[This Transcript is Unedited]
Department of Health and Human Services
National Committee on Vital and Health Statistics
Subcommittee on Standards and Security
April 6, 2005
Hubert H. Humphrey Building
200 Independence Avenue, SW
Washington, DC 20201
CASET Associates, Ltd.
10201 Lee Highway, suite 160
Fairfax, Virginia 22030
TABLE OF CONTENTS
- Call to Order, Welcome and Introductions – Simon Cohn
- CMS Update – Tony Trenkle
- HIPAA ROI: Panel 1
- HIPAA ROI: Panel 2
- Subcommittee Discussion on Secondary Use of Clinical Care Data – Stan Huff
- NPI Implementation
- Subcommittee Discussion – Jeff Blair
P R O C E E D I N G S [9:06 a.m.]
DR. COHN: Okay, good morning, I want to call this meeting to order, this is
a one day meeting of the Subcommittee on Standards and Security of the National
Committee on Vital and Health Statistics. The national committee is the main
public advisory committee to the U.S. Department of Health and Human Services
on national health information policy. I’m Simon Cohn, I’m the associate
executive director for health information policy for Kaiser Permanente and
chair of the committee, I’ll be helping Jeff and Harry, Harry are you on the
MR. REYNOLDS: Yes, sir.
DR. COHN: Okay, good, in terms of helping to facilitate the meeting today.
I obviously want to welcome fellow committee members, HHS staff and others here
in person, and also welcome those listening in on the internet and of course as
always want to remind everyone to speak clearly and into the microphone.
Now I just want to take a moment even though we’ll be hearing from him in
just a second but just to welcome Tony Trenkle who’s the new director of the
Office of HIPAA Standards so welcome and happy to have you join us. As I
understand I know you came from Social Security but you actually had a very
long involvement at least as I understand in e-government and e-commerce and we
obviously look forward to using those applications as you move more into health
care, so welcome and we’ll look forward to hearing from you in a couple of
Now for those on the national committee I would ask if you have any
conflicts of interest related to any of the issues coming before us today,
would you so please publicly indicate during your introductions, and with that
let’s have introductions around the room. Stan?
DR. HUFF: I’m Stan Huff, I’m with Intermountain Health Care and the
University of Utah in Salt Lake City, a member of the committee and member of
DR. FITZMAURICE: Michael Fitzmaurice, Agency for Healthcare Research and
Quality, liaison to the national committee and staff to the subcommittee.
MR. TRENKLE: Tony Trenkle, director, Office of HIPAA Standards.
MR. SMITH: Joseph Smith, vice president and chief information officer for
Arkansas Blue Cross and Blue Shield.
MR. TENNANT: Robert Tennant, senior policy advisor for the Medical Group
MS. NARCISSI: Jean Narcissi, director of electronic medical systems at the
American Medical Association.
MS. PICKETT: Donna Pickett, National Center for Health Statistics, Centers
for Disease Control and Prevention and staff to the subcommittee.
MS. GREENBERG: Marjorie Greenberg, National Center for Health Statistics,
CDC, and executive secretary to the committee.
DR. WARREN: Judy Warren, University of Kansas School of Nursing, member of
the committee and member of the subcommittee, and I’m not aware of any
conflicts I have today.
MS. FRIEDMAN: Maria Friedman, CMS, lead staff to the subcommittee.
MR. BLAIR: Jeff Blair, Medical Records Institute, and co-chair of the
Subcommittee on Standards and Security.
DR. COHN: And Harry Reynolds?
MR. REYNOLDS: Harry Reynolds, Blue Cross Blue Shield of North Carolina,
co-chair of the committee, and although the Blue Cross Association is
testifying today I am not aware and have not seen any of that testimony so I
don’t feel I have any conflicts today.
DR. COHN: And we’re obviously glad you can join, you’re sounding better on
MR. REYNOLDS: It’s good to sit up, Simon.
MS. GREENBERG: The sniffling executive secretary here, I don’t think that
is really the factor, whether or not Harry is aware of or has seen the
testimony, I think —
MR. REYNOLDS: Well, help me with that, Marjorie.
DR. COHN: Marjorie you need to get closer to the microphone.
MS. GREENBERG: But I think as long as the matters discussed are general and
not particular or specific to Blue Cross Blue Shield is not a problem but any,
I think any specific position that’s taken by Blue Cross Blue Shield Harry
should recuse himself from discussion or voting and I don’t think we’re at a
MS. SQUIRE: Marietta Squire, I’m with CDC and NCHS and I’m staff to the
MR. ALFANO: Bill Alfano, I’m policy consultant with Blue Cross and Blue
MS. CHRISTENSON: Susan Christenson with AHRQ.
MR. ARGUS: George Argus, American Hospital Association.
MR. SPIDEL(?): Paul Spidel, American Medical Association.
MR. POLLARD: Michael Pollard, Medco Health Solutions.
DR. ZUBELDIA: Kepa Zubeldia, Claredi.
MS. FRANK: Sheila Frank, Delta Dental Plans Association.
MR. WHICKER: Jim Whicker, representing WEDI with Intermountain Health Care.
MR. MCLAUGHLIN: Mark McLaughlin, McKesson.
MR. SHUPING: Jim Shuping, chief staff executive with WEDI.
MR. ZIRAKOWSKI(?): Art Zirakowski, Center for Devices, FDA.
MS. ZIGMAN-LUKE: Marilyn Zigman-Luke, America’s Health Insurance Plans.
DR. COHN: Okay, well good morning everyone and this is Simon Cohn, I have
no conflicts of interest either, Marjorie I was going to turn it over to Jeff
and Harry but if you’d like to make a comment.
MS. GREENBERG: Okay, I just wondered if we could have a moment of silence in
memory of Elliott Stone who was a great friend of all of ours, to the
Committee, to WEDI, to Standards and Security, small and large, and he died
tragically much too young on Monday night. We’ll miss him terribly.
DR. COHN: Let’s just take a moment to pause that.
[Moment of silence.]
DR. COHN: Thank you, Marjorie. Jeff, I’m going to hand it over to you and
Harry to review the agenda and then we can get started.
MR. BLAIR: Thank you, Simon. Harry Reynolds and I co-chair the Subcommittee
on Standards and Security and we sat down to kind of craft the agenda for today
at our last meeting when we were at the airport and there’s three themes to
this particular day. One is for us to get some feedback from the industry on
their experience with implementing the HIPAA standards, especially the
financial administrative transaction standards, and it was couched in terms of
return on investment, it would really be nice if anybody is able to wind up
indicating anything specific or definitive in terms of return on investment.
However, we’re not expecting the discussion to be limited to only something
quantitative or financial in terms of return on investment, there might be
other experiences that will be helpful for the subcommittee and the full
committee to know as we begin to look at implementing e-prescribing and other
standards in the future. So that’s one theme.
A second theme is going to be the beginning of a major new exploration which
will build upon one of the visions that the subcommittee set forth back in the
year 2000 when we started to look first at clinical data, at that time we did
it under the terminology from the HIPAA law which referred to it as patient
medical record information and in the Patient Medical Record Information Report
of August 2000 that vision indicated that we’re looking for the day when
clinical information, patient care information, could be captured once at the
point of care with derivatives of that information being available for clinical
research and reimbursement and public health. And Stan Huff is going to be
leading the discussion for us to explore how we could begin to do that in terms
of using the derivatives of clinically specific data captured at the point of
care, so that’s the second theme of our meeting today.
The third is that we’re going to have, well we’re going to be hearing on the
national patient identifier and the fourth kind of is a bonus and extra and
actually I’m going to leave that to Maria to introduce a new major figure
within the federal government that will be giving us guidance and leading us in
terms of HIPAA standards and clinical data.
So now that I’ve kind of given you an overview of what our day will be like
I’m going to turn it over to Maria and Karen for the first panel. Maybe before
I do that, Harry, did you have any other comments or words with respect to our
agenda for today?
MR. REYNOLDS: No, I agree totally with what you said, Jeff, I guess I would,
since it will be hard to jump in through the phone I guess there’s three things
that I would really like to hear especially as it relates to ROIs is how can
everyone improve the ROI across all participants, what are the arenas to assure
cooperation and consensus based on whatever testimony comes out today, and what
are the learnings that we need to carry forward as new HIPAA standards are set
based on the ROI that has come out of the first bit of information. And then
I’ll comment on NPI and the other and having been in the hospital for ten days
your subject, since the hospital that I was in had an electronic medical record
it’s very near and dear to my heart now so I will be much more supportive of
your discussion today.
MS. GREENBERG: Harry, was it a requirement when you became co-chair that you
make a site visit?
MR. REYNOLDS: Yeah, and as usual I stayed longer then my welcome probably.
MS. GREENBERG: We’re glad to hear your voice.
MR. REYNOLDS: It’s good to be back, thank you.
MR. BLAIR: One last comment that I might say, most of the folks in the room
already know that you got a blind guy here —
PARTICIPANT: We don’t blindside you.
MR. BLAIR: Exactly. Simon, who is now chair of NCVHS has been kind enough to
offer to assist me so as we go forward and people do have questions Simon will
wind up identifying you and helping from that standpoint. But let me turn it
over to Maria so that you can introduce Tony —
MS. FRIEDMAN: Thank you, Jeff, I think Tony has been introduced but I would
like to welcome him again, not only because he’s my boss but also because he’s
going to be an integral part of the work that we do here and I also like to
think that the work that we’ve done here with NCVHS has created a new role for
our office which I think Tony is going to talk about a little bit and also Jeff
and Harry, Karen is not here this morning, she’ll be joining us this afternoon,
she had some unavoidable conflict so just for you to know. So anyway, I would
like to turn it over to Tony Trenkle.
MR. TRENKLE: Thank you, Maria, good morning. I just want to make a couple
introductory remarks before I give you an update on some of the areas we’ve
been involved with that we want to keep you current on. First of all I echo
what Maria said about the committee, I’ve been very impressed, I’ve only been
at CMS two weeks now so I’m still getting my feet wet so I beg your indulgence
in terms of questions and things of that sort. But what I wanted to say is I’ve
been very impressed with the amount of work, the thoughtful discussions, and
the insights that you provided in a number of areas, most recently in the
e-prescribe area. I came here from the Social Security Administration and one
of the areas we’ve worked with over the years has been the area of electronic
signature so I was very interested in reading the comments that you wrote and I
thought you really captured some of the key concerns, issues, and your
recommendations I felt were right on target so I appreciate that and look
forward to a dialogue with you.
And as Maria mentioned we’re expanding our role but what I want to say is
while we’re expanding our role to deal with standards and services we’re not
going to abandon the area that we’re in, this is an expansion of what we’re
doing and as Maria has said we think it complements and expands but also
strengthens the areas that we’ve been working in before. So I look forward to
working with you, look forward to dialoguing with you, and I also look forward
to continuing to have staff support for your activities. I know that Maria and
Karen and others have provided a lot of support and I think this is also a two
way street, I think we need to provide you with the support in order that you
can help provide us with the recommendations and the insights that we need in
this complex and diverse area.
I want to spend a couple moment just bringing you up to speed on a few areas
that you’re familiar with, one is the HIPAA regulations, our claims attachment
proposed rule was expected to be published this summer and as you know it
proposes to adopt electronic standard for claims attachments and it’s now going
through the clearance process so I can’t give you a date on when it’s going to
be published because as you all know these clearance processes can take
sometimes longer then we anticipate so we’ll just say this summer so that will
give you a little bit of a timeline there.
Secondly in the HIPAA regulations area the standard unique health plan
identifier proposed rule was expected to be published this fall and I believe
Karen is going to be talking some more about that later this morning but
basically as you know it adopts a national plan ID as a standard identifier for
health plans and it will create a federally directed registry to assign an
identifier to health plans. And as I said Karen is working very closely in this
area and she’ll provide you with much more detail later today and as time goes
on she’ll be keeping you updated on that.
The third thing I wanted to mention to you is the second round of
modifications to the transactions code sets is under development, expected to
be published by the end of the year, and as you know we’ve been working very
closely with the Designation Standards Maintenance Organizations and hopefully
this will provide some streamline at the standards updates process.
The second area I want to mention is the HIPAA enforcement area, last week,
I guess now it was the week before last, we published the notice in the Federal
Register to basically our procedures for reviewing and investigating
complaints, nothing in these procedures is new, basically what we’re doing is
providing you with a public document to get it out in front of everybody so
that people are aware of what these procedures are and can use that as a
reference. Of course all of this information is available on our website which
I think all of you are aware of, www.cms.hhs.gov/hipaa, so if you want
to get more information on that please reference that site.
The enforcement proposed rule is nearing completion, should be published
later this spring, it details the policies for violations and actions that the
department will take against the violators. And I think one of the things that
Karen and others asked me to discuss this morning is just to give you kind of
an update on the complaints and where we stand at this point. As of March the
28th we received 325 total complaints, 78 percent were against the
private sector entities, 16 percent against Medicaid and six percent against
Medicare. And as you know this is a complaint driven process and basically we
try to resole these complaints as quickly as possible. But the main reasons are
compliant claims rejected, code set violations, and trading partner disputes,
and of course none of these are unusual, these types of things as you know if
you’ve worked in the EDI area happen quite a bit.
But I think what I found very enlightening if not pleased is the fact that
of the Medicare statistics through March 25th 99.32 percent of
national HIPAA claims were compliant which I think is a very good record and
most of these complaints as we mentioned are settled fairly quickly and are
dealt with in a way that I think has been reflective of the industry working
cooperatively with the government in getting the HIPAA regulations and the sets
enacted so I’m pleased with that.
I want to mention to you just a moment about the security area, as you know
we’re going to have the deadline on April 20th 2005 and in 2006 for
the small plans area, one of the major areas in this that we’re obviously
concerned with is the overlap between security and privacy so we’re working
very closely with the Office of Civil Rights on how we deal with the issues
that overlap both areas. And I don’t know what the percentages are going to be
but I would suspect quite a bit of the security violations will also include a
privacy violation and vice versa so one of the things we are developing and
have continued to develop with the Civil Rights Office is to streamline
procedure to deal with these types of issues to make sure that both sides are
working in conjunction with each other so we get them resolved together. And I
think we’re looking at it from both areas, not only from an intergovernmental
or within the agencies type of arrangement also, as a customer service it’s
imperative that we make this process as seamless and as painless as possible so
we’ve been working very closely with that office and you’ll be hearing more
about that as we go along.
Let me see if there’s anything else in that, well, and of course as you know
it’s going to be primarily complaint driven as the current process with the
transaction code sets is so it will be self reporting and will be dealt with as
we’ve dealt within the other area which I think we’ve been pretty successful in
working in that. Of course when you get into the security and privacy it can
get very complex and there can be a lot of new players involved in that so we
expect to see a larger number of complaints in this area, much larger then what
we’ve seen in some of the other areas but hopefully once we get through the
initial process we’ll be developing some ways to deal with that because I’m
assuming that most of the disclosure and other types of issues that come up
will be ones that we deal with over time so we can develop some standard
methods of dealing with these types of issues.
I’m going to then turn now a little bit to e-prescribing and of course
sitting here today is the agency expert on that, Maria, so Maria if I misstep,
misspeak or miss something I’d appreciate it if you jump in and correct me, I
don’t mind being corrected —
MS. FRIEDMAN: You know I’m shy.
MR. TRENKLE: I know, and Maria as you all know is very shy and retiring, but
I will urge you to speak up.
Basically I think there’s two areas that you’re interested in, one is the
proposed rule and yesterday we closed the comment period for that. We’re on a
very aggressive schedule, as you know the final rule is schedule to be
published no later then September 1st of 2005 so we have a lot of
work to do with consolidating the comments and making changes based on the
recommendations to incorporate into a final rule and Maria and her team are
going to be working very hard over the next few months.
And as I mentioned before I’m very pleased with the two letters that you’ve
sent to us in the e-prescribe area, I think they show a lot of thought and
we’ll certainly be taking your recommendations as part of the overall
considerations as well as you know and of course Maria has worked closely with
you on them so obviously she has a vested interest in making sure the
recommendations get incorporated as well. I think also this has been very
helpful, we’ve had some discussions with DEA and you’re familiar I know with
some of the concerns we’ve had with the PKI area so your comments I think
really help address that as well and we will be meeting with OMB and DEA
sometime in the next couple of weeks and hopefully we can resolve concerns in
And finally the second area that you’re interested in is the e-prescribing
pilots and we’re basically at the point now of drafting and RFP for pilot
participants, we have a number of issues we’re dealing with so I can’t give you
the dates yet but I will say that we’re working very hard on that and should be
having something to report to you in the near future.
With that I’m finished with the updates, any questions anybody has or
comments, in voice or anything else you want to give? Maria, did you want to
MS. FRIEDMAN: In case anybody is wondering I’ve had several people ask me
how many comments we’ve gotten on the NPRM and we don’t know yet because we’re
still in the process of reviewing them and of course the comment period closed
yesterday and I know a lot of people filed comments at 5:00 or close to it so
we will report back later on how that process went.
MR. TRENKLE: But we are ready to receive them and have a team put together
who’s going to go through the process so I think as Maria said we haven’t
gotten too many yet but we know how these comment periods happen and everybody
sends their comments in at the last minute so we anticipate a large volume to
Other questions, comments?
DR. FITZMAURICE: I guess a comment and a question, the comment would be that
we’ve relied very heavily on the good work of Karen and Maria to help advance
our issues and agendas at the NCVHS, at AHRQ we also rely on them to help us
with our data standards program, while we haven’t spent an awful lot of money
some of the standards such as for the formulary for electronic prescribing have
needed to be advanced and we’ve relied on their advice to tell us what small
amounts of money when spent where can further advance this, we’re hoping to get
some of these standards ready for the pilot. So the question would be there are
six standards under the claims attachment, do you have some additional
priorities for what the next sets of claims attachments should be? That may be
a little bit early, it may be you might want to think about that for the next
time you report to us but it seems to me that we can start picking off needed
areas where clinical data needs to be uniform and standardized by adding them
to the claims attachment so it’s an opportunity.
MR. TRENKLE: I’ll take that under consideration and certainly any
recommendations you might have would be certainly helpful in this regard.
MS. FRIEDMAN: And of course we will report back once the claims attachment
reg is out, we will report to the subcommittee on the substance of it so you’ll
have a chance to see what we’ve done with those and make further
DR. FITZMAURICE: Thank you, Maria.
DR. COHN: Other questions or comments? Oh, Kepa, why don’t you come on,
introduce yourself and Kepa for those who don’t know is a former member of the
NCVHS so please.
DR. ZUBELDIA: Good morning, Kepa Zubeldia with Claredi. Tony, could you give
us an update on CMS’s contingency plan for the HIPAA transactions and where the
plans are to terminate that?
MR. TRENKLE: On the contingency plan —
MS. FRIEDMAN: Contingency plan for Medicare operations, we’re still under
the contingency, we’re still operating under the contingency and I don’t have
information on where we are with that, I think we will of course report also to
the subcommittee at such time when we want to terminate the contingency and
talk about what the next steps would be and where we’ve been on that.
DR. FITZMAURICE: As I remember, Maria, the contingency was that for those
who submit claims they would be expected to be paid within I think it was 15
days and those who don’t could expect another 15 days delay while it’s worked
out and then those claims would be paid after 30 days. Is that roughly it?
MS. FRIEDMAN: That’s roughly it and as far as I know and I apologize for not
having the most current information but as far as I know it’s worked very well.
DR. FITZMAURICE: It would seem that if you have 99. something percent
compliant claims that the contingencies must be awfully small at this point.
MS. FRIEDMAN: I would also like to note that we’re not the only ones who are
still operating under contingencies at this point.
DR. FITZMAURICE: I think CMS has led the industry in how to work into the
HIPAA standards and how to eventually gain almost 100 percent compliance.
DR. COHN: At least for the claims transactions.
DR. FITZMAURICE: Yes.
DR. COHN: Jeff, do you have a question, comment?
MR. BLAIR: Yes. Tony, I’d like to really welcome you to what I guess a lot
of us feel is a very dedicated, committed, and sometimes passionate community
of health care informatics standards and they’ll be a lot of people I think
that will be able to help you and Maria can give you guidance in terms of
either documents or individuals or stuff to help you sort out the complexities
here a little bit. The question that I have is going, I’m going to put a little
bit into the context of a little bit of history and I don’t know frankly
whether this is too early for you to answer it or not or maybe just an
impression. In a lot of ways when the Health Insurance Portability and
Accountability Act was. passed the administrative simplification portions of
that, that was what many people considered to be the first major step forward
in setting forth national standards to be able to transfer from health care
into the information age and I suspect that you’ve probably already looked at a
lot of those documents and pretty familiar with that. One portion of that was,
had very limited directives and it was called the patient medical record
information portion and it was kind of left to the NCVHS in large ways to wind
up saying, making recommendations for the adoption of standards for patient
medical record information, a lot of folks felt that those were electronic
health record standards, a lot of folks felt that those were clinical data
standards, Congress used the word patient medical record information and people
tended to translate that.
NCVHS made its first report on this huge area because this gets down to the
core of health care, this gets down to patient care, and it was very complex
and frankly it was more difficult. So in the July/August timeframe of 2000
instead of giving specific recommendations the NCVHS basically set forth a
strategy for how we would proceed and in that strategy we wound up setting
forth a vision which Stan Huff is going to be pursuing at this stage, it’s
taken us a number of years to get to that step. It also wound up being
virtually like a tutorial on here’s where we’re starting, here’s the major
standards organizations, here’s the major issues that need to be confronted and
with that strategy to go forward it also wound up saying here’s the criteria
that we would be using to select and recommend standards and we asked CMS and
HHS if they felt comfortable with those criteria and they said that they did.
So we then proceeded and in I believe it was February 2000 we recommended
the first set of PMRI standards which were a set of message format standards.
They included HL7, IEEE-1073, DICOM, and NCPDP Script as a matter of fact at
that time and we indicated some were emerging and that although they fell short
of what our criteria, NCVHS criteria was for full interoperability many of them
had degrees of market acceptance and were valuable and we encouraged their use,
we also encouraged that steps be taken to improve the level of interoperability
in the future.
Those recommendations in many ways flowed forward into what became the
Consolidated Health Informatics Initiative standards and that was a big help.
Now with those recommendations NCVHS felt as if now that we’re getting down to
the core of health care we didn’t think it was good to go forward by mandating
the use of standards by a particular date as we did with the HIPAA financial
administrative transactions and instead we said that there needed to be
incentives, an array of different incentives, and among the things was that we
felt that the federal government should act as an early adopter.
Now I can’t be entirely clear but the Consolidated Healthcare Informatics
Initiative basically wound up saying we’re going to be early adopters, whether
that was because of NCVHS recommendations or for other reasons because of the
e-government initiative, which basically I think may have come to the same
conclusion independently, nevertheless that has been a major step forward and
that’s an example to the industry and I think that many vendors and users are
looking at those standards as a result to be able to have the industry migrate
in an orderly way with the understanding that a lot of those standards are not
perfect in terms of interoperability and that’s why we’re not mandating a use,
looking at an evolution.
The NCVHS next set of recommendations was what began as PMRI terminology
standards and we looked, we got a lot of testimony on that and it looked as if
there’s no way to set a full set and we looked at a core with a reference
terminology, a set that could be part of that core, and I believe it was
September of 2003 when we set forth those recommendations. And you’re already
familiar with the e-prescribing ones so I don’t have to mention that but the
reason that I was mentioning this little bit of a history was that the
Consolidated Health Informatics group now has a few other entities that it’s
interfacing with and that’s emerging, one is ONCHIT and the other is an entity
that appears to be emerging which I’ve heard referred to as the federal health
architecture, so now here comes my question, now it’s in context so it will
make some sense. To what degree do you feel that your role will interact with
the others, which of the clinical standards, terminology standards, and other
standards will you be responsible for versus the federal health architecture
and what ONCHIT might be doing or what others might be doing, where is the
boundaries of your responsibility for either setting, adopting, or mandating
standards? And to what degree will you be working with the private sector?
MR. TRENKLE: Well, that was a long question but let me just say a couple
things here. One is one of the areas that I really need to work and have
started to look at is the way that the different boundaries are in these areas
and I prefer not to call them boundaries as much as points of coordination and
when you start setting up saying boundaries then you start basically looking
like you’re declaring a conflict. I don’t consider this to be a conflict, I
consider the fact that we have some additional players in the area, the federal
health architecture grew out of the OMB’s e-Gov initiatives, I think it’s an
important initiative that is going to help not only CMS and the federal
government but I think industry as well. ONCHIT as you know has been an
evangelist and the office has assumed more responsibilities over the last
number of months, they do the program management for the CHI area.
