National Committee on Vital & Health Statistics

June 17, 1998

Health Care Financing Administration
Department of Health and Human
Services
Attention: HCFA-0149-P
P.O. Box 26585
Baltimore,
MD 21207-0519

To Whom It May Concern:

The National Committee on Vital and Health Statistics (NCVHS) is pleased
to submit the following comments on the Notice of Proposed Rule Making
(NPRM) labeled HCFA-0149-P.

Upon reading the Notices of Proposed Rule Making published on May 7, we
are pleased to have contributed to this effort and find that the Secretary
has indeed relied on the advice of the National Committee on Vital and
Health Statistics. Therefore, the following comments deal almost
exclusively with selected issues on which comments were requested
specifically in the NPRM.

PROVISIONS OF THE PROPOSED REGULATIONS

On the issue of the impact of electronic standards on the long-term care
industry:

As part of its monitoring of standards adoption for its annual report
to Congress, the NCVHS will be interested in hearing from
representatives of the long-term care segment of the health care
industry. However, we believe that the proposed standards offer the
opportunity for all segments of the health care industry to adopt
automation and to benefit from such adoption. Long-term care providers
may elect not to use electronic transactions, just as other providers
may do. Yet, when long-term care providers elect to use electronic
transactions, the standard provides them with a single method that can
be exchanged with all payers. This offers much greater incentives to
adopt electronic transactions than currently exist. The NCVHS believes
that it would be an unfortunate precedent to exempt segments of the
health care industry from these rules.

On the issue of scheduling early implementation of the standards to
avoid disruptions and ease the transition:

The NCVHS concurs with the recommendations that came from the
Workgroup on Electronic Data Interchange (WEDI) at their Healthcare
Leadership Summit in August 1997. Under that recommendation, willing
trading partners could implement any or all of the standards by mutual
agreement at any time during the 2-year implementation phase (3-year
implementation phase for small health plans). However, health care
providers should not be required by health plans to use any of
the standards during the first year after adoption of the standards, and
a health plan should give its health care providers at least 6 months
notice before requiring them to use a given standard. These
recommendations offer a realistic and functional approach to management
of the 2-year implementation schedule and, most importantly, this
approach would remove many of the disincentives to early implementation.
The NCVHS recommends that this implementation schedule be incorporated
into the Final Rules, if there is legal authority to do so, to reduce
the uncertainty and ease the transition period for all segments of the
health care industry. If this goes beyond the authority accorded by the
Health Insurance Portability and Accountability Act of 1996 (HIPAA), we
urge the Department of Health and Human Services (HHS) to identify other
mechanisms to accomplish this objective.

CODE SETS

On the issue of adoption of universal product numbers (UPNs) as a
national coding system:

Just as the adoption of national drug codes (NDC) to replace Health
Care Financing Administration Procedure Coding System (HCPCS) “J”
codes was the right thing to do at this time, the NCVHS believes that
movement toward adoption of UPNs is essential and compatible with the
administrative simplification philosophy of adopting standards whose
maintenance is the responsibility of the private sector. To this end, we
urge HHS to begin planning a smooth transition to UPNs nationwide. As a
first step, HHS should monitor the adoption of UPNs by the Department of
Defense and California Medicaid to learn about the benefits and pitfalls
of using UPN codes for coding and for payment in real-world
applications. Further, we urge HHS to work with these and other relevant
organizations to overcome the limitations cited for UPNs currently. As
part of its continuing interest in coding and classification standards,
the NCVHS will continue to monitor activity in this area to assist in
the transition to one national system of UPNs that can be adopted for
health care.

On the issue of eliminating local codes from HCPCS and establishing a
process for supplying new codes when necessary:

Today, local codes (HCPCS Level 3) are adopted by health plans to fill
the gaps where no national code exists for particular services. However,
there is no process currently for extending these codes to national
coverage. The NCVHS believes that elimination of local codes, when
coupled with an expedited process for establishing new codes, is
essential to achieving the goal of administrative simplification. To
remove these impediments to simplification, we recommend that HHS
provide the resources necessary to establish and support the
infrastructure to replace local codes with permanent national codes that
will meet the business needs of health plans and providers. Similarly,
we support the adoption of national coding guidelines for diagnosis and
procedure coding and a process to maintain them.

In addition, we reiterate our willingness to work with HHS and other
organizations toward the development of a unified framework for coding
procedures. As noted in our June 1997 recommendations to the Secretary,
we recommend that HHS identify and implement an approach for procedure
coding that addresses deficiencies in the current systems, including
issues of specificity and aggregation, unnecessary redundancy, and
incomplete coverage of health care providers and settings. The committee
will continue its leadership and participation in this endeavor.

