Minutes of the March 30-31, 2004 NCVHS Subcommittee on Standards and Security Hearing

Department of Health and Human Services

NATIONAL COMMITTEE ON VITAL AND HEALTH STATISTICS

Subcommittee on Standards and Security

March 30-31, 2004

Washington, D.C.

Meeting Minutes

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The Subcommittee on Standards and Security of the NCVHS was convened on March 30, 2004 at the Hubert H. Humphrey Building in Washingon, D.C. The meeting was open to the public. Present:

Subcommittee members

• Simon Cohn, M.D., Chair
• Jeffrey S. Blair, M.B.A., Vice Chair
• Stanley M. Huff, M.D.
• Harry Reynolds
• Judith Warren Ph.D, RN

Absent

John P. Houston, J.D.

Staff and liaisons

• Maria Friedman, D.B.A., CMS, lead staff
• Vivian Auld, NLM
• J. Michael Fitzmaurice, Ph.D., AHRQ
• Gail Graham, DVA
• Marjorie S. Greenberg, NCHS
• Debbie Jackson, NCHS
• Donna Pickett, NCHS
• James Scanlon, HHS, ASPE
• Steve Steindel, Ph.D., CDC
• Marietta Squire, CDC, NCHS
• Karen Trudel, CMS

Others

• Bill Alfano, BCBSA
• Gloria Barteen, Wexler and Walker Public Policy
• Gary Beatty, X12N
• Bob Beckley, SureScripts, NCPDP
• Carol Bickford, Amer. Nurses Assn.
• Holly Blodgett, Amisys Synertech
• Alicia Bradford, Consolidated Health Informatics Initiative
• Bill Braithwaite, independent consultant
• Teri Byrne, RXHUB
• Roy Bussowitz, NACDS
• Gary Cavanaugh, CMS
• Sylvain DeLisle, VA
• Sheila Derrybury-Walcoff, Mayer, Brown, Rowe and Mah
• James DePietro, Buchanan Ingersoll
• Irene Door Akaski, Amer. Coll. of Surgeons
• Danielle Dreissel, Hogan & Hartson
• Irene Dworakowski, Amer. Coll. of Surgeons
• Karen Eckert, Medi-Span
• Jack Emory, AMA
• Marilyn Figmund Luke, Amer.’s Health Insurance Plans
• Cheryl Ford, CMS, CHI
• Anders Gilberg, AMA
• Lynne Gilbertson, DSMOs
• Jodi Goldstein Daniel, Office of General Counsel, HHS
• Mark Gordon, American Coll. of Physicians
• Emily Graham, Amer. Soc. of Cataract & Refractive
• Kimberly Greco, Hogan & Hartson
• Helene Guilfoy, Guilfoy Consulting
• Tony Hausner, CMS
• Gary Heinberg, Akin, Gump
• Brenda Hicks, CMS
• Richard M. Hodge, Aventis Pharmaceuticals
• Mike Hoke, Strategic Health Solutions.
• Kevin Hutchinson, SureScripts
• Michele Johnson, Amer. Academy of Family Physicians
• Ed Jones, WEDI
• Jorue Kerren, CMS
• Marilou King, Office of General Counsel, HHS
• Katherine Kuhn, Natl. Community Pharmacists Assn.
• Mara Krause, Pharmaceutical Research & Manufacturers of Amer.
• Patricia Kurtz, JCAHO
• Frank A. Kyle, Jr. ADA
• Dan Landrigan, Atlantic Information Services
• Steve Lazarus, WEDI
• Randy Levin, FDA
• Bill Lovano, Blue Cross/Blue Shield Assn.
• Lane Macalester, RXHUB
• Barbara McKinnon, AstraZeneca
• Mark Mantooth, Office of General Counsel, HHS
• Barbara Marone, Amer. Coll. of Emergency Physicians
• Ross Martin, Pfizer
• Carol Monaco, Amer. Osteopathic Assn.
• Thomas Murray, AMA
• Mike Noman, Health Resources and Services Administration, HHS
• Todd Omundson, Natl. Uniform Billing Committee
• Michael Perrini, Pfizer
• Matthew Peterson, FoxKaiser
• Frank Pokorny, ADA
• Michael Pollard, Medco Health
• Phil Rothermich, Express Scripts
• Jim Schuping, WEDI
• Paul A. Speidell, MGMA
• Jonathan Teich, Health Vision
• Robert Tennant, MGMA
• Steele Thomas, The Pink Sheet
• Jessica Townsend, HRSA
• Laura Vartain, Wexler & Walker
• Michael Weinberger, Johnson and Johnson
• Gladys Wheeler, CMS
• Tom Wilder, AAHP-HIAA
• Daryn Williams, Kaiser
• Michelle Williamson, NCHS, CDC
• Kepa Zubeldia, Claredi

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EXECUTIVE SUMMARY

INTRODUCTORY REMARKS, Jeff Blair

Mr. Blair introduced a 15-month work plan building to final recommendations on E-prescribing (e-prescribing) to the Secretary by June 2005 and interim recommendations by November 2005.

ISSUES RELATED TO THE MEDICARE PART D BENEFIT AND E-PRESCRIBING, Karen Trudel

Ms. Trudel explained the objectives in the law for e-prescribing, legislation requirements and design criteria. Messaging, vocabulary and knowledge representation standards are needed. She noted links to e-signatures (e-sigs) and prescriptions and described ongoing initiatives. NCVHS hearings go through June 2005. The Secretary will announce the initial standards in September 2005. Pilot programs run through 2006. Announcement of final standards via regulation will be in April 2008; the standards will be implemented in April 2009.

STATE OF THE ART E-PRESCRIBING, Jonathan Teich, Chief Medical Officer, Health Vision

Dr. Teich said adverse drug events occur in 5-18 percent of ambulatory patients and IT could prevent two million events each year. He noted doctors’ concerns about e-prescribing. Dr. Teich explained ERx Rapid Adoption Project’s guiding principles; work group objectives and imperatives, and standards and regulatory concerns.

E-PRESCRIBING STANDARDS

• Bob Beckley, Member, Board of Trustees, National Council for Prescription Drug Plans

Mr. Beckley described e-prescribing as a communications triangle: patient, physician and pharmacy. Script supports messages for new prescriptions, prescription changes, refill requests, prescription fill status notifications and cancellations. He described SCRIPT’s data segments, noting a prescriber with drug-history information and a database with the algorithms could identify and display any formulary information or drug-to-drug interaction before sending the prescription. Pharmacies could do a drug-to-drug interaction, notifying the physician of situations.

E-PRESCRIBING STANDARDS

• Lynne Gilbertson, Director of Standards Development, National Council for Prescription Drug Plans

Ms. Gilbertson cautioned against broad-stroking a single solution.

FEDERAL PERSPECTIVES ON E-PRESCRIBING

• Randy Levin, Federal Drug Administration

Dr. Levin discussed the collaboration between FDA, VA, NLM, ARC, manufacturers/ repackers/relabelers and health information suppliers to support e-prescribing focused on structured product labeling (SPL). The partnership flows from the SPL, FDA, NLM, the Daily Med and health information suppliers to patients. The electronic labeling, professional labeling, and drug listing rules must be in effect. Prime goal for phase one is making the SBL available for approved human prescription drugs. Start up is aimed for July 2005. In 2006, the rule would be implemented, systems in place and the National Drug Code (NDC) generated.

FEDERAL PERSPECTIVES ON E-PRESCRIBING

• Sylvain DeLisle, MD, Veterans Administration

Dr. DeLisle described the VA’s Computerized Patient Record System (CPRS), noting about 95 percent of VA prescriptions were prescribed electronically. She described the practical problems of the practicing outpatient physician and noted the major failures in pharmacal therapy were determination of whether the drug was needed or efficient and whether a theory was evaluated altogether. VA deployed the logic of evidence-based drug utilization, provided context-sensitive information, mined for the data from EPR, accessed supportive literature through hypertext, and automated actions. Dr. DeLisle said the goal was reducing wasteful use of medication and emphasized that the rules had to be embraceable, the process practical and credible, and interface with the data elements from EPR was critical.

OPEN MICROPHONE

Mr. Rothermich emphasized the exponential distinction between formulary and benefit and that both had to be known for a physician to make an informed choice. Kevin Hutchinson with SureScripts recommended focusing on technical standards of the exchange required for e-prescribing and workflow standards.

DISCUSSION OF NEXT STEP

Members and staff began to identify lessons learned from these testimonies and noted others they needed to hear from and areas of standardization that still had to be considered.

HIPAA UPDATE, Marie Friedman

About 75 percent of the Medicare claims were HIPAA-compliant. Slow-pay policy begins in July. The MPI rule was issued in January. Modifications to the standards and the claims attachment are expected by early fall.