So part of my charge is to determine what makes the most sense for CMS and
for my office to take a lead role in where it makes sense for ONCHIT and the
federal health architecture to take the lead role in and to be honest with you
I’m still sorting those out because it seems like over time they’re continuing
to evolve. But I think what’s important and this is where your second part of
your question where you talk about industry is is that we’re clear on where we
need to go and what the primary priorities are and I think it’s important that
all of us work together on that. I look at the government as having a number of
roles, whether it’s us or ONCHIT or the federal health architecture, one is in
the standards area and certainly not only setting the overall standards but
also for the government to follow those standards themselves, eating your own
dog food as they say.
Secondly the government is a big demand side player and in many areas, I was
involved in the procurement area years ago when we first began moving into
electronic commerce ten years ago and the government working together with the
industry, the supply and demand sides coming together to develop what makes the
most business sense, not develop a government proprietary system or a number of
industry proprietary systems but to come together and work on overall goals and
priorities I think makes the most sense.
So to get down to where the rubber meets the road I think it’s something
that I’m going to need to sort out with the other players over the next few
months but I think it’s important that we work together as a team because I
think as I said a few moments ago setting up boundaries doesn’t help, setting
responsibilities does help, I mean people have to be responsible for certain
areas but I like to hope that we can continue to do that. We’ve worked closely
with ONCHIT, as you know the RFI that they came out with, my office and other
parts of CMS worked closely in going through the comments in that area. We’ve
continued to work closely with industry so I think CMS has a role as part of
CMS business processes but we also have a role as part of the overall moving
the industry and government forward.
So I think in a way I would say it’s premature but in another way what I’d
like to say is I don’t want to set up boundaries but I want to work with your
group and take your recommendations and others from industry, the WEDI folks
and others, to come up with what makes the most sense. And when I say what
makes the most sense something that enhanced our business processes, not
something that hurts our business processes, something that provides more
efficiency and effectiveness, I mean these are the kinds of things that we can
work together on, not to set up something that’s going to make business harder
or put more processes into place that create more problems.
I’ve seen a number of initiatives at the federal sector that have done that
and I’m not going to get into them but there’s a number of them in the past
that have set up barriers and we’ve tried to do the government way of business,
well, we got to get away from that, we’ve got to look more holistically and I
think we are and I think one of the roles of your committee is to help us work
in that area, to build the partnerships, to get input from industry to make
sure that when we go along the roadway here that we’re working together with
you not at opposite ends and I think that part of this with the federal health
architecture and ONCHIT is it’s a dual education process, we need to be
familiar with what they’re doing but we also need to guide them because we have
experts such as Maria and Karen and others who have been through these
So part of our charge is not to shy away from these things but to make sure
that they’re crafted in a way that helps as many people as possible to come out
with something that makes. So that’s basically the way I’m going to look at
MS. FRIEDMAN: I’ll just follow-up. I’d like to say that one of the reasons
that Tony was brought in is because of his experience across the government in
e-Gov and these other initiatives and he will bring those strengths and that
experience to our enhanced role of our office in coordinating these types of
issues, both within CMS and in the broader arena in HHS and beyond.
DR. COHN: Maria and Tony thank you very much and Jeff, thank you for the
background as well as the question. Obviously Tony we’re delighted to have you
involved in all of this stuff, I was actually as you were talking reflecting on
your comments about e-signature and I’m actually delighted that you’ve had some
experience in that area, I think most of us consider that to be a tough
discussion that we had with the industry over the last couple of months and
we’re obviously delighted to hear that you’re going to have conversations with
the DEA and OMB and all of that because obviously that’s, depending on how that
plays out it’s either a tremendous enabler of both e-prescribing and other
electronic initiatives in health care or it could be something that sets the
industry back so we appreciate your sensitivity on that.
MR. TRENKLE: And I appreciate your comments on that, I think the e-signature
is a perfect example of what I’m talking about as an approach. When you
prescribe a solution and not deal with the problem necessarily, you try to
shoehorn a solution into a problem you often create more problems and part of
the problem in the e-signature area has been a focus in some quarters on a
solution as opposed to what is the problems that this solution is trying to
solve and I think your response got to the heart of some of that and I think
the problem that we run into is a lot of this gets into a risk mitigation type
of thing in the e-signature area, what are the risks and problems we’re trying
to solve here, and what makes the most sense from a, not only from a risk
management standpoint but from a usability standpoint.
And part of the problem we run into in the government when we’re dealing
with issues of security is we adopt the atomic bomb approach when it often
makes more sense to adopt another approach and I think the points that you
pointed out in your comments in terms of looking at how it’s being done today
and that it’s working today and how that can be adopted as we scale this effort
I thought were, that’s the type of thinking that needs to be brought into all
these areas and that’s where I plan to go, whether it’s dealing with the
federal health architecture or the private sector on some of these issues.
And part of that is relying on your group to come back to us with the
reality test basically, a lot of times you can sit in the room and come up with
something that sounds great on paper but it needs, you’re the people in
business and tied to the business area where this actually has to occur to work
and you need to tell us when we’re on track and off track and it helps to have
a continuing dialogue starting at the very beginning and that way you don’t go
too far down the road and develop solutions that may sound great on paper but
don’t make a whole lot of sense when you try to bring them out in the real
world and scale them up to meet the needs of that area.
DR. COHN: Well, I guess I don’t see as many experts joining us today so we
will rely heavily on obviously the experts in the public sector, actually in
the private sector to help assist us with and keep us honest.
MR. TRENKLE: Absolutely, it’s a public and a private sector joint
MS. FRIEDMAN: I’d just like to remind everybody that one of the
recommendations from the last letter was that HHS and DEA continue discussions
on some of these issues so we have followed-up on that recommendation.
DR. COHN: Exactly, well thank you. Well I think that this, Tony, obviously
thank you very much and we’re very appreciative of having you join us as well
as we look forward to a close collaboration. I think some of the comments that
you made about showing business value are a wonderful transition to our first
panel which is really at this point beginning to look at HIPAA and the issues
of return on investment and all of that. So assuming it’s okay we’ll sort of
move into panel one and I think Joseph Smith, you’re leading off.
MR. SMITH: Good morning, thank you for the opportunity to share with you
information about HIPAA and its return on investments. The slide presentation
I’m walking through is a summary of some written information that I’ll provide
to you this morning. I’m Joseph Smith, vice president of private programs and
chief information officer for Arkansas Blue Cross and Blue Shield, I’m speaking
to you today on behalf of the Blue Cross Blue Shield Association, it is
composed of 40 independent and locally owned plans serving over 91 million
Americans, nearly one in every three Americans.
A way of some overview perspective, what I want to cover to you is first
we’re looking at HIPAA as a continued work in process initiative and talk about
some of the activities underway there. Many of the payers including all of the
Blue Cross plans are enabled to fully support the present HIPAA suite of
transactions that are currently and have been in operation since October of
2003, yet what we are seeing and our experience is that providers are not
making full use of all of the transaction sets and I’ll give you some very
illustrative information about that.
Based on our 17 months of HIPAA experience so far we want to offer four key
points to you in terms of that return on investment. First in terms of the
administration simplification we have not seen any return on investment as of
yet. We are however supportive of the HIPAA initiatives and have done a lot of
activities undertaken across the country in our various plans to support that
HIPAA compliance working with providers as well as clearinghouses and self
funded employers in that regard. We do see that there is potential for some
return on investment yet to undertake across the industry if the providers to
engage in the full suite of those HIPAA transactions, especially those that are
initiated at their particular site or receive back directly at their site in
terms of their systems that they support their business on and we’ll continue
to work with other organizations across the country to make this happen.
First of all in terms of return on investment to date, as I mentioned we’ve
seen none so far, when we reflect back on the original return on investment
business case was based on the 1993 WEDI cost/benefit study which projected a
$29 billion dollar savings over ten years, it did assume a full implementation
of all the transaction sets as of the first 2002 compliance date. There are we
believe four factors why we have not seen any return on investment yet, I’ll
mention just each of these four and then I’ll five into each of those a little
bit more specifically for you.
First of all the cost to implement HIPAA was far greater then originally
estimated. Secondly the benefits to be achieved are lower then what were
projected. A third is the continued need for the redundant operations,
particularly in health plans, while we’re in this contingency window having to
operate under both scenarios, providers under one but the health plans have to
be in both postures. And then there’s some gaps that I want to highlight in
terms of readiness of vendor supply and practice management systems.
I’m going to take a look at each, the first one in terms of the
substantially higher costs. We can now look back in history and actually see
what has occurred over the cost of implementation since that’s behind us now
and seeing that that’s substantially higher then what was originally forecast.
In advance of HIPAA the Nolan Group studied a number of the issues in terms of
cost to compliance and estimated that it would be at least ten times higher
then the original HHS estimates, an average was estimated by Nolan to be about
$10 million dollars versus $1 million dollars under the original cost/benefit
analysis. What we’ve seen and many of our plans have reported even several
times higher then that $10 million in terms of cost of compliance for the
various HIPAA requirements to date.
Provider costs were estimated originally at three times that, we don’t have
any specific figures to report to you on that, there were no ongoing operating
costs included in that original cost/benefit analysis and certainly the
incremental compliance costs for additional regulations that we have on the
dock right now in terms of the NPI, claim attachments, uniform payer, those
were not included at least as we understood that initial study.
In terms of looking at some of the benefits, one of the first ones in terms
of value of the ANSI 837 to providers, health plans, and Medicare really did
not see a huge incremental value of that and the reason for that is the large
EDI rates that we were seeing prior to HIPAA. In the case of the Blue Cross
plans we were seeing EMC rates in 90 plus percent on pre-HIPAA for the
institutional, for professional we were looking at 60 plus in very high first
pass rate payment rates of 50, 60 percent or higher. Without updating that 1993
cost/benefit plan many of the technology advancements that did take place from
1994 through 2003 did not get reflected in that and there was a lot of
technology advancements accruing a lot of benefits to the industry throughout
that time period. And particularly because of the Y2K issues you remember back
in the year 2000 a lot of concern over that, many health plans did implement
OCR and imaging capabilities of paper claims at that time and that had a huge
advancement of productivity and cost savings there which occurred prior to
The extended contingency plans, in the year 2000 it was apparent that the
required changes that needed to take place for all the covered entities was not
going to be ready by 2002, the Blue Cross Association of plans working with
many others in the industry groups sought an extension to that effort,
ultimately one year was granted on that, October of 2003. But before we even
got to that October standpoint in July we did see the train wreck coming,
financial train wreck, and put in place the contingency window which enabled us
to maintain that cash flow to support the covered entities throughout that
process. And that window still remains open today and we’re well down that,
about 99 percent as was indicated earlier today. However that contingency
window has driven a great deal of redundant costs that have been incurred by
the payers in particular who must run both the old pre-HIPAA systems as well as
the new HIPAA compliant systems in this dual window process and continue so
we’re a couple years now in that dual process, knowing that we’re continuing to
see great volumes of paper generation, mass mailings, to support the
Another area that we’re seeing is some, and the reason for why we believe
the providers have not seen a great deal of adoption, some of the full suite of
the transaction sets is the vendor supply practice management systems in terms
of where they’re at in their status right now with HIPAA compliance. The
potential originally did exist for us to reduce the costs associated with
clearinghouse volumes by enabling that direct connections to exist in the HIPAA
compliant fashion from payers, from providers directly to payers and back in
those standard transaction sets. However, most of the pervasive practice
management system vendors have really not updated their systems to generate
that full suite of provider related HIPAA transactions, rather they’ve directed
those transactions to their captive clearinghouses for that HIPAA translation
thereby prohibiting the use of the free direct connections.
I want to share with you a study we’ve recently completed on some 27,000
providers who bill Medicare in the states that Arkansas Blue Cross supports and
you see out of this 26,000 on a pre-payment basis some 65 percent of the
providers were interacting with Medicare on a free direct connection basis and
some 35 percent were electing to pay for either a clearinghouse or other
billing agents for services to conduct that for them. Because of the issues
I’ve talked about with the practice management systems and so on, in a
post-HIPAA environment you’ve seen that free basis drop off significantly in
the amount of physicians paying into clearinghouses or other fees has jumped
substantially on this 27,000 providers across these six states. So extrapolate
that over a number of other states and you see a significant shift that’s taken
Some of the efforts that I mentioned that we have undertaken in Blue Cross
plans in terms of HIPAA, we are all have been ready for the HIPAA compliance
and the full suite of capabilities since October 13th of 2003 and
have undertaken a significant amount of testing with trading partners and
offering testing facilities to undertake that with a number of organizations,
provided web-based telephone kinds of information sources, to providers, to
vendors, and to self funded employers, a lot of individual direct
communications within as well. We’ve worked collectively to provide a free
HIPAA toolkit to help providers assist in that HIPAA implementation where they
can do that in those contexts where they can control their environment and
provide the companion guides to fill the gaps where there were no specific
requirements set off in the standards.
Where we do believe there is some future potential for the HIPAA return on
investment is in some of the areas other then in the claims areas. Because of
the EDI claims we’re already at very high levels, there’s been very little
incremental value seen in transition for those in terms of those categories.
However, if you look at the eligibility, the claims status and the electronic
remittance advices we believe there are still good potential for some return on
investment to be seen there if they are adopted on a wide scale by the provider
community and are instituted if you will from that point of provider origin
where those transactions could be generated in the HIPAA applied format and
take in the response back automatically and post those to their systems. We do
expect that you could see some large reductions in the paper printing, handling
and mailing costs, obviously the long distance telephone calls that are
associated with people calling in. And the automated posting of the 835 to the
practice management system with all the attendant balancing capabilities that
would help immensely in terms of provider offers in that reconciliation
So the real question we think is why there haven’t been any return on
investments is that providers fundamentally remain focused on the claim
transactions and to demonstrate this to you we’ve gone and looked across our 50
states for all of the 40 Blue Cross plans all of the claims transaction for the
year of 2004, which is about 361 million claims that took place for national
account business and people who are travelers. Nearly all of those came to us
in a HIPAA ANSI 837 format in compliant basis, a significant amount of money at
demonstrating the point we’ve talked about earlier. However, as you can see for
the eligibility of the claims status referrals there’s just a handful if you
will of that, it’s about two percent if you look on a summation basis of those
transactions have occurred on a national account basis. In other words clearly
those capabilities are not being used.
We take a look at this also on a local basis in addition to the national
account just within the state of Arkansas and our own business for December and
January of this past year, for those two months, we had about 1.8 million
claims that we received, almost all of that in the 837 transaction format.
However, reflective of what we saw in the national level you can also see just
a handful of the eligibility inquiries, claims status and referral
authorizations as well as in this case the 835s because that’s where it gets
delivered or picked up by the provider.
Two important points I would note to you is that most of those eligibility
inquiries and claims status occurred in a direct data entry fashion. In
Arkansas we have direct data entry capability as well as the other
transactions, as you can see nearly all of those that did occur occurred
through the direct data entry capability, not coming out of the practice
management systems, and in the case of the 835, the second major point is we
prepared 835s for all 1.8 million claims but only a handful of those have been
actually picked up by the providers. We cannot tell even if they picked them up
whether or not they can actually use them and post them but they’ve not come
and picked those up, they’re still looking for paper transactions to be
Here’s that same set of data displayed a little bit differently in showing
you particularly those five transactions. The area in blue is where we see all
of those transactions could have been changed or could in terms of return on
investment if they did move to ANSI transactions originated from the provider
locations, could be driven a lot of value in terms of saving paper cost
reduction, saving telephone calls, people costs and so on. So there’s an awful
lot as you can see in terms of the opportunity, what’s in the blue there, to
move those to the HIPAA transactions.
The underlying cause of all this we believe is that there’s low use on the
non-claims transactions due to those practice management systems not being able
to generate those other transactions from the point of origin to directly
connect from the payer, from the provider locations to the payer. Many of those
systems cannot originate those 270s, 276s, use the internet to have a direct
connection to the payers and get a response back and automatically post those
into their practice management system which in turn could generate cleaner
claims when they come out if the eligibility information for example is matched
and loaded from the eligibility reply. The same is true in terms of not being
able to automatically accept those. Until such time as this is rectified
through further adoption we believe the extension for return on investment will
be elusive until we can move particularly those transactions in the non-claim
We as the Blue Cross system of plans will continue to work with various
industry sectors and continue to do that, we’ve worked with the Council on
Affordable Health Care to clarify various business rules around eligibility
queries, in fact this past December on a nationwide basis we just implemented
many system changes regarding the eligibility transaction to give a lot more
robust data as well as increased response time available requirements that we
can provide that information, continuing to work with other standard
designating organizations and clarifying some of the ERA remarks codes. In fact
some plans have already implemented supplemental ways to get access to
additional information based off the ERAs through direct data entry kinds of
transactions, not through the practice management systems, and continue to be
very active in roles in helping to move this around.
So on a summation basis in terms of conclusions we want to say we’re
committed to continuing to improve that in looking to raise and seek that
potential for return on investments, the specific areas I’ve identified for you
we believe are ripe for that opportunity. We would urge you as well as the
policy making organizations to support the industry working through the various
standard designation organizations to work these issues through. Secondly to
finish the current requirements before adding new ones and including
encouragement to the practice management vendors to make their systems HIPAA
compliant to enable these transactions to be initiated and received back, and
to pilot test some of those proposed new standards to assess that potential for
risk before we actually implement those. And finally to use a national roadmap,
if we don’t know we’re going obviously any road will get us there but if we do
have a national roadmap of where we want to go, put that plan in place and
begin to follow that.
With that I’d be happy to answer any questions from anyone.
DR. COHN: Joseph, thank you very much and we’ll have questions and
discussion after everybody has testified. Robert Tennant, you’re on next,
MR. TENNANT: Thank you very much, the Medical Group Management Association
is pleased to submit our testimony to the subcommittee. My name is Robert
Tennant, I’m senior policy advisor for MGMA, also a member of the NUCC, WEDI,
and co-chair of WEDI-SNIP. We don’t have any definitive data on the ROI but we
can certainly talk about some of the potential ROI, some of the challenges, and
offer some recommendations. It will be interesting that they’ll be quite a bit
of overlap between Joe’s testimony and ours which is interesting coming from
two very different sectors of the health care industry.
I’d like to term this section of my testimony the theoretical ROI of HIPAA.
There’s no question that when they developed the regulation providers were very
excited, the opportunities to streamline some very onerous business processes
was certainly evident and of course the 837, the claim and COB, the 278,
eligibility, remittance advice, all of those had a lot of promise. In
particular I think we were excited about the claim, going from 400 plus formats
down to one format was certainly going to make the provider’s life a lot
easier, as with eligibility, technically practices have patients come in, they
get treated, and then they check eligibility down the road only to find out
services are not covered or the patient has moved on to other insurances which
they failed to provide, which means that bad debt piles up in practices and
it’s a serious financial impediment. To be able to check eligibility
electronically for a lot of providers really was the core to ROI with HIPAA. As
Joe’s graphs quite clearly show we haven’t yet reached that end.
I wanted to talk about some of the challenges and the question is always
asked well why didn’t we achieve the return on investment that many of us
expected. And Joe certainly touched on a lot of them and I’m going to touch on
those and a few others. One is a very simple reason and that is although
Subtitle F of HIPAA was aimed at administrative simplification obviously the
legislators were concerned about information flowing electronically and they
included privacy and security along with the simplification elements.
Unfortunately the industry focused on privacy and that includes the popular
media as well mainly because privacy interacted directed with the patient so it
impacted potentially all folks in the United States.
But what it did was take the focus of HIPAA and turn it into a compliance
perspective so providers were looking at trying to avoid jail time and save
civil fines and not focused on trying to achieve the return on investment
through the transactions. And I think the industry as a whole has to take some
blame here but certainly CMS could have turned their attention more so to
educate providers on the opportunities that the transactions provided and
again, Joe’s graph shows that even now well into the compliance period very,
very few providers are taking advantage of all the transactions.
The results of the problem of delayed timing, whenever you delay and
protract the release of regulations it sends a signal to the industry,
especially to the vendor industry, that they don’t want to move too quickly,
they don’t want to upgrade their software and offer it to their customers until
everything is settled and things were very unsettled for many years and I think
that certainly added to the uncertainty of the whole process, throw into the
mix that there was actually legislation presented in the Senate that would have
essentially killed HIPAA. So the message was mixed coming from all sectors yes
we’re supposed to hurry up but don’t hurry up too fast.
Perhaps the most important impediment though and Joe certainly hit on this
was the reliance on a non-covered entity for compliance. Providers had to rely
on their practice management system and billing system vendors in order to
become compliant with the transactions. Many practice management systems
upgraded and provided that upgrade to their customers, some did not, some had
no intention of upgrading their systems, some upgraded their systems in such a
way that they forced providers to go through a proprietary clearinghouse and in
fact I got calls from some Blue Cross Blue Shield plans from around the country
complaining about vendors who no longer allowed their customers to go direct to
the Blues plan or Medicare and I think Joe’s graph, I think graphically showed
that as well.
And if you extrapolate that it’s a very frustrating experience for
providers, they have to rely on their vendors but the vendors weren’t providing
them the systems needed to take advantage of HIPAA. It wasn’t possible for most
providers to simply throw away their current practice management system and buy
another one, these systems are very expensive, it takes a long time to train
staff on, and so they were forced to basically do whatever their vendor was
In defense of the vendors though you have to remember that with all of the
delayed timing, with all of the variations on the 837 for example it wasn’t as
easy to go direct as we anticipated as the regulations were being developed. So
I think they were trying to come up with a solution that met their business
needs and trying to get the claims paid.
I think we also have to recognize that there was marginal compliance by some
health plans. Dr. Zubeldia is going to tell us this afternoon a little more
about the convergent project but it’s clear that we went from 400 claim formats
to many more formats for the transactions due to variability in terms of what
data elements were required from the health plans. So they made the decision to
not go with a standard format to make their own companion guides, not develop a
single one through the industry, and of course that forces providers to go
through a clearinghouse to try to get their claims paid.
MR. BLAIR: Rob, could you just clarify, I didn’t quite understand that
sentence, you went from many different claims standards and then after that I
couldn’t follow what you said, could you repeat that?
MR. TENNANT: Again, Kepa is going to go into far more detail on this, what
happened was there was a lot of variability in terms of what a health plan
could ask for in terms of the data and they published what’s called companion
guides telling providers how best to fill out the claim and the other
transactions and so all that variability was extremely difficult for providers
to go direct to their health plans not knowing exactly which data elements were
required. So again, yet another barrier I think to providers taking advantage
of the transactions.
On the eligibility side, and again this was the transaction that many
providers anticipated would be a real money saver, many plans answer yes/no,
give the absolute bare minimum information which forces the provider to go back
to the phones or faxes and get that information such as co-pays and
deductibles. There is some exciting work being done now, I think the new
version of the 837, the 5010, hopefully will cut down on the variability and as
Joe mentioned the Council for Affordable Quality Health Care has initiated a
project to identify operating rules for eligibility and that’s a very exciting
project that MGMA is involved with and a number of providers. We’re hopeful
that if this project is successful the private sector can move on in other
areas of the transactions and come up with industry solutions and not wait for
In terms of a few recommendations, we’re still a little bit concerned about
the contingency plan and we think we have to be very careful with ending it,
even though Medicare is reporting 99 percent plus compliant claims probably the
majority of those are coming in from clearinghouses. And the goal in HIPAA I
believe is to cut out the clearinghouse, there’s really, that’s a wasted
transaction, it’s money lost from providers, it’s time lost, and I think the
faster we can get to direct connection between providers and payers the better
for everybody. We also want Medicare and the commercial health plans to
continue to report missing data so if the contingency plans end we will know
exactly what data we need to collect at the point of service to ensure claims
are getting through clean.
Obviously CMS should increase its educational outreach, its work with the
provider and other stakeholders, we need to ensure that whatever decisions are
made at the federal level they’re communicated effectively and quickly to
providers. We’re also very concerned that CMS avoided staggering the compliance
dates and that was a problem for providers and for payers, they were aiming at
the same date and there wasn’t a built in time for testing and therefore we
have to have an extension and things didn’t go smoothly. We’re hoping that as
they develop regulations going forward they’ll consider staggering the
implementation dates to allow health plans to get their systems ready and then
allow providers to come in and submit data.
They’re also, and it’s a sort of a standard recommendation, and that is we
need to learn from our mistakes. There were a lot of mistakes made by all
stakeholders including the government in the deployment of transactions and
code sets, we need to learn from that and not make the same mistakes as we move
forward with things like the NPI, claim attachments, electronic prescribing,
and hopefully down the road electronic medical records.
