan had as his final question was well geez, is this subcommittee or is this full committee and I think we can see what the interest is.
MS. GREENBERG: But what's directly relevant to certainly to a few of the other groups.
DR. COHN: Please, Carol.
DR. BICKFORD: Carol Bickford, American Nurses Association, in taking a look at the list there are three things that I don't see but might be encompassed in some of the areas, one is we've been focusing on morbidity and mortality and not have tended to health and wellness and health promotion, so those pieces are missing. The second thing is the linkages between diagnoses, interventions, and outcomes, the work that nursing has been trying to do in teasing out what we do, that might fit in the decision support arena but it has a much bigger perspective in looking at the outcomes piece. And the third thing that's missing is the context of care delivery, who's doing what, where is it happening, and what are the relationships as we're doing the handoff. So we don't know what best practices are and where they best occur so we've missed that context piece of care delivery.
DR. COHN: Michael.
DR. FITZMAURICE: I would also include FDA because they're doing quite a bit of work on classification of devices on terminologies and working also with the National Library of Medicine on beefing up RxNorm.
DR. COHN: Stan, I think I have a bit of advice for you just based on being a subcommittee chair for a number of years. Scope issues are going to be important and I'm obviously suggesting that, I mean one could potentially develop a whole work plan initially, I think we may be a step before the work plan, well, let me think about this, you've got a work plan, I wouldn't spend a lot of my time writing up a five or ten page work plan at this point but I think what we do need to do is to come up with a session, be it at the full committee or subcommittee, probably a half day, maybe a little more --
MS. FRIEDMAN: Sounds like we've got a full day because I have a whole list of folks who are doing work in this area and who are doing a lot of work in this area.
DR. COHN: Yeah, well I was just trying to think, I mean I guess I would defer to our subcommittee chairs on when that can be scheduled, I do know that trying to get a full day of full committee time becomes a year's worth of two hour sessions --
MS. FRIEDMAN: I think this is the subcommittee's slide, get ourselves up to speed and find out --
MS. GREENBERG: You could have a third day and it could be sponsored by the subcommittee and then anybody else who wants to stay for it could.
DR. COHN: I was just thinking that that is another option certainly, some way to be able to make it accessible to people but somewhere between a half to a full day where it's really sort of an exploration of the issue and I think that there's been enough people that have chimed in that you sound like you have quite a number of speakers that could be potentially invited to begin to give us their view of what this is all about without really predisposing an answer, I mean I would actually throw in in all of this stuff, I hate to say it but natural language processing wherever that is in this day and age, I'm not suggesting that we investigate that but it may be that some people who come forward with solutions might be leveraging that and that may turn out some of our structuring X, Y, and Z and data model stuff somewhat on its ear or at least cause us to look at it differently. So I guess --
DR. HUFF: Based on the amount of input that we had I think, it seems like you could approach it in three phases, sort of some education exploration about what people have thought about and what the issues are, number two what people are really working on, and from that perspective probably we need to prioritize and say are there three or four areas we can, because it sounds like this could become a 100 things and we become too diffuse looking at everything we won't make any progress or recommendations about anything. But that would be a way to approach it as far as get some education, understand more, find out what people are really doing, then set some priorities amongst the committee about what we think are most important and maybe then have some more focused hearings about those particular areas about what we could do in the high priority areas.
DR. COHN: Especially the things that are low hanging fruit.
DR. HUFF: Yeah.
DR. COHN: Quoting Jeff on that one. Well sounds good. Well, Stan, do you feel like you've gotten some input from --
DR. HUFF: I feel like I've gotten a lot more then I bargained for, so thank you all, so what literally, do I need to call Maria or Maria will call me or what happens to take it to the next step?
MS. FRIEDMAN: I think you and me and Jeff and Harry need to have a conversation at some point and then you and I need to have a conversation and then I need to start working the phones.
DR. COHN: Well, I think we need to take it to the Executive Subcommittee to figure out when we should do it which is I think part of the question.
MS. GREENBERG: And I think the Executive Subcommittee is having a conference call on the 19th so Jeff, Harry --
MS. FRIEDMAN: I'm not going to be able to make that call.
MS. GREENBERG: Oh, you're not available the 19th? Well, I just heard that Mark Rothstein wasn't either but anyway.
DR. COHN: Okay, well we'll figure this one out. Now we do need to transition conversations --
MR. BLAIR: -- let's just verify that Harry is still with us, Harry are you still with us?
MR. REYNOLDS: Yeah, I've been cut off twice but I'm back on.
DR. COHN: Well, thank you for your comments, Harry.
What we are going to do is change topics, I do want to apologize to everybody for sort of moving the agenda around and I do know that George Argus needs to get out to the airport within the next 20 to 30 minutes so we wanted to offer him the opportunity to give us some of his views on the NPI implementation. And George we do apologize for running a little late here.
Agenda Item: NPI Implementation - George Argus
MR. ARGUS: Okay, well thank you for allowing me the opportunity to come here for the subcommittee, I am here today on behalf of the American Hospital Association's 4,700 member hospitals and health care systems and the 31,000 individual members. The AHA appreciates the opportunity to comment on the upcoming implementation of the National Provider Identifier. The AHA is very concerned about the process for enumeration in the implementation of the NPI.
Hospitals remain confused about exactly how and when the NPI will be implemented and one especially confusing issue is the subpart identifier. We are witnessing the same level of confusion that providers experienced from the adoption of the HIPAA transaction standards. Without additional guidance the implementation of the NPI will likely result in significant additional costs that could have otherwise been avoided if we had clearer guidance especially on subpart enumeration and a better deployment process.
Currently there are many unanswered questions on NPI implementation and providers and others have a desperate need for additional outreach and educational materials. To effectively orchestrate the much needed guidance there must be a central authority that can effectively respond to questions and concerns raised about the NPI. This central authority should be the source for clear and authoritative responses about general NPI issues and questions, subpart guidance, especially in relationship to federal programs, bulk enumeration procedures, and enumeration progress reports. In addition it is essential to encourage additional coordination and collaborative outreach initiatives in order to ensure that independently developed information and material is consistent with the NPI regulations and instructions.
