Statement To




January 24, 2007

Presented By: Patrice Kuppe

Director Administrative Simplification – Allina Health System

WEDI Board Member

Chairmen and members of the sub-committee, I am Patrice Kuppe, Director Administrative Simplification – Allina Health System (a large provider), and serve on the WEDI Board of Directors. My responsibility for Allina is to implement HIPAA regulations and other process improvement for our clinics, hospitals, pharmacies, labs and other allied health organizations to achieve administrative savings.

I would like to thank you for the opportunity to present testimony on behalf of WEDI concerning findings from our industry wide National Provider ID (NPI) Readiness Assessment survey conducted in October, and to present recommendations for NPI contingency.

On two previous occasions, WEDI has made advisements on what needs to occur so that the industry can meet the compliance deadline without impacting the health care industry including, patients, providers, and health plans.

I am glad to say that we have seen an increase in the number of individual and organization providers that have obtained NPIs, but I am also sorry to say that the industry will still not be ready to meet the May 23, 2007 deadline. Even though many providers have their NPI, they are still in the process of communicating these to the health plans, or waiting for their billing system vendors, clearinghouses, and/or health plans to indicate they are ready to begin testing with NPI.

WEDI’s recent discussions with over 200 healthcare industry experts, indicates that the industry is still in the very early stages of implementation. The lack of a published NPI Dissemination Notice and procedures, and the inability to access information in NPPES, has severely slowed the industry’s progress.

The industry as a whole has also underestimated the complexity and level of work required to implement this national standard. We are undoing years of identifier assignment that are built around provider and health plan contracts, or around system programming logic. We are changing and sometimes increasing the burden on provider enrollment, as is the case for Medicare which now requires the actual NPPES Notice to be attached to enrollment forms.

We presented our May survey findings at your last meeting, and now would like to share survey results from our NPI readiness survey conducted in October 2006. The survey results indicate that the health care industry is not currently positioned to meet the May 23, 2007 compliance date. It is important to note that these statistics are coming from some of the most informed providers, vendors, clearinghouses, and payers in the nation. We believe if these organizations are behind in their plans, then the rest of the industry may be even further behind. I would like to also explain that since we did not perform this as a blind survey, we may have some organizations answering that they will be ready, even when they are not going to be.

Some of the important findings of our survey:

• Only 50% of providers have their Type 1 NPIs (individual), and only 39% have their Type 2 NPIs (organization).

• Over 50% of provider respondents indicated they will not be ready to use NPI on claims and remittances until after April 1, 2007.

• 65% of the payers will not be ready to use NPI on claims and remittances until after April 2007. Testing is important in order to validate that providers will be paid the same on the NPI as they are on legacy today.

• As of October 31st, 75% of billing system vendors are not ready for the NPI, which means providers do not have the software available to start the testing and implementation process.

• Approximately 20% of clearinghouses will not be ready to process with NPI by March 31, 2007. In addition, 59% of clearinghouses indicated they will need anywhere from 6 months to 20 months for trading partner migration activities.

It is important to note that these findings are about just two transactions; the claim and remittance advice. What we don’t know is what the impact will be if we have to stop using these due to non-compliance. There are many health care organizations that have implemented other HIPAA transactions such as eligibility, and claim status and these transactions are just as important to administrative data flow as the claim. If we have to turn these off, we will lose all the savings we may have gained from their implementation.

A common issue affecting both providers and health plans is the lack of the data dissemination system. Without an easy look-up tool, providers who are ready with their own NPIs are still at risk that they will not be able to create a compliant claim. This is because many providers do not have an understanding about how, and to whom, they should share an NPI. Without an online lookup as we had for UPINs, providers are not able to share NPIs in an effective manner.

Example: A hospital receives a call from a clinic referring a patient for lab work. The hospital’s scheduler informs the clinic that they need the referring provider’s NPI. The clinic does not know what the hospital is asking for. In past processes, the hospital would ask for UPIN. If unknown, the hospital would look it up on the UPIN website. Under this scenario, a claim can not be submitted without the referring provider’s NPI.

Labs and pharmacies are facing a similar problem, but are even more removed since the patient and/or provider are not part of the business flow at all.

Example: A pharmacy is required to submit the NPI of a prescriber. However, without a formal business relationship with prescribers, providers are unaware of the pharmacy need for NPIs, and pharmacies are having difficulties obtaining NPIs from physician offices.

The absence of a data dissemination system consumes valuable resources in NPI implementation. Providers and health plans have had to focus their efforts on collection of NPIs among each other since there is no dissemination system available.

One of the recommendations put forth by WEDI in a letter to HHS, based on information gathered at an NPI hearing sponsored by WEDI in April 2006, stated that we needed to have CMS issue the NPI Dissemination Notice and have in operation a dissemination system by June 15, 2006. This date was agreed upon by the participants in the hearing as to the latest date dissemination should be made available so as to not impact the successful implementation of NPI. As of today, we still do not have a dissemination notice. We believe that this delay has caused us to change the recommendation we brought forward to you last time. That recommendation stated that we needed a contingency period of 6 months from the deadline, where transactions would be required, to have the NPI but could continue with the legacy ID (dual use).

Wedi recommends that HHS should establish a contingency plan to allow the use of legacy identifiers, in addition to the NPI, for 12 months after the industry has access to NPPES data.

We thought long and hard about how much time the industry might need, and we based this on studies that we conducted back in 2004 when the industry put together an outline on what steps needed to happen for a successful implementation. We still believe this new deadline will be a challenge since it is 12 months shorter than what we believed was necessary in 2004. We believe 12 months is the minimum to avoid payment disruptions. 
The contingency is necessary because we have major milestones left to implement:

  • The industry needs access to NPPES data, and have a clear understanding of the process and policy for dissemination:
    1. 15-30 days to read and understand policy
    2. 5-30 days to communicate the rules to all affected business areas
  • The industry must be able to access and use the data from NPPES:
    1. 60-90 days to download large files and to create cross walks
    2. 1-30 days to train front end process personnel on how to access
    3. 90 – 180 days to test internally, and to test and implement with trading partners (testing includes all transactions, EDI and web/IVR methods, and includes testing for technical and revenue compliance).
  • Extensive time is required for end-to-end testing between business partners. Up to twelve (12) months will be required for second tier connection testing (e.g. Clearinghouses must test and implement with all health plans – testing includes technical compliance and routing to appropriate trading partners.) There is some overlap to trading partner testing identified above, but the number of entities involved in this phase is significant and will require additional time.
  • Finally, A significant number of health plans, clearinghouses and large providers will not have adequate time to complete their NPI crosswalk population and validation along with testing their claims adjudication and remittance systems by May 23, 2007. This is due in principle that the NPI implementation process involves a ‘trickle-down’ effect, resulting in a significant number of activities being done in a compressed time period. As an industry, the following key activities are all behind schedule and must be completed before adequate trading partner testing between providers and payers can be accomplished:
    1. Providers must acquire their NPI through the enumeration process
    2. Vendors must deliver a fully functional NPI solution to their healthcare clients
    3. Data dissemination procedures must be available to healthcare organizations
    4. Implementation of the new paper claims forms which accommodate NPI requirements must be done in conjunction with electronic claims processing capabilities.

In conclusion, WEDI acknowledges that there are many details and questions that will need to be addressed as part of this recommendation. However, WEDI is willing and able to leverage its knowledge, industry expertise and resources to work in partnership with CMS to address the challenges, and to insure a smooth transition to NPI for the industry.

Thank you for your thoughtful consideration of these comments.