In conclusion MGMA is highly supportive of national standards, we’re very
confident that once everything is moving smoothly there will actually be some
ROI. We also look at HIPAA as an excellent foundation including security and
privacy, we needed to move forward with HIPAA and certainly with its
implications, that’s the only way we’re going to move forward with electronic
prescribing and electronic medical records.
We appreciate the subcommittee’s interest in this important topic and we
thank you for inviting us.
DR. COHN: Robert, thank you very much. Jean Narcissi from the AMA.
MS. NARCISSI: Thank you. My name is Jean Narcissi and I am the director of
electronic medical systems for the American Medical Association and it is my
pleasure to appear today on behalf of the AMA before the Subcommittee on
Standards and Security of the National Committee on Vital and Health
Statistics. I would like to thank you for the opportunity to testify. My
statement will summarize the views of the AMA on HIPAA transactions and code
sets, the following comments will address the questions we have been asked to
discuss before the subcommittee, as well as other issues of concern to the AMA.
In response to question number one, describe the ROI results achieved as a
result of HIPAA transactions and code sets, the AMA does not have specific
information at this time regarding return on investment results from HIPAA
transactions and code sets. In fact the AMA believes it may be difficult to
gather this information in a survey, it would depend on how return on
investment would be defined in order to determine whether or not this data
could be collected in a survey.
In addition the AMA has not determined how many of the HIPAA transactions,
other then claims, are being implemented by physicians. In a recent AMA and
Forester(?) survey entitled Physician’s Use of Information Technology
physicians indicated on average that 88 percent of their medical practices
claims are submitted electronically, however the survey did not specify what
percentage of the other HIPAA transactions are being utilized by physicians.
Without these kinds of data we simply cannot prove that there has been any
return on investment for physician practices stemming from the HIPAA
transactions and code sets. Moreover we emphasize that many physician practices
face significant costs as a transition to new HIPAA standards. We also believe
many practices are currently in the middle of transitioning so it could be some
time before they realize any return on investment.
Once physician’s practices fully embrace the following transactions a return
on investment may be realized. The 270/271 eligibility, these transactions
should significantly reduce the amount of staff time used to make phone calls
to check the status of eligibility. Automated captured of data could also help
to reduce keying errors and allow for more accurate bills to be submitted the
first time, again having a potential impact on improving collection and
accounts receivable days. However, the AMA believes that the quality of the 271
eligibility responses from health plans needs to be improved in order to
provide more information that is relevant and needed by physicians and other
health care providers.
In the current HIPAA 270/271 eligibility transaction a health plan may
either give detailed benefit information or simply give a yes, this person has
coverage, or no, this person does not have coverage. Physicians need more
detail then yes/no and they need the information in a more consistent way.
The Workgroup for Electronic Data Interchange and the Council for Affordable
Quality Health Care are working together on a project to encourage all health
plans to respond to eligibility questions based on business rules established
by the industry that are agreed to by health plans in concert with other key
stakeholders such as health care providers, vendors, and X12. This effort is
just beginning although planning has been going on for some time. The AQH
initiated the process in January, the AMA is a participant in this project and
recommends that the requirement for better response information be strengthened
in accordance with the findings of the WEDI CAQH project.
The 276/277 claims status inquiry, these transactions should provide the
ability to query on submitted claims electronically prior to re-submittal of
that claim. This could lower costs by reducing duplicate claim submission and
telephone inquires for claim status. Secondary billing can be initiated sooner
for those claims that have been fully adjudicated thus reducing accounts
receivable days for physicians.
The 278 authorization and referrals, this transaction should reduce
paperwork for the physician’s practices and improve efficiency of the health
care system especially for the patient. The administrative task of
authorizations and referrals is very burdensome and having an electronic
process should improve the efficiency of both the provider and payer’s
environment as systems, which are largely manual systems, are replaced by more
The 835 remittance, when this transaction is fully automated at the
physician’s practices it should reduce costs by automating payment posting. It
should also improve the ability to produce more accurate and faster secondary
billing transactions, again leading to better collection and reduced accounts
receivable days as well as generate better standardized reports. When using the
electronic funds transfer function there should be cost savings to the
physicians, the EFT function should also improve cash flow to the physicians,
help to reduce accounts receivable days even further.
In response to question number two, define the positive business impacts of
HIPAA transactions and code sets. The AMA believes that an unjustifiably high
percentage of every health care dollar is spent on administrative overhead.
Administrative overhead includes processes for enrolling an individual in a
health plan, paying health insurance premiums, checking insurance eligibility,
getting an authorization to refer a patient to a specialist, filing a claim for
payment for health care that has been delivered, requesting or responding to
additional information, coordinating the payment of a claim involving two or
more insurance companies, and notifying the provider about the payment of the
claim. Prior to HIPAA these processes involved numerous paper forms and
telephone calls and many delays in communicating information among different
locations creating problems and increased costs for health care providers,
plans and insurers alike.
To address these problems the health care industry developed standards for
accomplishing these transactions electronically but for physicians it has been
difficult to implement all of the transactions in part due to the challenges
outlined in the next section of my statement. The AMA believes that once the
physician’s practices embrace all the transactions the positive impacts of
HIPAA should be realized.
In response to question number three, define the business challenges related
to HIPAA, the HIPAA regulations still remain a critical issue for the health
care industry. Prior to the implementation of HIPAA there were approximately
400 claim formats in use by the payer community in the United States. However,
since HIPAA has been implemented standardization still remains a major problem
because nearly 1,000 payer companion guides have been identified for the X12
HIPAA transactions. The HIPAA transactions convergence project is in the early
stages of development with a goal of providing a means for the industry to
converge on a common set of HIPAA transaction requirements. Participating in
the initiative are several leading industry Designated Standards Maintenance
Organizations and the HIPAA standards development organizations including the
National Uniform Billing Committee, the National Uniform Claim Committee, the
American Dental Association’s Dental Content Committee, and the National
Council for Prescription Drug Programs. And Kepa will be going into detail on
The AMA believes that another business challenge for physicians will be the
issue of transactions fees. Up until recently many payers were willing to
assist with the cost of EDI through clearinghouses to avoid paper claims and
their associated costs. The payers would supplement the transaction fees to the
clearinghouses and allow for physicians to use the network at a reduced rate or
at no cost. However, many of the payers have signed exclusive agreements with
one clearinghouse, the result may be that payers will no longer subsidize their
fees and other clearinghouses may be forced to raised their fees to make up for
the lost revenue. In addition, with payers moving to not subsidize the
transaction cost these costs will likely shift to the physicians. The
possibility of less competition is also a concern to the AMA.
In a statement to health data management that appeared March 3rd
2005 AMA president John Nelson said the AMA believes that the needs of patients
are best served by free market competition and free choice by physicians of the
vendors that they may wish to use for electronic transactions in the health
care system. The AMA would be concerned if agreements among vendors and health
plans foreclose access of physicians to all the potential services offered by
vendors in a competitive marketplace.
Another business challenge that physicians encounter is the submission of
attachments for claims in order to get paid. The AMA and Forester survey
indicated that 76 percent of physicians report that their payers require the
medical practice to submit additional documentation attachments in order to
have certain claims processed. It was determined that on average for 20 percent
of their total claims they need to submit additional documentation. The survey
also found that 47 percent of the physician practices typically submit claims
attachments by regular mail, 23 percent by fax, six percent by electronic
transactions, five percent by messenger and two percent by scanned images. The
AMA believes that standardization of formats in electronic exchange should
reduce the costs of preparing and submitting attachments and enable physicians
and the health care system to realize the full benefits of electronic data
interchange in administration simplification.
However physicians should know up front what additional clinical information
will be required for specific services so they can either submit it with the
claim or when the attachment data or images are available. Furthermore, until
standardization is achieved regarding when attachments are required, and not
just how they are submitted, the use of any attachment standards should remain
optional and based on trading partner agreements between physicians and payers.
Additionally the AMA believes that standard implementation guidelines for
code sets are essential for uniform national application of the code sets. If
standard guidelines for medical code sets were adopted many attachments would
be eliminated. If health plans and physicians are permitted to implement and
interpret medical data code sets as they see fit the purpose of administrative
simplification will not be achieved. An important part of administrative
simplification, a reduced regulatory hassle, certainly includes the
simplification of instructions for the coding of health care services. The
overwhelming amount of paperwork to which physicians are subject would be
significantly reduced if coding guidelines are standardized within electronic
The AMA believes that the CPT guidelines and instructions should be
specified as the national standard for implementing CPT codes. The instructions
and guidelines contained in the CPT book are subject to the same rigorous
editorial process used to develop CPT codes. The CPT editorial panel and CPT
advisors consider CPT section guidelines, specific code level instructions and
definitions, and the application of modifiers at the same time the language for
CPT code descriptors are developed. Thus, the proper use of CPT codes is based
on all of the associated material contained in the CPT book, for example
simple, intermediate, and complex repair are defined in the book prior to the
actual repair codes so that users understand the circumstances for reporting
each. Also, coding conventions such as add on codes are explained in the
guidelines. The use of codes and descriptors apart from this information limits
the functionality of CPT and its uniform application and contributes to
improper coding interpretations which are counter to the purpose of having
national standard code sets. Therefore the AMA strongly encourages the
subcommittee and the NCVHS to recommend that CPT guidelines and instructions
for applying the codes also be included as a national standard.
In response to question four, what can be done to improve the ROI of HIPAA
transaction and code sets, as I mentioned previously once physician’s practices
embrace all of the HIPAA transactions the AMA believes that a return on
investment may be realized. In addition the results of the convergence project
should identify the differences and similarities among payer companion
documents which could provide the basis of information needed by payers to
organize their HIPAA transactions requirements into a common set of
requirements. This should make the submitting of the necessary data elements
for the transactions more consistent for physicians.
The AMA also believes that if physician’s practices are directly connected
to the payers there would be cost savings on transaction fees for the
physicians. The AMA and Forester survey that I mentioned previously indicated
the following, 47 percent of physician practices submit claims directly to
payers, 41 percent of the physician practices submit claims through a
clearinghouse, and 19 percent of physician practices send claims to a billing
service which submits them to the practice and six percent of physician’s
practices do not submit claims, for example the practice is cash based and
patients submit the claims themselves.
In response to question number five, what is your adoption percent for the
HIPAA transactions and code sets, and I mentioned previously the AMA and
Forester survey results indicated that 88 percent of their medical practice’s
claims are submitted electronically. However, we do not have a breakdown of the
implementation percentages for the individual HIPAA transactions. However, we
are willing to work with the NCVHS and others to achieve a better understanding
of the state of the HIPAA transactions and code set adoption within the
Thank you for this opportunity to present the views of the AMA, I’d be
pleased to respond to any questions.
DR. COHN: Okay, I want to thank all three of you for some very interesting
testimony. Questions from the subcommittee? Harry, are you there? Do you have
any questions that you’d like to pose?
MR. REYNOLDS: Yeah, I do have a question. As you listen to all of the
testimony obviously I think the momentum on the 837 is clear and everybody is
working towards it. I heard a mention of a number of different initiatives and
I understand that Kepa is going to discuss later some things, but does the
group, each of the members mentioned some things that could happen but what are
the specific things that maybe they would have a consensus on that should
happen or that we should even help happen to close some of these gaps that each
of them mentioned?
DR. COHN: Okay, each of the presenters maybe comment, Joe do you want to
MR. SMITH: I think one of the commonalities I heard here was the
transactions being involved in the non-claim transactions and finding all three
of us commented upon that and the ability to see tremendous return on
investments as well as the direct connection theme which in many cases could be
done for free over the internet in today’s world that would help and that would
be a very focused effort I would think could be undertaken.
MR. TENNANT: I certainly echo that but I’d also add it certainly falls on
the shoulders of CMS to provide more outreach, it’s almost like we’ve passed
HIPAA, like we’ve moved on to other things and I don’t think we achieved what
we wanted to with HIPAA, I think there should be some continued outreach, not
only to providers but also to vendors. WEDI and CMS had a number of forums
aimed at vendors bringing them up to speed, I think if they’re more engaged in
the process they’ll be more willing to develop products that will allow the
providers to take advantage of the transactions so I think there has to be more
MS. NARCISSI: Well, I agree with both of the comments and I too think that
there needs to be more outreach. Perhaps CMS can work with some of the other
organizations such as WEDI like they did in the past, the regional efforts I
know that WEDI had sponsored along with CMS were quite successful but that was
mainly again for the claim but we need to work with the providers on the other
And the other thing that I think HIPAA really missed the whole point in was
this whole area of vendors, they weren’t part of the whole equation and I think
somehow the vendors need to be pulled in. And I know that there are many of
them that probably are ready with all these other transactions but I think
maybe there are also a lot that are not.
MR. REYNOLDS: Thank you, Simon.
DR. COHN: Marjorie, Jeff, and then Judy.
MS. GREENBERG: I had just a specific, first of all thank you all for your
very informative testimony, we appreciate it, I had a specific question for
Jean. In your survey that showed that 88 percent of the claims are being
submitted electronically, did that differentiate whether they were being
submitted electronically according to the HIPAA standards or could that also be
like flat files under the contingency?
MS. NARCISSI: I agree that it’s probably different formats because I think
they’re going through the clearinghouse. So the question didn’t get into
specifics and if it was HIPAA compliant because actually we pulled the survey
questions together quite a while ago and it was just done over the last few
months. But I do believe it’s any format going out the door, even paper going
to a billing service.
MS. GREENBERG: Thank you. And Mr. Smith, again, thank you for your
testimony, I wondered if looking down at future benefits the association has,
and I know these are hard to quantify, but has thought about or attempted to
quantify the benefits that might come from higher quality data, more comparable
data for purposes such as coordination of benefits but also for things like
quality assurance, pay for performance, etc. I mean from what we know and heard
because of the companion guides there isn’t as much comparability as originally
envisioned although hopefully that will improve over time. But is that
something that you’ve looked at?
MR. SMITH: We have a number of efforts underway studying those initiatives
to look at pay for performance and other data contents, I think the notion of
the companion guides though while there might be many of them I think we got
most of the claims there were 99 percent there so I mean I think we’ve worked
through those issues on that perspective, I think the other transaction sets
and helping in the data as I mentioned, we’ve just added additional data to our
eligibility requirements and required all of the plans to provide much more
robust information to be responsive as well as on the 835s to provide
supplemental access to information to help improve that process.
DR. COHN: Jeff.
MR. BLAIR: Two questions, one of the suggestions that I heard was that the
compliance date be staggered and I wanted to get a little clarification on that
because it sounded to me as if you were saying it should be staggered in terms
of a compliance date for a plan and then another one for the completion of
internal testing, another one for external testing, another one for overall
compliance. But I wasn’t sure whether that was what all of you were thinking
and then there was another staggering which I wasn’t sure about as to whether
or not you were saying that the different messages should be staggered, and I’m
thinking of this in terms of as we go forward with e-prescribing or other
things that may come down in the future, whether we have to stagger compliance
for message by message versus a group. Could you clarify what you were thinking
MR. TENNANT: It’s Robert here. Well, maybe all of the above, the more that
you talk about it the more intriguing it becomes when you think about message
in the sense of how you’re going to get an industry to move from where they are
now to where you need them to go, there has to be coordination first of all and
that means going to the industry, finding out what are the capabilities, how
quickly can a health plan move forward with their compliance, how quickly can
providers. And so I think CMS has to be thinking a little more strategically
about how they’re going to get the message out to the industry, how they’re
going to convince the stakeholders of the steps they need to take to move
And I’ll give you one quick example with the compliance date for security
coming up in a couple of weeks, CMS has in the works I think six papers on
security, they published one, there’s two weeks to go, those should have been
out two years ago. So I think we need to get the message out quickly, well
before people need to start working on this, build the momentum, but also
stagger in terms of allowing some time to test. So rather then everybody
cramming for one date including the vendors, because the vendors were telling
providers don’t worry, we’ll get you ready for the compliance date, not that
we’ll get you ready a year in advance so you can test and make sure when the
switch is turned you’ll be able to get compliant claims through. So I agree
with all of that and maybe we need to take that to heart.
MR. SMITH: A slightly different view on that, I think the nature that Rob is
pointing out in terms of the advanced testing and coordination is very
important to occur between organizations, we’re not necessarily supportive of a
staggered dates to occur for the payers versus providers and so on but that
advanced work has got to be done and in a coordinated fashion but we believe
for more a fixed date. To give you an example, of the 40 Blue Cross Blue Shield
plans every year, at least twice a year on certain transactions and others it’s
sometimes three times, we go through upgrades of our capabilities, new
functions just like I cited earlier, and we all go and make that transaction
one date but we’ve backed up in time from a planning perspective and built
those items that Rob has mentioned into the implementation plan if you will so
that we all can execute on one date and therefore not run redundant systems
while we’re in that transition phase if you will so we’ve kind of backed up
this process but still working on the one effective date.
MS. NARCISSI: Jeff, I believe that, well it’s been several years ago now
when we were commenting on HIPAA the AMA suggested phasing in not just
individual transaction but certain aspects of HIPAA. For instance they believe
that the first should have been privacy and security together, then perhaps the
NPI should have been phased in, and then perhaps the transactions and maybe
look at the individual transactions on which would be implementable. The claims
of course, a lot of electronic claims were being submitted already, so that
would have been the first one. But that’s how we believed it should have
happened, maybe in certain phases with certain portions of HIPAA and clearly it
did not happen.
MR. BLAIR: My second question is a number of you have pointed out that one
of the things that has impacted your ability to achieve a return on investment
was, I think Jean you wound up saying you’ve gone from 400 to 1,000 companion,
400 separate payer requirements to 1,000 companion guides, I’m not sure that
that’s a one to one match but in short could you just give me your thoughts as
to why there was a need to develop companion guides so that maybe we could
understand why has that that has emerged.
MS. NARCISSI: Jeff, I know that Kepa is going to cover this thoroughly in
the next panel but the 400 claim formats were prior HIPAA, the companion
guides, of the 1,000 companion guides, and those cover all the transactions, I
believe over 250 are related to the 837 and that number may have risen since
the last time Kepa and I spoke. I do believe there probably is a need for some
companion guides based on different benefit plans, on what the plan purchaser
has purchased, so there may be different requirements, there may be different
pieces of data that are necessary to be reported to the health plan. But I
think we need to take a look at them thoroughly, I think there are too many
similarities that could be reported in the same way.
MR. TENNANT: If I can just add to that, there’s sort of a prior problem as
well and that is the X12 process that decides on the data content, at least the
first round. There’s clearly not enough provider participation at the X12 level
and they’re always complaining that there aren’t enough providers, well, it’s
expensive, it’s difficult for individual providers to foot the expense to go to
these meetings, so the obvious solution to that is bring the X12 to the
providers, why not have an X12 meeting where the American Academy of Family
Physicians is meeting and have some focus groups and get some input from
clinicians directly. To my knowledge I don’t think they’ve attempted that but
if they’re complaining there aren’t enough providers well then they need to go
to the providers either with drafts, I mean make it clear they need direct in
put on the data or else we’re going to run into these same problems year after
DR. COHN: Joseph?
MR. SMITH: One additional comment on the companion guides too is many of the
content of those are related to optional data elements as been stated, there’s
also some gaps in terms of the standards or individual ways, how to contact and
communicate, how to test some technical definitions that are related as to how
you interact with those particular organizations and some of the self employed
benefits which are very unique in some cases.
DR. COHN: I guess we have Judy, Stan, and Michael, and then we will take a
break, we’re running a little late as it is. Judy.
DR. WARREN: This is for you, Mr. Smith, you had talked about the contingency
plans and the contingency windows and that that cost more money because you
were having to maintain both processes, could you help me understand that a
little bit more and what you’d like to see come of that?
MR. SMITH: Sure, prior to HIPAA we were generating and let me just use the
835 remittance advice, we were generating paper transmissions or because the
providers wanted those in a proprietary formats and they came out of the claim
system in a specified proprietary format. With the HIPAA and the 835
particularly we had to move to that type of output for all of our claim
transactions to be made available in the 835 format, those are two totally
separate processing modules, well because the providers are not picking up
those 835s they continue to want the old way. What we’re faced with doing
through the contingency window is operating both of those modules so we get
output from our claim systems, we’ve got to run the modules that generate all
those 835 electronic transactions and we’ve also got to run the modules to
generate all that old format in all that old paper and produce the paper and
mail it and make sure that the two come out with the same answers obviously
because they look different, they are different, so we’re having redundant
capabilities that have to operate. And the same is true for the other
transactions where you’ve got multiple ways, you’re having to maintain two
systems to accommodate that contingency.
DR. WARREN: And if you didn’t have the contingency what would you do?
MR. SMITH: We would shut down the old module and move to the 835, but
providers continue to ask for the paper and use that and they’re not picking up
the 835s because we’re generating those for all the transactions but we’re
continuing to have to generate all that paper. We’d like to be able to turn
that off and have the savings for that but we understand that providers can’t
work with the 835s yet so we haven’t done that.
DR. WARREN: What would help to move us more to where we didn’t need the
MR. SMITH: I think on the claim transactions I think we’re already there and
we may want to, in fact we’re looking at right now shutting our window off for
the claim transactions, we’re the other ones we’re going to leave it open for
the capabilities. But as we mentioned earlier having the providers be able to
initiate and receive back directly at their point of location, point of origin,
having the capability with that practice management system, that that would
enable all that to take place and then achieve all that area that I had in blue
which is really the big potential to generate some savings.
DR. WARREN: So you would agree with Jean that trying to bring the vendors
more into this would really help the whole process.
MR. SMITH: Absolutely, I mean that practice management is a major area that
has been missed in terms of compliance here and why we’re not seeing a lot of
DR. COHN: Okay, Stan.
DR. HUFF: Yeah, my thought is very close to Judy’s, I mean what I heard
basically is that we haven’t realized the benefits of standardization because
we haven’t standardized. I mean we’ve allowed contingency and combination of
two things, basically we’ve supported the old system and even though there’s
diminishing volume you have a basically a static overhead for continuing to
support the old things and at the same time we have a proliferation of
companion guides which means in fact the standard is really not standard and so
you don’t realize the benefits. And so having said that then I was surprised to
see the recommendation from Robert that said please don’t, please let us
continue to accept proprietary formats and I guess I’m asking the same question
really Judy did which is it seems to me that we’re never going to recognize the
benefits of standardization if we actually don’t standardize, but how do we do
that in a way that people don’t lose revenue, how do we do it in a way that
people have in fact a very strong incentive to truly standardize so that we get
passed, because what we’ve really done is just added one more way to do stuff,
we didn’t eliminate any other ways of doing stuff, we just added one more way,
so in fact just looking at it at a macro level you would assume our costs
increased because we added one more way to do this instead of eliminating a
bunch of ways to do it.
MR. SMITH: That’s correct and I believe, and I don’t want to speak for Rob
but my impression of what he was saying is that the notion of not having a
practice management systems be ready to accept all this stuff back in the 835
for example or the 270, they can’t react to it in that format so that’s why
they need the old format, well, I think you’re asking that it continues, and
the reason for that is if you can’t get it in that electronic format and
interact with it you’ve got a bigger problem, for example posting your
receivables. If you can’t get it in a format that you can automatically post to
your practice management system then you’ve got the traditional and posting by
an individual sitting down there and 835s are a very complicated transaction
for someone in the billing office to sit down, the system, practice management
system ought to be made HIPAA compliant to take that 835, automatically post it
to the open receivables and then generate the subsequent 835 coordination of
benefit claim for example. But that’s not and until it gets there I agree with
Rob that providers will be in a tough position if they didn’t get the
proprietary old fashioned, that’s part of the dilemma here.
DR. HUFF: You would have thought that the efficiency of being able to
automatically post in those other things would have created a market
differential between the systems that could and couldn’t and that that would
have led to innovation and a market opportunity for vendors. Do you have any
insight in why that didn’t happen?
MR. SMITH: Sure, it’s very expensive to change practice management systems,
you’ve got all your data loaded for your patients in there and it’s very costly
to do that and go through that migration, you’re relying on that, that’s a very
tough and disruptive process to change practice management systems. I agree
with you it is a differentiator, some vendors have done that, I think they got
an advantage, but because of that cost barrier it’s very difficult for the
physician to make that shift over and they’ve got enough other issues that
they’re struggling with today in their offices to add on top of that the layer
of $150,000 dollar conversion to a new practice management system.
MR. BLAIR: It sounds like you’re saying that they’d have to completely
replace their system, is that what you’re saying?
MR. SMITH: Well, I believe I was answering the question of Dr. Huff here of
if you changed, you had a differentiator, if your current vendor, what they
should be doing is providing upgrade release that is HIPAA compliant and that
would not require a complete replacement, it’s an upgrade. But if that’s not
there you have to shift, if you want to take advantage of some of this
automation you’d have to go through that migration and shift to another system.