WEDI UPDATE ON HIPAA

• Ed Jones, Chair, WEDI

Mr. Jones outlined findings and recommendations from WEDI’s January 2004 hearing including: maintaining contingency plans as implementers move towards compliance with the transaction and code sets, focusing on data content and sequencing, revising and enhancing the standards development process in accord with business practices, and validating the cost and benefit of transaction and code set standards.

WEDI UPDATE ON HIPAA

• Steve Lazarus, Past Chair, WEDI

Mr. Lazarus emphasized that trading partners had to communicate and collaborate to implement the transactions and code sets (TCS), share definitions and test and conveyed WEDI’s recommendations.

AMA/AHA VENDOR COALITION REPORT ON IMPLEMENTATION ISSUES

• Jack Emory, Assistant Director for Federal Affairs and Outreach, American Medical Association

Mr. Emory expressed concerns of the HIPAA Implementation Working Group that the current haphazard migration process increased transaction cost and risks, disrupting healthcare payments and services. The Working Group recommended a strategy of rational migration and suggested principles to guide HHS actions regarding implementing administrative simplification.

AMA/AHA VENDOR COALITION REPORT ON IMPLEMENTATION ISSUES

• Gary Cavanaugh. Director, Business Standards and Systems Operations Group, Center for Medicare and Medicaid Services .

Mr. Cavanaugh said about 82 percent of intermediary claims and 68 percent of carrier claims coming into Medicare were in HIPAA format. He noted the issue of passing data to the coordination of benefits (COB). Starting July, Medicare will send a compliant transaction for COB. He emphasized that the industry had to take a bigger role in resolving issues.

DSMO ANNUAL REPORT

• Frank Pokorny, 2003 Chair, DSMO Steering Committee

Mr. Pokorny said the healthcare community continued to request changes in the HIPAA standards although average monthly volume of change requests dropped from 14.3 to 11.3. The DSMOs continued to work with CMS on facilitating implementation of existing HIPAA standards and expediting changes arising from regulatory requirements. Discrepancies in instructions in Version 4050 implementation guides seen as a foundation for the next generation of HIPAA Administrative Simplification Compliance Act (ASCA) transactions would be resolved by each DSMO the Steering Committee in accordance with principles and protocols in accordance with the objective of HIPAA.

DSMO ANNUAL REPORT

• Gary Beatty, 2004 Chair, DSMO Steering Committee

Mr. Beatty explained the DSMO was looking in 2004 at process improvement from both short- and long-term perspectives as they pursued an ongoing modification process moving from one version to the next implementation guide.

FOLLOWUP ON DSMO REQUEST ON TRANSACTION STANDARDS FOR BILLING FOR SUPPLIES

• Lynne Gilbertson, Director of Standards Development, National Council for Prescription Drug Plans; DSMO

Ms. Gilbertson explained the request that: NCPDP be designated as HIPAA-compliant standards for the billing and authorization of supplies billed by a dispensing retail pharmacy, NDC be designated, when available, and otherwise the Health-Related Item Code (HRI), Uniform Product Code (UPC) or HIKPIX be used where non-specific codes would not lead to potential problems.

FOLLOWUP ON DSMO REQUEST ON TRANSACTION STANDARDS FOR BILLING FOR SUPPLIES

• Tom Wilder, America’s Health Insurance Plans

Mr. Wilder urged the Subcommittee to recommend the change request so HHS could get the process moving.

SUBCOMMITTEE DISCUSSION

Members noted there was much work to be done at the May 25-26 Subcommittee meeting related to e-prescribing, ambulatory e-prescribing and patient safety; the letter about pharmacy-supply had to be finalized (additional testifiers might be needed); tracking industry implementation of the 837 Professional Claim Standard (837) and assistance with other transactions. The DSMOs have been asked to consider and share their plans for outreach activities. Dr. Cohn proposed identifying the time-definite critical WEDI recommendations that would most help everyone through the 837 implementation. Other next steps included the NCPDP and ongoing discussion about HIPAA implementation.

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DETAILED SUMMARY

The details of all presentations and letters drafted can be found in the meeting transcript posted on the NCVHS Web site, ncvhs.hhs.gov

INTRODUCTORY REMARKS, Jeff Blair

Mr. Blair introduced a 15-month work plan building to final recommendations to the Secretary by June 2005 and interim recommendations by November 2005. Hearings will be held with different users of e-prescribing during May, July and August to determine how e-prescribing standards meet their needs, gaps, and additional standards that need to be enhanced or created. Standards and terminology developers will review those findings in September hearings discussing plans to address gaps. The Subcommittee will develop the interim recommendations to the NCVHS in September, October and November. During the first quarter of 2005, members will look at e-sigs related to e-prescribing and other remaining issues leading up to the final recommendations in June 2005.

ISSUES RELATED TO THE MEDICARE PART D BENEFIT AND E-PRESCRIBING, Karen Trudel

Ms. Trudel explained that the electronic prescription (e-Rx) program was applicable to eligible individuals benefit in the voluntary Medicare prescription drug benefit program (Part D). Providers did not have to submit prescriptions electronically, but prescriptions transmitted electronically must use the standards.

Objectives set out in the law for e-prescribing are: patient safety, quality of care, and efficiencies in delivery of care including cost savings. Design criteria include: no undue administrative burden on providers, pharmacies or pharmacists; compatibility with HIPAA and health IT standards, and support of electronic exchange of labeling and drug-listing information maintained by FDA and NLM. The legislation requires: building in eligibility information and permits tiered formularies, collaboration with U.S. Pharmacopeia on a model of categories and classes for formulary development, ability to provide prescriber drug information including patient and related medical histories. The medical history provision stating the Secretary is to adopt standards specifically to do this, is linked to the electronic health record (EHR) and on a separate, not necessarily unrelated, time line. Messaging, vocabulary and knowledge representation standards are needed so the data is provided back to the prescriber in a way clinically useful at the time of the prescription. Ms. Trudel noted links to e-sigs and prescriptions and ongoing initiatives: FDA’s physician labeling and electronic drug listing regulations, NLM’s RxNorm and FDA’s structured product label.

In addition to enabling transmission of pharmacy prescription data to and from doctors and pharmacies (including e-label), e-prescribing standards cover: transmission of data about the patient’s drug utilization history, possible interactions, information on the drug plan (e.g., formulary and cost sharing, lower-cost, and therapeutically-appropriate alternatives. The standards must comply with the HIPAA privacy rules. Messaging unrelated to appropriate prescribing (e.g., marketing, is not permitted. NCVHS’s role is to make recommendations to the Secretary on e-prescribing standards in consultation with a specific group of constituencies: physicians, hospitals, pharmacists and pharmacies, prescription benefit managers (PBM), state boards of pharmacy and medicine, federal agencies and other e-prescribing experts. Within a year of promulgation of the final standards, prescriptions for covered Part D benefits transmitted electronically must be sent according to the standards. Prescription-drug plans (PDP) must issue a card or other mechanism of identification enrollees can use to access their prescription drug plan. The mechanism will use formatting standards developed in consultation with NCPDP. Unless adequate industry experience with the proposed standards already exists, a pilot project must be completed prior to promulgation of the final standards. Voluntary participation will be via agreements. The Secretary, in consultation with the Attorney General, will develop safe harbors under anti-kickback and physician self-referral laws permitting hospitals, plans and PDPs to provide non-monetary remuneration (e.g., software, technology services training) to enable physician participation.

NCVHS hearings go through June 2005. The Secretary will announce the initial standards in September 2005. Pilot programs run January through December 2006. Evaluation and the report to Congress will be by April 1, 2007; announcement of final standards via regulation in April 2008, and the standards will be implemented in April 2009. She said the critical challenge was ensuring that e-prescribing standards could be integrated into Medicare Part D implementation.

Ms. Trudel cautioned that e-prescribing standards had to be consistent and workable with the claim and eligibility standards used to submit claims from pharmacies to PDPs, data content consistent, and information maintained through the process. Interoperability and technology issues had to be addressed. Ability for multiple PDPs per region was expected; pharmacies and prescribers had to do business with different PDPs. She noted drugs covered under Medicare parts A and B were excluded from D.

Discussion

Dr. Cohn noted that they had to become clear about any Part B drugs the patient might be administered or taking. Ms. Trudel agreed that the statute did not clearly define medication or patient history. She suggested that medication history was the patient’s current and previous history of prescriptions, including allergies. Much medical history was relatively irrelevant to prescribing and there were questions about which information was most germane to quality in terms of prescriptions and medications. Relevance, availability, how these bits of data might get to the prescriber, and privacy implications were open issues.

Ms. Trudel said it was clear that much of the retail pharmacy world did business real time and CMS was focused on making eligibility, coinsurance and deductible tables from the Medicare databases available in real time. Dr. Fitzmaurice remarked that the pharmacy’s need to know how much to charge when filling a prescription was not part of the e-prescribing from the physician to the pharmacy, but part of making the system work.

