6. Standard: Eligibility for a Health Plan (Subpart P)

a. Background

Often, health care providers may need to verify not only that a patient has health insurance coverage but also what specific benefits are included in that coverage. Having such information helps the health care provider to collect correct patient deductibles, co-insurance amounts, and co-payments and to provide an accurate bill for the patient and all pertinent health plans, including secondary payers.

In addition, simple economics dictates that the out-of-pocket cost to the patient may affect treatment choices. The best case is when there are two equally effective treatment options and coverage is only available for one. More often, the question may be whether a particular treatment is covered or not. Here is an example: Jane Doe has cancer and a bone marrow transplant is the treatment of last resort. Since insurance coverage does not extend to "experimental therapies," the question becomes: Does Jane's insurance cover a bone marrow transplant for her diagnosis? If she has leukemia, the treatment may be covered; if she has cervical cancer, it may not be. Whether Jane could afford to pay out-of-pocket for such a treatment could affect her treatment choice.

The value of eligibility information is enhanced if it can be acquired quickly. Traditional methods of communication (that is, by phone or mail) are highly inefficient. Patients and health plans find it disturbing when the deductible and co-pays are not correctly applied.

When insurance inquiries of this sort are transmitted electronically, health care providers can receive the information from the health plan almost immediately. However, in current practice, each health plan may require that the health care provider's request be in a preferred format, which often does not match the format required by any other health plan. This means that the health care provider must maintain the hardware and software capability to send multiple inquiry formats and receive multiple response formats. Because of this situation, adoption of electronic methods for inquiries has been inhibited, and reliance on paper forms or the telephone for such inquiries has continued.

i. Candidates for the Standard

The HISB developed an inventory of health care information standards to be considered by the Secretary of HHS in the adoption of standards. The ANSI ASC X12N 270 - Health Care Eligibility Benefit Inquiry and companion 271 - Health Care Eligibility Benefit Response, the ASC X12N Interactive Health Care Eligibility/Benefit Inquiry (IHCEBI) and its companion the Interactive Health Care Eligibility/Benefit Response (IHCEBR), the NCPDP Telecommunications Standard Format, and the NCPDP Telecommunication Claim Standard for Pharmaceutical Professional Services are the standards available for the electronic exchange of patient eligibility and coverage information.

ii. Recommended Standard

We propose to adopt the ANSI ASC X12N 270 - Health Care Eligibility Benefit Inquiry and the companion ASC X12N 271 - Health Care Eligibility Benefit Response as the standard for the eligibility for a health plan transaction.

When evaluated against the criteria (discussed earlier) for choosing a national standard, the ASC X12 Transaction Sets 270/271 met the criteria more often than did the ASC X12 interactive or the NCPDP transactions. The ASC X12N 270/271 transaction set is supported by an accredited standards setting organization ASC X12 (criteria #5). By comparison with the alternatives, the ASC X12N 270/271 would have relatively low additional development and implementation costs and would be consistent with other standards in this proposed rule (criteria #4 and #3). The NCPDP standards, because they are specific to pharmacy transactions, were rejected because they would not meet the needs of the rest of the health care system (criteria #2), whereas the ASC X12N 270/271 would.

The X12N subcommittee and its Workgroup 1, which is responsible for the eligibility transaction, recommended in June 1997 that the ASC X12N 270/271 be adopted as the HIPAA standard (criteria #5).

There are specific, technical reasons against adoption of the IHCEBI/IHCEBR at this time. The IHCEBI/IHCEBR is based on UNEDIFACT, not ASC X12N, syntax. Because of concurrent changes in UNEDIFACT design rules, the IHCEBI/IHCEBR is not a complete or consistent standard. It has not been classified by UNEDIFACT as ready to implement. In X12N, the current version of IHCEBI/IHCEBR is 3070, and we believe that current use is centered on a prior version (3051), which is not millennium compliant. The IHCEBI/IHCEBR transaction is not ready to be moved into version 4 (4010), as are the other transactions being recommended in this proposed rule. We also believe that current use is quite limited, and not consistent across users; in effect, current uses of this transaction have been implemented in proprietary format(s). For all these reasons, the ICHEBI/ICHEBR is neither technically ready nor stable and cannot be recommended as a standard at this time. Thus, the IHCEBI/IHCEBR would require higher additional development and implementation costs (criteria #4), and they would not be consistent or uniform with the other standards selected (criteria #3).