MR. TENNANT: Just to add to that, Joe’s absolutely right, it’s not practical
for a small group practice to simply switch practice management systems, it’s a
lot easier for somebody like Intermountain that has the clout and the financial
resources to do something like that. But also you’ve got to say to yourself why
didn’t the vendors do this, well, because it’s a potential money maker, if they
are now getting transactions flowing through a clearinghouse and they’re
getting a piece of that action that’s a great business model for them so the
motivation perhaps wasn’t there. But also a lot of these practice management
systems in practices are very small, they’re regional sort of mom and pop
software and that’s not easy to upgrade as well, the vendors didn’t have the
resources to make a whole scale change.
Again, to reemphasize, I’d love it if we didn’t need the contingency plan
but we do, unfortunately we don’t have providers at the level yet where they’re
able to accept all the transactions and submit them. Hopefully at some point we
will and again, maybe the answer to the claim is the 5010, maybe if X12 would
look at the convergence project, learn from that instead of keeping it on the
side, maybe we could develop a claim format that payers could agree on and then
we wouldn’t need a contingency plan.
MS. NARCISSI: I just wanted to comment on the vendors, that that cost is
passed back on to the physician of course and it might have been easier for the
physician to say well I’m going to send these claims directly through the
clearinghouse now instead of going direct to the payer because that cost would
be less then perhaps upgrading to a new practice management system. But I also
wanted to mention that I believe that there has to be some kind of an effort
for this convergence project, perhaps the same way that the WEDI CAQH project
is looking at the eligibility, I believe we have to pull the key stakeholders
together, the leaders, and look at each individual transaction and try to look
at all of the companion guides to see what kind of similarities there are or
dissimilarities there are and make some recommendations. I don’t believe that
this can be done in a standards development organization like X12, X12 is a
technical committee and they were tasked with developing the messages for
sending the data to the payers, somebody else needs to be responsible for that
data content within all the transactions, perhaps the convergence project will
help define that.
DR. COHN: Jeff, did you have a final follow-up on that one? Okay, remember
we have a second panel on these issues so this is not the only opportunity.
Michael, I think you have the final comment.
DR. FITZMAURICE: In the interest I’m time I’m going to skip questions about
the use of new technologies such as XML, I will not ask what percentage of Blue
Cross claims are compliant with HIPAA standards, I won’t ask if the plans have
any plans to charge more for claim submissions that are not HIPAA compliant,
and I won’t ask if conformance or compliance testing is needed for practice
What I will ask instead is does the market work? Because here we have
providers paying clearinghouses for handling transactions, billing services for
putting them into the right formats, and sending them to health plans. Health
plans have gone through a lot of investment to make sure that they can handle
HIPAA compliant claims but on the other side I don’t see providers doing it, I
don’t see vendors helping providers doing it, so I say is the market working.
Well, maybe it just costs that much more for providers to become compliant,
they have a lot of different health plans and they have to deal with a lot of
them, the vendors aren’t producing the right system upgrades, providers aren’t
saying they’re willing to buy them, what’s a money maker for clearinghouses is
a money expense for providers.
So I guess my question will be is there any provider organization that’s
willing to take up the mantle of providing return on investment for providers
for the HIPAA transactions by working with the health plans, the vendors, and
the SDOs? Providers are a lot of individuals but added together if it saves
each one of them so much money they’d be willing to pay at least half of it
I’ll bet to an organization that would represent them and get them a return on
The vision of the future was that you’d have your practice management
system, it sends things to a directory that then routes that claim right to the
health plan and it’s in a standard format so that it’s received and can be
acted upon and once we get the claims right then prior authorization for things
like drugs and procedures become a lot easier. The business rules are easy to
work through but they can be worked through, as technology changes you need
more data elements so maybe Jean is right, maybe you need some other
organization to be responsible for the data content of message standards.
But is there any provider organization willing to take up this mantle of
looking for the return on investment and trying to make it happen for
providers? Do you see one on the horizon? Anybody.
MS. NARCISSI: Well, as we stated in our testimony I think we need to go
through a lot more steps before we’ll even be able to judge what the return on
investment will be with these types of transactions. However, I think that
perhaps some kind of a consortium could be formed, maybe with the participants
that we see here today and start talking about where do we go from here or can
we measure the return on investment, can we do it through a survey, do we have
to do it through like a focus group, and maybe that could give us a lot of
valuable information. So maybe that’s where we need to go, to step back a
little bit and work with our partners.
MR. TENNANT: Let me put a little different spin on that, when you think
about incentivizing providers to move forward there’s certainly a lot of talk
in Washington about doing that on electronic health records, so why not think
about that in terms of HIPAA transactions, certain Medicare is going to benefit
if providers are going to them electronically in all of the transactions. But
look at what CMS did, they turned what could have been a positive into a
negative by using the stick approach, by saying if you don’t submit a compliant
claim to us we’re going to delay payment. Why not turn that around and say if
you submit a compliant transaction we’ll pay you in seven days instead of 14
days, what message would that have sent to the providers, they would have been
scrambling to try to take advantage of that. Instead, again, HIPAA is seen as a
negative, why not add a pay for performance component that would pay providers
for utilizing some of these other transactions that are clearly going to save
the health plan money, if you go electronic with your eligibility they don’t
need somebody at the other end of the phone answering the questions. So we need
to be thinking more positively and maybe some sort of pay for performance
program that incorporates some of these other transactions and not just the
clinical side is one approach.
DR. COHN: Well, I want to thank you for starting the conversation here, I
think it’s a very interesting issue, I’m beginning to feel that we probably are
not going to get to the bottom of this by the time the morning is finished but
at least it’s a start.
We’re now running about 35 minutes late on our schedule, we will take a ten
minute break and come on back and we’ll probably go a little bit into the lunch
hour for the second session.
DR. COHN: Okay, if everybody would please be seated we’re going to get
restarted with our second morning session, I do want to apologize to everybody
that we’re running a little late. The second session starts with Jim Whicker
from WEDI, please.
MR. WHICKER: Mr. Chairman, members of the subcommittee, I’m Jim Whicker,
chair elect of WEDI, the Workgroup for Electronic Data Interchange located in
Reston, Virginia. WEDI is an association of over 200 corporate, government and
individual members that are representatives of the spectrum of health care
industry stakeholders. As you know WEDI also is designated in the HIPAA Act and
subsequent enabling regulations as an advisor to the Secretary of Health and
Human Services on HIPAA administrative simplification implementation matters. I
am here today in my WEDI role to discuss challenges and successes related to
those matters. I’m also director of EDI for Intermountain Health Care, ICH,
located in Salt Lake City, Utah. In addition to my role with WEDI I serve as
EDI liaison for AHEM, an association of provider financial services
professionals. On behalf of WEDI I would like to thank you for the opportunity
to present testimony today. In order to save time for questions and answers I
will discuss summary comments and in my hard copy remarks you will find
additional explanatory detail for some of the items discussed.
In general terms some success reported to date by entities seeing value as
we’ve moved to HIPAA transactions payers are reporting increase in volume of
claims as well as some volume increases for eligibility and claim payment
transactions. We hear reports that more claims move through automated
adjudication processes thus reducing cost for payers and payment wait times for
providers. Providers are reporting successes through reductions in claim
denials and report increases in efficiencies using automated posting, data
Some challenges, the variability of data mapping, code usage, and
transaction implementation by both providers and payers is evidenced in the
number of companion guides in the industry. Trading partners still must
customize the processing of data to and from payers, providers, and
clearinghouses in order to move transactions. There’s a pressing need to close
the transaction loop by adopting standard acknowledgements, this needs to be
accomplished as soon as possible for claims.
Speaking today on behalf of WEDI and my bias as that of a provider and one
who has the information systems backing of a progressive technology advanced
and integrated network of 21 hospitals, over 100 clinics, and more then 550
employed physicians with home health, IAB and DME services. We also have our
own health plan. It’s no coincidence that Dr. Huff who you all know very well
is on your agenda later today. During our HIPAA transactions development our
clinical and financial systems interfaces team reported through to Stan. I have
attempted to adjust my comments to be reflective of an industry perspective and
represent WEDI in what I perceive to be issues that our members would want
To add to your specific questions on percentages of adoption I’ll answer for
IHC as a provider as well as give additional information I’ve gleaned from
several others who have responded to my request for information. So for IHC as
actual implemented transactions in HIPAA formats, 80 to 85 percent of our
claims go out in the 837 format, 65 to 70 percent of our payments are received
and posted using 835 transactions, 50 percent of our eligibility, we have
implemented 50 percent of our payers with eligibility transactions, 40 percent
with claims status, and we’ve implemented 60 percent of our payers with an
unsolicited 277 transaction that payers and providers in Utah have implemented.
Please note however that the percentage for other providers will be somewhat if
not significantly lower for non-claim transactions.
I have the luxury of the support from a company that’s committed to
technology and a boss who recognizes the benefit automation brings to the
finance side of health care. Also some providers report that due to
clearinghouse or vendor assistance claim totals for them are at 100 percent.
Most entities report that the volume of 835s is beginning to increase as is the
volume of eligibility, the data I received show that the numbers are still
In general providers and payers have not yet realized a return on investment
of any significant amount. Some feel that ROI estimates from years ago over
estimated the early benefits, under estimated the amount of time that was
predicted it would take to get the transactions up and running and under
estimated the costs. Covered entities that have spent the time and effort to
transform business processes to take advantage of the transaction capabilities
are starting to see benefit from using the transactions. Payers and providers
who had already automated the majority of their claims pre-HIPAA are not seeing
a lot of early returns as most providers have only adopted the claim.
One payer reports that it has offered proprietary claims status and
eligibility information for 25 years. For these entities the ROI hasn’t been
achieved as they have simply moved from one format to another. Some payers are
reporting it is much easier to bring new providers on board for EDI as a
processes have been standardized and simplified, in UHIN they report an
increase of 30 percent in claims volume, mostly due to non-traditional
providers, chiropractors, home health, various therapists and so on, who are
now able to send claims in standard formats. One payer reports that it has been
able to increase first pass adjudication from about 40 percent to 70 percent of
their inbound claims.
In IHC as a provider we have a been able to reduce or reassign seven FTEs
from our EDI submission process to assist in other areas of the business
office. Our accounts receivable days, or AR days, are at the lowest in history
for us. Many other providers, however, have not had the same experience. While
these are complicated transactions and the systems they interact with are
complicated as well there are definite positive business impacts for both
payers and providers. Entities who are reporting positive impacts appear to
have also made changes in the way their systems operate to incorporate the new
functionality into their daily operations. Often especially at smaller provider
offices staff do not understand the data or the process involved or don’t have
the software, IT, or vendor experience required to achieve the vision of true
EDI in administrative simplification. Rejected claim information often
discusses loops, segments, and qualifiers, all of which mean nothing to the
typical office billing staff.
To eliminate the problems with claim implementation the payment status and
eligibility transaction must be implemented in concert as well as standard
acknowledgements for claims which is not currently a HIPAA standard that
reports clearly and in standard fashion what happened with each submitted
claim. By implementing all of these transactions many are starting to se
Additional areas that IHC has been able to realize function improvement as a
result of HIPAA, we have centralized and automated the cash posting function
for electronic payment, we provide workless(?) where staff attention is needed,
and can send COB claim transactions to secondary payers with little manual
intervention. Payment data are utilized for many research and statistical
purposes. IHC providers have generated almost a million eligibility
transactions in the 12 months since the 270/271 was implemented with four large
payers, including the Blue Cross Blue Shield Association and their national
network. An eligibility request in ICH takes two key strokes, negative
eligibility responses are routed to appropriate staff automatically.
When received data content allows comparisons systems are validating at the
proper plan selected at registration, the correct member ID is on file as
reported by the payer, and comparisons of patient and subscriber name can be
made between the payer and the provider data. Systems are then updated
Reports from a large national, excuse me, a large regional provider
organization indicates they have experienced an average 45 percent decrease in
claim denials due to eligibility related issues for the payers they have
implemented. With claim status they have experienced a 43 percent decrease in
the dollar amount in aging categories between 90 and 120 days. By automating
the 835 for posting they have been able to reduce two FTEs per payer
Moving beyond claims creates a seamless automated way to communicate with
payers and reduce costs. Providers who have implemented all the core
transactions have reduced claim denials and are better able to collect patient
co-pays at the time of service. They are better able to track revenue by payer
or contract and reflect payment data for the correct payer. Those who take
advantage of the EFT capability in the 835 has streamlined the balancing of
data and the data reconciliation process and reduced their costs by not having
to handle an account for paper checks.
Entities that have been active in industry groups such as WEDI, X12, ESDLs
and so on appear to have more transaction activity and have had an easier
implementation experience. Active provider outreach, education and
communication are helping to increase volumes.
So what challenges remain? Some payers have extended a lot of time and
resources developing internet capability that provides claims status,
eligibility, claim entry, payment information, etc. Often these capabilities
offer much more timely response and richer data content then the corresponding
HIPAA transaction. For both payers and providers the ROI of HIPAA is in the
ability to automate transactions, speed of responses, and eliminate manual
intervention. While internet access accomplishes this for the payer and some
low volume providers it may not be appropriate for high volume providers. The
effect of web based transaction has not been investigated to see if this is a
cause as to why ROI and HIPAA has not been realized. Bringing EDI transactions
on par with or perhaps superior to web application might encourage more
provider adoption, however, to accomplish this in the most effective manner
practice management systems must integrate at a minimum the 270/271, the 837,
the 276/277 and 835 transactions.
So what can be done to improve the ROI? The number one issue is the
variability from payer to payer and from provider to provider must be reduced
as much as possible. Over 1,000 companion guides have been identified,
companion guides currently are necessary to avoid confusion and help clarify
processes not covered by HIPAA. But those issues that create the need for the
companion guide need to be addressed and mitigated whenever possible. There is
no standard for acknowledgement of a claim that indicates acceptance or
rejection and why, this often results in significant efforts to track down what
happened to specific items. WEDI is working in concert with X12 to develop
recommendations that promote the initial voluntary industry wide adoption, a
specific X12 acknowledgement transactions, and recommends that NCVHS support
that effort. For claims this must happen as soon as possible.
We need cross industry support using the standard development organizations
to resolve and clarify content and usage issues, as well as to identify ways to
better communicate information to all parties involved. While we support
recommending moving forward with clinical applications we must remember that we
have not fully implemented the administrative transactions, we must take time
to finish the roll out of current HIPAA transactions before adding additional
complexity to the industry, even in the administrative arena.
When new transactions are promulgated they must first be taken through a
proof of concept process where a true pilot of the transactions and
communication process identifies or resolves issues prior to general adoption.
Any national information technology standard for health care should use the
same road map to simplify implementation of the standard. Communication of
changes, clarifications, timelines and adjustments to the standards should be
communicated in the same way regardless of whether they are clinical or
administrative in nature. Emphasis on resolving lingering issues with the
payment eligibility and claims status transaction will greatly enhance the ROI
now that the claim transaction has been widely adopted.
Adoption of the national payer ID would simplify the communication of
information in all transactions. Simplification of set up and communication,
speed of response to transactions for real time and batch claims status and
eligibility transactions as well as the richness and the quality of data in the
response and quality of mapping those codes by both payer and provider would
encourage more providers to adopt additional capability. Contingency plans for
an unanticipated development in HIPAA, they have added cost and implementation
delay to the project.
There is no standard definition of what constitutes an institutional claim
versus a professional claim, this must be addressed and standardized. WEDI is
working on this issue through its health care claim encounter format selection
task group. Some practice management systems have not integrated the
functionality of the 835 and its automation into their systems. When they do
they find that 835s often do not balance, they don’t pass validation for basic
X12 and implementation guide requirements, or they contain data content issues
that make them difficult if not impossible to implement.
Lack of a national payer ID or standard data content requirements for payer
or plan identification in the 835 makes it difficult for a provider to properly
post payment data. Vendors and providers report that they must customize the
835 for every payer they have in production.
There is evidence that at least some payers have implemented the claims
status using only a minimum level of response indicating that the claim has
been accepted or paid and denied. A more robust response to indicate the status
between acceptance and payment would be more useful to providers. There is a
wide disparity in the quality of content from payer to payer for eligibility
responses reported, the result is the provider often has to make a follow-up
phone call to gather additional information, needed information. X12N is
working on enhancing future versions of the eligibility transaction and WEDI is
also working with the Council for Affordable Quality Health Care to create
operating rules for eligibility and benefits and help solve this problem in
It’s too early to determine the ROI for NPI and attachments, WEDI is working
with New York Empire, Blue Cross Blue Shield, X12N, HL7 and two New York
providers on a claims attachment demonstration project and tests are being
measured. Current work is being done to evaluate issues related to the NPI.
Overall HIPAA implementation is progressing, the support of NCVHS and HHS in
removing the obstacles surrounding the implementation of remaining HIPAA
transactions will help the industry achieve the ROI that is truly possible.
WEDI looks forward to continuing working with NCVHS and HHS to improve the ROI
in health care administrative transactions.
Mr. Chairman and members of the subcommittee, thank you for the opportunity
to testify, this concludes my statement.
DR. COHN: Well, thank you. Mark McLaughlin, you’re our next presenter. And
actually Jim, let me apologize, I think you looked at a little funny as I was
introducing you, when I saw Jim I was expecting your executive director and the
last name sort of threw me there so my apologies.
MR. MCLAUGHLIN: Mr. Chairman and members of the subcommittee, good morning.
My name is Mark McLaughlin and I’m a regulatory policy analyst in the
regulatory affairs department at McKesson Provider Technologies which is a
wholly owned subsidiary of McKesson Corporation. McKesson is a Fortune 15
Corporation, the world’s largest supply management and health care information
technology company. McKesson provides supply solutions and information
solutions across the entire continuum of health care including market leading
businesses in pharmaceutical and medical surgical distribution, automation,
information technology, and outsourcing services for health care providers and
payers. McKesson Provider Technology software applications include enterprise
wide patient care, clinical, financial, and strategic management of software,
as well as internet based and networking technologies, electronic commerce,
outsourcing, and other services to health care organizations throughout the
Regarding return on investment results achieved, McKesson Provider
Technologies, hereinafter referred to as McKesson, is deeply committed to
providing our customers with the most efficient and cost effective solutions
possible. In order to establish that value to our customer base McKesson
committed the time and resources necessary to enhance the applications and
services to enable our covered entity customers to be compliant with the final
regulations of the Health Insurance Portability and Accountability Act of 1996,
or HIPAA. The McKesson Clearinghouse alone invested 110 person years of effort
in the project needed to update the computer programs necessary to process
HIPAA transactions. This equates approximately to an $11 million dollar
investment for computer program development alone and does not include any
support services required to assist customers in resolving issues surrounding
the implementation of each business partner.
To this point we have seen little or no return on this investment but rather
are treating this initiative as the cost of doing business in this market
space. To date we have not seen much improvement in processing efficiency for
the transactions being traded. Under the umbrella of McKesson Provider
Technologies as a business unit which creates applications that handle pharmacy
transactions the McKesson Automation Business Unit noted that the use of
electronic real time prescription claim billing has been in industry wide use
using a previous version of the NCPDP standards. Because of this prior use
there were no discernable positive impacts on ROI from the software development
perspective, further the NCPDP 5.1 version has added considerable complexity to
the existing process without improving payer responsiveness, claim processing
accuracy or speed of payment to providers.
This additional complexity resulted from two principle factors, the first
being migration to a variable claims standard form from a standard that
combined both fixed and variable components, and inconsistent implementation of
standard concepts by different business partners. The new standard also added
operational costs to the pharmacies by virtue of requiring major software
upgrades, in some cases such upgrades required new hardware in order to
accommodate the size of required applications. Additional collection and entry
of new data elements that had not been previously required or captured by those
applications have added complexity to the pharmacy operations.
Defining the positive business impacts of HIPAA transactions and code sets,
in general business partners are diligently trying to address discrepancies in
interpretation related to the implementation guides. There appears to be more
of a cooperative spirit among business partners to implement the transactions
in a manner that moves the industry toward the goals of administrative
Positive business impacts which have been experienced by the McKesson
Clearinghouse include the implementation of additional process improvements
related to HIPAA that will allow for more efficient system maintenance.
Reduction in sales cycle time, this has occurred because preliminary research
related to the viability of clearinghouse capabilities regarding the handling
of proprietary transaction formats no longer needs to be conducted. Its created
a common language between all trading partners so we’re all speaking the same
language, the terminology related to fields or data elements has allowed for
more efficient communication between trading partners. Prior to using the ASC
X12N implementation guides the terminology was often as proprietary as the
transaction formats. The HIPAA implementation guides have created a level
ground for business partner discussions.
Reduction in documentation, McKesson’s internal library containing
proprietary business partner requirements has become smaller and more efficient
due to two factors, the first being the size of the documents containing the
business partner requirements has been reduced, and the second being many
business partners have taken the opportunity to move their business
requirements documentation to their websites so the number of physician
documents that need to be printed, or physical documents, excuse me, that need
to be printed and stored in a library had been reduced.
The McKesson Automation Business Unit noted that while they have not
experienced any significant positive business impact at this point in time it’s
possible that the new infrastructure will generate positive benefits in the
future. The newly available capabilities advanced as a result of
standardization and transactions and data elements have not been explored to
date, however as a result of the Medicare Modernization Act where the NCPDP
e-prescribing transactions will be used it’s anticipated that there will be a
shared benefit in being able to use the eligibility data between pharmacies and
prescription drug plans because of the standardization provided under HIPAA’s
In defining business challenges related to HIPAA transactions and code sets
we believe there are several challenges yes to be conquered and below is a
discussion of those challenges. Regarding standardized electronic
acknowledgements, while the health care industry has moved forward with
exchanging claim, remittance, and eligibility transactions a key component of
that exchange is still lacking. The communication between business partners
related to the health and integrity of the exchange of information is often
insufficient or absent altogether. The communication is often a one way
communication from the health plan or the payer to the provider, a provider
often may not communicate discovered data or file problems using a standard
electronic acknowledgement techniques because two way communication was never
part of the infrastructure in the past.
Insufficient two way communication continues to be an issue and providers
are left with little recourse other then to pick up a telephone and verbally
report the issue. The McKesson Clearinghouse experience has been that more then
90 percent of health plans are returning some form of electronic acknowledgment
to validate the syntax and integrity of the sent file. Those acknowledgements
come in the form of ASC X12 997 transactions. While the majority of health
plans are using the 997 transaction this transaction often varies in content
due to the variations in the in bound claim batching scheme.
The batching scheme is defined by the health plan, in addition the 997
transaction provides for a very high level assessment of the overall syntax of
the file but does not include a detailed assessment of the validity of the data
element and the contents within a file. For example, in the case of a claim,
the assessment may be accomplished by returning an unsolicited ASC X12 277
acknowledgement transaction, currently the unsolicited 277 acknowledgement
transaction does not have widespread use of as the 977 transaction does,
further the current acknowledgement methodology which uses an electronic print
image or actual paper reports is proprietary and inefficient. Additional
standard electronic acknowledgements may provide added benefit.
WEDI is currently working on this issue with the acknowledgments task group,
McKesson recommends that the NCVHS support the WEDI recommendations when final
and that the NCVHS make recommendations to HHS that the Centers for Medicare
and Medicaid Services implement the recommendations completely and in
accordance with the timeline identified by WEDI.
Related to claim rejection issues, file or batch level rejections based upon
claim level errors which was a large issue more then a year ago, well this
issue has improved somewhat over the past year, there are still business
partners that are enforcing a file level reject based on a claim level error.
This problem is troubling to national clearinghouses because batch files often
contain more then one single provider’s data. One errant claim from one
provider may cause all provider’s claims within the batch to be rejected which
can cause potential cash flow issues for all providers who have claims in the
rejected batch. While there are software programming solutions around this
situation, such as changing how claims are batched, this work around solution
is very inefficient for all business partners and creates more processing
overhead and ultimately more cost to the healthcare industry.
Sometimes valid claims are also rejected simply because the business partner
does not want to use the data being sent. An example of such a situation is the
use of the reference identification, or ref segment, within the ASC X12 837
transactions. The ref segment may occur multiple times within a claim and may
be used to provide the billing provider’s secondary identification numbers. A
provider may have several of these numbers depending on how many payers to whom
they are sending the claims. Even if the claim may be sent to several payers
via coordination of benefits it may be necessary for the provider to include
several reg segments within a single claim transactions. Rather then continuing
to look at subsequent ref segments for the number they need some payers are
rejecting the claim if the very first identifier within the ref segment isn’t
the one that they are looking for. McKesson recommends that the NCVHS request
the Department of Health and Human Services to issue guidance on the
appropriate rejection methodology so that the industry can move forward with a
single efficient solution.