Observing that they were not necessarily talking about querying Medicare databases directly but about making data appropriate for the transaction available as needed, Ms. Trudel suggested going beyond real-time access to Medicare databases and ensuring appropriate data was available to the right people at the right time. Noting that ARC, Hub and SureScripts provided information they would hear about over the coming months, Ms. Cronin emphasized focusing short term on what already existed in the private sector. Ms. Trudel said ensuring that definitions in the data content of existing files were known and consistent was among the work still at beginning stages. Mr. Reynolds noted that the Medicare system would be the only one having most the medical history. Anything not there that had to be gathered was currently dealt with between the pharmaceutical situation, drug store and physician. He cautioned about changing the whole gathering and flow of information.

Ms. Trudel suggested determining the extent that ongoing demonstrations and pilots used medical history to inform the prescriber and which bits of information were pertinent. Pointing out that the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) had no requirement for e-sigs for prescriptions, participants said whatever was done with e-prescribing had to be sturdy enough that a physician did not have to do anything different when it came to prescription-controlled medication, the e-prescribing law’s requirement at the state level for signatures for controlled substances, and the need to work closely with DEA on requirements in their law and regulations.

STATE OF THE ART E-PRESCRIBING, Jonathan Teich, Chief Medical Officer, Health Vision

Dr. Teich said adverse drug events occur in 5-18 percent of ambulatory patients and two million adverse drug events could be prevented each year using IT in the ambulatory practice, saving about $4 per member per year. He noted a ten percent rate of overused medically unnecessary medications and a three-to-five percent under use of necessary meds, resulting in about $35 to $70 per member per year from over under use.

Doctors’ concerns include: cost of buying and installing systems, initial time invested, time/RVU to review warnings, reimbursement for costs and resources, insufficiently publicized safety improvements, and lack of an accepted standard of practice. Driving physician acceptance requires: proven safety/quality improvement, easy and fast use, and financial incentives to overcome cost.

EHI developed a multi-stakeholder group devoted to rapid adoption of computerized prescribing. ERx Rapid Adoption Project supports practical, workable incentives; design input for useable, fast systems; and demonstration projects. Guiding principles encourage: adoption of implementable systems, eRx workable in various settings, standards, incentives, education, physician-patient relationship and choice.

Design and implementation working group objectives are: develop/disseminate design and implementation techniques that support prescribing tools, physician/practitioner workflow, patient safety and patient/caregiver education. Incentive implementation working group objectives are: promote financial, regulatory and other incentives that accelerate adoption, enhance cost-effectiveness and increase value to all. Usability imperatives included speed, convenience and easy implementation; support prescribing models and provider workflow; accessibility wherever scripts are written; and simplify processes.

Safety imperatives are: supporting safe, optimal care, proactive reactive guidance, instantaneous order feedback and pharmacy compliance initiatives, basic/advanced clinical decision support (CDS), ability to comply with guidelines and promote appropriate use of medications instantaneously, educational and reference materials. Reimbursement imperatives come from: formulary support, prevention of over/under use, and cost correlates of safety. Connectivity imperatives are: potential access to a complete medication regimen including input from multiple practitioners and personal over-the-counter (OTC) meds, efficiency, anonymous aggregated data for research/ surveillance, two-way communications, connection to inpatient CPOE systems, and portability across systems. Protection imperatives for patients included: careful reuse of data for safety, public health, and surveillance; provider/patient concerns about data marketing; protecting privacy/confidentiality while providing necessary date to providers; choice of pharmacy.

Standards and regulatory concerns are: varied “standards” made development difficult and expensive, lack of drug specification at the “doctor-friendly” level (NLM’s RxNorm project aims at resolution), nonstandardized prescription specification. Economic incentives included malpractice reform and pharmacy handoffs in exchange for better data. Internal policy incentives are credentialing and operational procedures. Public policy incentives focus on Medicare, Patient Safety Improvement, and Stark Acts. Patient Safety Incentives include accrediting groups, The Leap Frog Group, error and quality reporting projects, and purchaser/ consumer education plans. High impact tools included pay-for-performance programs, direct reimbursement for utilization of information, pharmacies defraying costs, and transaction fees.

Dr. Teich noted high potential incentives: economics (i.e., reimbursement for utilization of e-prescribing in the form of resource value documenting the use of e-prescribing and using that as an RVU-based item; pay for performance; third party involvement (e.g., payers, pharmacies, transaction brokers); and the Medicare Act, Stark relief and other legislation. He highlighted policy directions: promote standards-based systems and rapid development of state bridging standards and unifications, support a “floor” of good system criteria and common research and education of such criteria, support quality through measurable CDS in many forms, and use e-prescribing acceleration as a model for other electronic health (i.e., NHII). Dr. Teich concluded that: ambulatory prescribing had substantial potential and might be easier to implement widely; usability and incentives promote adoption while CDS, communication and data integration promote quality; standardization could promote portable, compatible interoperable systems; and e-prescribing could be a migration step toward EHR.

Discussion:

Dr. Teich said e-prescribing was available as a stand-alone application but already had much of the infrastructure to do EHR; its potential was as a module. Skillfully rolled out, it would also bring tools to promote infrastructure for other applications, problem management and disease-management tools. Noting that formularies and targeted alternatives had significant value and were current practice with systems provided and backed by PBMs and networks provided by pharmacies, Dr. Teich said it was also necessary to ensure that the axis of prescribing and prescribing choice rested with the provider and patient, subject to seeing information available on cost and other issues. Bob Beckley, a designer of the NCPDP standards, explained the prior authorization capability within this crib standard.

Dr. Teich highlighted priority standards needed for e-prescribing: prescriber-level vocabulary, resolving the issue of states requiring different prescribing forms, ability for formularies to come through as a standard form, and all possible eligibility pieces. He noted that lack of HIPAA unique health-plan identifiers cost time and productivity when bringing up a new practice. Dr. Teich said CDS was about what could be done to alter, promote, remind, educate and provide additional information so the physician, pharmacist or payer had all the information necessary to make the best decision about a transaction. CDS was about cost, patient convenience or logistical issues and included alerts, reminders, guidelines and proactive measures. Drug utilization review (DUR) was a subset dealing with appropriate utilization of drugs.

Noting many things the non-controlled environment did made things harder in ambulatory care, Dr. Teich emphasized that the dictionaries needed to include alternative and foreign medications. He underscored the need and feasibility of having standards done by feel, allowing the differentiation or severity rating of drug interactions. Consortium good guesses could be done without upsetting competitive advantage

Dr. Teich said related medical history referred to other information necessary to make records complete and sustain CDS. At the lowest level, a standalone application could at least check typical drug doses. The next level included data easy to catch (e.g., patient specific allergies, patient’s age, sex) that drove “quite a bit.” The patient’s other medications (which generated drug interactions and therapeutic duplications) were a level above. The problem list (a major driver) and recent procedures were above that. The front screen of most EHR products had more drivers: problems in medications, allergies and, sometimes, health-maintenance issues and recent visits

He noted work was underway on supplying the complete medication history by collecting claims form various sources and aggregating that into a message from the payer channel indicating the patient’s claims for medication. Problem lists could be collected either by hand or ICD9 codes from previous visits. Allergies usually were connected by hand. Procedures could come from ICD and CPT code. Much could be collected with reasonable specificity indirectly through automatic sources.

Dr. Teich called for useful, “real” guidance about the selling of data. He noted the benefit of organizations in the private sector that protect and make use of data, adding that there had to be safeguards. Dr. Teich said the e-health report would be released April 14, 2004. Dr. Cohn said the Subcommittee was delighted and would probably have additional questions.

E-PRESCRIBING STANDARDS

• Bob Beckley, Member, Board of Trustees, National Council for Prescription Drug Plans

Mr. Beckley defined e-prescribing as both two-way communications between physicians and pharmacies (new Rx, refill authorizations, change requests) and potential for information sharing with health care partners (eligibility/formulary information, medication history). E-prescribing was a communications triangle: patient, physician and pharmacy. Script supports messages for new prescriptions, prescription changes, refill requests, prescription fill status notifications and cancellations. Pharmacy-initiated messages included: refill request/renewal authorization, change request, DUR, formulary, prior authorization), filled notification, respond to a cancelled Rx. Physician-initiated messages include: new prescription, respond to a refer request, respond to a change request, and initiate a cancel request.

SCRIPT utilized data segments: header, physician, pharmacy, patient, drug, COB (not used), observation (not fully developed or used), and trailer. The header contains: version number, message type, trace numbers (assigned by originator, echoed by responder) sending/receiving identifications (physician – DEA, NPI, HCIdea, trading partner identifiers- and pharmacy – NCPDP Provider ID). The physician segment indicated the physician’s location, who was involved and any supervision or authorized agent. The pharmacy segment conveyed the pharmacy identifier and name. The patient segment included the patient’s name, birth date, gender, identifier, address and communication identifiers. The drug segment included drug name, strength and form (text); drug code (NDC, UPC, MFG); form encoded; drug strength code, and generic drug identifier (Drug Data Base, RxNorm, NDF-RT).