One are that especially deserves more attention is subpart enumeration. There is insufficient guidance at the present time on what criteria providers should consider as they determine whether to apply for a subpart identifier. The final rule, and in particular the preamble, states that the provider generally will make the decision to apply for subpart identifier. Hospitals have indicated that there is insufficient guidance on how they should approach this decision and they are fearful of making the wrong decision. Consequently we are seeing wide variations among providers in how they are approaching subpart identifiers. Wide variations in the approach to subpart enumeration will defeat the purpose of administrative simplification and is likely to increase the cost for both providers and health plans.
Providers are also concerned that they may be coerced into filing for a subpart identifier in order to accommodate a particular health plan's need. Many providers, for example are currently being asked by health plans to apply for a subpart identifier based on the location of a particular unit within the campus of the hospital. While location deserves some consideration in making the decision it should not be the sole factor that drives the decision to enumerate an organizational subpart. Other more important elements, other then location, should factor into this decision, for instance governance, senior management team, strategic budgeting and operational oversight are components that are more important in defining an operation than is location. These components are instrumental in determining how the provider's operations function. In addition to these operational elements there are other organizational elements that should be considered, including specialized units that require or meet unique certification and/or special licensure requirements. Until we see guidance to clarify this issue we cannot move ahead to mandate the routine use of the NPI.
A staged implementation approach for the NPI is extremely important and the AHA is collectively working with other organizations to develop a set of recommendations related to the deployment approach. This collective work really became, was a result of an informal meeting that we had at the National Uniform Billing Committee in February and it came to our attention that not only our providers and health plans having the same sort of problem but physicians and others are also indicating that same level of confusion. And without a clear path that has well defined, that readily defines the readiness stages implementation of the NPI is likely to proceed in a confusing and increasingly costly way for all. Our members seem to prefer a step-up approach that has been clearly defined readiness stages much like the following.
Basically for May 23, 2005 through May 22, 2006, basically the first year, have this simply as a period for acquiring an NPI, recommend against the use of the NPI during this period. The enumerator, the organization that issues the NPI, should run periodic progress reports by each type of provider category. We would encourage collaborative outreach programs during this time period to increase provider awareness and to establish NPI web based boards that could provide frequently asked questions and serve as a central point of contact for asking additional questions throughout this transition period. In addition the fast track bulk enumeration readiness by the NPI contractor needs to be moved up significantly, we have heard that fourth quarter 2005 is the date, we believe that this is unacceptable.
From May 23, 2006 through December 2006 we believe this timeframe should be a period of testing between trading partners allowing providers and health plans with sufficient opportunity to examine whether appropriate identification and processing of the claim can be derived from the NPI information supplied or whether other information supplied on the claim should be used in combination with the NPI. This would allow health plans an opportunity to modify the edit logic of their claims processing systems.
And from January 2007 through May 22, 2007, this third stage would allow routine sending of both NPI and legacy IDs, and this would allow the health plans to utilize this information as a crosswalk that can validate the NPI against previous legacy IDs.
Then finally as of May 23, 2007 moving forward from this point on all eligible providers should report only the NPI.
The first two initial phases of the staged approach are critical and require constant monitoring and reporting to ensure that appropriate progress is being made and that the testing is occurring among trading partners. Monitoring the enumeration progress is essential and will help to identify whether and what types of additional outreach measures are needed. This is especially important for hospitals who not only must report their own NPI but also that of the attending, operating, or other physician or caregiver involved in the care of the patient. Hospitals are concerned about the timing required for all of these care givers to obtain their NPI and share this information with the hospital.
An adequate period of testing is essential to ensure that all of the NPI receivers are ready and capable of handling the submitted NPI. As part of the staged approach HHS should make clear that routine use of the NPI should not begin any sooner then first quarter of 2007. Providers don't want to be forced into using the NPI earlier for one health plan while another health plans are not ready. They want an NPI start date where there is a significantly large number of receivers are ready to accept and successfully utilize the submitted NPI.
Finally, in the spirit of creating a collaborative approach to education and outreach to ensure that providers receive additional clarification about a number of key concerns, especially the enumeration of organizational subparts and the bulk enumeration processes, the AHA is offering to use its numerous communication vehicles to ensure that all critical information reaches the hospital community.
And again, I want to thank the subcommittee for the opportunity to comment on this important issue. And I'd be happy to take any questions that you may have.
DR. COHN: Questions? Maria?
MS. FRIEDMAN: I just wanted to apologize, Karen Trudel is supposed to have been here, she had a meeting on the Hill and because we ran late she had to go to the Hill and I don't know whether she'll be back in time to respond before you leave, George, but I know Karen is very involved in NPI implementation in CMS, there's a group going, she's taking over for Judy Berek and I know we've also just announced our enumerator, I believe it's five systems and I believe there's a press release up on the website.
MR. REYNOLDS: Simon, this is Harry, can I comment and ask a question?
MS. FRIEDMAN: The enumerator I believe is Fox Systems and there should be a press release up on the CMS website to that effect.
DR. COHN: Harry, did you have a comment or question?
MR. REYNOLDS: Yeah, I do. George, thank you, that was an excellent presentation. I think what's interesting about this next step in HIPAA different then the one we heard about this morning is that the providers have to move first this time before the payers can move whereas when we implemented the transactions and code sets it was pretty much reversed. And I think if the American Hospital Association is calling for outreach I would assume that the individual providers would equally need the same thing, the small doctor officers versus just the hospitals. That may be an important message we need to take away from George's comments, that we've got to make sure that everybody out there really understands this and really understands how to get their numbers and what to do with them so that we can move along whatever schedule is set up, whether it's the one he recommends or the one that's in place.
