National Committee on Vital and Health Statistics

Subcommittee on Standards and Security

ASC X12, HL7, NCPDP Joint Standards Development Organization

October 11, 2006

SDO Representatives:

ASCX12: Alexandra Goss, Donald Bechtel

HL7: Maria Ward

NCPDP: Lynne Gilbertson, Margaret Weiker

Mr. Chairmen and members of the Subcommittee on Standards and Security, the Accredited Standards Committee (ASC) X12, Health Level Seven (HL7) and the National Council for Prescription Drug Programs (NCPDP) thank you for the opportunity to testify today on the subject of the Standards Development Organization (SDO) process and how it works within the regulatory environment. My name is Lynne Gilbertson and I am speaking today on behalf of the “joint SDO” initiative to improve the standards adoption process under HIPAA.

The testimony delivered today on behalf of ASC X12, HL7 and NCPDP is a continuation of the December 2005 testimony each individual SDO provided on this topic. At the conclusion of the December hearings the Subcommittee requested that we (the SDOs) collaborate to present one unified testimony on this subject.

Our formal remarks to you today are a summary of our comprehensive proposal document. The recommendations provided to you in the document entitled “Proposal for the Modification of the HIPAA Transaction Standards Adoption Process” represent the SDO unified approach to streamlining the HIPAA standards adoption process. This joint SDO prepared document examines the current process for adopting transaction standards, summarizes findings, and proposes ways to improve the adoption process that result in increased efficiency. The joint SDO proposal has been approved by all three SDOs and the approaches we recommend can and will be implemented by us should HHS elect to adopt this streamlined approach.

In order to maximize the time for us to engage in a more productive discussion with the Subcommittee on this topic we’ve elected to keep our verbal testimony brief to allow more time to fully explore your questions to the identified problems and proposed solutions that we prepared for your review, input and support today. In anticipation of this approach we delivered the document to the Subcommittee for your review prior to this session.

The Current Process:

It has become abundantly clear that the Health Insurance Portability and Accountability Act (HIPAA) has a profound and burdensome impact on health care transaction implementation specification development and deployment. Several years of researching the problems resulted in white paper drafts as well as recommendations to HHS and to NCVHS, it became clear that the Administrative Procedures Act (APA) constrained the process since it has a direct impact on the Federal Government’s ability to timely adopt modifications to HIPAA implementation specifications. The current process for adoption of transactions adopted under HIPAA is problematic.

Operating in the regulatory environment, the ability of the Standards Development Organizations to be responsive to industry need is greatly impaired, resulting in stakeholders waiting a minimum of 5 years to be able to implement new specifications adopted under HIPAA. Please refer to section 4 Problems with the existing HIPAA Transaction Implementation Specifications adoption process” for additional information.

Most concerning are the underlying industry assumptions

  1. To wait until the NPRM to review and provide input on the implementation specifications and
  2. Based on public comments received through the NPRM process, the approvedpublished version of the implementation specification may be opened and updated and republished in order to accommodate changes requested by the NPRM comments.

Due to the time lag in the APA steps, these changes may be requested years after the approved implementation specification has been published and brought forward. Changes made in this manner either require a new SDO ballot/approval process to take place (and consequently a new version released) or cause the SDO to proceed in a manner contrary to their American National Standards Institute (ANSI) based procedures. Refer to section 4.3 “Modifications Being Made to Approved Implementation Specifications” for additional information. An additional dynamic exists for X12 related to their underlying base standard. The X12 base standard is used by many industries for EDI exchanges. X12’s implementation specifications are built from a specific version of the X12 base standard. A requested change to an X12 implementation guide may correlate to a base standard change. This base standard change needs to be fully vetted through the consensus based process to prevent a negative impact to other industries.

The regulatory process is not predictable (when it begins or ends), is potentially very lengthy, and compromises the ability of the SDO to be responsive to industry’s business’ requirements.

The Proposed Solution:

This proposal retains many of the existing processes. It also offers a more efficient approach to several of the “key” areas where current problems exist. Opportunities for input and participation are not eliminated. Rather, efficiency is achieved by consolidating public participation and input at the appropriate time. Additionally, we propose adding steps that are critical to the process, such as the development of a benefit analysis report, requested by the Office of e-Health Standards and Services (OESS). Finally, this proposal incorporates recommendations made in House Resolution (HR) 4157.