Mr. Beckley noted SCRIPT would identify and display any formulary information or drug-to-drug interaction before sending the prescription to the pharmacy for a prescriber with drug-history information and a database with the algorithms. Pharmacies did a drug-to-drug interaction, notifying the physician of situations. Physicians responded and both proceeded accordingly. Pharmacists commonly had information about allergies, but seldom had data on recent lab tests. A third DUR check occurred when the pharmacy submitted a claim through the payer or PBM.

E-PRESCRIBING STANDARDS

• Lynne Gilbertson, Director of Standards Development, National Council for Prescription Drug Plans

Noting providers had different questions, Ms. Gilbertson cautioned against broad-stroking a single solution. Ms. Gilbertson said available medication history (e.g., pharmacy/prescriber to PBM using iPBM identifiers for patient) provided some infrastructure.

Discussion

Mr. Beckley emphasized that drug databases were an integral part of physician, pharmacy and payer systems and linkage was needed to reach the proper level for DUR. Dr. Huff proposed RxNorm or another non-proprietary code where everyone knew the mapping. Mr. Beckley said an identifier code could move the generic drug identifier up to the drug code and everyone could cross map to their databases. He said “dispense as written” was mostly accepted in every state SCRIPT was used and adjudication was not a concern. Mr. Beckley said a standard for a codified SIG was “one of the bloodiest” conversations. Pharmacies were concerned about understanding physicians’ intentions, converting systems where four billion prescriptions were dispensed each year, and translating correctly six years of history

He said SCRIPT already had in place ability to pass back and forth DUR information. With minor modifications, SCRIPT could also send a physician’s request for prior authorization. Soon the Standard could be used to query for an eligibility check. Seventy-five percent of retail pharmacies had electronic equipment in place to receive E-Rxs and send refill requests. Manhattan Research indicated that about three percent of the prescribers were connected to the pharmacy and had true E-prescribing capabilities. Full-blown implementations were active and numbers were ramping up. Thirty-seven percent of the physicians were interested in sending electronically to the pharmacy in the next 12 months. The top drivers were: increased accuracy (47%), reduced pharmacy calls (45%), and commonly used Rx list (42%). Another driver was being able to send scripts electronically and accurately. Mr. Beckley showed a pharmacy list of partners that could do E-prescribing and a list of physician technology vendors that wrote to the SCRIPT Standard and developed software.

Mr. Beckley emphasized that state regulations and e-sigs were not a barrier. SCRIPT had a unique identifier for the physician. Controlled substances (about 15 percent of the prescriptions) were handwritten. The transmission standard and code sets were not the issue. He said the provider identifier would not be a problem if HCIdea was fully adopted. HCIdea would “take it down to” the person and location needed for E-prescribing and claims adjudication. Mr. Beckley said the biggest hindrance to E-prescribing was educating prescribers to the benefits (including significant return on investment (ROI) for automating refills and changes) and making them aware of pharmacy readiness.

Testifiers explained that the NCPDP format and telecommunication standard were used for eligibility checking. Current industry modes of communication were from prescriber to pharmacy and pharmacy to PBM. Two fairly mature standards supported those communications, and MMA envisioned another line from prescriber to PDP that was not yet mature or exercised. NCPDP worked on that as business needs came forward.

Mr. Beckley noted that, with a standard identifier, medication history could be obtained from the pharmacies that dispensed them (including cash/third-party). Terry Bern from Rx Hub clarified that X12 was designed to obtain eligibility from a doctor to a payer. Ms. Trudel pointed out that Medicare was a more homogeneous, closed environment and had an identifier for all its beneficiaries. She suggested communicating eligibility issues to the Secretary, but minimizing the time spent on them.

Participants noted PDPs could give feedback on the transaction for eligibility, formulary standards and dealing with standards for classifications of drugs. Some larger chain pharmacies wrote their own software and could provide another perspective. Phil Rathermick from Express Scripts urged the Committee to set a single standard for both authentication of end users and what constituted acceptable script for the pharmacist to fill without assessing different state regulations. Mr. Reynolds cautioned about losing sight of the significant portion of the healthcare industry using NCPDP for automated scripts from the pharmacies to PBMs. Noting these involved the same doctor, pharmacy and PBM, he suggested piggybacking.

Ms. Cronin predicted much activity at the state level and the NHII Subcommittee might develop local indexes and other mechanisms for looking within Medicare at a unique identifier beyond the social security number (SSN). Participants said PBMs were “jumping through hoops” to modify to a non-SSN in a number of states and in 18 months most payers probably will have transferred identifiers. The NCPDP standards package costs $650. Membership is $550 annually.

FEDERAL PERSPECTIVES ON E-PRESCRIBING

• Randy Levin, M.D., Federal Drug Administration

Dr. Levin discussed the interagency work FDA with is doing VA, NLM, and ARC to support E-prescribing focused on SPL, a computer file containing information about medication proposed as a standard for exchange of medical information between the FDA, pharmaceutical companies, manufacturers, NLM and information suppliers. A professional labeling for prescription drugs, SPL will also include over-the-counter drugs. An HL7 XML standard based on the clinical document architecture, SPL is up for membership ballot in May 2004. The contents of SPL would include: how and when to use the medications, description of medications, and how the medications are supplied and distributed.

Dr. Levin noted the proposal called for a partnership between FDA, manufacturers, repackers/relabelers and NLM utilizing the SPL XML and making it available in the daily med repository.

The labeling information provides data about ingredients, strength, dosage forms and route of administration that supports NLM in generating RxNorm and their daily med repository of medication information. Health information suppliers will provide information to the various groups that will be accessible through NLM for use in decision-support systems.

Dr. Levin described the collaboration. Manufacturers marketing new medication and repackers/relabelers changing their packaging and labeling would submit their information to FDA which would generate and send the SPL to NLM. SPL also will be available to health-information suppliers to use in their E-prescribing systems for getting it to the user.

The prime goal for phase one is making the SBL available for approved human prescription drugs. Start up is aimed for July 2005. Phase one will introduce SPL as a standard for communicating the information, unique ingredient identifiers (UNI) for active/inactive ingredients, and medication terminology. A substance registration system is being developed to assign UNI along with a set of business rules so everything is drawn in a standardized way. An electronic labeling information processing system (ELIPS) will enable content management of the labeling information, labeling review, moving into SPL and export to MLN. In phase two, targeted to begin July 2006, FDA intends to add availability of other human drugs, including over-the-counter drugs, and work with registering their information. FDA also will register facilities where drugs are manufactured and repackaged for inspection purposes.

Dr. Levin described E-prescribing as a partnership flowing from the SPL, FDA, NLM, the Daily Med, health information suppliers, to patients. Three regulations had to be in effect: the electronic labeling rule (finalized and effective in June 2004) that requires manufacturers to send in their labeling in electronic format; the professional labeling rule that would require manufacturers to define a highlighted section of the labeling containing key information prescribers use most and that FDA and manufacturers would collaboratively bring forward; and the drug listing rule that would require repackers/relabelers to provide information about new products to FDA who would assign the NDC and drug product code. Manufacturers will provide information about the product (e.g., description, when and how to use); repackinging/relabelers will indicate who distributes and how it is supplied. Standards and SPL will be used. FDA will look to the VA National Drug File and FRT codes and terminology. Information will go into both the ELIPS System and the eLIST System (used for qualify control, registering products on line, and generating NDC and drug product codes). In 2006, the rule would be implemented, systems in place, and NDCs generated.

Dr. Levin said the potential trouble spots would be having the regulations move through the comment and response period and obtaining terminology standards that could be incorporated into the SBL. He clarified that FDA will use standards already enumerated in numerous places in the SBL tags. In the collaborative label approval process, FDA will ask manufacturers for evidence of some items (e.g., severity of the indication.) Asked if the anticipated regulation would require FDA to make assignments within a certain time period, Dr. Levin said FDA understood that the manufacturer had to know the NDC in advance of marketing the product.

FEDERAL PERSPECTIVES ON E-PRESCRIBING

• Sylvain DeLisle, M.D., Veterans Administration

Dr. DeLisle discussed the VA’s CPRS in place in 153 hospitals and 800 clinics in which 1,000 full-time and 30,000 part-time physicians work. About 95 percent of VA prescriptions are prescribed electronically; the other five percent are written prescriptions required for controlled substances. The VA system processed 102 million prescriptions in 2003. Dr. DeLisle described the practical problem of the practicing outpatient physician: a 73-year-old patient with a three-day history of cough, producing sputum, who is on 13 drugs from six providers for seven diagnoses. She said the drugs, providers and diagnoses were on VA’s problem list in ICD9 codes, but did not help at the point of service.