Related to code sets, code sets used in the HIPAA transactions today are
ubiquitous and are managed by various entities. It’s because many code sets are
managed by various entities that there is no single point of truth for what
codes are valid and when the codes go into effect. Some code sets are effective
the day that they are published while others may depend on service date within
the transaction itself. This variance causes unnecessary and constant system
updates that can hinder provider productivity. Due to the copyright and royalty
issues it may not be feasible to have a single maintainer/distributor of all
code sets, however, having a single effective date for all code sets would be a
positive impact to the industry overall. A single effective date, whether it be
quarterly, semi-annually or annually could make system updates more predictable
and scheduled accordingly.
Local codes are still being required by some business partners. Although the
local code issue is supposed to be eliminated with HIPAA there are still some
business partners that are requiring codes that are not within the valid code
lists as defined under the regulations. McKesson recommendations that the local
code issue be investigated and continued usage of such codes be removed as an
What can be done to improve ROI over transactions and code sets? In addition
to the recommendations listed above convergence of requirements of the claim
transaction is necessary to reduce the programming maintenance required to
support HIPAA transactions. The McKesson Clearinghouse is one of the nation’s
largest clearinghouses processing hundreds of millions of transactions per
year. The statistics below have been provided by McKesson’s Clearinghouse to
illuminate the issues surrounding the use of companion guides.
More then 300 separate computer programs are needed to produce properly
formatted claim files to the 500 direct payer connections maintained by the
clearinghouse. The clearinghouse may send several health plan’s claims to a
single payer. Each computer program has more then 1,000 lines of computer
programming code that needs to be maintained by clearinghouse personnel. In
addition to basic HIPAA implementation guides that are standard across all
payers there are more then 1,200 additional payer specific edits that are
programmed and maintained by clearinghouse personnel. These edit programs are
separate from the formatting programs mentioned above.
The McKesson Clearinghouse’s New Development Unit is responsible for
creating new formatting and editing programs, its been noted that companion
guides vary in length from one page to more then 600 pages. Because of this
diversity of information contained in these guides resources are required to
analyze, interpret, and code separate programs to adhere to the varying
business rules required by business partners. WEDI is currently working on this
issue through the convergence task group and McKesson urges HHS and CMS
participation in the WEDI convergence task group.
What is your adoption percentage for HIPAA transaction and code sets? The
McKesson Clearinghouse adoption rates are as follows, 97 percent of the claims
outbound to payers are in the 837 transaction format. Those not being sent in
the 837 transaction format are not in the HIPAA format due to the inability of
the business partner to handle the transaction accurately, consequently there
are still, we are still using proprietary formats in those instances. 60
percent of claims inbound to the clearinghouse from providers are received in
an 837 transaction format, the remaining 40 percent are received in proprietary
format that contain all of the necessary data elements for converting to an 837
outbound transaction. 97 percent of remittances inbound to the clearinghouse
are received in an 835 transaction format, 100 percent of all eligibility
transactions are sent and received in the 270/271 transaction format, and 100
percent of the pharmacy transactions that are used in the NCPDP version 5.1.
The McKesson Clearinghouse has not yet implemented other HIPAA transactions
primarily due to lack of customer demand.
Summary, in general HIPAA has brought business partners together and given a
common language on which to base discussions. Organizations such as WEDI
continue to bring together disparate health care stakeholders to illuminate
issues and drive toward resolution. There is still opportunities for realizing
ROI through convergence of standards and voluntary adoption of non-regulated
transactions such as acknowledgement responses.
Of the HIPAA transactions that McKesson Clearinghouse has implemented the
usage percentages relative to HIPAA standards are closing in on 100 percent. We
believe the health care industry has a unique opportunity to learn from the
implementation efforts of HIPAA and apply the lessons learned to future
initiatives such as e-prescribing, electronic health records, and other efforts
as outlined in HHS’s Framework for Strategic Action.
Lessons learned from HIPAA include pilot testing, implementation of
standards that have been fully vetted through the pilot test among all relevant
industry stakeholders, phased implementation schedule, to give consideration to
the order in which stakeholders must implement to aid in a smooth transition to
new standards and processes, standards version control when implementing
standards to allow for efficient methodology by which subsequent versions may
be quickly implement, and finally related to standards requirements, reduce the
ambiguities between all stakeholders to enhance the success of implementation.
On behalf of McKesson Provider Technologies I would like to thank the
subcommittee for this opportunity to present our comments.
DR. COHN: Okay, Mark, thank you. Kepa.
DR. ZUBELDIA: Thank you. It’s a pleasure to be back here with the NCVHS and
trying to shed some light on a topic that is near and dear to my heart. The
topic is, I’ve labeled it From HIPAA to Interoperability, there’s a difference
between HIPAA compliance and actual real interoperability of these
Let me take you back a little bit through history, going back almost seven
years ago, May 17, 1998, the NPRM for transaction and code set said among other
things that currently there are about 400 formats for electronic health care
claims being used in the United States, that was in ’98. In the final rule,
August 17 of 2000 there was a comment on the ability to have mutually agreed
requirements and the final rule preamble said we disagree with the commenters
that we should add a new usage statement that says not required unless
specified by a contractual agreement in the implementation guide, we believe
that a usage statement would have the same effect as allowing trading partners
to negotiate which conditional data elements would be used in a standard
transaction. Each health plan could then include different data requirements in
their contracts with their health care providers, health care providers would
then be required to use a variety of guidelines to submit transactions to
different health plans, this would defeat the purpose of standardization.
So whoever wrote this gets my kudos.
The final rule itself species requirements for trading partner agreements
and says that you cannot change the definition, the data condition, or the use
of any data element or segment in a standard. And any data element or segments
cannot be added to the maximum defined dataset or you cannot change the
requirements from not used to using them and change the meaning or intent of
the standard implementation specification.
So we have very high expectations from HIPAA, the HIPAA standard
transactions should be acceptable to all covered entities, payers, providers,
and clearinghouses. And the expectation was that if a provider or
clearinghouses sends a claim that meets the HIPAA standard implementation guide
then the payer is required to accept it without imposing additional
requirements, that was the expectation. The reality today is that there’s many
additional requirements imposed by the payers and clearinghouses, some of them
are contractual requirements, some of them are because of other laws and
regulations, telecommunication requirements, implementation restrictions, data
formatting requirements and data content requirements. Most of these
requirements are reasonable and let me emphasize that, most of them are
reasonable, they’re specifying requirements that were left unspecified in the
HIPAA guides and because they were left unspecified most of them have to be
specified in order to conduct business.
Examples of these requirements, for instance some trading partners are
specifying segments that are either required in all cases or segments that are
not used, perhaps they have not implemented that specific functionality and
they’ll say don’t send this segment because we haven’t implemented it. There
are some data formatting requirements, some of the companion guides will
specify that names and addresses cannot have punctuation in them, that’s very
common, so all those O’Malley’s and O’Leary’s and hyphenated last names have to
be changed. Some of them will specify a maximum of so many bytes in the
provider names, so if your practice has a long name you have to cut it off or
abbreviate it or change it. There’s more on that.
Some of them will specify that for instance dollar amounts have to have a
trailing zero zero, never mind that that’s against X12 syntax, that’s what they
need. Some of them will say in their data content requirements that identifiers
they need for the providers and that’s a legitimate requirement that is
required to do business, if you’re Medicare you want the provider’s Medicare ID
number, you don’t want the Medicaid ID number or the Tax ID number, you what
the Medicare ID number. That’s supposed to go away with the NPI. Another
typical requirement is whether for anesthesia claims you have to do the billing
in minutes or units and for ambulance claims whether you have to specify the
miles of the ambulance trip or you have to specify the zip code of origin or
zip code of destination, things like that.
There are some payers that require the provider spelling, the name of the
provider spelling to match the name of the provider spelling in the payer’s
system. And if it doesn’t match the claim doesn’t get accepted into the system
at all, rejected in the front end, never mind that the provider’s spelling is
spelled incorrectly in the payer system. And there’s other unique code set
restrictions, payer specific modifiers, Jean Narcissi mentioned how the coding
guidelines need to go along with the code sets, there’s a good number of payers
that will say we want these modifiers used in these circumstances to mean these
different things and that changes from payer to payer, not only is it very
difficult for the providers to keep track of what each payer wants in terms of
modifiers but also makes coordination of benefits impossible.
So where are all these requirements? Some of them are in HIPAA companion
guides or the NCPDP equivalent called payer sheets. Some of them are in
provider bulletins and newsletters. Some of them are in instructions for filing
different types of claims, DME, anesthesia, home health, ambulance, all of
these have requirements in instructions and newsletters. Some of them are in
Joe’s head, some of them are codified in legacy computer systems and nobody has
access to the code anymore but that’s where they are. And in some cases people
are scratching their and saying why do we require this again and nobody knows.
So how many sets of requirements do we have? Before HIPAA there were 400
formats in use, that’s for the NPRM reports. After HIPAA there’s one standard
format for the claim, the X12, and one in NCPDP, the reality today is that
yeah, we have one standard format, but we have companion guides, we have
identified as of last week 1,082 companion guides for the X12 HIPAA
transactions and the number keeps growing. We’re still working on identifying
the NCPDP payer sheets, so far we know of about 200 of them and the number
keeps growing too.
In September of last year, September 1st, we looked at a
distribution of these companion guides and we found for the 837 professional
262 guides, 837 institutional 223 guides, 837 dental 76 guides, 835 12 guides,
for the 270 46 guides, for 271 36 guides, for the 276 51 guides, for the 277 42
guides, for the 278 request 22 guides, for 278 response 12 guides, for the 834
13 guides and for the 820 12 guides. Now why is there discrepancy between the
number of guides of the request and the response? Something that’s still
We took another inventory last week, as of April 1st 837
professional 292, 837 institutional 252 guides, 837 dental 88 guides, 835 28
guides, 270 85 guides, 271 63 guides, 276 63 guides, 277 62 guides, 278 request
41 guides, 278 response 25 guides, 834 34 guides, 820 23 guides. So we compared
September to April we see an increase in the number of companion guides for the
837 around 12 to 14 percent increase in the number of guides, for the 835
there’s an increase of 133 percent in the number of companion guides. On the
270/271 an increase between 85 and 75 percent in the number of companion
guides. On the 276/277 increases between 24 and 48 percent of the number of
guides. 278 request has increased by 86 percent, the 278 response by 109
percent in the number of companion guides. The 834 has increased by 162
percent. We still only have 34 guides but that’s an increase of 162 percent.
And the 820 has increased by 92 percent.
So let me make some editorial comments on this, it seems like the increase
of companion guides for the 837 transactions is settling down, down to 12, 14
percent, which seems to indicate that there is about maybe 300 payers that are
accepting these transactions directly and therefore they’re publishing
companion guides. You can kind of equate the number of companion guides with
the number of entities that receive the transactions directly so there is about
300 that are taking them directly.
There is only 28 guides for the 835 and I’ve heard some rumors that there
are some providers that are going to start issuing 835 guides saying this is
what I want instead of just trying to take whatever the payer is sending. So
there may be a further increase in that number.
The other thing is that I would venture to guess that most likely if a payer
is accepting transactions electronically they have a companion guide for it. I
don’t know offhand of any payer that accepts transactions electronically
without having a companion guide for them so this kind of reflects the number
of payers and clearinghouses, but mostly payers, the number of payers that are
taking transactions directly for the different HIPAA transactions. It’s not
scientific but it’s pretty close and you can see how many are taking 834s,
820s, 270, 276, 278, as opposed to taking claims directly.
So Claredi has put together a website, a page with links to all of these
companion guides we have identified and in the website we list, you can see the
list is with small print, Jeff don’t worry, they can’t see it either, it’s too
small print, it’s a very small print, it’s a very long list that has a lot of
links to the websites and we link to each companion guide or to the page of
that payer site where the guide is available. This is updated on a weekly
basis, at least on a weekly basis, we have built an internet robot that goes to
all of these sites and see any changes in the guides and compares today’s
version of the guide with yesterday’s version of the guide and if there’s a
change we get notified, we update the site, we update our systems with the new
guides and so on so this is totally automated.
This is a free companion guide portal, it’s a free resource on the internet,
list of all the companion guides we’ve identified with links to the guide
themselves, however, only about 60 percent of the guides, 65 percent of the
guides are available through the internet. Some guides are restricted
distribution, some guides you have to sign an NDA to get the guide. The next
task is to get the NCPDP payer sheets and the NCPDP, the American Society for
Automation of Pharmacy and the National Association of Chain Drug Stores are
cooperating to try to get together the payer sheets and do the same thing for
NCPDP payer sheets as X12 companion guides.
We will also work on attachment templates because I foresee a great variety
of attachment templates that will come out as soon as the attachment NPRM hits
the street, all the payers will do the same thing that they’ve done for the
companion guides this time for attachments, it will be a lot more fun. And
eventually they’ll be a CCR template website, that’s also in the cards, we
expect CCR to have the same kind of variability from implementation to
implementation so we’ll try to do the same thing.
So how do help in converging all of this into common requirements? We
started about a year ago the HIPAA Transactions Convergence Project. Clearly
this convergence project is to help the health care industry converge on a
manageable set of requirements for the HIPAA transactions, to identify
divergent requirements, to automate the identification of the requirements in
machine processable format, and to provide a convergence model that will be
useful for other transactions, like those in the NHII, and it’s a free project
open to the entire industry. Hopefully we’ll see how convergence will lead to
interoperability and that’s the goal.
We’re looking at what we call data content profiles and the data content
profiles for different types of transactions, and I’ll go into a lot more
detail on this, are driven by the NUBC, NUCC, the ADA Dental Content Committee,
NCPDP, NDEDIC, National Dental EDI Council, CAQH, ASAP, American Society for
Automation of Pharmacy, and others. We believe that the industry should adopt
this data content profiles as reference point, or what we call target for
convergence. It provides the site, the convergence site provides a feedback
mechanism to compare transaction requirement profiles among the different
participants, we can see deviations defined from the requirements defined by
the data content committees and others against your own requirements. You can
see deviations of requirements among the same payer, multiple payers, you can
just compare different sets of requirements.
There’s two different kinds of convergence profiles in the site, there’s
some general convergence profiles and then there’s trading partner specific
convergence profiles. In the general convergence profiles define common
requirements as a target for convergence, for instance NUCC is defining bill
type, I’m sorry, claim type convergence profiles, what are the requirements for
an ambulance claim, what are the requirements for a home health professional
claim, what are the requirements for a lab claim. And you can see how an
ambulance requirement or a chiropractic claim or an anesthesiology claim will
have different data requirements. Implementation guides specifies general
requirements for all claims but once you go to identify maybe by specialty on
the different requirements you see different subsets of data that can and
cannot be used or must or must not be used. For instance on an anesthesiology
claim it would be pretty useless to have podiatry information but on a podiatry
claim it would be required to have podiatry information. So it’s those
different convergence profiles for the type of claim.
The NUBC is doing the same thing for the bill types and for each one of the
bill types specifying what’s required for an outpatient hospital stay, what’s
for an inpatient hospital stay with interim billing, an inpatient hospital stay
with a discharge patient and so on. So that specifies the targets for
convergence and we expect these profiles defined by the NUBC, NUCC, ADCC,
NCPDP, NDEDIC, CAQH to be usable by the entire industry as their target for
Then the payers and the clearinghouses and the vendors can define their own
profile and the profile can be for instance these are my capabilities as a
vendor, this is what I can produce, or as a specific payer they could say this
is what I need for this specific plan, in some cases some of the employer
driven plans have very specific requirements and they can say for this plan
this is what I need. And it allows you to compare the profiles, one to another.
We can also keep the profiles private so you can open a Claredi account to do
this, your own private Claredi account, you can keep your own private profiles
and compare your private profiles against the profiles that have been published
by the standards setting organizations.
This doesn’t replace companion guides, it supplements the companion guides.
Eventually all of these private profiles should go away, now let me qualify the
term should, we’re talking about HIPAA right, so the term should means that
they will never go away but they should go away, the probability of them to go
away is practically zero.
This is some images of the convergence project website, you have lists that
have been published already and Claredi has been trying to extract information
out of the payer’s companion guides that we have, those over 1,000 companion
guides, we’re going through the guides and kind of identifying requirements,
we’re kind of trying to seed the directory so people can find a use for it
immediately before they jump in and define their own guides.
So for instance this is the list on the screen that shows some companion,
some profiles, convergence profiles, defined for different bill types of the
UB92. For 11X hospital inpatient discharge Medicare non-PPS, another 11X
hospital inpatient discharge Medicare PPS, another 11X hospital inpatient
discharge non-Medicare, another 11x hospital inpatient no discharge Medicare
non-PPS, another one hospital inpatient no discharge Medicare PPS, and so on.
We expect to have about 80 to 100 different bill types for the UB92, maybe 60
or so different claim types for the 837 professional.
CAQH is going to be defining standards for the 271 requirements for the data
content, NDEDIC, National Dental EDI Council, is defining requirements for the
270/271 for dental transactions. ASAP is gathering the requirements for the
different pharmacy transactions. So we have also gone through some of the payer
specific guides and publishing them on the site and the idea is that you can
see from this site a summary of the data content requirements, more then
defining the transaction because the transaction is defining the implementation
guide, this is data content requirements. For instance, and I picked out an
example, I don’t know if anybody here is from Blue Cross Blue Shield of
Florida, Blue Cross Blue Shield of Florida says if you’re going to send me a
transaction the payer primary identifier has to be me, has to be Blue Cross
Blue Shield of Florida, and therefore has to be equal to 590, that’s my payer
ID. That’s a very legitimate requirement but people need to know about it so
this is a way to publish that.
They also say for claim submission/resubmission code the only code I accept
is one, which is original submission, if you send me a resubmission or a
correction to a previous claim or something like that electronically that may
be a legitimate HIPAA code but it’s not implemented to the specific plan. The
billing provider additional identifier has to be that billing provider
additional identifier 1-B which means Blue Shield code and it has to have a
length of five bytes, exactly five bytes. In some cases they provide a
template, what it’s supposed to look like, three alpha and two numeric or
whatever the code is, so all of that can be done with this convergence
They also say we require the principle diagnosis code and you can see that
the claim attachment report type of the paperwork segment, essentially
attachments sent along with the claim are not used. It doesn’t say don’t send
them, it’s telling the provider we won’t use them if you send them. Which is a
very legitimate function for the provider to know what to expect when they do
transactions with its trading partner.
This list can be downloaded electronically as either XML or comma separated
values, or you can view it on the web with HTML. And we support all of the
HIPAA transactions, X12 and NCPDP transactions. We have the addenda version and
the pre-addenda version, just in case somebody is still on the pre-addenda.
This is kind of how you define there’s a series of data elements that follow
the implementation guide for the transaction set, you choose which are the ones
they are going to define in your profile, and then you define for your data
elements with a very simple web based interface with buttons and selection
boxes and so on, what is it that you’re going to require, not require, not use,
not allow, and let me talk about the not allow, there are some data elements
that are allowed by the HIPAA implementation guide that don’t make any sense
for a specific transaction.
For instance this is bill type 11X, hospital inpatient not-discharged, that
bill type you would not allow the claim discharge hour because by definition
it’s a patient that has not been discharged. So that kind of clarifies how this
use of allow/not allow, and this is defined said data content profile, not the
format but a data content profile of what’s required for the different bill
types, for different claim types, for the different business cases, for the
different payers, for different transactions.
You can also put comments along with the list to guide the person that is
looking at the list as to what is it that you actually are looking for, and the
best part of the project is when you go to compare the requirements list.
There’s a long list of profiles, you can select the profiles that you want to
compare and you just clicking on the compare button at the bottom of the
screen, put those profiles side by side and have the computer compare the
requirements. In this case I’m using a very simple example, comparing the
requirements between bill types 11X, 12X, 13X, and 14X. You could compare the
requirements from one payer to another payer, you could compare the
requirements on two different bill types from the same payer, you could compare
the requirements from one payer against the equivalent requirements from NUBC,
or compare the requirements against NUBC and maybe eight or nine payers side by
side and it will tell you what is the difference.
Let’s say that you’re a provider and you’ve already implemented Medicare,
now you’re going to implement Medicaid in your state. You could compare the
requirements between Medicare and Medicaid and know what it is that you need to
do different. All of these comparisons appear visually on the screen, if the
requirements are the same they appear in green, if the requirements are
opposite to each other, contrary to each other, they appear in red, in this
case you can see in one column it says require the presence of the element, in
the other bill types it says not allowed. If the requirements are different but
still compatible, like an element may be required in one case and in the other
case is silent about it then they appear yellow. And so it produced a beautiful
colorful display of the comparison of the requirements but it’s very easy to
read what are the differences between this specific profile and another profile
that perhaps I’ve implemented already or perhaps I’m going to implement.
And we support both NCPDP transactions and X12 comparisons, this is for
instance shows the comparison between compound drugs and non-compound drugs and
the NCPDP claims. It also has a little bit of statistical information where it
shows how many of these guides are listed in the website, this is an old slide,
at this point we have implemented, we have entered, kind of seeded the site,
about 250 837 guides from 250 payers, so there’s 837 professional, 837
institution, 837 dental, and that kind of seeds the site and gives people a
feel for what to do with it.
You can also see what elements are used and not used, for instance we can
see that on the billing provider identifiers a lot of the implementation guides
that we’ve entered are requiring the specific provider ID, either the Medicare
ID or the Medicaid ID or the Blue ID or Champus ID or whatever it is that the
guide corresponds. But if there are elements that nobody is using you will see
the statistics so you will see this element is used 98 percent of the time or
this element is used only one percent of the time, and this hopefully will help
X12 refine the requirements for 5010 where they can see what are the elements
in 5010 that really nobody cares about, that nobody has defined any use for
them in the companion guide, or what are the elements that everybody is
requiring and you can come here and see that everybody is requiring specific
data elements and identified that as a candidate for being a required element
for everybody instead of having left it up to companion guides. So —
DR. FITZMAURICE: Excuse me, Kepa, by 98 percent of the time do you mean 98
percent of their written requirements required or 98 percent of the
transactions have it on it?
DR. ZUBELDIA: In this case it will be 98 percent of the profiles that have
been entered into the project, so it’s neither, and at this point we’ve only
entered about 250 837 profiles, 837 professional, institutional and dental sets
so we’re not there yet and I would like to see the payers entering their own
profiles because they know exactly what they require and sometimes this is
changing dynamically, even more rapidly then the companion guides change. The
idea is that this will be published by NUBC, NUCC, ADA, ADCC, CAQH, NDEDIC, and
The HIPAA covered entities should published their own specific profiles that
clearly provides the infrastructure, this is free, each publisher maintains
some profiles and we’re entering an initial set of payer specific profiles as
part of our implementations to seed the directory but it’s just a directory
seed. We’ve entered over 250 to date, we expect to see if each payer breaks
down maybe by ten bill types and ten different types of claims, we’re talking
about thousands of these profiles.
We made the machine readable and downloaded so the practice management
vendors will be able to go there and download those profiles and built it into
the practice management systems so when they collect the data that they’re
going to send to a specific payer they will know within the practice management
system what is it that this payer needs because they were able to retrieve it
from this site. Ideally we would like to have convergence so until we have
convergence we have a web portal where the companion guides can be referenced,
we have downloadable in machine readable format these requirement profiles,
this list of requirements, they’re easy to compare, this doesn’t replace the
companion guides, the ultimate goal is convergence.
Now the probability, if I was working for government I would say the
probability of convergence is zero, but until we get there there’s an easy way
to automate the divergence measurements. It’s free to the industry, I want to
extend again an open invitation to participate to anybody that is listening on
the internet and anybody in this room, and if you have any questions don’t send
me an email, the convergence project url is
and just try it, it’s free, and enjoy it. Then we welcome feedback, positive
Thank you for the opportunity to make this presentation and now it’s open
DR. COHN: Well, thank you all for some very interesting testimony. Kepa, I
guess as you enter your middle age I notice a little bit of cynicism or
skepticism here about the probably —
DR. ZUBELDIA: It hasn’t changed.
DR. COHN: It hasn’t changed, huh, this probably equality zero, so you think
this will be a tool, let me just ask as we move forward, I mean do you
anticipate in whatever the ANSI version 6030 or 6050 there might rather then be
an institutional and provider there may be really ten or 15 different subsets
with implementation guides out of all this?