Streamlined process Highlights:

  • The Federal Register, HHS listserves, and the SDO processes alerts the industry to the development of an implementation specification. The industry is made aware and encouraged to participate. Refer to section 5 “Changing HIPAA Transaction implementation specifications adoption process – outline narrative.”
  • Industry involvement in these steps is critical to the successful development of consensus-based standards that represent the widest, most diverse collection of industry stakeholders.
    • The most effective use of the industry volunteer input and time is during the development of an implementation specification.
    • Individuals not wishing to participate in the development can participate during the public comment/ballot timeframe.
    • Valuable input occurs during the public comment/ballot timeframe.
      • This involvement results in the collection of all technical public comments at one time – while the implementation specification is being developed and approved, thus eliminating the need to “re-open” an already published implementation specifications years later.
      • The collection of comments at one time improves the timeline for adoption – the industry knows that their comments are discussed during development and during ballot/approval processes.
    • The Federal Register, HHS listserves, and the SDO processes alerts the industry to the ballot/approval process steps and critical dates/ timeframes The industry is made aware and encouraged to participate.
  • While the DSMO process is underway, an industry benefit analysis survey is conducted by WEDI.
    • This is another opportunity for the industry to be alerted of activity, and to provide valuable feedback.
  • The resulting report is provided to the SDO, the DSMO Steering Committee, and to NCVHS for their review.
  • NCVHS receives public testimony, which includes
    • A recommendation on the Change Request from the DSMO.
    • A report of the survey findings from WEDI.
    • Public testimony.
  • The Final Rule is published in the Federal Register, based on recommendations from the SDO, DSMO Steering Committee and NCVHS.
    • It provides the adoption and implementation timeframe,

With these process improvements important benefits are reached.

  1. The timeliness and length of time for adoption are optimized.
  2. The volunteer industry participation is at the beginning of the process, yielding more efficient use of limited volunteer resources.
  3. The stakeholders have input during both the development and the approval of the implementation specifications – and they are notified of the timeline.
  4. Beyond the increased quality perspective, timeframe estimates prepared for both the current and proposed process indicate potential timesavings of up to 3 years. And, we eliminate the possibility of having an endless loop of NPRM change requests that never move to a Final Rule. Refer to section 5.2 “Proposed Improved Process Timeline”.

ASC X12, HL7 and NCPDP thank you for the opportunity to offer these collaborative recommendations on improving this important process. We have spent considerable time understanding the process, assessing the impacts, and building recommendations. We firmly believe that action needs to be taken at the federal or congressional level for changes to occur that will allow us to be responsive and supportive of industry business needs in a predictable and timely manner. We look forward to further discussing our recommendations with the NCVHS and OESS to affect change on this important issue.

We would like to thank the Subcommittee for the opportunity to testify today. We welcome any questions you may have.

About Accredited Standards Committee X12

ASC X12 ( develops, maintains, interprets, publishes and promotes the proper use of American National and UN/EDIFACT International Electronic Data Interchange Standards. The ASC X12 body comes together three times each year to develop and maintain EDI standards. Its main objective is to develop standards to facilitate electronic interchange relating to such business transactions as order placement and processing, shipping and receiving information, invoicing, and payment and cash application data, and data to and from entities involved in finance, insurance, education, and state and federal governments. Together, committee members develop and promote EDI standards that streamline business transactions.  X12 standards facilitate these transactions by establishing a common, uniform business language for computers to communicate across town or around the world.  With more than 275 transaction sets, X12 standards can be used to electronically conduct nearly every facet of business-to-business operations.

About Health Level Seven

Founded in 1987, Health Level Seven, Inc. ( is a not-for-profit, ANSI-accredited standards developing organization dedicated to providing a comprehensive framework and related standards for the exchange, integration, sharing, and retrieval of electronic health information that supports clinical practice and the management, delivery and evaluation of health services. HL7’s more than 2,000 members represent approximately 500 corporate members, including 90 percent of the largest information systems vendors serving healthcare.

About the National Council for Prescription Drug Programs

NCPDP ( is a non-profit ANSI-accredited Standards Development Organization consisting of more than 1,500 members who represent computer companies, drug manufacturers, pharmacy chains and independents, drug wholesalers, insurers, mail order prescription drug companies, pharmaceutical claims processors, physician services organizations, prescription drug providers, software vendors, telecommunication vendors, service organizations, government agencies and other parties interested in electronic standardization within the pharmacy services sector of the health care industry.