Outside of inclusion or exclusion from the formulary, all the other restrictions that could help best treat patients were flawed. Ms. Graham clarified that there was no standard for going off formulary. Standards were used for order checks, drug-drug and drug-lab interactions at the point of physician order entry. Drug interactions were based on NDFRT; algorithms were not yet standardized for drug-drug interaction.

Dr. DeLisle said the major failures in pharmacal therapy were determination of whether the drug was needed or efficient and whether a theory was evaluated altogether. Best practice guidelines and the science supported these efforts, but were not accessible at point of service.

VA deployed the logic of evidence-based drug utilization, provided context-sensitive information, mined for the data from EPR, accessed supportive literature through hypertext, and automated actions. Noting it took an average of 5.4 minutes to fill the Amiodarone tool, although the goal was 15-30 seconds with the doctor, Dr. DeLisle pointed out that the alternative of doing everything manually 15-20 minutes. The tool also allowed for feedback.

Dr. DeLisle emphasized that the rules had to be embraceable for the evolution of e-prescription. The goal was reducing wasteful use of medication and the process had to be practical and credible.

VA developed their own drug nomenclature. Dr. DeLisle said VA had begun developing a lexicon for adverse events and drug allergies, but doctors were still entering in free text that could not be used for alert systems. She emphasized that, regardless of the standards put together, the interface with the data elements from the EPR was critical to the good practice of medicine. She expressed concern about whether the authentication standard would allow for distinction between the transmission and transaction standards or use technology as secure as DEA was developing. She noted VA would prefer to have the prescription standard harmonize with HL7.

Discussion

Dr. DeLisle gave an example of how the VA system “geared up.” Learning that a drug company could no longer supply product to their 3,200 patients on Filodapine, VA faced two choices. Rather than switch to the equivalent drug and absorb $1,000,000 a year in costs, VA reviewed four sets of guidelines and extracted key elements, deploying them on a tool and sending them to providers who elicited their patient on that medication and did an evidence-based medication switch. Within 48 hours, 18 percent of the patients originally on Filodapine were on Ladapine.

Asked if doctors liked the tool or turned it off, Dr. DeLisle said “nobody likes to stop at a red light.” Providers had to be convinced that there was a good reason, but they could live with that and took pride in picking up a hypothyroid patient that otherwise they would not have suspected. Asked if there was interchange between the VA’s patient-safety-reporting and drug-ordering systems, Ms. Graham said there was a mechanism that could connect with the electronic record and work with the National Center for Patient Safety. VA was cognizant that overloading providers with alerts desensitized people, but with patient safety VA tried to bring that feedback loop into the system. Awareness was also done through provider education.

Dr. DeLisle noted a project that emerged from the aggregate data through NASA was the issue of anticoagulants in hospital (i.e., mechanical calculation errors resulting in over/under-dose of heparin). VA bought pumps with calculations already pre-inputted and created quick order sets that just name the dose or protocol. Participants clarified that the formulary standards could make the necessary distinction but currently could not allow for automatic prompting of replacement through classifications in NDFRT.

Dr. Cohn thanked Dr. DeLisle for reminding members of the complexities of formulary/ provider interface as well as formulary management, and the possibility of turning that into value added. He noted the Subcommittee would return to management issues of operationalizing formulary restrictions while keeping providers in the loop and utilizing them as assets.

OPEN MICROPHONE

Mr. Rothermich noted the exponential distinction between formulary and benefit: a health plan could have a single benefit; formulary might have hundreds. A health plan had numerous customers; a PBM’s numerous customers were health plans. Formulary answers alone did not indicate tiered benefits; both the formulary and benefit had to be known for a physician to make an informed choice. Flexibility was important in the standard. PBMs tried to enhance their systems to identify uniquely down to the individual group, but it was complicated. Any standard created had to be able to send available information and the software vendor had to be able to know what to do with it. With Medicare, complication was primarily due to the type of eligibility. He said much of this capability existed; whether a standard for provision of benefit information was needed was debatable. He cautioned against creating a standard that precluded availability of information key to decision making on “the other end.”

Any extent the transaction standards supported the provision of formulary was a plus, but Mr. Rothermich envisioned a transaction standard (e.g., NCPDP) with a mechanism for communicating information in a standard way rather than a more problematic standard for formulary. Dr. Cohn agreed that everyone might benefit from the additional functionality formulary offered. Patients benefited from knowing what they were “getting into” before leaving the doctor’s offices and providers wanted to be able to order medications they felt confident the patient could afford. Kevin Hutchinson with SureScripts urged the Committee to understand and appreciate how what they decided about these standards would impact work that had gone on in the industry for years. He recommended focusing on technical standards of the exchange needed to be able to do E-prescribing and workflow standards.

Discussion

Mr. Blair noted that the Committee had never stretched their scope of standardization to workflow. Noting the Medicare legislation prohibited commercial messaging, Mr. Hutchinson pointed out that what determined whether messages that popped up when a physician wrote a prescription were commercials or evidence-based messages would impact workflow and adoption by physicians. Asked to clarify whether the definition of e-prescribing addressed more than pharmaceuticals, Dr. Cohn said the prime focus of the Subcommittee’s work at this point was meeting requirements of MMA specifically related to Part D, drug benefits, not the larger issue of all orderables. Noting the point where all ordering merged, he said the Subcommittee would discuss this as they went forward. Ms. Bickford asked if they would consider with the use case the bigger picture and issues that had to be tended, so this coding structure and thinking might apply to other commodities or resources. Noting FDA’s initiatives focusing on “the human piece,” she encouraged considering hybrid products, with both mechanical and biological coding structure, and plans to accommodate naming and components.

DISCUSSION OF NEXT STEP

Dr. Cohn noted the Subcommittee had to make time to hear from experts about how patient safety could be assisted and encouraged with ambulatory e-prescribing and from CMS, intermediaries, prescription drug plans and Medicare Advantage organizations to ensure their needs were met. Members had to learn where the line was drawn between Medicare benefits (Parts D, B and A) in terms of prescriptions and about IVs at home and home health medications. Dr. Huff advocated getting to one set of drug codes for the standard tied to the drug codes FDA might provide or a combination of RxNorm and/or new product ID’s. Members had to consider: a process for updating the standard that enabled doing enhancements in an orderly, timely way; how to deal with controlled substances that did not work in SCRIPT, possibly using digital signatures; and workable, feasible checking for provider, pharmacy, payers and PBMs.

Mr. Reynolds remarked that the four standards Ms. Trudel identified might serve as guiding principles. Another guiding point was NCVHS’s role. Dr. Teich had emphasized speed, easy usability, and focusing on how people worked together. Mr. Reynolds cautioned that how medical history and other items were defined could dramatically change the workflow process. He proposed focusing on refill requests and sorting out the interplay and benefit between formulary and eligibility. Dr. Steindel said that the problem list for recent procedures might encapsulate the medical history. He noted they also had to consider the physician’s choice, speed issues, and identifiers. Dr. Warren remarked that how long it took and what was involved in writing queries and getting drug history was another issue.

Dr. Fitzmaurice recounted hearing what MMA required and functions clinicians/ pharmacies desired permitted by SCRIPT. He called for a schematic representation of scenarios and functions performable when standards were available. Dr. Fitzmaurice questioned the cost and benefit and if the information should come from PBM, Medicare, health plans or be carried by the patient. He emphasized the key was access to information needed to make decisions and workflow move more smoothly. Having heard about information needed and sources, they had to determine what information needed standard representation and whether it existed or would need a reference terminology. Authenticating the sender and validity of information with e-sigs (especially digital) remained problematic.

Mr. Blair noted the law charged NCVHS to look for standardization in four areas testifiers reported gaps: eligibility, formularies and medication and medical histories. They heard the identifier standards were an issue. He suggested learning whether the HCIdea NCPDP said would still be needed when the NPI was available required recognition or support, determine whether RxNorm in portions of NDFRT and FDA’s code was sufficient to support e-prescribing, look at patient safety, and review the e-prescribing definition, ensuring items (e.g., syringes, insulin pumps) were not left off and that they did not unnecessarily extend or define it so narrowly that it became impractical. Noting Dr. Teich called for protections to prevent the marketing of this information, Dr. Steindel asked whether special considerations had to be given to privacy and confidentiality. Dr. Cohn noted to refer this to the Subcommittee on Privacy and Confidentiality.

Recalling they heard about much successful activity in the private sector with e-prescribing, Dr. Cohn suggested asking those doing demonstration projects and vendors about essential medical information and confidentiality issues. Participants noted the standards created could encourage or discourage adoption and that workflow had to be considered. There could not be so many requirements that physicians “had to wait forever” for a response. He noted legislation did not provide funds for implementation and the standard had to be implementable within a reasonable business model. Ms. Cronin clarified that e-prescribing grants available in 2007 if Congress appropriated funds were only for providers and would not sooth the potential industry burden. Dr. Cohn emphasized making a business case underscoring reasons to implement. Members will invite an expert to discuss patient safety aspects of e-prescribing at the May meeting. Participants will e-mail their notes to Ms. Friedman.