DR. COHN: Yeah, I think Harry you make a very good point. Maria, I guess I should ask, when is enumeration scheduled to start since obviously it's not very useful to start communicating in advance of anybody being able to do anything about it.
MS. FRIEDMAN: I believe they're on track to start in a couple of months, next month.
DR. FITZMAURICE: May 23rd is the, Karen announced it at the March meeting it would be in May.
MS. FRIEDMAN: As far as I know we're still on track for that, obviously there is still a lot of details to be worked out and a lot of issues related to bulk enumeration. So I would propose that we will get back to you on that, if Karen gets back here in time maybe she can speak to that.
DR. COHN: Well certainly bulk enumeration is an attractive concept here.
MR. ARGUS: I want to also add emphasis to what Harry Reynolds mentioned in terms of physician awareness, I've heard from Rob Tennant and others and I've heard it from physicians who approached us or hospitals who've approached me about physician awareness. Many just don't understand what the NPI is all about and many in fact may believe that they already have an NPI because they have a UPIN number and that's not the situation. So there needs to be a vast outreach communicated to the physician community so that they are made aware of the differences. But the important thing here I think is really to have a staged approach where you don't require its use until there is sufficient synergy in terms of NPI enumeration and then you should begin testing at that point in time so that people are managing their resources with testing NPI and then step it up after that point in time.
DR. FITZMAURICE: I wonder, maybe Maria isn't the right person to ask this but is there anything in George's timeline that differs from that CMS would require? I remember the National Provider Identifier isn't due to be mandatory until 2007, so it looks like the end dates may be appropriate, that maybe there are things in the middle that are at variance with CMS's plans.
MS. FRIEDMAN: I'm the wrong person to ask about this because I know Karen has been working on this issue. I know there have been discussions internally about moving up some of these just because of some of the other things that have gone on since that legislative timeline was established.
DR. FITZMAURICE: It would seem that the electronic prescribing pilots would benefit from a testing of the National Provider Identifier so for people who participate in there there might be some encouragement for them to get National Provider Identifiers to then start this in actual practice.
MR. ARGUS: Well the timeline isn't quite as structured as I presented, as I recall CMS has indicated that within six months after the enumeration process begins it may be possible that a health plan may require the NPI for a particular provider. And that to me creates more confusion rather then lessening the confusion and adds additional burden I think for everyone involved, some might be ready earlier, some may not be ready, and so what we want to do is see a more formal timeline with specific milestones achieved within each of those timelines.
DR. FITZMAURICE: Could I ask another question to see if I understand this, some health plans pay providers differently based upon where they deliver the same service, a hospital emergency room, a clinic over here or a clinic over there and often they assign different provider numbers in their own health plan to make that payment differential. And so if this goes into effect what they would have to have is the National Provider Identifier and perhaps another variable, maybe a contract number or something, to identify the location of that service so that it fits in with the payment schedule. Is that about it?
MR. ARGUS: Well, there are other variables in the claim that could be utilized to help identify a particular service location too, zip code might be one but then the zip code might be within the same geographic location. I think a lot should really depend on how the organization, the provider organization operates and how they set up their clinics and what their obligation is to the rest of the facility as part of their service. And I think the confusion at least at the present time is that many health plans are saying well we want you to have a separate subpart for this clinic even though it may be on the campus premise because we want to pay it differently and providers are concerned that this may not work with the way they had envisioned it and the way I think the NPI rule basically set it up.
DR. FITZMAURICE: It does seem a little strange that the purpose is to uniquely identify a provider and it doesn't take three or five numbers to uniquely identify a provider, but it may take that to identify the location on a payment schedule for how much a provider should be paid for a particular service. So I mean it's separating out the different functions of a provider identifier and saying well this identifies a person and the rest of these variables identify where you fit on a payment schedule.
MR. ARGUS: And I think that's where the second phase really of testing should come into play, where you can at least work with your trading partners to work out I think how those methods might be melded together in terms of fact finding and go from there.
MR. REYNOLDS: Simon, can I make a comment? Michael, when you made your comment, one of the most significant issues is that currently pretty much every payer has their own set of provider numbers with that provider and the single designation by provider may not just be one number but it will be one set of numbers and then all payers, whether it be Medicare, Medicaid, commercials or others, are going to have to adjust to that number. So that's the further complication of the whole thing and so it's not just whether or not they have one provider number or three, they may have 15 with another payer, ten with one, four with Medicare and so on, and when they pick three everybody has to go to those three and figure out how they charge and how they bill and how the revenue stays neutral and that's going to be the big significance of the providers going ahead and picking their numbers and then everybody trying to adjust to it. So your point is well made but that's only a portion of the significant consolidation that has to go on once a provider picks whatever numbers they pick.
DR. FITZMAURICE: Thank you for that supplement, Harry.
MR. REYNOLDS: That's the big issue that's going to happen because right now payers just say here are the providers numbers I want you to use and they go back and forth, it doesn't matter how many, who has what, but that's going to change dramatically.
MS. FRANK: This is Sheila Frank with Delta Dental Plans Association and we're one of the organizations with a number of other industry organization that George alluded to to try and define some of these issues and to key off of what Harry just said, does anyone hear the word companion guide ringing in their head as they hear him discuss these different models that are in existence today? With HIPAA we didn't legislate that everybody adopt the same business model and so these business requirements aren't changing, we have Medicare legislated requirements for those Medicare providers that they use different provider numbers within the same institution, we have as Harry described different models for different payers.
The one thing I wanted to bring up additionally is that we haven't talked about dissemination of NPIs to the user community and that's one of the things that needs to be probably added to this timeline, CMS hasn't been able to be definitive about how and when people will be able, organizations or users will be able to query the national plan and provider enumeration system database to find out what numbers have been assigned to their various trading partners and I think that's another key piece. I think Simon said something just now about not wanting to advertise too early, that everyone should go get their NPI, but I think we have so many unanswered questions we can't even write our advertising campaign and that's the big issue. When the time comes that we want to start doing our outreach we need to have these ducks in order and we're a long way away from being there. Thank you.
