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GUIDE TO TRANSACTIONS
AND CODE SETS STANDARDS
May 2000
PREFACE
DHHS and standards organizations like Workgroup for Electronic
Data Interchange (WEDI) and Data Interchange Standards Association
(DISA) are urging us to begin implementation immediately. What is
this reg? Why implement it now, when the law provides 26 months
for compliance? How do we implement this reg? And what will implementation
do to -- and for -- healthcare?
FROM MANY STANDARDS TO ONE
Today many healthcare providers and plans use EDI, Electronic Data
Interchange or the digital exchange of standard business documents
and data. In fact, DHHS estimates that 400 formats are used in the
US today for health care claims processing. This apparent lack of
standardization makes it difficult for vendors to develop software,
inhibits potential efficiencies, and increases costs for health
care providers and health plans. The increased administrative costs
of healthcare ultimately impact you and me, the patients!
In order to perform EDI using a common interchange and data structure,
widely adopted use of standards is required. As part of the Healthcare
Insurance Portability and Accountability Act, DHHS was directed
to issue standards for electronic data transactions used in the
administration of health care data and claims. The use of industry-wide
standards is expected to eliminate the need for software adaptation
for multiple formats required to meet the demand of proprietary
variations, now in use by providers and plans. Operational efficiencies
with long term savings is the result. The Final Rule for Electronic
Transactions Standards, to support HIPAA, is expected June 30, 2000.
Compliance will be required by 8/2002.
The HIPAA Standard EDI format requires standardization of the data
content by specifying uniform definitions of the data elements that
will be exchanged in each type of electronic transaction and identification
of the specific codes or values that are valid for each data element.
Payers are required by law to have the capability to send/receive
all HIPAA transactions.
IMPROVING CARE QUALITY AND REDUCING COSTS
While it is easy to imagine the work involved with converting one's
system to become standardized, let's remember the outcome potential:
- Reduction in handling and process time
- Elimination of the risk of lost paper documents
- Elimination of the inefficiencies of handling paper documents
- Improvement of overall data quality
- Decreased administrative costs
The implementation of the regulations within human resources and
employee benefit management sectors of business is likely to improve
the quality of service to the patient.
UNDERSTANDING THE HIPAA EDI TRANSACTION STANDARD
The Transactions & Code Sets Standards applies to "...any health
plan, any health care clearinghouse, and any health care provider
that transmits any health information in electronic form in connection
with..." the defined transactions. The scope of the Transaction
Standard includes:
- Electronic transmissions using all media, even when the transmission
is physically moved from one location to another using magnetic
tape, disk, or CD media.
- Transmissions over the Internet (public network), extranet (private
network using Internet technology to link a business collaborating
parties), leased lines, dial-up lines, and private networks are
all included.
- Telephone voice response and "faxback" systems would not be
included.
HIPAA defines EDI healthcare transactions as:
- Health claims or similar encounter information
- Health care payment & remittance advice
- Coordination of Benefits
- Health claim status
- Enrollment & dis-enrollment in a health plan
- Eligibility for a health plan
- Health plan premium payments
- Referral certification & authorization
- First report of injury (will not be included in Final Rule)
- Health claims attachments (will not be included in Final Rule)
ACHIEVING ONE STANDARD
By now, you are wondering, "What do I have to do to be compliant?"