HIPAA UPDATE, Maria Friedman

Ms. Friedman reported the trend continued upward; about 75 percent of the Medicare claims were HIPAA-compliant. The slow-pay policy begins in July. The MPI rule was issued at the end of January 2004. Modifications to the standards and the claims attachment are expected out in late summer or early fall. Plans for the health-plan identifier were “in the works.”

WEDI UPDATE ON HIPAA

• Ed Jones, Chair, WEDI

Mr. Jones set the context for the findings and recommendations from WEDI’s January 2004 hearing in Tampa that explored challenges and successes in implementing the administrative simplification, transaction and code set standards. In November 2002, WEDI’s board noted the likelihood that many covered entities would not be ready to implement the standards or be in compliance by October 2003. WEDI recommended in March 2003 that the Subcommittee, the Secretary and CMS consider a contingency plan; in July CMS announced its plan. The 2003 federal initiatives dictated that WEDI look at the EHR and provider and payer groups at a September 2003 strategic planning meeting emphasized the close correspondence between ability of providers to implement EHR and success of the ASCA transactions (much data collected in the clinical process populates and drives the administrative side). Mr. Jones noted a new initiative called 4C (an acronym for foreseeing) strategically looks three-to-five years out and evaluates what might be done.

Over 50 people provided testimony in January 2004; transcripts are available at the WEDI.org Web site. A committee developed findings and recommendations and sent a letter to the Secretary in March recommending: continuing to allow contingency plans as implementers move towards compliance with the transaction and code sets, focusing on data content and sequencing, revising and enhancing the standards development process to accord with business practices, and validating the cost and benefit of transaction and code set standards.

Mr. Jones conveyed WEDI’s perspective on ROI, noting much attention was given to the national accounts basis of cost and benefit but neither the government nor industry did well conveying to stakeholders on the provider, physician and dental side the calculus and ways to interpret ROI that had to be made in implementing these standards. The WEDI Foundation was focused on implementing these transactions in rural arenas.

WEDI UPDATE ON HIPAA

• Steve Lazarus, Past Chair, WEDI

Mr. Lazarus noted trading partners had to communicate and collaborate to implement the transactions and code sets, share definitions and test. Testifiers had stressed the volume and complexity of multiple testing. He emphasized software vendors’ role in implementing TCS and stressed incorporating them in the process. He advised against one deadline for “every transaction and everyone.” He called for a reliable, predictable process for regulations, pointing out their significant impact on industry timing. He noted: a lack of standard data for the testing process that testifiers said would make the process less complex; lack of coordination between trading partners; Medicare contractors had not completed the transition to a new standard for crossover claims, slowing down a substantial segment of the crossover business.

Mr. Lazarus said full regulation had to be implemented to reap benefits of administrative simplification. Impact of the addenda and ASCA were significant. Interpretation of technical requirements remained an issue. Trading partners had good-faith differences of opinion and lacked a timely process or authority for resolution. Lack of provider participation and end-to-end pilot tests with users in X12 led to concern that content standards were not tested in “the real world.” WEDI tried speeding up changes through regulatory and standards-development processes, but had not gotten parties involved in finding their own solutions. Most system vendors waited for published addenda before delivering upgrades and ran into resource problems; many did not support acknowledgments and other standards that might resolve issues. Adjustment reason codes in the 835 remittance advice transaction did not give reasons for adjustment, blocking savings in administrative simplification. CPT guidelines and instructions for defining codes and their use were not included in the implementation guides. Mr. Lazarus noted issues regarding implementation of trading-partner agreements and the need to standardize use of acknowledgments and reporting of errors. He recommended considering contingency plans on a transaction-by-transaction and staged-by-transaction or transaction-pair basis. Providers were reluctant to file complaints, fearing trading partners might react adversely. Anticipating CMS would ask parties to “work it out” between themselves, many organizations attempted to resolve issues before filing.

Poor communication between covered entities and communication limitations stymied tests and production. Some health plans posted companion guides and testing processes, but offered no contact for resolving problems. Neither the X12 nor CMS FAQ process provided timely resolution to many technical issues. Insufficient provider participation in standards development resulted in incomplete data content and difficulty collecting data. Payers interpreted data requirements in companion documents inconsistently. Testifiers noted the lack of unique identifiers. Mr. Lazarus said realization of the cost benefits of administrative simplification would not be achieved until transactions were fully applied. He cautioned that the cost of implementation exceeded expectations and the industry would not get there in the next year.

WEDI recommended to: continue to allow contingency plans and emphasize moving plans/ clearinghouses into full compliance as providers complete testing and implementation; focus on implementation of non-claim transactions; continue CMS roundtables, SNIP Forum and regional affiliates outreach; do less at a time with realistic time lines for completing required actions; when implementation cannot be accomplished in a reasonable period, subdivide it into components that can be completed separately; phased implementation by entity and transaction; establish standard communication protocols; develop standard test data; a feasibility study to develop national test data; pilot standards prior to issuance of final rule; establish an authoritative technical interpretation of the implementation guides and an authoritative industry forum to answer questions with SMOs developing FAQs utilized by CMS; educate system vendors on needs to adhere to TCS regulations; continued outreach to covered entities to ensure systems vendors and business associates understand their responsibilities.

Recommendations for standards: collectively generate provider outreach and business decision makers participation; determine if changes in the standards process and a more expedient change process are warranted; address data issues with COB; review crossover requirements, determine if the NCPDP standard and version are appropriate; instruct Medicare contractors on populating crossover data in a standard way; address timely data content coding, assignment, assessment and revision issues, dealing with consistent data use and a predictable process for updating/maintaining codes; require standard acknowledgment and error reporting and implement it promptly in a standard way; assess new technologies; implement unique identifiers; schedule and review realistic cost-benefit studies and effectiveness of the implementation; and identify further opportunities for administrative simplification.

AMA/AHA VENDOR COALITION REPORT ON IMPLEMENTATION ISSUES

• Jack Emory, Assistant Director for Federal Affairs and Outreach, American Medical Association

Mr. Emory expressed concerns of the HIPAA Implementation Working Group, a healthcare provider and vendor coalition, that the current haphazard migration process increased transaction cost and risks, disrupting healthcare payments and services. The Working Group recommended a strategy of rational migration and suggested guiding HHS actions regarding implementing administrative simplification by the following principles: payments of claims should not be disrupted during the transition or rejected because they miss data payers do not need to process the claim; standards should impose proportional burdens on payer and provider communities related to data collection; and the standards change process must be made more efficient, effective and fair to providers and vendors. Mr. Emory noted that recent modification of the CMS contingency plan delayed payments for providers that did not submit claims in the HIPAA standard format. However, there was no indication that all CMS carriers and fiscal intermediaries could accept HIPAA-formatted transactions by the July 1, 2004 deadline. He said the modification was unfair, imposing penalties exclusively on providers, and failed to require payers to offer standard electronic remittance advice, eligibility and claim status transactions prior to terminating their contingency plans for claims.

The group urged HHS and CMS to immediately: continue the contingency period; understand the health field’s readiness before considering contingency plan termination; demonstrate leadership in preventing disruption of cash flow by maintaining the Medicare contingency plan and urging other payers to do the same; make clear to commercial payers that modification of the CMS contingency plan underscored the need for staged implementation and significant advanced notification of trading partners prior to implementation of any change in HIPAA contingency practices; issue guidance that payers not end use of contingency plans until conducting HIPAA-standard electronic remittance advice, eligibility and claim status transactions; coordinate development and implementation of a rational system-wide migration plan; adopt a practical implementation specification in two phases; adopt further modifications to the implementation specifications, including changes approved through the DSMO process; sequence implementation of the HIPAA standards; phase in compliance by covered entities based upon their role in the system; build advanced implementation efforts on initial success, with enforcement focused on achieving a base level of system-wide compliance upon which standardization is built over time; establish or identify a way to resolve differences in interpretation of standards and implementation specifications to achieve uniformity and administrative simplification; increase provider and vendor access to the modification process; support and lead a rigorous analysis of the standards-change process, identifying and correcting imbalances in the sector representation.

AMA/AHA VENDOR COALITION REPORT ON IMPLEMENTATION ISSUES

• Gary Cavanaugh. Director, Business Standards and Systems Operations Group, Center for Medicare and Medicaid Services .

Mr. Cavanaugh noted it was five-and-a-half months beyond the deadline for implementing these transactions across the entire industry. He said CMS worked closely with payers, providers, submitters and clearinghouses to ensure implementation was as smooth as possible and tried to be considerate of cash-flow and other issues. He said the contingency plan modification was a measured step toward compliance that encouraged the industry to implement the claim standard for incoming claims, and a first step toward compliance of all the transactions and ending the contingency. Without a deadline or other incentive “pushing” everyone toward completion, he contended compliance would not happen.