DR. COHN: Thank you, point well made. Other comments, questions? George, I promised that I would let you go by 3:00 because of your flight and I am sorry that Karen isn't here but I think Maria has heard you well and she will thank you for also some of your comments. Michael, are you trying to keep George here?
DR. FITZMAURICE: No, I want him to make the plane too because I want him to come back happy the next time he visits us. Bulk enumeration, what is the problem with bulk enumeration?
MR. ARGUS: Apparently the numerator won't be ready with the capability of doing bulk enumeration until after the third quarter so it will be fourth quarter this year when bulk enumeration will be ready. We'd like to see that fast tracked because it would alleviate a lot of the burden I think for many providers or group practices to basically enumerate on behalf of their physicians or others who may be on staff.
DR. FITZMAURICE: Thank you, that's clear.
MS. FRIEDMAN: And just a related piece of that is for the various provider groups, they all have different systems and the process by which we can upload all their stuff, because not all of them are quite ready for prime time with that either.
DR. FITZMAURICE: But is it a matter of CMS putting out the format for here's how the stuff should come in, here's where the address is and the dates of birth and all should be in and they put it in that format, it comes in and they get a number back?
MS. FRIEDMAN: I don't know, I think Karen would have to --
DR. FITZMAURICE: Maybe it's more complicated then that.
DR. COHN: Kepa?
DR. ZUBELDIA: Kepa Zubeldia with Claredi. Maria, there is an 816 transaction for memberships that is designed just to do that, that was kind of a side comment.
My concern with bulk enumeration is big, is that if bulk enumeration doesn't happen until the end of this year the providers will not be able to request their individual provider ID numbers until they know whether they've been automatically assigned one or not, otherwise you're going to have a mess of duplicates on your hands where the providers are requesting ID numbers and then the bulk enumeration process assigns them a new one, which one do they use and is it going to be correct. One of the reasons for the NPI is because the ID numbering system that we have today with the UPIN and Medicare IDs and Medicaid IDs and all those IDs are incomplete and incorrect and I'm really concerned that bulk enumeration is just going to perpetuate the same problem again and create even a bigger problem this time because it's supposed to be unique, whereas the previous one we knew it wasn't unique and now it's supposed to be unique and you won't be able to request a number until the bulk enumerator in your state does bulk enumeration. So it's postponing the whole thing until that bulk enumeration problem is solved and I think bulk enumeration problem is not going to resolve the problem, it's going to be the source of a problem. Just a thought.
MR. BLAIR: What do you suggest?
DR. ZUBELDIA: I've heard a proposal that may be a little bit challenging but instead of bulk enumeration it could be bulk invitation, which says the bulk enumeration source would say we propose that a provider, that you be assigned a number by us and if you don't tell us anything within a month this is information that we will request on your behalf. And the bulk enumerators could use that kind of invitation to providers, at least to let the providers know that they are going to request a number on their behalf, which right now there's no way to know that, and second, to get something ready so when there is a bulk enumeration at least everybody will know, Medicare is going to request one on behalf, Medicaid is going to request one on my behalf and this association is going to request one on my behalf, maybe I need to coordinate something here. I don't know, I don't know if that's a solution or not, it's very complex.
MS. FRIEDMAN: Do you think that's going to solve the problem of the incorrect information from the get go and if people don't respond after 30 days we're going to go ahead on your behalf, that's not going to solve all of the issues you've already identified.
DR. ZUBELDIA: Let's not do it automatically, let's not have bulk enumeration and tell the providers this is the information your system, you are to request a number as soon as possible.
MS. FRIEDMAN: You made the point in your presentation earlier about how incomplete and incorrect the data are already.
DR. ZUBELDIA: Yes, and I'm really concerned if there has to be bulk enumeration I'm really concerned. My preference would be to not have bulk enumeration at all, it just gets in the way and perpetuates the problem, that would be my preference.
DR. COHN: Well, rather then trying to solve this problem especially without Karen in the room I suggest Michael you might ask that of Karen when she returns and talks about NPI. George, I really want to thank you especially for sticking around, we do apologize for how the schedule sort of moved around and Sheila thank you and Kepa for your comments.
Now what we're going to do is take a 15 minute break and hopefully by that time either Karen will be back or the subcommittee will continue on their discussion. So 15 minute break.
[Brief break.]
Agenda Item: NPI Implementation - Ms. Trudel
MR. BLAIR: We still have a quorum so we're still in business and we have some remaining questions, George Argus gave us some very helpful testimony with respect to issues concerning enumeration of the NPI and his suggested timelines for what American Hospital Association would like to see in terms of the timeframes. And Kepa also wound up, is Kepa still here? Okay, Kepa indicated his concern about mass enumeration and rather then my continuing to try to sum this up for Karen's benefit let me ask Maria if you would --
MS. TRUDEL: Maria is not here either.
MR. BLAIR: Oh, that's right --
MS. TRUDEL: Maria and I have traded places.
MR. BLAIR: So Karen, let me just leave this open ended and if you are able to maybe share with us whatever you can at this point in terms of the plans for enumeration and testing and timeframes and dissemination of the NPI why don't we start with that and then folks could ask questions based on what you've said and what we heard before the break.
MS. TRUDEL: And I have to say that I wasn't, I'm not entirely prepared to answer all those questions but I do have a new vested interest in the NPI so I'd like to just talk a little bit about what we're doing internal to CMS. We realized that CMS as a covered entity or a group of covered entities will also have to implement the NPI and we regard it as an enterprise that's somewhat on the magnitude order of Y2K and we're handling it in a very similar way, basically setting up a program management office and matrixing all of the organizations and the players, the business owners of the systems that we need to get this internal process going.
The lead for the program management office is Stuart Streimer(?) and I think many of the folks on the committee are familiar with Stuart because he was the CMS liaison at one point and he's asked me to help him out with that so I'm going to be also involved in that process. We have set up a number of working groups, and this has happened all within the last month or so, a number of working groups and one of the ones that is really starting to speed up right now is the outreach group and I noticed that a number of the things that George has to say in there have to do with outreach.
