Michael O. Leavitt
U.S. Department of Health and Human Services
200 Independence Avenue SW
Washington, DC

Dear Secretary Leavitt:

The National Committee on Vital and Health Statistics (NCVHS) has responsibilities for assessing the impact of the adoption and use of transactions and code sets adopted under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). During 2005, the Committee attempted to determine whether there has been any return on investment (ROI) from the use of HIPAA transactions and code sets that have been adopted to date. To make this assessment, the Committee held several hearings and received testimony from payers, vendors, and providers.

The testifiers who were using the HIPAA health claims transactions indicated that they were not yet able to show a positive ROI.. Testimony from the hearings indicated that the ROI from the use of HIPAA standards was disappointing.However, the Committee also learned that the following actions could significantly increase the return on investment from the use of HIPAA transactions and code sets:

  1. Encourage the adoption and use by providers / payers of the HIPAA eligibility transactions (270 / 271) and HIPAA claim status transactions (276 / 277). These transactions when incorporated into daily processes can reduce staff and increase efficiency.
  2. Encourage payers to include enough information in their responses to eligibility increase standards 271 and 277 to allow providers to use the information to actually improve their processes.
  3. Encourage vendors to implement the aforementioned non-claim transactions in practice management software used in provider offices.
  4. Reduce unnecessary variability of business rules. Specific ways to accomplish this have been identified by payers and documented in companion guides. In addition, some independent initiatives are underway to further evaluate those differences in business rules. Continued support of these efforts would advance the original intent of standardization.
  5. Encourage the adoption of one of the current non-mandated acknowledgement transactions (e.g. 997 or 999) to standardize the acknowledgement process between providers, payers, clearing houses and vendors. Lack of such adoption allows disparate processes among the affected partners, and prolongs a non-standard approach.
  6. Encourage the standardization of the timing of changes to standardized code sets to reduce the amount and quantity of changes experienced by the providers, payers, clearing houses and vendors. Alignment of changes and updates to the code sets would allow the industry to coordinate, test and implement on a more orderly schedule and reduce rejected claims.

We urge the Department of Health and Human Services to consider these recommendations in developing further rulemaking, guidance, and requirements for claims and billing operations. In addition, improving the ROI from HIPAA transactions and code sets will serve as a significant driver for further adoption of information technology in the healthcare field.

We look forward to advising the Department on issues related to HIPAA transactions and code sets and health information technology in 2006.


Simon P. Cohn, M.D., M.P.H.