Remarking that he kept hearing that day that Medicare contractors were not ready, he recalled that the WEDI testimony indicated people would not bring these issues forward. CMS was aware of issues with other transactions, but not with the remittance-advice transactions. In their view, contractors were ready to accept claims transactions, actively testing, and able to accommodate the testing with clearinghouses, providers and vendors. If there were issues, CMS wanted to correct them. But Mr. Cavanaugh emphasized that, first, they had to be told.

Mr. Cavanaugh reported that about 82 percent of intermediary claims and 68 percent of carrier claims coming into Medicare were in HIPAA format. One of the most difficult dilemmas CMS dealt with was passing data to the COB. Between 60-70 percent of Medicare claims cross over and COB were sent electronically to partners that insisted that they receive a compliant transaction. Starting July, Medicare will edit for data Medicare does not use and send a compliant transaction for COB. Noting CMS had enforcement, regulatory and implementation components, Mr. Cavanaugh agreed as an implementer that the change process had to be improved and an authoritative source was needed for answering questions. He emphasized that the principal issue was determining who was to resolve these issues. Mr. Cavanaugh said the law was not set up for the government to resolve all these issues and, personally, he felt the industry had to take a bigger role. Otherwise, people might not like the answers.

DSMO ANNUAL REPORT, FRANK POKORNY

• 2003 Chair, DSMO Steering Committee

Dr. Cohn noted he was on the WEDI Board and would recuse himself from conversations about their recommendations. Mr. Pokorny highlighted material in the DSMO Annual Report, noting 2003 was a year of revisiting past issues and new requests. Overall, the healthcare community continued to request changes in the HIPAA standards. Mr. Pokorny said a drop in the average monthly volume of change requests from 14.3 to 11.3 could indicate maturing of the DSMO process or that the healthcare community was consumed with the HIPAA implementation process. He emphasized that change-request protocol remained responsive to serving the community’s needs, noting the HIPAA-DSMO Web site ( www.hipaa-dsmo.org ) requires a more robust change request submission and requests no longer must proceed in lock step.

The DSMO continues to work with CMS on ways to facilitate implementation of existing HIPAA standards and arriving at processes to expedite changes arising from regulatory requirements (e.g., addressing the disconnect between the 60-day public-comment period and timing for the notice of proposed rule making (NPRM) process and the standard development organizations’ SDO balloting periods; melding how the pace of healthcare industry changes often outpaces regulatory requirements). Ongoing DSMO Steering Committee discussions with CMS on these issues began at the June 2003 X12 meeting.

The steering committee was aware that instructions in some Version 4050 implementation guides, expected to serve as a foundation for the next generation of HIPAA ASCA transactions, were in conflict with decisions made in the DSMO process. Mr. Pokorny expressed confidence that discrepancies would be resolved by each DSMO acting individually and the DSMO Steering Committee collectively in accordance with principles and protocols agreed upon by the MOU in accordance with the objective of HIPAA.

The steering committee expressed appreciation to Washington Publishing Company for continuing to support the HIPAA-DSMO Web site and change request system and to individuals and organizations that constitute the SDOs and data-content committees.

DSMO ANNUAL REPORT

• Gary Beatty, 2004 Chair, DSMO Steering Committee

Mr. Beatty explained the DSMO was looking in 2004 at process improvement from both short- and long-term perspectives as they pursued an ongoing modification process moving from one version to the next implementation guide. Short-term, the DSMO looked at emergency situations and issues within the specifications causing significant barriers towards implementation. They were defining emergencies, criteria to measure, and a process to address them. Each DSMO worked on its internal processes to determine a mechanism to timely meet industry needs. Noting HHS aimed to publish a new regulation in 2004, he said the DSMOs hoped to finish as soon as possible. Long-term, DSMOs looked at how to manage ongoing version control and a time frame for the next version. The biggest challenge was alleviating some emergencies without being bound by a two-to-three-plus-year regulatory process.

Discussion

Dr. Cohn observed that an issue for 2004 was improving the HIPAA process and the question about improving the current version of the HIPAA standards or moving to the next generation was in everyone’s mind. He was pleased to hear that the DSMO suggestion for a more rapid improvement process would likely show up in new regulations. Mr. Beatty said in defining the regulation process they would gain an idea of what could be addressed in a short-term expeditious process and what had come through the longer turnaround time of the modifications process. In developing a proposed regulation to deal with emergencies and regulatory requirements, Mr. Pokorny urged CMS to consider that SDOs had a structured process for changes while content committees did not have that American National Standard Institute’s (ANSI) accreditation structure and could be more responsive to emergencies and requests.

Observing that they were talking about an enormous set of healthcare relationships, Mr. Jones said many problems were due to that complexity. He said neither the government nor industry had conveyed to covered entities or vendors the benefits. Noting he had accumulated over 100 case studies with rapid ROI among practice-management groups and hospital environments; he said that same education had to be done on the administrative side. Despite the angst, everyone said the testifier and trading partner were making progress. He proposed a common set of test data with positives and negatives as a common denominator in testing.

Mr. Lazarus recalled hearing at WEDI’s January hearing that the covered entity was responsible for accomplishing this process. He noted Tampa General Hospital’s testimony about taking another approach to get TCS implemented when working with their vendors and clearinghouses did not accomplish the business case. Noting the process’s complexity and that most people viewed it from their own perspective, he stressed understanding how this affected everyone in order to find middle ground. He recalled they heard that CMS, WEDI and others were working out how to deal with the recommendations, rather than count on the government to do it all or assuming it would happen without anyone taking the lead. He cautioned about the perception that the submitter count was important, contending that how many initiators implemented was most relevant.

Mr. Cavanaugh emphasized bringing the provider perspective into the development of standards. Most submitters not yet compliant were two-, three- or four-person practices trying to cope with the transaction standard’s myriad of requirements. He urged testing and ensuring standards work before requiring them. He expressed concern about constant change and revisions in submitting data to payers; ROI required quid pro quo. Mr. Beatty advised finding ways to engage providers and leverage their knowledge, so standards met business needs. He noted the number of change requests approved increased, but appeals had doubled. Mr. Schuping noted WEDI developed 26 regional affiliates and other associations also had regional entities that could be used as a conduit to get information and education out and gain input.

Remarking that practitioners did not like change, Mr. Pokorny suggested promoting confidence about the intent for stable standards and ROI. He noted that 88-92 percent of dental practices were single practitioners doing eight-to-10 transactions a day and unlikely to invest in the apparatus for EDI types of transactions when major dental insurers had gateways. He agreed that the “real hits” would come on eligibility and remittance. Dr. Greenberg described a venture to create an organization that represents the interests and needs of most people in public health that did not have the time, technical knowledge or experience to participate in the standards processes, educating them in the process and gaining their input.

Mr. Jones reported about 120 ROI studies on the clinical side, noting an enormous amount of innovation on the clinical side was driven by encouraging non-administrative procedure act initiatives. With eligibility and remittance standards, he reported small companies were developing and marketing integrated types of systems that he predicted would have enormous impact over the next several years. Noting WEDI’s 4C initiative looked at the minimum data set needed to adjudicate claims or handle other transactions, Mr. Jones emphasized that all parties would have to realize an epiphany about what was needed to conduct business, distinguishing that from competitive aspects. The two-year process focusing on administrative aspects would provide a venue to pull stakeholders together and focus on narrowing that set. Mr. Beatty said X12 established the Convergence Outreach Task Group for outreach to all industries.

Mr. Cavanaugh noted the testimony cautioned CMS and payers some ways from compliance not to prematurely cut off contingency plans. Ms. Trudel said CMS’ establishing the contingency and providing ample warning of the modification demonstrated their commitment to carefully and thoughtfully addressing completion of the contingency. She emphasized that, without deadline, the last percentage of submitters will not make the change.

Mr. Reynolds said most the Blue plans achieved between 20-75 percent readiness. He noted it was ramping fast. BC/BSNC had 76,000 837s in October; expected 500,000 in March against a goal of 1,700,000. Twelve of BC/BSNC’s top 23 submitters were in production; 11 were tested. Only seven providers who signed up for any of the 27 transactions had started testing. He emphasized that this was not negative: the focus was on the 837 and cash flow. BC/BSNC had 92 percent of its hospital claims automated in 79. Industry was consolidating.

Mr. Beatty noted people had contingency plans beyond claims. Many eligibility transactions were done on the phone. The contingency plan was why they were not doing eligibility, referrals and precerts. A predictable managed process was needed to move forward within the industry.

Mr. Lazarus noted two barriers to implementing the eligibility transactions. Batch processing used for other transactions did not work well: real-time transactions were needed. Payers had the option of providing yes/no responses instead of the full-blown eligibility detail, necessitating phone calls to determine eligibility. Along with the move toward practice management systems, he noted a shift to a real-time database process.