If an interactive eligibility transaction standard were ratified by an accredited standards setting organization sometime in the future, then it could be considered for adoption as a HIPAA standard. However, at this time, we expect that any future standard for an interactive eligibility transaction is likely to differ substantially from the current IHCEBI/IHCEBR and the time to readiness could be substantial as well (criteria #6).

The goal of administrative simplification, as expressed in the law, is to improve the efficiency and effectiveness of the health care system (criteria #1). Whereas it might seem that the interactive message would yield greater efficiencies in terms of time saved, similar efficiencies are available with the ASC X12N 270/271. In fact, the ASC X12N 270 can be used to submit a single eligibility inquiry electronically for a very quick turnaround 271 response. Response times, measured in seconds, would compare favorably to a true “interactive” transaction and would be a substantial improvement over telephone inquiries or paper methods of eligibility determination.

Transactions concerning eligibility for a health plan would be used only to verify the patient’s eligibility and benefits; they would not provide a history of benefit use. The electronic exchange using these standards would occur usually between health care providers and health plans, but the standard would support electronic inquiry and response among other entities. In addition to uses by various health care providers (for example, hospitals, laboratories, and physicians), the ASC X12N 270/271 can be used by an insurance company, a health maintenance organization, a preferred provider organization, a health care purchaser, a professional review organization, a third-party administrator, vendors (for example, billing services), service bureaus (such as value-added networks), and government agencies (Medicare, Medicaid, and CHAMPUS).

The eligibility transaction is designed to be used for simple status requests as well as more complex requests that may be related to specific clinical procedures. General requests might include queries for: all benefits and coverage conditions, eligibility status (whether the patient is active in the health plan), maximum benefits (policy limits), exclusions, in-plan/out- of-plan benefits, coordination of benefits information, deductibles, and copayments. Specific requests might include procedure coverage dates; procedure coverage maximum; amounts for deductible, co-insurance, co-payment, or patient responsibility; coverage limitations; and noncovered amounts.

Another part of the ASC X12N 271 is designed to handle requests for eligibility “rosters,” which are essentially lists of entities -- subscribers and dependents, health care providers, employer groups, health plans -- and their relationships to each other. For example, this transaction might be used by a health plan to submit a roster of patients to a health care provider to designate a primary care physician or to alert a hospital about forthcoming admissions. We are not recommending this use of the ASC X12N 270/271 at this time because the roster implementation guide is not millennium compliant and the standards development process for the implementation guide is not completed. After the standards development process for the roster implementation guide is completed, it may be considered for adoption as a national standard.

The data elements for this transaction, and other information, may be found in Addendum 6.

b. Requirements

i. Health plans.

In § 142.1604, Requirements: Health plans, we would require health plans to use only the standard specified in § 142.1602 for electronic eligibility transactions.

ii. Health care clearinghouses.

We would require in § 142.1606 that each health care clearinghouse use the standard specified in § 142.1602 for eligibility transactions.

iii. Health care providers.

In § 142.1608, Requirements: Health care providers, we would require each health care provider that transmits any health plan eligibility transactions electronically to use the standard specified in § 142.1602 for those transactions.

c. Implementation Guide and Source

The implementation guide is available for the ASC X12N 270/271 (004010X092) at no cost from the Washington Publishing Company site on the World Wide Web at the following address: http://www.wpc-edi.com/hipaa/. The data definitions and description of data conditions may also be obtained from this website.

Users without access to the Internet may purchase implementation guides from Washington Publishing Company directly. Washington Publishing Company, 806 W. Diamond Ave., Suite 400, Gaithersburg, MD, 20878; telephone 301-590-9337; FAX: 301-869-9460.

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