Again, the lead for this group is working right now to develop both initial message and then some subsequent FAQs, guidance, right now what our message is is that the NPI is coming, you will be able to begin to request an NPI in May of this year, and we are on track for that, you shouldn't wait until the last minute to request one, it's very easy to get one, and you don't need to do anything with it right now, that the implementation, the compliance data is still two years out and that there will be much more information coming between now and then, both from us and from the various health plans as they begin to implement the NPI.
So that's basically where we are right now with outreach, we have a number of people who are very tuned into Medicare provider outreach, we have my outreach group which has a much broader kind of constituency, we have several HIPAA roundtable calls scheduled, I think there's one in June and one in September, that will be solely dedicated to the NPI and doing presentations and asking questions. We will have information on our website, the enumeration contractor Fox Systems is also expected to have both a hotline and website and so we'll be making use of those tools as well as we move forward. But we do expect to be able to enumerate in May and I'm sorry, I don't have the deadlines for the batch enumeration in my head right now but I guess the bottom line if I need to assure people that our focus is on this, we realize it's a massive undertaking, we realize that outreach is necessary, we're all aware that one of the main things that people need information on is the notion of subparts, that that's, I mean George has --
MR. BLAIR: You heard that, good, or you read his --
MS. TRUDEL: I skimmed his testimony and it's really clear that we need to get out some guidance on that but that was not something that we didn't know already.
MR. BLAIR: Okay, good. The other piece that might have been --
DR. WARREN: Could you just explain a little bit about this batch enumeration? Kepa seemed to be really concerned about it and I don't understand anything about the process.
MS. TRUDEL: I don't know a lot about the details of it but the sense is that if there is an existing database that has the appropriate data in it already and it can demonstrate a certain level of quality that rather then requiring each of those providers to come in separately that we would take the database and basically do a just one time load. Was his concern the quality or --
DR. WARREN: I think it was the quality and the fact that one provider might be in a couple of the database and thereby would get several NPIs.
MS. TRUDEL: That shouldn't occur because of the duplicate criteria.
MR. BLAIR: Ah ha, that was the concern he had was duplications.
MS. TRUDEL: There are duplication criteria so that if he were, if the provider were enumerated first individually and then through some sort of a file upload the second one should get caught by the criteria.
One of the concerns I know that we heard from a number of people was that the UPIN registry was definitely not a good candidate for that kind of load because the quality was fairly low and we don't have any intention of using that UPIN database.
MS. GREENBERG: What I heard, I don't know if it was Kepa or George also was concerned about was that the contractor wouldn't be ready to do the mass enumeration, bulk enumeration, until the last quarter of 2005 and it wasn't clear to me whether that was fiscal year 2005 or calendar year 2005, but in any event then they felt that people shouldn't be encouraged to request their own NPI if in fact they're going to be picked up by this mass, this bulk enumeration, and it just creates extra work for people. So I guess maybe there it might say people could be made to know what types of circumstances, under what circumstances they're likely to be included in a bulk enumeration then people just who know they aren't, don't meet those, could start applying, rather then encouraging everybody to --
MS. TRUDEL: So what I'm hearing is that there's a timeline issue that could lead to even more duplication of effort and that outreach could perhaps help to alleviate some of that. I'll definitely take that message back.
DR. FITZMAURICE: More specifically I think what he was saying that if the bulk enumeration doesn't happen until the end of this year providers won't know if they already have an ID or already have an NPI and either they'll apply for one and maybe get a duplicate or they just won't apply and so they won't --
MS. TRUDEL: And they won't have any at all.
DR. FITZMAURICE: They'll just delay applying until the very last moment.
MS. TRUDEL: I understand, thank you.
MR. BLAIR: Actually with a little bit of prodding by the subcommittee he indicated gently that his preference would be that there not be bulk enumeration, he felt that it would create more problems then it would address.
DR. FITZMAURICE: You're talking about Kepa, Jeff?
MR. BLAIR: I'm sorry, Kepa, and so I think it would be worthwhile if you have the opportunity to just let him explain why he --
MS. GREENBERG: What did the final rule say?
MS. TRUDEL: It left the door open, it did not specifically say that we were going to do it and these were the partners that we would work with but it did leave the door open.
DR. FITZMAURICE: There was also a point raised by Kepa and that is that suppose the Medicare program, the Medicaid program, and a physician's association all three request a National Provider Identifier for a given physician, could that lead to a problem? I can see that whoever gets their first gets the identifier, everybody else that follows says well no, this looks like a duplicate, but I think that could be handled but Kepa thought that there might be a problem with that.
MR. BLAIR: Nobody's hand is up? Raise your hand or forever hold your peace --
DR. FITZMAURICE: George Argus mentioned that there's a strong need for central authority to respond to questions about the National Provider Identifier to make decisions and particularly was concerned about the business rules that some health plans used to make payment to physicians and Harry elaborated on it further saying health plans would give out one, three, five, 15 provider numbers to the same provider and each number denotes a different contract rate for a particular procedure and that they will have to find another way to use the NPI and maybe a location site or some of their contract number rather then the different numbers that they assign to the provider, or maybe they could use their numbers in addition to the NPI but it sounds like a little bit of overkill. And someone, I can't remember, maybe it was Sheila Frank, said that HIPAA didn't, maybe require everybody to have the same identifier but doesn't require everybody to have the same business rules and so different health plans may determine those payment schedules differently and they would just have to learn how to do it differently with a National Provider Identifier.
MS. TRUDEL: I think there were a few questions in there, I'll do my best to respond to them, but very good points. One is that every plan that implements the NPI is going to figure out how, is going to have to figure out how to do it, working around the constraints in the NPI rule and their own business rules, that is what CMS is doing now, we're trying to figure out, we have internal systems that key on intelligence in a provider number that tells us what kind of institutional provider it is and what payment edits and what rates are applied to it. We have state codes that are imbedded in our provider numbers, we're trying to figure out how to work around those and still be HIPAA compliant and utilize the NPI. And it takes an awful lot of people, it is not easy, it is not a trivial undertaking and if I have to say something on the record it's that I encourage other health plans to be doing the same thing right now as opposed to waiting until later.