ENROLLMENT

On the issue of using the X12 834 enrollment transaction for collecting
demographics:

The NCVHS recognizes that demographic information is very important to
health care provision and research, and we believe that the 834 is the
appropriate vehicle for collecting such information. The 834 transaction
already includes the necessary data elements and offers a method for
collecting demographics that, while imperfect, is likely to be superior
to third-party observation, which is the method commonly used to collect
demographic detail for health care claims and encounter records. To
ensure that demographics are available for use with claims and
encounters for health care and research, we urge HHS to take a proactive
stance to encourage employers, sponsors, private health plans, State
Medicaid agencies, and the Health Care Financing Administration to adopt
the 834 enrollment transaction and to make those data available, under
stringent safeguards, for legitimate purposes.

INJURY

On the delay in adoption of the first report of injury transaction:

When the NCVHS recommended adoption of the ASC X12N 148 for the first
report of injury transaction, we expected that the 148 would be
completed and ready for adoption with the other eight transaction sets
in this NPRM. Unfortunately, that has not happened. Therefore, we concur
now with the HHS analysis that the functions covered by the first report
of injury transaction need to be more limited and consensus on the
standard needs to be reached. To this end, we urge X12N and the
International Association of Industrial Accident Boards and Commissions
(IAIABC) to work together to produce a compatible transaction
architecture and data content that can be adopted by HHS within the next
year.

IMPLEMENTATION

On the issue of mechanisms for assessment of compliance with standards:

The NCVHS believes that HHS must encourage the private sector to take
the lead in these areas. The 2-year implementation period may be the
time when the greatest need and the greatest incentives exist for
industry cooperation in this area. During this time, we would expect
that a number of organizations that represent standards developers,
health plans, health care clearinghouses, health care providers, and/or
vendors would have an interest in ensuring that independent validation,
testing, and certification take place. Later, there may arise sufficient
incentives for the market to supply these functions. Regardless, it does
not seem practical or necessary for the Government to undertake these
activities.

NEW AND REVISED STANDARDS

On the issue of designing a process to handle requests for new or
revised standards:

Under HIPAA, the Secretary of HHS is the final arbiter of which
standards are adopted and how they are changed. However, we urge HHS to
consider having the process for evaluating proposals for new standards
(including requests for waivers and testing) rest with a private sector
organization with public sector involvement. Such an organization could
operate under guidelines set by HHS in the Final Rules. These guidelines
should incorporate those principles proposed in the NPRM, including the
ANSI accreditation principles for processes which are followed by
accredited standards development organizations and are proposed below
for the content committees.

On the issue of establishing data content and maintenance committees and
their processes:

The NCVHS believes that HHS should specify and establish guidelines in
the Final Rules for the operation of data maintenance and content
committees. We believe that such committees, if not ANSI-accredited,
should operate in accordance with four principles: (1) Public meetings
should be held, at reasonable cost and at reasonable intervals. (2)
Meetings should be broadly announced to reach interested and affected
parties. (3) Changes in products should be broadly announced to reach
interested and affected parties. (4) There should be evidence of
responsiveness to public input. Because there are several specific
issues to be resolved concerning the operation of data maintenance
committees, the NCVHS intends to hold hearings to advise HHS on future
rules that might be appropriate.

On the issue of what committees should be designated, the NCVHS
recommends that there not be separate data maintenance committees for
each X12 transaction. For administrative simplification to succeed,
linkages and relationships among X12 transactions need to be
acknowledged and, when changes to the content of one transaction are
considered, the effect on all other transactions needs to be considered
as well. This is not to say, for example, that the American Dental
Association’s responsibility for the dental claim should be transported
to another body. Rather, it is to recognize that a coordinated approach
to data maintenance is necessary and the number of bodies that can
effectively manage such coordination should be limited. Whether this
coordinating function should remain the responsibility of X12 or whether
a superstructure for data maintenance committees is necessary should be
evaluated with an eye toward achieving a careful balance between costs
and benefits.

On the issue of ongoing Federal oversight/monitoring of maintenance
processes and procedures:

As long as authority to adopt and modify standards rests with the
Secretary of HHS, a certain amount of Federal oversight and monitoring
must take place. However, the level of HHS involvement can be minimized
by the requirements suggested above.

Sincerely,

Don E. Detmer, M.D.
Chair