DR. ZUBELDIA: That’s a very intriguing thought, right now it’s divided into
three claims, professional, institutional and dental, there’s two subsets in
the institutional, inpatient and outpatient, and I can see how if those subsets
are still being limited to two subsets in the institutional and then
professional and dental, if they had been defined as maybe 15 or 20 different
subsets for the professional and maybe 60 to 80 subsets for the institutional
we would probably have been better off. There’s a lot of variability now
because while what you interpret as outpatient I may interpret as inpatient
requirements and what you interpret as a chiropractic maybe I don’t interpret
as chiropractic requirements and it’s just there’s all kinds of variability for
that reason and maybe that could be narrowed down.
DR. COHN: Just a question. I do want to remind everybody that we’re running
about 45 minutes late now, any questions from the subcommittee?
MR. BLAIR: Kepa, you’ve provided what appears to be an extremely valuable
helpful tool to promote convergence and from what you were saying a number of
organizations appear to be interested in working with this tool. Is the
motivation of these organizations, the motivations of the payers and the
providers and the vendors sufficient to give us good convergence over the next
few years? Or is something else needed as an incentive or some other entity
needed to be able to be a catalyst to promote convergence?
DR. ZUBELDIA: Everybody that is participating in the convergence project
believes that it will help guide the industry towards convergence. Everybody is
trying to do the right thing, there is a lot of pressures, external pressures,
other competing projects, if there is a catalyst it will go faster, that’s what
catalysts tend to do. At this point the process is probably going to take ten
to 15 years and probably one or two more iterations of the HIPAA guides before
we achieve something that is in line with the original goal of being able to
send the same transaction to multiple trading partners without having to go
like McKesson through 300 different programs that provide validation of the
data content for 500 payers. And the problem is a serious problem but it’s a
slow process, the payers have to change their systems, clearinghouses have to
change their systems. If you’re thinking about regulation I would be very
hesitant to mandate through regulation a second time what was not fully
achieved the first time.
MR. WHICKER: I might also mention that with WEDI at our conference in May we
have a pre-conference workshop, I believe it’s four hours of information
gathering and trying to get those who are there to participate, payers and
providers and so on to start working on getting additional work going on this
DR. COHN: I have one other question, obviously I want to thank you all, Kepa
we do appreciate your effort on this one, I know you’ve tried to figure out how
to do this somehow for the last, for as long as I’ve known you, this obviously
is probably a softer way of encouraging convergence then many we’ve considered
over the years. As I’ve listened and I’m trying to think of how to put together
this panel and the last panel I’m hearing some sort of key issues around return
on investment and I just want to sort of reflect on them and make sure I got
Now what I hear number one is sort of this, the issues around return on
investment number one have to do with increased use of the non-claims
transactions and that seems to me to be the, of all the things that’s sort of
like the big number one here. And of course it also, and a piece of that is
somehow encouraging practice management systems to fully implement all the
transactions, maybe CMS outreach related to some of that, but think about how
maybe to do that becomes sort of those particular pieces.
I hear there being some angst relating to this issue about the, I guess the
inability or problems with providers being able to directly connect with
payers, but I think Kepa and the convergence project bring up sort of the
issues of well, there’s so much variability it becomes sort of hard to figure
out how you would directly connect with payers in this environment though I
think that’s yet another issue.
And then I think there’s sort of the third one which is maybe really the
second piece is this issue of trying to reasonably reduce unnecessary
variability in the 837 which we’re already seeing and I think Kepa made the
interesting observation that the reason we haven’t seen too much variability in
the rest of them is that they aren’t implemented too far yet. And that if
really these other transactions were implemented we’d have 300 to 500 of these
other companion guides.
Am I missing something here? I mean it all sort of sounds like this issue of
getting these things, they’re the things being used as well as figure out ways
to be, to sort of softly begin to sort of move us more towards more
MR. REYNOLDS: Simon, this is Harry, another one I think that came up is this
whole code set process.
DR. COHN: That’s right, and your comment was is that the variability of the
timing of implementation.
MR. REYNOLDS: Right, that was one of the comments that came up also.
MR. MCLAUGHLIN: I would also recommend that we take a look at the
non-regulated HIPAA transactions, those as I mentioned being the
acknowledgement transactions that would allow for a more complete communication
between business partners, that’s something that’s not currently regulated by
HIPAA but would certainly help providers understand what transactions are being
rejected by the payers that being by providing an unsolicited 277 back to the
providers that would tell them what was accepted and what was rejected among
other transactions such as the TA1 which communicates whether the communication
itself was successful and the 999 which is actually going to work as a
replacement to the 997 to give syntax type of information related to the
transactions being passed. And as I mentioned WEDI also has an effort working
on that and recommendations will be coming forth to this committee as well.
MR. WHICKER: And I just had a comment also, the more specific that my
trading partners are, speaking as a provider here implementing, the more
specific the requirements are the less likely I am to be able to implement,
I’ll drop that payer or that trading partner to the bottom of the list and
implement someone else who has less specific requirements, things that they
reject the transaction because of content. And it reflects back to the things
that Kepa showed on his slides, if a payer expects this ref segments but won’t
allow this other ref segment that is an appropriate qualifier and value I’m
less likely to be able to bring up my transaction with that payer.
DR. ZUBELDIA: There is a challenge in flexibility, evidently if all the
payers were capable of accepting all the transactions and all the versions of
the 837, if I could produce an 837 that is acceptable to all payers without
changes that would require the payers to have the flexibility to accommodate my
peculiar implementation of the 837 as opposed to Jim’s peculiar implementation
of the 837. So if the payers build in that flexibility to accept the
transactions without very rigid requirements, which is something very
desirable, we end up also with what they call interpretations and they will say
well, there’s enough flexibility in HIPAA for me to interpret that when it says
must I interpret that as should or as may and that flexibility of
interpretation helps in some cases and hurts in other cases.
And there is not a good process to resolve those issues, there are several
processes to resolve those issues, one is the ask HIPAA process, there’s
another one through the DSMOs, there’s another one through WEDI, there’s
another one through X12, there’s not a definite process to resolve some of the
issues. For instance what’s an inpatient claim and what’s an outpatient claim,
and if there was a way to say that definition comes from the NUBC and somehow
delegate the authority and somewhere say this flexibility in interpretations
are authoritatively defined or resolved by some entity. And there’s not one
entity that does that today but if we could have some entity that says this is
the definite resolution on different topics it would help the entire industry
convergence into common interpretations.
DR. COHN: Well I guess as I listen to all of this stuff I think of some
things as first steps and some things as maybe it’s the 8030 version of the
HIPAA implementation guides —
DR. ZUBELDIA: It was 6030 a minute ago.
DR. COHN: No, yours I was referring to as the 8030 actually, only because I
think, I mean I think that that may actually take a little more work since
that’s a lot more standardization of the industry which I think is what you’re
reflecting on and it’s that delicate balance between business processes versus
transmission of standards. I don’t know but I agree with you, these are, I mean
I think we’re all trying to take steps in the direction of increasing the
value, increasing the level of standardization and I think it’s been a reminder
that you don’t get there overnight and I think back in 1996 we though if we
turned the switch and go from 400 NSF formats and UB92s down to zero by the
year 2000 and clearly that’s not happening. Stan, Michael, and then we have a
question about next steps in this area and then we will take a lunch break.
DR. HUFF: So being mostly in the clinical I can ask the naïve questions
and then you guys won’t laugh too hard. I would have naturally thought that the
authority for this would have been somebody in the government and does that
exist and I guess to what extent for instance is that role of being interpreter
of the law and the standards muddled with the government’s role as a payer? Is
that a distinct, are there distinct separate responsibilities somewhere that
reside in the government to adjudicate the interpretation of the HIPAA
standards versus the role of the government as a payer and what they’ll accept
as a payer?
DR. COHN: Well, I don’t know if they can answer, I’ll try and then maybe
Karen but there’s an Office of HIPAA Standards, they are separate from the
payment aspects of CMS, I don’t know if that answers your question —
DR. HUFF: Yeah, that’s basically the question.
DR. COHN: Okay, Karen, do you want to —
MS. TRUDEL: The reason that there is a separate Office of HIPAA Standards is
to separate primarily the regulatory and enforcement functions of HIPAA which
had been delegated to CMS by the Secretary from the covered entity parts of
CMS, like Medicare fee for service and managed care, etc. And we do maintain
that what we call a fire wall rather rigorously and I think where you find our
interpretation coming into play primarily is when there’s a question that
relates to an enforcement process to a complaint where someone says is this
transaction HIPAA compliant or not, we are the ones who need to make that
decision. And we do it with a great deal of expert input but I think your
question was fundamentally at the end of the day it’s an inherently federal
role. And it is kept very separate from the covered entity parts of CMS.
DR. COHN: Stan, are you okay with that?
DR. HUFF: Yeah, I guess then in the Office of HIPAA Standards, I mean are
you doing work similar to what Kepa is doing there at the volunteer, I mean are
you working towards, I mean from the way you described it it sounds like if
people ask you a question you’ll provide an answer —
MS. TRUDEL: Yes.
DR. HUFF: Are you doing prospective things to say could we reduce the 300,
500 implementation guides to one standard implementation guide? Is that in the
purview or do you even have the mandate to do that from the legislation?
MS. TRUDEL: I don’t know that we have a specific legislative mandate but we
certainly do have a responsibility to work with industry organizations to
enhance the implementation of HIPAA wherever we can and we very often do that
in just voluntary venues like the CAQH process that has to do with the
eligibility of the 270/271, there’s no requirement that anyone participate in
that, there won’t be any requirement at the end that the results of that
project must be adhered to but we certainly encourage it and have been actively
working with CAQH to get the ball rolling and we have an ongoing relationship
with WEDI as well. So I would say that we’re pretty well linked into some of
these things that are going on.
DR. COHN: Michael.
DR. FITZMAURICE: Well Stan raises something interesting, as did Karen, that
is I don’t know that we’ve heard from the business operations side of CMS,
we’ve heard from Blue Cross, other health plans, but we’ve not heard from the
Medicare program as a health plan, are they having the same kinds of problems
with these code sets, when they deal with coordination of benefits, different
health plans have different requirements and different meanings for a code set,
does that cause the Medicare program any problem and there are probably a bunch
of things that I couldn’t think of but we just haven’t heard from probably the
largest health plan in the United States. So that was just my comment on what
But I have a more specific question for Kepa and that is what you’re doing
in the, I’ve forgotten the name of it, the process whereby you’re listing all
of the requirements for the HIPAA transactions, that’s a fantastic tool, it’s
absolutely amazing, it’s something I would expect to be a public good and a
clamor for government funding, I’ve not heard a clamor for government funding.
It’s amazing to me that the private sector has come forth with this initiative
and so like Simon sometimes you get a little, you squinch your eyes and say
well what is the business model for this because it’s obviously good publicity
and it’s something that’s very well needed. So Kepa what’s the business model
DR. ZUBELDIA: If you want to write a check I’ll tell you where to send it.
The business model is none, this is a strictly voluntary effort because I
believe it’s necessary, in fact I’ve been fighting some people within my own
company that are saying well why are we doing this, what do we get out of it,
and I said well maybe we don’t get anything out of it but we need to do it. We
collect the HIPAA companion guides, not because they’re pretty but because we
implement those in our products, so in our product we have in excess of 8,000
edits that apply directly to HIPAA companion guides. We have about 3,500 edits
just for HIPAA requirements plus 8,000 edits for HIPAA companion guides. We get
those out of the HIPAA companion guides that we get so we have a repository
both electronic and paper of HIPAA companion guides and we have people that go
through them and go through all the updates when they get updated weekly or
more frequently then that and make sure that our systems are kept up to date
with all those edits. And because we have it we might as well just with a
minimal incremental effort publish it, it took us a while to develop the tool
and to make it look user friendly and put the security there to let people
create their account in our system and all that, but that’s a one time
development and it’s done, we have a website, we have a directory, we have a
repository, it’s just minimal incremental additional costs that is just
practically nil on an ongoing basis.
DR. FITZMAURICE: Well, I was just going to say that this appears to be an
extremely valuable tool and not are you and Claredi to be congratulated but
also the people who partner with you that give you their information and that
eventually may voluntarily update this website, it would be invaluable for a
practice management system or somebody else needing to move information around
to find out what those requirements are, also invaluable for somebody who wants
to mush them more and more together as is possible, like was done with the
state cooperation with the local code sets, this is another example that
private sector can work to harmonize things.
DR. ZUBELDIA: And we’re offering the downloads that you saw, XML or CSV, so
the practice management systems can in fact download this automatically and
build those requirements in their system and if they need a complete table of
everything that we’ve got we’ll provide them with that. There was a comment by
one of the WEDI convergence chairs that said this is great if it achieves
convergence, but if it doesn’t achieve convergence the fact that I can download
these requirements automatically and built it into a practice management system
makes the non-convergence irrelevant because now I can have all of that
automated in the system anyway. So one way or the other I hope that we can help
in getting these HIPAA transactions better.
DR. COHN: Karen and then I want to make a comment and then we’ll break for
MR. REYNOLDS: Simon, can I make one comment?
DR. COHN: Oh, sure, you can make a comment before I do then. Karen first.
MS. TRUDEL: I think one of the most valuable things I’m taking away from
this whole discussion this morning is that there’s more to companion guides
then meets the eye and we’ve all heard people say well we used to have 400 now
we have 1,000, this is terrible, the sky is falling and what it seems that I’m
taking away from this discussion is that more companion guides aren’t
necessarily a bad thing because if someone doesn’t have a companion guide for a
transaction there’s a chance that they haven’t implemented it at all and that
there are valuable and not particularly supportable real reasons for having
different interpretations and different ways of doing things among different
plans and that what we need to concentrate on is defining those and getting rid
of the extraneous requirements that are just there because they’ve been there
DR. ZUBELDIA: Let me make a comment on that because in one of the slides I
say that most of the requirements in the companion guides are very reasonable
and they’re absolutely necessary, when they talk about telecommunications,
acknowledgements, provider ID numbers and what to use and what types of claims
they accept and what business they’re not in that business, very, very
important things. And like you said if they don’t have a companion guide most
likely they have not implemented the transaction.
Now when we find through this process, we take the companion guides we have
on the list and go through the guides and build the edits in our system, in
that process when we find something that is against the HIPAA requirements our
experience has been that we’ll contact the payer and say hey, this companion
guide you have a requirement that is odd, we’ll implement the way you have it
described but we believe that if we implement it that way there may be a little
bit of a conflict with HIPAA, we try to be soft about it. And 99 percent or 100
percent of the time they’ll come back and say well you know you’re right, let’s
either clarify the language or that’s not what we meant or let’s remove that
requirement, let’s fix it, we’re finding very good cooperation from the payers
in cleaning it up. And it’s very rare the case where we’ll find somebody that
says I don’t care about HIPAA, I want this, 99 percent of the time we find very
good cooperation, they revise the guides.
The other day during the HL7 meeting a payer came to me and said Kepa how
come Claredi has this requirement that specifies that we cannot accept this, I
said well it’s in your guide, and he goes really? We looked at the guide and it
was there, it was in the guide. So that’s the kind of feedback process that
helps the entire industry, kind of having a third view of the guides by a third
party and kind of help convergence. And hopefully, it will take a long time but
hopefully we’ll get there.
DR. COHN: Harry.
MR. REYNOLDS: Yes, Simon, as Jeff and I were setting up this panel and I
wanted to say this before if any of the speakers have to leave at lunch, our
goal was that people would come in and take a short look back but really try to
look at how to make things better going forward and I’d like to commend to the
speakers, not being able to see body language or anything sometimes you just
hear the basic message, I feel that the tenor, the quality, and the focus of
the presenters has been outstanding and exactly what I know we were trying to
get to so I’d like to thank everyone that testified because I think it really
gave us some good things to take forward.
DR. COHN: Well thank you, well I was wondering if you had a question or not.
MR. REYNOLDS: No, I know we’re behind and I’m getting good information.
DR. COHN: I appreciate that, and I guess the comments I would make just in
terms of closing, I think this is an issue, this is a topic I think we want to
sort of move through the year so this is not, this is sort of session two of
probably four or five sessions around all of this.
I am sort of struck as we talk about all of this that there’s, we’ll
probably need to get some of the practice management system vendors in to talk
to them about how we can help and the issues, are they really able to put in
all the transactions, are there barriers, what issues are they experiencing, I
mean what is their perspective on it because I think certainly we heard some
today that makes one think that they are a group, they’re important to all of
this and we need to find out their view. I do think that also hearing
potentially from CAQH and the eligibility work, I know they’re doing it with
WEDI and others, but I believe they’re leading that effort so maybe getting an
update from them about what’s happening.
Once again as we move into this issue of these other transactions and really
making them all work, the other piece of course also taking a slightly longer
look is that the claims attachments I know we’re at some point going to see the
proposed rule but as claims attachments come down the way I think Kepa is
probably right that there will probably be HIPAA compliant attachments and then
there will be everything else and we probably need to think through that a
little more as we go forward. And I may be off on that one but I think that’s
something we should at least think about as we move forward, just along the
lines of something else that adds value to the ROI here.
And once again I’m just sort of trying to think of all of this before I, I’m
sure we’ll sort of forget as we move into the afternoon but anyway I think
these are some very useful conversations.
We are now running an hour and a five minutes behind our schedule, what I am
going to suggest is if possible can we take a 45 minute break and then we’ll
come back shortly after 1:30 and start up again so thank you.
[Whereupon at 12:50 p.m. the meeting was recessed, to reconvene at 1:43
p.m., the same afternoon, April 6, 2005.]
A F T E R N
O O N S E S S I
O N [1:43 p.m.]
DR. COHN: Okay, we are going to get started with the afternoon session, now
we’re changing around the agenda a little bit, we’re changing around the agenda
a bit and we’re going to now spend a little time talking about subcommittee
discussion on secondary uses of clinical care data. We’ll talk about the NPI
implementation following. Stan, do you want to lead off this conversation?
DR. HUFF: Okay, what I’d planned to do is just talk about the idea a little
bit and then talk about what the opportunities are and then how we would change
sort of this list of things into a work plan to discuss this item and then any
issues that come up we could put on an issue list and make those topics for the
work plan as well.
DR. COHN: Stan, should we check is Harry on the phone?
MR. BLAIR: Harry, can you hear us?
MR. REYNOLDS: Yes, I can hear fine.
DR. HUFF: What I’ve done Harry and Jeff as well, I’m just projecting sort of
an outline of things and I’ll kind of fix this as we go along.
So the idea again of this idea, and it’s not original with me at all, it’s
been expressed by other testifiers as well as our own documents as Jeff pointed
out, but Chris Shute(?) has been a particular advocate of this activity. The
idea is that you would collect clinical care data encoded in using standards
shared data models and standard coded terminology and the kind of data that you
would collect would include orders and results and text documents and clinical
assessments from nurses and respiratory therapists and physical therapists, all
of the data that you could collect you would collect and that data collection
would happen according to what’s needed to take care of the patient, what you
need to record to take care of the patient.
And then that data would then serve as the basis for algorithmically
assigning and doing other tasks and the kinds of tasks, try to make a good list
below, you could basically apply a program to that data and the program would
algorithmically assign the appropriate morbidity and mortality codes for that
stay or that visit, or it would assign the appropriate billing codes or it
would do automated creation of HEDIS reports for quality on that, those kind of
things. And so that would be the, what you’re trying to do is accomplish in an
automated way things that are happening now by a lot of manual chart review and
other kinds of review.
The algorithms would be standardized also and basically would constitute
rules for standard classification or derivation and so a lot of the kinds of
things that are now written down in paragraphs and pages of descriptions to
people would become instructions that are executable by programs in assigning
those kinds of codes.
So that’s sort of the general idea and maybe I’d stop there and ask if there
are comments or questions about sort of the idea or whether it’s even a good
idea. If you prefer we can through more and then, okay, so the second thing
then is to try and get, do a little brainstorming here with the group in terms
of the list of things that might be done and I think this should include things
that people know are already going on and/or things where there’s an
opportunity and nobody is doing anything yet so it should include both things.
The list of things that I have for Jeff and Harry, I have automated
assignment of morbidity and mortality codes, automated assignment of billing
codes, automated creation of HEDIS reports, evaluation of adherence to best
clinical practice, QOI which I’ll need help from this but the idea is that you
could use this in fact to assess quality directly from the primary care data as
opposed to the peer review sorts of activities that are going, used to go on,
and I may be behind the times there. Automated response for clinical data to
support claims, so basically the automation of claims attachments is
conceivably possible based on primary data.
Assignment of nursing acuity codes, derivation of some population statistics
and the example for instance would be that if we were interested in heights and
weights and what are happening to heights and weights of people, in fact
Intermountain Health Care has thousands of those and actually are chronological
over time and we have probably some people from birth to a certain age and
nobody is looking at that data or doing anything particularly with it but it
might in fact inform some kinds of population statistics. If you apply these
things in real time then you could do bio surveillance so that’s something
that’s already being done.
So those are the sets of things that I could think of.
MR. BLAIR: Is Michael here to hear this?
DR. FITZMAURICE: Yes, I’m here Jeff.
DR. HUFF: So that’s a list and we can come back and try and add to that
And then for each of those opportunities, so for each of those things that
we listed potentially we can say is anybody working on that, who’s working on
it, what’s been done, what’s the potential pay back or the business, what would
drive in fact people to do that, what’s the incentive to do that, and then what
could be done to encourage the activity which probably comes down to the
recommendations this committee might make is are there specific recommendations
that we could recommend funding or research or general moral support that would
cause these things to happen that would result in more efficiencies within
And a fourth category was just looking at are there activities or standards
that are common to the process and of course an obvious thing is standard coded
vocabularies, not quite so obvious is the need for standard shared data models
that need to be coupled to those terminologies, and then standards for
representing the actual logic, the rules that are executed that cause these
classifications to occur within software.
MR. BLAIR: Could you elaborate a little bit about either examples of what
you’re thinking of when you say data models?
DR. HUFF: Yes, and actually I have a small slide set just in the case
somebody asked that question so I’m glad you asked that question. So the idea
is that there are lots of ways to say the same thing even if you’re using
standard coded terminologies so on this slide we’re talking about deep tendon
reflexes and the things that are in red essentially represent one code and the
things that are in blue represent the value of that evaluation so the first
statement says left patellar deep tendon reflex intensity and that would all be
represented as one, could be represented as a single pre-coordinated code and
then have a value of two plus. On the other hand it could have been done as
patellar deep tendon reflex intensity as two plus and laterality as left and so
that would have been actually two codes with two values associated with it. Or
you could be even more atomic and more post-coordinated by saying the deep
tendon reflex intensity is two plus and the body part, if we were particular we
would say it was the patellar tendon and the laterality is left. And so those
are all ways that you can decompose the same thing and if you’re not careful
you get unrecognized synonymy within a database because you choose those
Now there’s even a simpler example, if you’re doing weights, you have the
patient’s weight and then you have all of these other kind of qualifiers people
attached to weights to say this is the patient’s weight at birth, this is their
ideal body weight, this was their admission weight, this was their post-op
weight, this is their whatever kind of weight. And you can pre-coordinate all
of those so that you have different codes for weight at birth, ideal body
weight, that sort of stuff, or you can do it as a post coordination where you
have a single code for weight and you have weight circumstance or some other
qualifier or weight qualifier that says at birth, with clothes, without
clothes, lean body weight, all of that sort of stuff.
So the whole point is that if you think about those two different models,
just continuing this weight example, if you wanted to calculate the weight gain
during a hospital stay it’s very different to do it if you have a single code
for weight with associated qualifier then it is if you have a single
pre-coordinated code to represent that same information. The actual things that
a computer would do to calculate the weight are quite different based on each
of those models.
Now a lot of the models are interchangeable and so you’re not really
necessarily forcing people to use one or the other of those models but you want
to recognize the synonymy that exists between those models so that in fact you
can do automatic transformation of those models and especially what you want to
do though is even though you’re not forcing individual systems to do one model
or the other those models become the basis for stating rules. So if you’re
going to state a rule that says has the patient’s weight increased this amount
from birth until a certain period of time until their first birth date or
something, that rule to be executable has to be stated against some assumptions
about the data model, not just the standard codes that are used in the data. So
those are the kind of standards that I mean about data models, you have to have
a way of saying am I going to do this pre-coordinated or post-coordinated,
recognize the synonymy between those two things but use a given base model for
the statement of rules that have to do with that kind of data. So those are the
kind of shared models I was talking about.
Other questions about that?
Okay, so again the activities, the things that may be standard or activities
or standards that are common to all of these processes are the standard coded
vocabularies, standards for shared data models, and then standards for
representing the logic, aggregation logics as Chris Shute describes them, which
again they’re candidates for how you might represent that logic.