As far as a central authority is concerned I believe that CMS and HHS have an ongoing responsibility to put out guidance with respect to the NPI just in the same way we have responsibility to put out guidance on security, privacy transactions, code sets, whatever, and that we definitely will be doing that and that that will include things like guidance and FAQs and as I said before I think the subpart issue is a key one and also the notion of multiple identifiers and when they're appropriate and when they're not.
DR. BICKFORD: This is Carol Bickford from the American Nurses Association, I have two questions for Karen. One, you were just describing how CMS is going through this process of evaluating your enterprise and determining what questions you need to answer and what best strategies to attend, are you recording that and providing that as lessons learned or think abouts for other entities who might be engaged in such a process? So that there's a sharing and we don't have to reinvent the wheel again and again.
And the second question is how are you going to be targeting the educational institutions so that the new providers coming out of the educational programs know that they have to get an NPI? I'm thinking about our nurse practitioners who might be looking for a practice or whatever they need to be identified as such, the physicians in practice, the PTs, OTs, whoever is going to be covered under this rule, how are we assuring that the educational facilities are getting the right content in the curriculum so that they are addressing that as part of their professional issues piece so you start out with providers right at the front end who know how to do it right.
MS. TRUDEL: Two good questions. The answer to the first one is that we haven't thought about providing best practices or lessons learned or anything like that but I don't see why we couldn't do that, I mean Medicare fee for service was very forthcoming in the implementation of the transactions and code sets with the kinds of edit rules that we were using with our companion guides, with the technical solution that we had using the store and forward repository and I don't see why we couldn't share some of those same messages, perhaps there's going to be, I'm sure WEDI will have a venue for that sort of thing.
The second question is one that I don't have a good clear answer to but I would very much like to talk to you and to others who have linkages with educational institutions so that we can figure out how to get that content in curriculums. That's something that we haven't been real successful about so far.
DR. FITZMAURICE: Another comment made by Sheila Frank is that she would hope that CMS will be very public about how users can access the NPI database to get information for providers that they may have contracts with.
MS. TRUDEL: There's a data use strategy being developed right now, I know it's circulating around in draft, so that's already underway.
DR. FITZMAURICE: Good.
DR. HUFF: Any other comments? Questions?
MR. BLAIR: Karen, thank you very much and Carol thank you for your comments and questions.
Agenda Item: Subcommittee Discussion - Mr. Blair
MR. BLAIR: At this point I think we could go into our open discussion phase of our day and my inclination if it's okay with everyone else, do I hear cheers and comments from the hall? I'd like to revisit all of the rich testimony we received this morning on return on investment.
Number one I took some notes on my Dictaphone and I'm sure I missed an awful lot, does anybody feel like they have good notes from the testimony we received on ROI? Because if so maybe you all could just briefly summarize it and then maybe send it in in email to everyone so that we could capture that and fold that into subsequent committee discussions as we continue to explore this area. Any volunteers?
MS. TRUDEL: Jeff, this is Karen, I took some notes based on Harry's list and then I think some of the rest of the group added to it, I think I had like five issues that were significant and I'd be glad to do that.
MR. BLAIR: Great --
MS. TRUDEL: Do you want me to read them first?
MR. BLAIR: Yeah, I would and actually I'd like to capture them again even though I did my best to record them at the time so yes, what are the five issues that you --
MS. TRUDEL: Increased use of non-claims transactions was critical to ROI is one, and that we would encourage vendors to implement those non-claim transactions. There's a need to reduce unnecessary variability. The issue of varying timings of code set implementations. And a need for voluntary implementation of the non-mandated transactions like the 997 and the 999. Those were the ones I got.
PARTICIPANT: What was that last one?
MS. TRUDEL: Voluntary implementation of the non-mandated transactions.
MR. BLAIR: The other things that I heard, and this was kind of interesting because it was almost like a thread and it evolved and it seemed to start off as if to say that the companion guides was one of the reasons that was an impediment to people receiving a return on investment, but then as Kepa began to testify he indicated that there's a lot of appropriate reasons why the payers developed companion guides and that the experience Kepa with the tool that he had developed which was the profiles was that when he identified something that did not appear to be an appropriate requirement within the companion guides and he went back to the payers, he had very high levels of receptivity that they would eliminate a requirement or modify or adjust or redefine a requirement if it didn't appear appropriate.
Did you all hear this thread? Because it modified significantly the attitude that I had about what action we might need to take to try to address convergence of the companion guides. It left me with the feeling that the industry is in a process of converging companion guides and when I asked if there's some incentives that we could use I didn't get a complete answer, just not a mandate, that wasn't really what I was thinking of was a mandate, I was thinking of incentives, but there was no incentives offered. I don't know whether we need to explore that further, because he was saying ten to 15 years and maybe that is what he's saying is the magnitude of the problem, the complexity of the problem, and that the framework the industry has developed is a balanced normal way of resolving that.
Is what I heard what you folks did? Or did you have a different observation on that?
DR. FITZMAURICE: Jeff, this is Mike, I heard what you heard but I didn't catch the veil of a threat, I took that as industry is working hard to make it work and sometimes when push comes to shove they may put out a companion guide that will make it work better for them and so that's why you have maybe 1,000, 1,200 companion guides is that each one of them may want slightly different information.