Mr. Pokorny pointed out that the healthcare business model that HIPAA was created in had changed. People were getting involved in their healthcare decisions and determining their eligibility. He urged the Subcommittee to be cognizant of issues with interactive transactions and testimony about the dentist and small practitioner in considering other transactions. Mr. Jones emphasized enormous consolidation in the third-party administrator market and most the claim status inquiry. Most big PPAs had developed Web sites and it was cost effective even for small practitioners to go on the Web for a few transactions. Having to adopt potentially volume technologies that did not reflect a provider’s business would be difficult.

Dr. Fitzmaurice expressed concern about disconnect: noting Mr. Emory implied some Medicare carriers and intermediaries might not be able to accept HIPAA-formatted transactions by the July deadline while no one had complained to Mr. Beatty and this was news to him. Dr. Fitzmaurice questioned whether provider views were addressed in the right place and if the Medicare program had a proper place for discussing implementation problems.

Mr. Jones proposed anticipating the technology at the end of the decade and how to use the existing model to gain real-time benefits. He emphasized working in tandem to pare down the content issue and create a standard. Observing that banks had payment clearinghouses, remittance-advice capacities, and were in the healthcare business “big time,” he said, “a lot of change were coming.”

Mr. Beatty noted not all providers sought to move to an interactive eligibility. There were initiatives to use these transactions, based upon current syntax and structure, in batch and interactive environments. Dr. Cohn said NCVHS would welcome more thinking from the DSMOs about an integrated activity. He suggested outreach include conversations about technology supporting healthcare and how to move the industry along on these other transactions

Elaine Gilfoy noted the regulation stated a health plan may not reject a standard transaction on the basis that it contains data elements not needed or used by the plan. She recounted how a valid request she submitted on March 3 finally was approved through the appeal process nearly a year later; there still was no date for when this change would effected. Ms. Gilfoy emphasized that this illustrated what users were up against, and why they did not use this process. Mr. Beatty said a reason DSMOs addressed the short- and long-term process was that, regardless of whether or not it was approved, they were bound by the two-to-three year regulatory process. The DSMOs worked closely with HHS to find ways to address these issues.

Ms. Gilfoy noted that only half the institutional 837 data and a third of the 835 data were collected. PMS software collected 74 percent of the 837; 51 percent of the 835. Most vendors collected more information with other transactions than with the claims and the remittance advices. The “boxes were not there” to hold the data. Dr. Cohn recalled this concern caused NCVHS to request the DSMO fast-track process identifying unnecessary data elements. Acknowledging they might have to look for unnecessary things, he noted much data that “filled out” the standard came through other systems. There was a commonality of views and intent to solve more vexing problems. CMS already had the WEDI information and DSMO recommendations. Much of the focus in 2004 will be on improving and streamlining the process, making things more responsive. Mr. Jones suggested inviting comment on a similar finding and recommendation categories and holding a hearing in January 2005.

FOLLOWUP ON DSMO REQUEST ON TRANSACTION STANDARDS FOR BILLING FOR SUPPLIES

• Lynne Gilbertson, Director of Standards Development, National Council for Prescription Drug Plans; DSMO

Ms. Gilbertson explained the request that NCPDP be designated as HIPAA-compliant standards for the billing and authorization of supplies billed by a dispensing retail pharmacy, noting it also requested that the NDC be designated, when available. When not, the HRI, UPC or HIKPIX could be used where non-specific codes would not lead to potential problems. Use of NCPDP was the predominant method used to bill for supplies in the retail pharmacy’s context and offers online, real-time DUR. Benefit, copayment and other processes are in place, especially when drug and supply were together, supporting claims processing and prior authorizations for claims for supplies and drugs in one transaction, a common practice. Modification would cause cost disruption and delays converting to a new standard that did not purport different functionality. Mandating only the 837 for billing these supplies would interrupt the current supply chain for many patients with chronic diseases; implementing separate transactions for drug and supply would disrupt both the patient and billing cycle. Denying use of NDC for supplies would cut off items that still had NDCs; not supporting use of HRI, might cut off use of supplies that moved from NDCs to HRIs. NDC, UPC and HRI were important for product recalls. Ms. Gilbertson noted NCPDP were developed with pharmacy industry consensus; the code sets named did not reflect current industry practice, improve efficiency or promote standardization for supplies.

FOLLOWUP ON DSMO REQUEST ON TRANSACTION STANDARDS FOR BILLING FOR SUPPLIES

• Tom Wilder, America’s Health Insurance Plans

Noting they did not have to wait for the NPRM to make a recommendation, Mr. Wilder urged the Subcommittee to recommend the change request so HHS could get the process moving. He clarified that America’s Health Insurance Plans (AHIP) was not asking to remove the 837 or use this transaction for services, and emphasized this was a real-time transaction that benefited payers, providers and patients, and it was critical that Medicare continue to use current systems. A system successfully processing fourteen million pharmacy claims for supplies each year by the NCPDP standards, representing some $447 million in claims, should not have to go to something that would not work for everyone.

Discussion

Ms. Pickett and Ms. Gilbertson were amassing information for the May Subcommittee meeting about the updating process and overlap of codes. Dr. Cohn noted there were two separate issues: the standard and the code sets. Specific information had not been brought forward about the code sets requested as HIPAA medical code sets. Ms. Kuhn from the National Community Pharmacists Association (NCPA) agreed with Ms. Gilbertson’s recommendation. NCPA preferred to continue to bill for supplies as they did currently. A limited supply intrinsically related to a prescription drug could be billed using NCPDP 5.1. Mr. Blair noted the need for flexibility to use whatever standard or code set enabled payment. Dr. Cohn and Mr. Blair called for a clear definition and the flexibility needed in the marketplace to use both claims standards. Ms. Kuhn noted it “boiled down” to the payer and what was paid under the pharmacy versus medical benefit.

Bill Alfond with BCBSA expressed two concerns: disputes-resolution concerns (e.g., multiple standards) and that currently most medical systems do not adjudicate or process claims billed to medical systems either on an 837 or NSF under a contingency plan. Dr. Cohn remarked on the need to draw a line between an NCPDP and 837 transaction. Ms. Gilbertson said this was common practice. Karen Eckert from Medispan agreed with separating questions of which standards and code-set to use, but cautioned about letting the code-set discussion lag. Dr. Cohn said the code-set would be discussed in May, once they had the information. Ms. Gilbertson explained the intent was to provide a definition CMS could use in the NPRM, showing there could be industry consensus on defining the standard to use. Dr. Cohn suggested CMS might go forward with this definition, elicit industry comment: NCPDP could be used for whatever fell into this definition. Ms. Gilfoy urged NCVHS to define the submitter and type of submission. Ms. Gilbertson said a WEDI work group was focused on that issue. Ms. Gilfoy noted this problem effected retail pharmacies and anyone billing for medical supplies. Dr. Cohn said the letter would be held until discussion of the code set. If there was agreement in May, the Subcommittee would prepare a draft letter with similar language about uses of NCPDP for billing supplies. Hopefully, appropriate individuals from CMS could provide input that eased concerns relating to the code sets. Ms. Friedman and Dr. Cohn will prepare a draft of a public letter for review.

SUBCOMMITTEE DISCUSSION

Members discussed next steps, noting the work to be done at the May 25-26 Subcommittee meeting related to e-prescribing including a session concerning ambulatory e-prescribing and patient safety. The letter about pharmacy-supply had to revisited and finalized; additional testifiers might be needed. Members also had to consider tracking industry implementation of the 837 and assisting the industry move forward with other transactions. Mr. Reynolds noted the extent of misconception and turmoil in the industry. Mr. Schuping said WEDI appointed a task group to define compliance and would soon have a definition for the Subcommittee. WEDI also collaborated with AFFECT on a vendor forum in June focused on resolving issues with claim attachments. He emphasized that the industry could move forward to find consensus on some of these issues. CMS would take action on others. Members noted the DSMOs also had been asked to think about and share outreach activities.

Dr. Cohn pointed out that the full Committee could not act until June on whatever the Subcommittee came up with concerning WEDI’s recommendations with time parameters. Noting that all WEDI’s recommendations were good, he welcomed identifying the time-definite critical few that would help everyone through the 837 implementation. CMS heard the issues and needed a time to come forward with recommendations for increased responsiveness and reacting to certain industry needs. DSMOs and others in the industry could be invited to convey in May their outreach and ideas about making this process work faster. And the industry would be encouraged to continue fixing itself. Other next steps included the NCPDP and ongoing discussion about HIPAA implementation. Emphasizing that e-prescribing was “a big part of their plates,” Dr. Cohn adjourned the meeting.

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I hereby certify that, to the best of my knowledge, the foregoing summary of minutes is accurate and complete.

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Chairman Date