Detailed Implementation Guides are available from the Washington
Publishing Company for web download of electronic documents or purchase
of bound hardcopy. The URL for The Washington Publishing Company
is http://www.wpc-edi.com/hipaa/
The details of the HIPAA Transaction Standards are explicitly defined
in each guide, including:
- Data elements required or conditionally required
- Definitions of each data element
- Technical transaction formats for the transmission of the data
- Code sets or values that can appear in selected data elements
Implementation Guides for HIPAA Standard Transactions are defined
and numbered as follows:
- Health care claims or coordination of benefits
- Retail drug NCPCP v. 32
- Dental claim ASC X12N 837: dental
- Professional claim ASC X12N 837: professional
- Institutional claim ASC X12N 837: institutional
- Payment & remittance advice ASC X12N 835
- Health claim status ASC X12N 276/277
- Plan enrollment ASC X12 834
- Plan eligibility ASC X12 270/271
- Plan premium payments ASC X12 820
- Referral certification ASC X12 N 278
The following Implementation Guides are pending further development
and publication of their NPRM and Final Rule:
- First report of injury ASC X12
- Health claims attachments ASC X12 275 & HL7 TBD
Critical to any standardized transaction is agreement of the definition
for the data elements. HIPAA Transaction Standards via the Implementation
Guides define a Master Data Dictionary for EDI which:
- Provides common data definitions across the standards
- Is readily available to the public
- Includes data element names, definitions, and appropriate references
to the transactions where they are used
Explicitly defined data elements need to be "filled" with standardized
data from HIPAA prescribed code sets. Industry de facto standards
have been adopted for the coding of medical data elements, such
as, diagnoses, procedures, and drugs. These code sets have been
developed by public and private organizations and are currently
mandated for use in Medicare and Medicaid documentation. Because
of the widespread use of these "standards", they have been adopted
by ASC X12N and the National Council for Prescription Drug Programs
(NCPDP) and recommended for inclusion in the HIPAA standards. Familiarity
with these standards is comforting in a time of sweeping changes
in the healthcare industry. Most of the players in the healthcare
industry will easily recognize the following required code sets:
- ICD-9-CM (vol. 1 & 2)
- Diseases, injuries, impairments, other health related problems,
their manifestations, and causes of injury, disease, impairment,
or other health-related problems
- CPT, CDT, or ICD-9-CM (vol. 3) -
- Procedures or other actions taken to prevent, diagnose,
treat, or manage diseases, injuries and impairments
- NDC - drugs
- HCPCS
- Other health related services, other substances, equipment,
supplies, or other items used in health care services
Characterized as "smaller code sets" by the HIPAA Transaction Standard
are sets of codes for data elements such as type of facility, type
of units, and specified state within address fields. Familiar to
us in this category are the U.S. Postal Service 2-character state
abbreviations and zip codes. Other proprietary code sets will be
eliminated if not explicitly mentioned in the Implementation Guides.
The standards clarify that newly developed code sets may appear
in response to the needs of future transaction standards.
IMPLEMENTING WITHIN YOUR ORGANIZATION
How you will implement the Transactions and Code Sets Standard
will depend upon what kind of healthcare-related organization you
are, i.e., provider, plan, clearinghouse. Highlighted below are
issues and factors PROVIDERS should consider:
Providers can achieve HIPAA compliance in their internal systems,
which, no doubt, will require partnership with their software vendor(s).
Providers could choose to continue/discontinue their relationships
with clearinghouse(s) or establish new relationships. Using the
traditional, although inefficient "paper" method also remains an
option at this time. HIPAA explicitly prohibits health plans from
refusing to process or from delaying the processing of a transaction
that is presented in HIPAA specified standard format. So, health
plans must be ready to do EDI in the upcoming "HIPAA world". In
effect, clearinghouses may continue in both traditional roles and
as translators of the HIPAA EDI transaction standards.
Because of the "interchange of data", planning for HIPAA transaction
processing will require coordination between all parties: providers,
plans, and clearinghouses. The compliance date is two years from
the date of the regulations Final Rule effective date, except for
small plans which have an additional 12 months. If you are an early
implementer, you may need to continue to use "old methods" until
the receivers are ready to implement the HIPAA transaction formats
by the deadline prescribed by law. DHHS has recommended that a health
plan give its health care providers at least 6 months notice before
requiring them to use a given standard. In spite of the volume of
work that standardized transactions may require, remember this is
a "one time system conversion" with long term benefits.
ACTION STEPS FOR PROVIDER ORGANIZATIONS
- Identify transactions & codes sets currently in use
- Determine HIPAA compliance of current transactions
- Identify information systems and feeder systems
- Determine HIPAA compliance of current systems
- Identify clearinghouse partners
- Determine future relationships
- Determine "clearinghouse to plan" HIPAA compliance timeframe
- Talk with your vendors
- Determine if system modifications (upgrades) will be offered
- Determine if new products will be offered
- Talk with your business partners
- Determine their HIPAA compliance plans
- Determine methodology to "secure" business partner relationship
- Involve legal counsel for all contract revisions
- As an organization
- Discuss long term strategic benefits to using additional
EDI for your organization
- Analyze cost benefits of potential strategic business changes
- Conduct a full HIPAA impact analysis in order to make educated
and strategic decisions
- Each system may require more than one change
- One change may impact other systems
- There may be economies of scale with vendors
Perhaps, five years from now, this one-time conversion will be
a fleeting, not altogether pleasant memory. Nevertheless, we are
all likely to be reaping significant rewards -- as industry members
and as patients -- as we enjoy greater efficiency in the electronic
interchange of healthcare data, and reduced costs in providing care.
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