MR. BLAIR: Standards for aggregation logic, please explain that to us a
DR. HUFF: Well, that’s just the term that Chris Shute uses to mean the set
of rules that allow you to calculate from the primary data that was charted to
whatever this derivative code is, whether it’s a classification code or a
billing code or a quality code or whatever it is.
MR. BLAIR: If I were to use the phrase that these are the rules that would
be the criteria for translating —
DR. HUFF: Yes, that’s the same way as I’m using this term.
DR. FITZMAURICE: Stan, could I ask, would aggregation of logic include here
is a something, a broken leg, how much should I pay for it, the aggregation
logic would move from the coded here is a broken leg to a payment schedule to
writing the check. Is that an example?
DR. HUFF: Yes. Usually it would go through a different step, usually that
is, your rule wouldn’t be specific enough that you could, you would base
billing directly on primary data, you’d usually go from the primary data to a
billing code and then say what, how much am I paying for that today. But yeah,
that’s exactly the same kind of logic.
DR. COHN: Marjorie had a question and then Maria and then Jeff. Marjorie?
MS. GREENBERG: Well, first of all I want to thank Stan for bringing this
before the group because I think it’s really very interesting and stimulating
and important and also I really like the fact that you’ve posed it as a series
of questions that probably require a research agenda because obviously it is,
that’s what it would be and the possibility of helping I would say probably the
Office of the National Coordinator and others, the National Library of
Medicine, etc., develop a research agenda that ideally could be taken forward.
Now you’re waiting for the but, right? I think that’s all great.
I did have some questions because particularly around not surprisingly the
idea of being able to in an automated way assign mortality or morbidity codes.
Right now when we talk about mapping we, well first of all mortality is codes
about, I don’t know, 90 percent or something are applied in an automated way
but from the death certificate because they require and that the physician or
the certifier go through these international rules and determine, you know, I
mean I’m sure you’ve filled out death certificates. But the precipitating all
the way down to the underlying cause which may not even be in the record or may
not certainly be in the record for that episode or that encounter.
And then NCHS over a period of about 30 years or so has developed automated
systems that take what the doctor wrote and then assign the appropriate code,
the appropriate ICD code, in this case now ICD-10, and also selects the what of
those codes which one should be the underlying cause. So that’s done in an
automated way but the source document is the death certificate.
So I’m wondering in that case if you’re thinking that you could skip the
death certificate and this process by which the whoever certifies the death has
to actually make those judgment calls by just applying all sorts of algorithms
to the information in the record and I would say I can’t even really imagine a
research project that could resolve, that could lead to that, I just don’t
think that’s practical, I mean for a lot of reasons.
So I’m just saying that in that case I don’t even see, although I
congratulate the idea of doing research to me that would, and so I think when
you put something like that up there people think oh we could do it. So that’s
my statement on that and we can talk about that later or in the future. And I
don’t know if that’s what you had in mind, just skipping the certification.
But the other is with the morbidity, I know you’re trying to cut me off,
Simon, but I really —
DR. COHN: Well, I just wanted to sort of comment that I don’t think we’re
necessarily trying to answer all the questions —
MS. GREENBERG: No, but I mean the question is would we even want to pursue a
research agenda on some of these things and some of them might be, have more
potential then others. With morbidity, what we’re talking about with mapping
obviously is going from the SNOMED codes, assuming that that’s what’s used, to
the correct ICD codes, and there’s a lot of work going on with that as you know
and this committee of course has recommended that. But as I understand it you
are going considerably beyond that and saying that it’s not just if the
physician has written down that the person has this condition in the SNOMED
codes, that then you would map it to the right ICD codes, but you’re talking
about actually applying algorithms that would look at all the tests and the lab
work and various other things as well. Am I correct about that?
DR. HUFF: Yes.
MS. GREENBERG: Okay, so that is clearly completely unlike coding is now done
because the coder to the extent coders are used do not diagnose the patient
from information in the record. I mean they could query the physician because
of information they saw in the record, so that would also be, it’s very
different from this mapping activity because it’s really, and I was wondering
if you were still thinking, just because I’m sure, I know you’ve thought about
this a lot, whether it still would require the physician to say that the person
had a health condition or alternatively that the algorithms might question the
physician having said the person had the health condition because the labs
don’t match up with it. So that’s just some of the questions that I have.
DR. HUFF: I think that, well, so let me respond. So I put things on the list
knowing that there are smarter people then me that knew the details of this and
I would tend to agree with you, I don’t, I think that the mortality coding
could be done but the honest situation as you described it is that the data is
never encoded in the medical record right now at least in any of the systems
I’m familiar with so that you have the primary, there is no primary, usually
you have all of the data up until they die and then it’s all written down on
death certificates or other things so there’s no data.
Morbidity on the other hand is very different and you’re exactly right, in
these other things what I’m saying is that you could have a rule that would
basically look at a person’s blood pressures over time which is a different
thing then a code mapping, it’s an algorithm that says okay, if I see blood
pressure from this person over the last six months where everyone of them is
elevated I’m going to say they have hypertension regardless, or I’m going to
assert that. And likewise if it’s renal failure or something I’m going to say
okay, I’m going to look at serum creatinines, I’m going to look at renal
biopsies, I’m going to look at other things and algorithmically say this person
has chronic renal failure based on the evidence, the primary data that’s in the
record. And so that’s why it’s different then coding although there could be
some, well it’s different then simple coding from one coding system to another
The kind of mappings that we’re doing, people already recognize this is in
the mappings we’re doing because to go appropriately from SNOMED to certain
ICD-9 codes you need to know the patient’s age and so it’s not, you have to
actually look, what you need to do is look in the patient’s record to get the
patient’s age and associate that with the appropriate code to make the
appropriate mapping and so you’re already starting to get into algorithmic
things as opposed to sort of pure mapping things and there are lots of other
situations like that in going from SNOMED to ICD-9 for purposes of billing.
MS. GREENBERG: Whether the person is pregnant or something like that.
DR. HUFF: Pregnant, yeah, is this gestational diabetes as opposed to,
anyway, so all of those issues.
DR. COHN: Well, I want to let Maria, Jeff, and then I had a comment and
MS. FRIEDMAN: I think you really hit on a very important topic and it
relates to work that a lot of us have been doing over the years and that’s
mining large datasets and trying to make them talk to each other, it’s been
mostly done on the administrative side but I think backing into it from the
clinical side is very important because we need those linkages and I think
anything that we can do to get it automated is way cool.
One of the things that we found as we pursued this stuff over the years is
if you think the variability in claims forms is great wait until you see the
variability in databases and the administrative reporting and just
classification of all kinds of things. So I’m not saying not to do it, I was
just wondering if it’s possible if this could be pursued in the context of
other research agendas, I don’t know if anybody else is working on this but
trying to figure out how to deal with the variation within and across databases
as well as prospectively defining a set of standards or algorithms that the
computer could do its thing with and then applying that retrospectively is
going to be an even bigger challenge.
DR. COHN: Jeff, it’s your turn.
MR. BLAIR: I’m a fairly transparent person so you know that I’m very excited
this concept. So I’m starting to think how it would be implemented and I know
that as I start to mention a few things that might go into a work plan that you
might bring back to us next time or something, Stan, I know that I’ll only hit
it at a high level and there may be several steps before each of these steps
that I’m mentioning could be done but maybe this is in part like a concept or
high level strategy.
What it would take, if we sort of look at our objectives one of them was to
be able to map patient care data to supporting the reimbursement process,
another one was to support the ability, you said to HEDIS but maybe other
measures of quality which may support pay for performance and those two don’t
get separated anymore because the mapping to reimbursement and mapping to
quality indicators down the pike are going, if we’re going to have pay for
performance I would think this is going to be a the core of something that
could support that. Other things are research agendas in public health and they
may turn out to be some derivatives of the first two and so that’s the reason
why I feel like we both have to analyze, have a research agenda for each of
these separately but then to look at it all together because we may find out
that we save an awful lot of time and money if this is somehow integrated and
that it’s not completely in isolation.
Now the reality may be that once we’ve done that we have an integrated
research agenda with all of those major pieces and then we take a look at that
and then we wind up saying well we can’t do it all at once but as we go down
and we pursue what we always refer to as the low hanging fruit which might be
reimbursement or quality or both of those or something like that and that’s the
low hanging fruit or a subset of each of those, but that we do it in a way
where we don’t create more stovepipes. We do it in a way where the mapping
projects can be as synergistic as possible and that can support the expansion
and where there’s dual uses for mappings.
That probably requires a work plan that would set forth as Marjorie said a
research agenda and so the other piece is the inventory you mentioned, Stan,
the inventory of what’s out there now and that may have to come after this, all
of the pieces that have to be there to be able to do these mappings, and then
you have to wind up looking at those and saying well what already exists or
what projects are in development that we can draw upon and that may reduce our
costs or that may bring us closer to answers on a near term. And then the third
thing I tend to think of is for the missing pieces and the gaps, who are the
special interests that will benefit that might be able to fund filling in the
DR. COHN: I guess I’ll put my two cents in now, Jeff I thought you made some
very good points. First of all I worry when we start talking at the onset of
things as a research agenda because I actually don’t think it’s the role of
this committee to have a research agenda per se though we can certainly add
bullets to a NCVHS research agenda. We may at the end of the day come out with
certain things that need a research agenda associated with them but as I look
at this I’m sort of going, to me it’s sort of the fundamental first question is
getting a little more familiarity with the area, just because I don’t feel like
I have enough to know what’s research and what’s not at this point.
And I’m sort of going geez, if I wanted to know more about what was really
there versus more was I think as Jeff described sort of things that were not
low hanging fruit might have Chris Shute come and tell us about his ideas and
thoughts. I know NLM is doing a piece of this and certainly talking to them and
hearing their piece which is mapping but also recognizing that there’s other
pieces that may need to be in place and their views of what else would need to
be there might be very informative. I suspect talking to people like AHIMA
might be very useful and I mention that primarily because a lot of the work
that’s manual that Marjorie was commenting on is all done by coders, not all
but 90 percent of it is that isn’t done by physicians and there’s a nationwide
coder shortage and it’s not likely to get any better any time soon.
So the question is is are there technologies, tools, approaches, people that
are as smart as we are and maybe smarter that are actually developing products
that might help move us in this direction. And I think that that might be a
very interesting just sort of beginning as we look into this area as opposed to
I think getting exhaustive on exactly all of the business cases for all the
particular pieces which I think begin to sort of fall out as we sort of move
further. That’s just sort of my thought and I think, since I mentioned AHIMA
and we have somebody in the audience, I haven’t even talked to you about this
MS. BOWMAN: Sue Bowman from AHIMA and this is a topic that is very exciting
to us and a very considerable interest both to our organization and to our
members and we have actually been doing and exploring quite a bit of, maybe not
official bona fide formal research but more of an exploration on some of these
related topics, maybe not as far as Dr. Huff has been going, more in the
mapping arena, but we have prepared, we did have a workgroup that was across
industry, not just HIM professionals but across industry group including
technology vendors that looked at the issue of computer assisted coding, which
is our sort of coined term for the process of going from the clinical data
captured at the point of care to all of the secondary data uses. And that group
has prepared a 16 page brief on the topic which we would be more then happy to
share with the subcommittee.
We’ve also been involved in some of the —
MR. BLAIR: If Dana Carvey was here he’d say how convenient —
MS. BOWMAN: We’ve also been participating in some of the mapping work, both
with the National Library of Medicine and with CAPP(?) and we’re also in the
process of hopefully what will the final stages of a long in process white
paper on the role of SNOMED and ICD-10 in the EHR and how they coordinate
together and tie into the National Health Information Network and
interoperability and so forth and hopefully we’ll have that paper finished in
the near future. So we have already really been focusing a lot of work and are
continuing to look at all of these issues related to classifications and
terminologies and how they will all work together in the future.
DR. COHN: Well, thank you Sue, that’s very useful additional information. So
anyway, obviously I tend to sort of jump from these things to sort of like well
what do we deem to do next to understand more and I am reminded that I am not a
professor of medical informatics as we talk about this. Michael?
DR. FITZMAURICE: Simon, you said a lot of the things that I was thinking in
terms of the role of NCVHS in research agendas, it would seem to me that what
we do is we make recommendations to the Secretary and in doing that we hear
from the private sector as well as from the professional expertise around the
table about what are the things that are needed. It’s natural for anybody in
this business to look for low hanging fruit, that is to look for a real world
application as opposed to an academic exercise and I think NCVHS is known for
real world applications and bringing in the academic to guide the setting of
priorities in what we do to make sure that it’s grounded.
And so I like the ideas that Stan has brought forward, I would like to see
some sense of priority setting and the need for certain vocabulary translations
to see if that can be made more efficient, I’d like to see what does the
private sector think are the low hanging fruit, LHF, I guess we can make that
an acronym, and move in this direction. I think it’s a positive direction, I
just want to urge us to be applied minded and sensitive to the needs of the
private sector as well as the public sector as we move ahead but this find a
lot of favor.
DR. COHN: Other comments? Jeff?
MR. BLAIR: Modification of terms, research can be thought of in many
different ways, one of the ways that NCVHS could move forward on this is not
necessarily, it may be that in time there’s portions of this that we may ask to
be a separate independent research activity that the RAND Corporation does or
someone else and we ask for funding for that, on the other hand we have hired
consultants to help us on you might say information gathering instead of
research, information gathering in a structured manner that over a period of
six, nine, 12, 15 months where we’ve come out with a good set of
recommendations, for example on the core set of PMRI terminology, or other
consultants like Margaret has helped us pull information together. So there may
be a good part of this that we may be able to do with an appropriate one or two
consultants, or three consultants that we could contract with, but as opposed
to what some people may think of as “a research agenda”, it’s still,
some parts of it may be a RAND Corporation study or something.
DR. HUFF: So cognizant that we’re behind on our agenda today it would seem
that what we’d like to talk about is next steps, I tend to agree that what, the
first thing that I would like to do is say what are people already doing, get
some perspective from AHIMA and some others, there may be lots of other things
that are going on within CMS that Maria knows about, I don’t know who we ask,
but it would seem maybe the next thing would be in fact to line up some folks
that could speak to things that are already in motion and that does keep us
applied minded because if people are already spending money to do it we know
that there’s probably a need out there and maybe there’s some way we could
augment or facilitate that. So being new at sort of tying to tend the work plan
for this kind of thing I need some help I guess to know what we do next, if we
talk to Maria and we try and figure out some people that would be interesting
to get some education from at a next session or how we move forward.
MR. REYNOLDS: Simon? Jeff and I had talked about this some and going along
with what Stan just had to say, the possibility of Stan coordinating with Maria
one of our next sessions whenever that is scheduled to be, that not only could
include everything that Stan already said but I’d love to also have the first
part of that include some kind of a primmer on the subject in general because a
lot of you are a lot further along, I know as I sit and listen to this I can, I
understand what you’re saying but I can’t put it in the whole context.
And the other thing that’s exciting about this kind of discussion is as we
go forward these are the kinds of things that with all the decisions whether we
make on HIPAA, electronic medical records, e-prescribing and everything else,
kind of all work towards, and all the coding, all kind of work towards the end
game of really tying all this stuff together to make a major different in the
end, both as we said in some of the tracking for the bio issues or just in
general administrative stuff through setting the codes.
That’s one of the things that Jeff and I had talked about and I think
hearing it today and hearing that there’s more going on maybe then even we knew
about, that might be a good way to approach it from a next step standpoint.
DR. FERRER: I would add that at CMS you probably want to get the Office of
Clinical Standards and Quality, NORDI, we’re working very closely with OCSQ and
actually gathering quality indicators from electronic medical records at the
point of care so it’s submitted to a clinical data warehouse for them to
consider potential pay for performances, so they have a lot of already mature
initiatives underway and Maria is one side of the shop but that’s really OCSQ
NORDI and I think under the leadership of Dr. Bill Rollow(?) and OCSQ and the
Krimperman(?) Group with the 8th Scope of Work coming out of that,
out of the agency, they have a very large agenda that touches on all these
topics and it would be very good to sit and actually hear what they’re doing
because as you know once CMS moves the industry tends to listen and it’s not
uncommon for them to set sort of the research agenda whether we like it or not
so I would strongly encourage them to come here.
DR. COHN: Okay, good. I think Harry makes a good point and as I said I
obviously, I’m as conversant as anyone on this and yet I feel like I have big
holes in my knowledge, for example I don’t fully understand exactly the rules
and I think Marjorie was beginning to reflect on them about morbidity,
mortality data and all of that stuff and I’m not suggesting that we spend four
hours talking about all the rules of how you identify the principle reason for
death or whatever but I think hearing from a variety of people and I’m trying
to think of whether there’s anybody who jumps out in mind is somebody who could
really give a primer but AHIMA may be able to give part of it, NLM may be able
to give part of it, CMS might be able to give a perspective on this one —
MR. BLAIR: Part of that also, I think Michael because with all of the things
that he’s doing to try to fund the missing gaps in standards I think he could
add quite a bit to this.
DR. FITZMAURICE: I could say what we’re doing but as far as being an expert
on vocabulary that’s probably outside of my bailiwick, vocabulary terminology,
I’m a learner like most of the rest of us around the table, I might turn to the
National Library of Medicine to draw some of that expertise for such a primer.
DR. COHN: I was sort of thinking like Betsy Humphreys if she’s available or,
I mean obviously I’m looking at Vivian as we say all of this but it’s one of
those things of, I mean I think many of us are involved in these sort of
mapping activities but the question is well what else to really make all of
this useful, which becomes really part of the question and discussion to have
with NLM. I agree with you, Mike, they are sort of the ones responsible for
this particular piece of the puzzle.
MS. AULD: I would just add that several of you know little pieces of what
we’re doing and I don’t think many of you know the entire picture of the actual
activities, nor is everybody aware of our long term plans, a lot of it fits
directly into this. So if we could give you that overview I think it would help
to explain from our perspective where it would go.
DR. COHN: I was going to make one comment and then we’ll let Judy, which is
I think we probably also need to hear from NCHS to understand what sort of
tools and approaches you’re doing around all of this because I think that’s a
really important piece of the puzzle here.
MS. GREENBERG: Well, particularly with mortality data, the other work we’re
doing with NLM and AHIMA for morbidity data. But we’ll talk about it, yeah.
DR. WARREN: I guess I’m getting, when Stan first started talking, I mean
this is why I went into informatics is Stan’s list, in fact Stan and I have
been at meetings together over the last years of talking about these things,
it’s why we approved the PMRI so that we would have the tools to do every one
of these things that’s on this list. But as I’m listening more to the
conversation I keep hearing mapping coming out as a key thing and that’s only
one piece of it, part of it is modeling this data in ways that we can share it
and that’s a different activity then mapping between terminologies. So I just
want to be sure that we get that kind of in there too and that may be something
that this committee can give a message to or put into our tutorial about the
different ways you can take data and aggregate it up, it could be through
algorithms, it could be through data models, it could be through a lot of
different things right now. But I mean this is, to me this is the gold in the
ROI because a lot of this stuff right now is being done manually and you can
save a lot of FTEs on your budget if we could ever get it automated.
DR. HUFF: So I think we need to get to action items here.
DR. FERRER: Let’s not forget ONCHIT, the request for information and under
sub workgroups quite a bit of overlap in the sub workgroups of Mike and a host
of other characters have participated have also a lot of the standard type
derivatives off of the RFIs, I would imagine that you’d probably want to hear
from ONCHIT on what that analysis is and where they’re headed because that
strategic framework is coming out of a lot of those RFIs that have already been
MR. BLAIR: Stan, with your list, there’s an amalgam that I think I’d also
like to add to your list, you’ve got reimbursement and you’ve got some measures
for quality, I think you also ought to list in that list the amalgam of both
which is identified as pay for performance.
DR. HUFF: Okay.
DR. COHN: Marjorie?
MS. GREENBERG: I just realized sitting here and of course it goes along with
what you said, Simon, if there were recommendations for a research agenda that
would come out of the committee ultimately, like any recommendations, but at
the same time just if you look at the breadth of what Stan is putting forward
you would I’d say sooner rather then later want to include the Quality
Workgroup because everything that Jorge is talking about is very relevant to
the Quality Workgroup and in fact under, they are now doing some agenda
planning and they’re particularly interested in how they can align what they’re
doing and their work plan with other priorities within the committee which of
course includes standards and electronic records and all of that. So I would
say there’s a direct fit there and then of course there also has a lot of
relevance for Population Subcommittee because we talked about mortality data,
we talked about the morbidity data as well from surveys and also I think you
had disease surveillance up there, so I would say this is definitely cuts
across all of the committees. And of course the NHII too.
DR. COHN: — actually let me say this a different way, when I interviewed a
lot of the committee members what I heard is is a desire to sort of start, sort
of combining efforts and start looking at problems from multiple different
views and so this is certainly one cut. I tend to think that the cut is
actually probably on that’s uniquely Standards and Security but I think we need
to bring it to the Executive Subcommittee and discuss it because there may be,
they may want to attend some of these meetings which is what I think you’re
bringing up, they’ll certainly want to know some of the output relatively
MS. GREENBERG: And I’m wondering if we’re going to have some kind of
tutorial or overview presentations whether that shouldn’t be either at the full
committee or maybe, either at the full committee because of the crosscutting
issues or it could be as you said a session more of this subcommittee in which
people are invited from the other workgroups or subcommittees.
DR. COHN: Okay, well I think that’s an agenda planning exercise so let’s
take that on, I saw Stan had as his final question was well geez, is this
subcommittee or is this full committee and I think we can see what the interest
MS. GREENBERG: But what’s directly relevant to certainly to a few of the
DR. COHN: Please, Carol.
DR. BICKFORD: Carol Bickford, American Nurses Association, in taking a look
at the list there are three things that I don’t see but might be encompassed in
some of the areas, one is we’ve been focusing on morbidity and mortality and
not have tended to health and wellness and health promotion, so those pieces
are missing. The second thing is the linkages between diagnoses, interventions,
and outcomes, the work that nursing has been trying to do in teasing out what
we do, that might fit in the decision support arena but it has a much bigger
perspective in looking at the outcomes piece. And the third thing that’s
missing is the context of care delivery, who’s doing what, where is it
happening, and what are the relationships as we’re doing the handoff. So we
don’t know what best practices are and where they best occur so we’ve missed
that context piece of care delivery.
DR. COHN: Michael.
DR. FITZMAURICE: I would also include FDA because they’re doing quite a bit
of work on classification of devices on terminologies and working also with the
National Library of Medicine on beefing up RxNorm.
DR. COHN: Stan, I think I have a bit of advice for you just based on being a
subcommittee chair for a number of years. Scope issues are going to be
important and I’m obviously suggesting that, I mean one could potentially
develop a whole work plan initially, I think we may be a step before the work
plan, well, let me think about this, you’ve got a work plan, I wouldn’t spend a
lot of my time writing up a five or ten page work plan at this point but I
think what we do need to do is to come up with a session, be it at the full
committee or subcommittee, probably a half day, maybe a little more —
MS. FRIEDMAN: Sounds like we’ve got a full day because I have a whole list
of folks who are doing work in this area and who are doing a lot of work in
DR. COHN: Yeah, well I was just trying to think, I mean I guess I would
defer to our subcommittee chairs on when that can be scheduled, I do know that
trying to get a full day of full committee time becomes a year’s worth of two
hour sessions —
MS. FRIEDMAN: I think this is the subcommittee’s slide, get ourselves up to
speed and find out —
MS. GREENBERG: You could have a third day and it could be sponsored by the
subcommittee and then anybody else who wants to stay for it could.
DR. COHN: I was just thinking that that is another option certainly, some
way to be able to make it accessible to people but somewhere between a half to
a full day where it’s really sort of an exploration of the issue and I think
that there’s been enough people that have chimed in that you sound like you
have quite a number of speakers that could be potentially invited to begin to
give us their view of what this is all about without really predisposing an
answer, I mean I would actually throw in in all of this stuff, I hate to say it
but natural language processing wherever that is in this day and age, I’m not
suggesting that we investigate that but it may be that some people who come
forward with solutions might be leveraging that and that may turn out some of
our structuring X, Y, and Z and data model stuff somewhat on its ear or at
least cause us to look at it differently. So I guess —
DR. HUFF: Based on the amount of input that we had I think, it seems like
you could approach it in three phases, sort of some education exploration about
what people have thought about and what the issues are, number two what people
are really working on, and from that perspective probably we need to prioritize
and say are there three or four areas we can, because it sounds like this could
become a 100 things and we become too diffuse looking at everything we won’t
make any progress or recommendations about anything. But that would be a way to
approach it as far as get some education, understand more, find out what people
are really doing, then set some priorities amongst the committee about what we
think are most important and maybe then have some more focused hearings about
those particular areas about what we could do in the high priority areas.
