III. Implementation of the Transaction Standards and Code Sets

A. Compliance Testing

We have identified three levels of testing that must be addressed in connection with the adoption and implementation of the standards we are proposing and their required code sets:

Level 1--Developmental Testing--This is the testing done by the standards setting organization during the development process. The conditions for, and results of, this testing are made public by the relevant standards bodies, and are available at the following Internet web site:

http://www.disa.org

The information on the web site is provided at the discretion of the standards setting organization and could, among other things, refer to pilot, limited, or large-scale production if appropriate. Information regarding code set testing will also be posted to a website. This website will be advertised on the HCFA home page.

Level 2--Validation Testing--This is testing of sample transactions to see whether they are being written correctly. We expect that private industry will provide commercial testing at this level. This level of testing would give the participants a sense of whether they are meeting technical specifications of structure and syntax for a transaction, but it may not necessarily test for valid data. This type of testing would inform individuals that the transaction probably meets the specifications. These edits would be less rigorous than those that might be applied by a health plan before payment (in the case of a claim) or by a health care provider prior to posting (in the case of a health care claim payment/advice). The test conditions and results from this level are generally shared only between the parties involved.

Level 3--Production Testing--This tests a transaction from a sender through the receiver’s system. The test information is exposed to all of the edits, lookups, and checks that the transaction would undergo in a production situation. The test conditions and results from this level are generally shared only between the parties involved.

Pilot production--Billions of dollars change hands each year as a result of health care claims processing alone. For that reason, we believe the industry should sponsor pilot production projects to test transaction standards that are not currently in full production prior to the effective date for adoption. Pilot production tests are not necessary for the NCPDP retail pharmacy claim since it is already in widespread use. On the other hand, some of the ASC X12N implementations have not yet been placed in general production. We believe that pilot production results should be posted on a website and show information of general interest to potential users. The information given is at the discretion of the entities conducting the pilot and might contain information regarding the number of claims processed, the identity of the entities participating in the pilot, and the name, telephone number or e-mail address of an individual willing to answer questions from the public.

It would be useful to all participants if pilot production projects and the results were posted to a web site for all transactions. For the claim and equivalent encounter transactions, we believe that posting pilot production projects and results to a web site must be mandatory.

B. Enforcement

Failure to comply with standards may well result in monetary penalties. The Secretary is required by statute to impose penalties of not more than $100 per violation on any person who fails to comply with a standard, except that the total amount imposed on any one person in each calendar year may not exceed $25,000 for violations of one requirement.

We are not proposing any enforcement procedures at this time, but we will do so in a future Federal Regulations document, once the industry has some experience with using the standards.

We are at this time, however, soliciting input on appropriate mechanisms to permit independent assessment of compliance. We are particularly interested in input from those engaging in health care EDI as well as from independent certification and auditing organizations addressing issues of documentary evidence of steps taken for compliance; need for/desirability of independent verification, validation, and testing of systems changes; and certifications required for off-the-shelf products used to meet the requirements of this regulation.

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