The Next HIPAA Frontier – Claims Attachments
By Josef Spencer, Director, Phoenix Health Systems
&
Mary Lynn Bushman, Project Coordinator, Empire Medicare Services
Updated March 2006
Most of the healthcare community understands that October 16, 2003
marked the deadline for complying with the HIPAA Transactions and
Code Sets (TCS) Rule. Iit is important to recognize that transitioning to
the transactions standards named in this Rule was only the beginning of mandated healthcare transaction "administrative simplification" in the United States. The Department of Health and Human
Services (HHS) issued the Notice of Proposed Rule Making (NPRM) for
the Claims Attachment transaction in 2005. The NPRM names
six required claims attachment types: Ambulance Services, Emergency Department, Rehabilitation Services, Clinical Reports, Laboratory Results, and Medications. Once the industry has filed its comments, HHS will
publish a final rule, after which the industry will have 26 months
to implement the new standard.
The American National Standards Institute (ANSI) X12N and Health
Level 7 (HL7) Standards Organizations worked together
to develop an electronic standard for claims attachments to recommend
to HHS. The ANSI X12N Healthcare Claim Request for Additional Information
(277), the ANSI X12 Additional Information to Support a Healthcare
Claim or Encounter (275), and the HL7 Clinical Architecture Document
(CDA) were included in the recommendation.
CLAIMS ATTACHMENT SPECIFICS
The X12N 277 transaction will allow payers to request additional
information to support claims. This transaction will use Logical
Observation Identifiers Names and Codes (LOINC) to request the clinical
information that is required to process healthcare claims. The X12N
275 transaction will be used as the provider response to the payers
277 request. The 275 will include embedded HL7 CDA attachment data.
The initial proposed approach that HL7 and X12N workgroups provided
for Claims Attachments included HL7 version 2.4 codes and LOINCs.
This approach focused on using mostly codified data, in the belief
that this approach would be most efficient. However, because there
is still great reliance within the healthcare industry on paper-based
or imaged medical records for Claims Attachment data, which may
not provide the codified data required by the HL7 version 2.4, the
workgroups explored using the HL7 CDA to relay the clinical
information from the provider to the payer. CDA is an Extensible
Markup Language (XML) based standard that supports the use of non-codified
data as well as codified data, and allows the continued use of LOINCs.
A NEW COMPLICATION
There is an additional layer of complexity being addressed. Prior
to October 16, clinical attachments derived from the patient's medical
record were copied (sometimes more than required) and mailed to
the payer. The first round of transactions standards established
by HIPAA did not include a standardized format to transmit attachments.
So, providers wishing to send a claim and attachment together
have had only one option, to send the claim and attachment in paper
form. Medicare claims must be sent electronically with the information
about the separate attachment documented in the electronic claim,
and the attachment mailed separately.
The publishing of the Claims Attachment NPRM and its eventual finalization
will allow providers to send electronic attachments with electronic
claims or send electronic attachments in response to electronic
or paper-based attachment requests.
WILL THERE BE BENEFITS?
From a payer perspective, there are many benefits of implementing
an electronic claims attachment standard. It will allow more timely
processing of claims attachment data, and will ultimately streamline
the payer's workflow as the industry moves toward using codified
data. The use of codified data will allow for system-to-system processing
without any manual intervention.
On the other hand, there are implementation issues that payers
will need to consider, such as how payers' current systems must
be changed. Payers will need to decide where and how they will store
and view the Claims Attachments data. This may require the use of
databases or other applications. Depending on their current hardware
and workflow, payers may need to upgrade dumb terminals to PCs.
They may also need a tool for viewing non-codified data. Most importantly,
payers will have to assess all aspects of the electronic claims
attachment and make several business decisions (e.g., auto adjudication
rules).
For providers, new challenges and benefits are also on the
horizon. On the challenge side, the use of the claims attachment
transaction will require new integration between their internal
financial and clinical systems. For example, in most acute care
environments, the patient accounting system that assembles the data
needed to create an 837 (Claim) currently has limited integration
with clinical systems used to care for the patient. Automating this
integration poses a challenge to develop middleware applications
to pull appropriate data from clinical systems and merge it with
the financial systems to answer specific questions from payers about
services rendered or conditions presented that required a service.
From a benefits perspective, eliminating excessive copying in medical
records and postage alone will provide significant opportunity to
reduce administrative costs for most providers. The proposed Claims
Attachment standard will provide a methodology to respond in both
codified and non-codified formats. Responses that are codified using
LOINCs will have the potential to be adjudicated quickly, thus further
improving the provider's revenue cycle. Responses that are non-codified
will still provide benefits to the provider by eliminating copy
and postage costs. In either format, the data will be sent electronically
to the payer reducing the number of days required to send attachments
via mail. Once received by the payer, the electronic documents will
then be easily forwarded to the claims adjuster for a final decision.
A REMINDER...
A guiding principle of HIPAA was to improve the efficiency and
effectiveness of the healthcare system by enabling cost reductions
for, or improvements in benefits from, electronic healthcare transactions.
With the current need of payers to request additional clinical documentation,
a goal of provider organizations should be to develop systems that
enable quick and complete responses with appropriate information.
Of course, when the Claims Attachment standard is finalized, providers
will have the choice to participate or not. Their decisions to participate
will be impacted by their internal implementation challenges and
potential revenue cycle benefits.
NEXT STEPS
Any and all participation is welcome in both the X12N and HL7 Claims
Attachment workgroups, which meet separately three times a year.
Industry comments – meaning, YOUR comments and viewpoints –
are critical. For further details about the next X12N and HL7 meetings, see the following web sites:
www.X12.org 
www.HL7.org
Josef Spencer is a Director with Phoenix Health Systems where his
consulting responsibities include systems assessments, selection,
& integration; and HIPAA compliance and related EDI project
management. He is active with the ANSI ASC X12N Attachments Workgroup.
Mary Lynn Bushman is a Project Coordinator for Empire Medicare Services.
She is the ANSI ASC X12N Co-Chair for the Attachments Workgroup.
In addition, she is also the HL7 Secretary for the Attachment Workgroup. (This article was originally written in 2003.)
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