It was good to hear Kepa say that in his opinion these companion guides were necessary to make it work. I like the idea too that he's developing this profile and making it publicly available, that lets people see the differences and maybe there will be some harmonization, some coalescence toward a few number of companion guides, that there can be a standard among companion guides. At least what he's doing is standardizing the reporting of the differences among the companion guides so that people can see it and so that practice management systems for physicians can pull that information into their vendor system and if a physician says I've got a contract with this health plan they know to go to that profile and here are the data you will need to submit a claim to that health plan. Not exactly the way we envisioned HIPAA working but it may provide a basis for reducing then the number of companion guides, being more specific about the data elements and the situations in which they're used, and still let health plans experiment with how to do things, how to pay claims and adjudicate them more efficiently. Maybe they do need some additional variables in some cases to test out if we put this screen on it do we make more reasonable and appropriate payments.
MR. BLAIR: I was left with the feeling that there was no recommendations that we should bring forward that could address the divergence in the companion guides at this time.
DR. FITZMAURICE: No, I think Karen's point about the timing of the code sets, make all the code set changes at the same time so we can note when it is, whether it's yearly, monthly or some other time, that you hate to keep going back every time somebody makes a code set change, make it effective as of a certain date, that would be helpful to the industry.
MR. BLAIR: Yes, make effective date code sets, so okay.
The other thing that I heard that I thought was sort of an action item for us was that it appeared as if we needed to invite a number of practice management system vendors and hear from them their views on what barriers or difficulties or lack of return on investment or whatever, why it appears as if they may be having difficulty being compliant with the HIPAA transaction and instead being dependent on the clearinghouses. Now that last way I phrased it isn't quite right, I heard someone saying that there's either arrangements between the two or in some cases the clearinghouses own some of the practice management vendors, but in any event I thought that I was hearing that we have to understand this part of the marketplace better and its reaction to HIPAA compliance. Is that something that was shared?
DR. FERRER: Jeff, this is Jorge. I certainly would echo that but I think it's also important too, we heard some language on the cost shifting that's going on besides the practice management systems and the physicians and actually individual action has to incur that cost and I think we should try to get a handle on some of that cost shifting that's going on because that might allow us to get a better handle on, it might be just a business need for the practice management software but if the physician has to incur that as part of his operating costs he might just very well say no at this point.
MR. BLAIR: Right. Did anybody else pick up any other issues on our return on investment discussion besides hearing from the practice management system vendors that we need to follow up on?
DR. WARREN: One of the things that was sort of discussed and I think by the panel and everybody else was outreach to the vendors to try to figure out a way to motive them or to stimulate them to also produce some of these standards and the reports and things like that. And I, at this point I don't know how to do that but I do know when talking with vendors a lot of them really don't see a need to adhere to standards because they can still sell their products, or their clients are so invested with them that they're not going to change vendors in order to get a standard, to use those standards such as the 875 or whatever it is. So I think that is an issue, I just don't know exactly how to go about it or what to do with it.
DR. BICKFORD: This is Carol Bickford again Jeff. It was fascinating from the presentation about the significant shift to the clearinghouses having accountability, responsibility, because the practice software wasn't able to do the direct billing to the third party payers. It would seem to me that that group has not been attended to from the NCVHS perspective and find out exactly what's going on in that clearinghouse arena and why do they have such a market share now and what's proprietary that's preventing the roll over orders that's selling that you have got to come to us because you can't do it yourself --
MR. BLAIR: So you're saying in addition to hearing testimony from practice management system vendors we need to hear testimony from clearinghouses as well?
DR. BICKFORD: Right, and what's the impact of the significant increase on their work load and what are they doing to do the reporting, is there something there that they're creating artificial barriers, I don't know, I'm just thinking about it and looking after we've made a shift in the graphs that they were demonstration.
MR. BLAIR: You can tell, I tend to look to where the loud speaker is so you can be sitting right next to me and I --
DR. WARREN: I think what Carol is getting at too is there was one slide that was done by Joseph Smith that I thought was very telling that prior to HIPAA a lot of people were doing their own direct billing, afterwards they were all shifting over to the clearinghouses. So we created a market that wasn't even there before by adoption of HIPAA, which adds to the whole cost of processing something.
MR. BLAIR: Maybe I missed that, who's doing the direct billing?
DR. WARREN: Joseph Smith had a slide on there that talked about prior to HIPAA there was direct billing and I think he quoted something like 60 percent or 40 percent of the people were doing their own billing and sending it direct to payers. After HIPAA though that decreased down into like 30 percent and the amount that was then forwarded on to clearinghouses increased dramatically. So basically it was the people could no longer put out data within the standards, they had to go a third party or these clearinghouses to do that. What slide number is that?
DR. FITZMAURICE: Number nine.
DR. WARREN: Number nine.
MR. BLAIR: Okay, so we need to understand that better.
DR. WARREN: Because if one of our requirements actually increased health care costs because we add a new entity, a new business model in there, then I think we need to know that too.
DR. FITZMAURICE: I think a lot of this is a matter of economies of scale and that a large clearinghouse may be better able to keep track of all of the requirements of the health plans then individual providers. What Kepa is doing with putting out those profiles is kind of evening the playing field, that if practice management vendors want to take that on they can do that by accessing this information assuming that it's accurate and up to date. I think the health plans gain by having more electronic interchanges with the providers, the providers would gain, and maybe at the expense of the clearinghouse if I'm guessing the market right. But that would be a very important tool for letting providers be able to achieve the savings, the return on investment, that health plans either are or getting.
Those that, we heard from Intermountain Health Care and I thought they've done an outstanding job of making a point to incorporate electronic transactions wherever they can and so they're getting up to 40, 50 percent even on the non-claims transactions and saying we're reducing costs, we're able to move FTEs to other parts of the business because we're doing this electronically. But that's a large organization with a lot of providers, a small physician's group may not have the same economies of scale and so some things you can do by combining with other groups and other physicians to bring about concerted action, it doesn't seem to exist the group that represents physicians wanting to get better return on investment from their administrative transactions but if they did they would be pushing hard for what Kepa is already doing. It's just a great tool.
MR. BLAIR: There was one other thing I heard, I'm not sure whether this is a follow-up item for us or not, did I fail after that or was that more, I think we understood, was there something that I --
DR. FITZMAURICE: No I think that's probably understood.
MR. BLAIR: You asked a question at one point, Michael, this morning and it was with respect to what entities or organizations need to educate the vendors and when you were saying that I was thinking of the practice management system vendors and the users, end users, of the benefits and value of the HIPAA transactions and being compliant with them and I don't remember that we got a clear definitive answer and I don't know whether or not this is something where this is something we need to pursue in terms of exploring --
DR. FITZMAURICE: Jeff, I don't remember asking that particular question because I think the vendors are very smart about knowing their markets and I think it's providers who are behind the eight ball, they practice medicine, they don't do administrative transactions, that's not why they went to medical school, although you do like to get paid it's understanding how they can deal directly with health plans and you need things like a directory of all health plans to be able to send it their, you need to know what their profiles are so you know what data elements there are, and you'd like to have a practice management system that you feed the data into your clinical system and it turns it into administrative data. Barring that you'd then have the clerk who turns in whatever data she has or he has into the practice management system that generates the bill and it's compliant for that particular health plan.
Judy raised a good question, did we create an industry and did we make more work then existed before HIPAA. I'd like to think that we're transitioning toward a system that eventually will be smoothly running and the marketplace recognizes most of the costs and the benefits and right now the providers say we get bang for our buck by dealing with our existing practice management systems without changing them and going through clearinghouses or billing services to put our transactions into HIPAA compliant for a particular provider. And I think it has to go back to those economies of scale and they're not built into the software at the site of care of the physician, they're built into the clearinghouse process.
So to answer your question I don't think that practice management system vendors need to be educated, maybe they could educate us further about how to make the system work better and why they haven't made the move that we would expect them to to be able to provide direct billing from provider to the health plan.
MR. BLAIR: Karen.
MS. TRUDEL: I apologize, I just wanted to let everyone know that I have all this down in notes and I'm afraid I have to go but Donna has agreed to continue to take notes and she and I will now touch base with Maria to make sure that we have a complete record of everything that's being discussed here. I'm sorry.
MR. BLAIR: Is there any other issues with respect to the return on investment discussions that we ought to capture or take action on or schedule testimony for? Not hearing anything then can we move on to our discussion on derivatives of clinical information? And Stan, maybe if you would summarize your feeling about where we were on that and what the next steps would be from your standpoint we could then react to it.
DR. HUFF: My summary is that what we want to do is schedule some educational session so we can find out what people, actually two things, get educated about the theory and potential opportunities and then actual activities that people are doing. And there were a number of people who, organizations and people who were mentioned so we need to know from AHIMA, their computerized coding initiative, we need to know from the NLM, they're doing a bunch of mapping activities that would be integral to this and other things as well that I'm sure we don't know about. The mention of the FDA, of NCHS, a lot of quality initiatives that pertain to this, things that I'm sure I don't understand. We could also invite Chris Shute and other folks like Jim Campbell to just come and say what's happening at their institution as well as what's happening academically about those things, that we needed to consider the ONCHIT and activities that they may have that pertain to this area. And so once we've both gotten some education and sort of a survey of the activities that were going on as a committee we would prioritize what those things were, what we thought were "the low hanging fruit" and focus on those areas and take testimony about NCVHS could recommend or do to encourage or support or enhance the highest priority activities.
MR. BLAIR: Thank you. I don't have anything else to add, does anyone else?
DR. FITZMAURICE: No, I think Stan summed it up very well.
MR. BLAIR: There was this talk about Harry and yourself and myself and Maria having a call to discuss this a little bit more in terms of who we might begin to schedule for maybe the July timeframe or a joint meeting with the full subcommittee, my inclination unless you feel differently Stan is to wait until after our Executive Subcommittee conference call on the 19th, is that okay with you?
DR. HUFF: Yeah, that's fine.
MR. BLAIR: Well, I'll tell you what, why don't I just very briefly summarize where we are and what we've done so that if you have anything to say or any questions before we adjourn, because we're just about to adjourn, we just heard from Karen who explained to us what some of the plans were with respect to the NPI and answered a number of questions. We then wound up revisiting what our to do's were and what our major points were from the return on investment discussion, and then Stan gave a summary of the major next steps for the derivatives, clinical data derivatives discussion. Is there anything that you had a question on or you wanted to add before we adjourn?
MS. FRIEDMAN: No, it sounds like a very full afternoon and sounds like we have some meetings to plan.
MR. BLAIR: Okay, there's one thing I'd like to say because I know it was very frustrating pulling together this agenda but I would have to say that this was a very productive day despite all those frustrations, very useful and very helpful day and thank you, Maria.
MS. FRIEDMAN: You're quite welcome and thank you.
DR. FITZMAURICE: Jeff, I would agree with that and you're whistling for the next productive day, do we anticipate that we will probably aim for hearings and educational efforts in July? The July meeting of SSS?
MR. BLAIR: Yes.
MS. GREENBERG: Not sure about the educational efforts because those may be done with the full committee.
MR. BLAIR: That's one of the open issues that we'll hear on the Executive Subcommittee meeting on the 19th as to whether it's in a third day to the Executive Subcommittee or how we'll divide it up.
DR. FITZMAURICE: Okay, thank you, Jeff.
MS. FRIEDMAN: We're actually not meeting again until July.
MR. BLAIR: Well, there's an NHII meeting later this month, there's Privacy meetings, Executive Subcommittee --
MS. FRIEDMAN: We're back to our regular schedule.
DR. FITZMAURICE: Well if there's an educational meeting that we want to plan for June, I don't know if the agenda for June would cover it but that's something that we would discuss in the executive meeting on the 19th.
MS. FRIEDMAN: See how much of a chunk for the full committee time we want to take or an add on.
MS. GREENBERG: July meeting is July 26th and 27th correct?
MR. BLAIR: Yes. Any other last minute comments or questions? We stand adjourned, thank you very much.
[Whereupon at 4:03 p.m. the meeting was adjourned.]