DR. COHN: Especially the things that are low hanging fruit.
DR. HUFF: Yeah.
DR. COHN: Quoting Jeff on that one. Well sounds good. Well, Stan, do you
feel like you’ve gotten some input from —
DR. HUFF: I feel like I’ve gotten a lot more then I bargained for, so thank
you all, so what literally, do I need to call Maria or Maria will call me or
what happens to take it to the next step?
MS. FRIEDMAN: I think you and me and Jeff and Harry need to have a
conversation at some point and then you and I need to have a conversation and
then I need to start working the phones.
DR. COHN: Well, I think we need to take it to the Executive Subcommittee to
figure out when we should do it which is I think part of the question.
MS. GREENBERG: And I think the Executive Subcommittee is having a conference
call on the 19th so Jeff, Harry —
MS. FRIEDMAN: I’m not going to be able to make that call.
MS. GREENBERG: Oh, you’re not available the 19th? Well, I just
heard that Mark Rothstein wasn’t either but anyway.
DR. COHN: Okay, well we’ll figure this one out. Now we do need to transition
MR. BLAIR: — let’s just verify that Harry is still with us, Harry are you
still with us?
MR. REYNOLDS: Yeah, I’ve been cut off twice but I’m back on.
DR. COHN: Well, thank you for your comments, Harry.
What we are going to do is change topics, I do want to apologize to
everybody for sort of moving the agenda around and I do know that George Argus
needs to get out to the airport within the next 20 to 30 minutes so we wanted
to offer him the opportunity to give us some of his views on the NPI
implementation. And George we do apologize for running a little late here.
MR. ARGUS: Okay, well thank you for allowing me the opportunity to come here
for the subcommittee, I am here today on behalf of the American Hospital
Association’s 4,700 member hospitals and health care systems and the 31,000
individual members. The AHA appreciates the opportunity to comment on the
upcoming implementation of the National Provider Identifier. The AHA is very
concerned about the process for enumeration in the implementation of the NPI.
Hospitals remain confused about exactly how and when the NPI will be
implemented and one especially confusing issue is the subpart identifier. We
are witnessing the same level of confusion that providers experienced from the
adoption of the HIPAA transaction standards. Without additional guidance the
implementation of the NPI will likely result in significant additional costs
that could have otherwise been avoided if we had clearer guidance especially on
subpart enumeration and a better deployment process.
Currently there are many unanswered questions on NPI implementation and
providers and others have a desperate need for additional outreach and
educational materials. To effectively orchestrate the much needed guidance
there must be a central authority that can effectively respond to questions and
concerns raised about the NPI. This central authority should be the source for
clear and authoritative responses about general NPI issues and questions,
subpart guidance, especially in relationship to federal programs, bulk
enumeration procedures, and enumeration progress reports. In addition it is
essential to encourage additional coordination and collaborative outreach
initiatives in order to ensure that independently developed information and
material is consistent with the NPI regulations and instructions.
One are that especially deserves more attention is subpart enumeration.
There is insufficient guidance at the present time on what criteria providers
should consider as they determine whether to apply for a subpart identifier.
The final rule, and in particular the preamble, states that the provider
generally will make the decision to apply for subpart identifier. Hospitals
have indicated that there is insufficient guidance on how they should approach
this decision and they are fearful of making the wrong decision. Consequently
we are seeing wide variations among providers in how they are approaching
subpart identifiers. Wide variations in the approach to subpart enumeration
will defeat the purpose of administrative simplification and is likely to
increase the cost for both providers and health plans.
Providers are also concerned that they may be coerced into filing for a
subpart identifier in order to accommodate a particular health plan’s need.
Many providers, for example are currently being asked by health plans to apply
for a subpart identifier based on the location of a particular unit within the
campus of the hospital. While location deserves some consideration in making
the decision it should not be the sole factor that drives the decision to
enumerate an organizational subpart. Other more important elements, other then
location, should factor into this decision, for instance governance, senior
management team, strategic budgeting and operational oversight are components
that are more important in defining an operation than is location. These
components are instrumental in determining how the provider’s operations
function. In addition to these operational elements there are other
organizational elements that should be considered, including specialized units
that require or meet unique certification and/or special licensure
requirements. Until we see guidance to clarify this issue we cannot move ahead
to mandate the routine use of the NPI.
A staged implementation approach for the NPI is extremely important and the
AHA is collectively working with other organizations to develop a set of
recommendations related to the deployment approach. This collective work really
became, was a result of an informal meeting that we had at the National Uniform
Billing Committee in February and it came to our attention that not only our
providers and health plans having the same sort of problem but physicians and
others are also indicating that same level of confusion. And without a clear
path that has well defined, that readily defines the readiness stages
implementation of the NPI is likely to proceed in a confusing and increasingly
costly way for all. Our members seem to prefer a step-up approach that has been
clearly defined readiness stages much like the following.
Basically for May 23, 2005 through May 22, 2006, basically the first year,
have this simply as a period for acquiring an NPI, recommend against the use of
the NPI during this period. The enumerator, the organization that issues the
NPI, should run periodic progress reports by each type of provider category. We
would encourage collaborative outreach programs during this time period to
increase provider awareness and to establish NPI web based boards that could
provide frequently asked questions and serve as a central point of contact for
asking additional questions throughout this transition period. In addition the
fast track bulk enumeration readiness by the NPI contractor needs to be moved
up significantly, we have heard that fourth quarter 2005 is the date, we
believe that this is unacceptable.
From May 23, 2006 through December 2006 we believe this timeframe should be
a period of testing between trading partners allowing providers and health
plans with sufficient opportunity to examine whether appropriate identification
and processing of the claim can be derived from the NPI information supplied or
whether other information supplied on the claim should be used in combination
with the NPI. This would allow health plans an opportunity to modify the edit
logic of their claims processing systems.
And from January 2007 through May 22, 2007, this third stage would allow
routine sending of both NPI and legacy IDs, and this would allow the health
plans to utilize this information as a crosswalk that can validate the NPI
against previous legacy IDs.
Then finally as of May 23, 2007 moving forward from this point on all
eligible providers should report only the NPI.
The first two initial phases of the staged approach are critical and require
constant monitoring and reporting to ensure that appropriate progress is being
made and that the testing is occurring among trading partners. Monitoring the
enumeration progress is essential and will help to identify whether and what
types of additional outreach measures are needed. This is especially important
for hospitals who not only must report their own NPI but also that of the
attending, operating, or other physician or caregiver involved in the care of
the patient. Hospitals are concerned about the timing required for all of these
care givers to obtain their NPI and share this information with the hospital.
An adequate period of testing is essential to ensure that all of the NPI
receivers are ready and capable of handling the submitted NPI. As part of the
staged approach HHS should make clear that routine use of the NPI should not
begin any sooner then first quarter of 2007. Providers don’t want to be forced
into using the NPI earlier for one health plan while another health plans are
not ready. They want an NPI start date where there is a significantly large
number of receivers are ready to accept and successfully utilize the submitted
Finally, in the spirit of creating a collaborative approach to education and
outreach to ensure that providers receive additional clarification about a
number of key concerns, especially the enumeration of organizational subparts
and the bulk enumeration processes, the AHA is offering to use its numerous
communication vehicles to ensure that all critical information reaches the
And again, I want to thank the subcommittee for the opportunity to comment
on this important issue. And I’d be happy to take any questions that you may
DR. COHN: Questions? Maria?
MS. FRIEDMAN: I just wanted to apologize, Karen Trudel is supposed to have
been here, she had a meeting on the Hill and because we ran late she had to go
to the Hill and I don’t know whether she’ll be back in time to respond before
you leave, George, but I know Karen is very involved in NPI implementation in
CMS, there’s a group going, she’s taking over for Judy Berek and I know we’ve
also just announced our enumerator, I believe it’s five systems and I believe
there’s a press release up on the website.
MR. REYNOLDS: Simon, this is Harry, can I comment and ask a question?
MS. FRIEDMAN: The enumerator I believe is Fox Systems and there should be a
press release up on the CMS website to that effect.
DR. COHN: Harry, did you have a comment or question?
MR. REYNOLDS: Yeah, I do. George, thank you, that was an excellent
presentation. I think what’s interesting about this next step in HIPAA
different then the one we heard about this morning is that the providers have
to move first this time before the payers can move whereas when we implemented
the transactions and code sets it was pretty much reversed. And I think if the
American Hospital Association is calling for outreach I would assume that the
individual providers would equally need the same thing, the small doctor
officers versus just the hospitals. That may be an important message we need to
take away from George’s comments, that we’ve got to make sure that everybody
out there really understands this and really understands how to get their
numbers and what to do with them so that we can move along whatever schedule is
set up, whether it’s the one he recommends or the one that’s in place.
DR. COHN: Yeah, I think Harry you make a very good point. Maria, I guess I
should ask, when is enumeration scheduled to start since obviously it’s not
very useful to start communicating in advance of anybody being able to do
anything about it.
MS. FRIEDMAN: I believe they’re on track to start in a couple of months,
DR. FITZMAURICE: May 23rd is the, Karen announced it at the March
meeting it would be in May.
MS. FRIEDMAN: As far as I know we’re still on track for that, obviously
there is still a lot of details to be worked out and a lot of issues related to
bulk enumeration. So I would propose that we will get back to you on that, if
Karen gets back here in time maybe she can speak to that.
DR. COHN: Well certainly bulk enumeration is an attractive concept here.
MR. ARGUS: I want to also add emphasis to what Harry Reynolds mentioned in
terms of physician awareness, I’ve heard from Rob Tennant and others and I’ve
heard it from physicians who approached us or hospitals who’ve approached me
about physician awareness. Many just don’t understand what the NPI is all about
and many in fact may believe that they already have an NPI because they have a
UPIN number and that’s not the situation. So there needs to be a vast outreach
communicated to the physician community so that they are made aware of the
differences. But the important thing here I think is really to have a staged
approach where you don’t require its use until there is sufficient synergy in
terms of NPI enumeration and then you should begin testing at that point in
time so that people are managing their resources with testing NPI and then step
it up after that point in time.
DR. FITZMAURICE: I wonder, maybe Maria isn’t the right person to ask this
but is there anything in George’s timeline that differs from that CMS would
require? I remember the National Provider Identifier isn’t due to be mandatory
until 2007, so it looks like the end dates may be appropriate, that maybe there
are things in the middle that are at variance with CMS’s plans.
MS. FRIEDMAN: I’m the wrong person to ask about this because I know Karen
has been working on this issue. I know there have been discussions internally
about moving up some of these just because of some of the other things that
have gone on since that legislative timeline was established.
DR. FITZMAURICE: It would seem that the electronic prescribing pilots would
benefit from a testing of the National Provider Identifier so for people who
participate in there there might be some encouragement for them to get National
Provider Identifiers to then start this in actual practice.
MR. ARGUS: Well the timeline isn’t quite as structured as I presented, as I
recall CMS has indicated that within six months after the enumeration process
begins it may be possible that a health plan may require the NPI for a
particular provider. And that to me creates more confusion rather then
lessening the confusion and adds additional burden I think for everyone
involved, some might be ready earlier, some may not be ready, and so what we
want to do is see a more formal timeline with specific milestones achieved
within each of those timelines.
DR. FITZMAURICE: Could I ask another question to see if I understand this,
some health plans pay providers differently based upon where they deliver the
same service, a hospital emergency room, a clinic over here or a clinic over
there and often they assign different provider numbers in their own health plan
to make that payment differential. And so if this goes into effect what they
would have to have is the National Provider Identifier and perhaps another
variable, maybe a contract number or something, to identify the location of
that service so that it fits in with the payment schedule. Is that about it?
MR. ARGUS: Well, there are other variables in the claim that could be
utilized to help identify a particular service location too, zip code might be
one but then the zip code might be within the same geographic location. I think
a lot should really depend on how the organization, the provider organization
operates and how they set up their clinics and what their obligation is to the
rest of the facility as part of their service. And I think the confusion at
least at the present time is that many health plans are saying well we want you
to have a separate subpart for this clinic even though it may be on the campus
premise because we want to pay it differently and providers are concerned that
this may not work with the way they had envisioned it and the way I think the
NPI rule basically set it up.
DR. FITZMAURICE: It does seem a little strange that the purpose is to
uniquely identify a provider and it doesn’t take three or five numbers to
uniquely identify a provider, but it may take that to identify the location on
a payment schedule for how much a provider should be paid for a particular
service. So I mean it’s separating out the different functions of a provider
identifier and saying well this identifies a person and the rest of these
variables identify where you fit on a payment schedule.
MR. ARGUS: And I think that’s where the second phase really of testing
should come into play, where you can at least work with your trading partners
to work out I think how those methods might be melded together in terms of fact
finding and go from there.
MR. REYNOLDS: Simon, can I make a comment? Michael, when you made your
comment, one of the most significant issues is that currently pretty much every
payer has their own set of provider numbers with that provider and the single
designation by provider may not just be one number but it will be one set of
numbers and then all payers, whether it be Medicare, Medicaid, commercials or
others, are going to have to adjust to that number. So that’s the further
complication of the whole thing and so it’s not just whether or not they have
one provider number or three, they may have 15 with another payer, ten with
one, four with Medicare and so on, and when they pick three everybody has to go
to those three and figure out how they charge and how they bill and how the
revenue stays neutral and that’s going to be the big significance of the
providers going ahead and picking their numbers and then everybody trying to
adjust to it. So your point is well made but that’s only a portion of the
significant consolidation that has to go on once a provider picks whatever
numbers they pick.
DR. FITZMAURICE: Thank you for that supplement, Harry.
MR. REYNOLDS: That’s the big issue that’s going to happen because right now
payers just say here are the providers numbers I want you to use and they go
back and forth, it doesn’t matter how many, who has what, but that’s going to
MS. FRANK: This is Sheila Frank with Delta Dental Plans Association and
we’re one of the organizations with a number of other industry organization
that George alluded to to try and define some of these issues and to key off of
what Harry just said, does anyone hear the word companion guide ringing in
their head as they hear him discuss these different models that are in
existence today? With HIPAA we didn’t legislate that everybody adopt the same
business model and so these business requirements aren’t changing, we have
Medicare legislated requirements for those Medicare providers that they use
different provider numbers within the same institution, we have as Harry
described different models for different payers.
The one thing I wanted to bring up additionally is that we haven’t talked
about dissemination of NPIs to the user community and that’s one of the things
that needs to be probably added to this timeline, CMS hasn’t been able to be
definitive about how and when people will be able, organizations or users will
be able to query the national plan and provider enumeration system database to
find out what numbers have been assigned to their various trading partners and
I think that’s another key piece. I think Simon said something just now about
not wanting to advertise too early, that everyone should go get their NPI, but
I think we have so many unanswered questions we can’t even write our
advertising campaign and that’s the big issue. When the time comes that we want
to start doing our outreach we need to have these ducks in order and we’re a
long way away from being there. Thank you.
DR. COHN: Thank you, point well made. Other comments, questions? George, I
promised that I would let you go by 3:00 because of your flight and I am sorry
that Karen isn’t here but I think Maria has heard you well and she will thank
you for also some of your comments. Michael, are you trying to keep George
DR. FITZMAURICE: No, I want him to make the plane too because I want him to
come back happy the next time he visits us. Bulk enumeration, what is the
problem with bulk enumeration?
MR. ARGUS: Apparently the numerator won’t be ready with the capability of
doing bulk enumeration until after the third quarter so it will be fourth
quarter this year when bulk enumeration will be ready. We’d like to see that
fast tracked because it would alleviate a lot of the burden I think for many
providers or group practices to basically enumerate on behalf of their
physicians or others who may be on staff.
DR. FITZMAURICE: Thank you, that’s clear.
MS. FRIEDMAN: And just a related piece of that is for the various provider
groups, they all have different systems and the process by which we can upload
all their stuff, because not all of them are quite ready for prime time with
DR. FITZMAURICE: But is it a matter of CMS putting out the format for here’s
how the stuff should come in, here’s where the address is and the dates of
birth and all should be in and they put it in that format, it comes in and they
get a number back?
MS. FRIEDMAN: I don’t know, I think Karen would have to —
DR. FITZMAURICE: Maybe it’s more complicated then that.
DR. COHN: Kepa?
DR. ZUBELDIA: Kepa Zubeldia with Claredi. Maria, there is an 816 transaction
for memberships that is designed just to do that, that was kind of a side
My concern with bulk enumeration is big, is that if bulk enumeration doesn’t
happen until the end of this year the providers will not be able to request
their individual provider ID numbers until they know whether they’ve been
automatically assigned one or not, otherwise you’re going to have a mess of
duplicates on your hands where the providers are requesting ID numbers and then
the bulk enumeration process assigns them a new one, which one do they use and
is it going to be correct. One of the reasons for the NPI is because the ID
numbering system that we have today with the UPIN and Medicare IDs and Medicaid
IDs and all those IDs are incomplete and incorrect and I’m really concerned
that bulk enumeration is just going to perpetuate the same problem again and
create even a bigger problem this time because it’s supposed to be unique,
whereas the previous one we knew it wasn’t unique and now it’s supposed to be
unique and you won’t be able to request a number until the bulk enumerator in
your state does bulk enumeration. So it’s postponing the whole thing until that
bulk enumeration problem is solved and I think bulk enumeration problem is not
going to resolve the problem, it’s going to be the source of a problem. Just a
MR. BLAIR: What do you suggest?
DR. ZUBELDIA: I’ve heard a proposal that may be a little bit challenging but
instead of bulk enumeration it could be bulk invitation, which says the bulk
enumeration source would say we propose that a provider, that you be assigned a
number by us and if you don’t tell us anything within a month this is
information that we will request on your behalf. And the bulk enumerators could
use that kind of invitation to providers, at least to let the providers know
that they are going to request a number on their behalf, which right now
there’s no way to know that, and second, to get something ready so when there
is a bulk enumeration at least everybody will know, Medicare is going to
request one on behalf, Medicaid is going to request one on my behalf and this
association is going to request one on my behalf, maybe I need to coordinate
something here. I don’t know, I don’t know if that’s a solution or not, it’s
MS. FRIEDMAN: Do you think that’s going to solve the problem of the
incorrect information from the get go and if people don’t respond after 30 days
we’re going to go ahead on your behalf, that’s not going to solve all of the
issues you’ve already identified.
DR. ZUBELDIA: Let’s not do it automatically, let’s not have bulk enumeration
and tell the providers this is the information your system, you are to request
a number as soon as possible.
MS. FRIEDMAN: You made the point in your presentation earlier about how
incomplete and incorrect the data are already.
DR. ZUBELDIA: Yes, and I’m really concerned if there has to be bulk
enumeration I’m really concerned. My preference would be to not have bulk
enumeration at all, it just gets in the way and perpetuates the problem, that
would be my preference.
DR. COHN: Well, rather then trying to solve this problem especially without
Karen in the room I suggest Michael you might ask that of Karen when she
returns and talks about NPI. George, I really want to thank you especially for
sticking around, we do apologize for how the schedule sort of moved around and
Sheila thank you and Kepa for your comments.
Now what we’re going to do is take a 15 minute break and hopefully by that
time either Karen will be back or the subcommittee will continue on their
discussion. So 15 minute break.
MR. BLAIR: We still have a quorum so we’re still in business and we have
some remaining questions, George Argus gave us some very helpful testimony with
respect to issues concerning enumeration of the NPI and his suggested timelines
for what American Hospital Association would like to see in terms of the
timeframes. And Kepa also wound up, is Kepa still here? Okay, Kepa indicated
his concern about mass enumeration and rather then my continuing to try to sum
this up for Karen’s benefit let me ask Maria if you would —
MS. TRUDEL: Maria is not here either.
MR. BLAIR: Oh, that’s right —
MS. TRUDEL: Maria and I have traded places.
MR. BLAIR: So Karen, let me just leave this open ended and if you are able
to maybe share with us whatever you can at this point in terms of the plans for
enumeration and testing and timeframes and dissemination of the NPI why don’t
we start with that and then folks could ask questions based on what you’ve said
and what we heard before the break.
MS. TRUDEL: And I have to say that I wasn’t, I’m not entirely prepared to
answer all those questions but I do have a new vested interest in the NPI so
I’d like to just talk a little bit about what we’re doing internal to CMS. We
realized that CMS as a covered entity or a group of covered entities will also
have to implement the NPI and we regard it as an enterprise that’s somewhat on
the magnitude order of Y2K and we’re handling it in a very similar way,
basically setting up a program management office and matrixing all of the
organizations and the players, the business owners of the systems that we need
to get this internal process going.
The lead for the program management office is Stuart Streimer(?) and I think
many of the folks on the committee are familiar with Stuart because he was the
CMS liaison at one point and he’s asked me to help him out with that so I’m
going to be also involved in that process. We have set up a number of working
groups, and this has happened all within the last month or so, a number of
working groups and one of the ones that is really starting to speed up right
now is the outreach group and I noticed that a number of the things that George
has to say in there have to do with outreach.
Again, the lead for this group is working right now to develop both initial
message and then some subsequent FAQs, guidance, right now what our message is
is that the NPI is coming, you will be able to begin to request an NPI in May
of this year, and we are on track for that, you shouldn’t wait until the last
minute to request one, it’s very easy to get one, and you don’t need to do
anything with it right now, that the implementation, the compliance data is
still two years out and that there will be much more information coming between
now and then, both from us and from the various health plans as they begin to
implement the NPI.
So that’s basically where we are right now with outreach, we have a number
of people who are very tuned into Medicare provider outreach, we have my
outreach group which has a much broader kind of constituency, we have several
HIPAA roundtable calls scheduled, I think there’s one in June and one in
September, that will be solely dedicated to the NPI and doing presentations and
asking questions. We will have information on our website, the enumeration
contractor Fox Systems is also expected to have both a hotline and website and
so we’ll be making use of those tools as well as we move forward. But we do
expect to be able to enumerate in May and I’m sorry, I don’t have the deadlines
for the batch enumeration in my head right now but I guess the bottom line if I
need to assure people that our focus is on this, we realize it’s a massive
undertaking, we realize that outreach is necessary, we’re all aware that one of
the main things that people need information on is the notion of subparts, that
that’s, I mean George has —
MR. BLAIR: You heard that, good, or you read his —
MS. TRUDEL: I skimmed his testimony and it’s really clear that we need to
get out some guidance on that but that was not something that we didn’t know
MR. BLAIR: Okay, good. The other piece that might have been —
DR. WARREN: Could you just explain a little bit about this batch
enumeration? Kepa seemed to be really concerned about it and I don’t understand
anything about the process.
MS. TRUDEL: I don’t know a lot about the details of it but the sense is that
if there is an existing database that has the appropriate data in it already
and it can demonstrate a certain level of quality that rather then requiring
each of those providers to come in separately that we would take the database
and basically do a just one time load. Was his concern the quality or —
DR. WARREN: I think it was the quality and the fact that one provider might
be in a couple of the database and thereby would get several NPIs.
MS. TRUDEL: That shouldn’t occur because of the duplicate criteria.
MR. BLAIR: Ah ha, that was the concern he had was duplications.
MS. TRUDEL: There are duplication criteria so that if he were, if the
provider were enumerated first individually and then through some sort of a
file upload the second one should get caught by the criteria.
One of the concerns I know that we heard from a number of people was that
the UPIN registry was definitely not a good candidate for that kind of load
because the quality was fairly low and we don’t have any intention of using
that UPIN database.
MS. GREENBERG: What I heard, I don’t know if it was Kepa or George also was
concerned about was that the contractor wouldn’t be ready to do the mass
enumeration, bulk enumeration, until the last quarter of 2005 and it wasn’t
clear to me whether that was fiscal year 2005 or calendar year 2005, but in any
event then they felt that people shouldn’t be encouraged to request their own
NPI if in fact they’re going to be picked up by this mass, this bulk
enumeration, and it just creates extra work for people. So I guess maybe there
it might say people could be made to know what types of circumstances, under
what circumstances they’re likely to be included in a bulk enumeration then
people just who know they aren’t, don’t meet those, could start applying,
rather then encouraging everybody to —
MS. TRUDEL: So what I’m hearing is that there’s a timeline issue that could
lead to even more duplication of effort and that outreach could perhaps help to
alleviate some of that. I’ll definitely take that message back.
DR. FITZMAURICE: More specifically I think what he was saying that if the
bulk enumeration doesn’t happen until the end of this year providers won’t know
if they already have an ID or already have an NPI and either they’ll apply for
one and maybe get a duplicate or they just won’t apply and so they won’t —
MS. TRUDEL: And they won’t have any at all.
DR. FITZMAURICE: They’ll just delay applying until the very last moment.
MS. TRUDEL: I understand, thank you.
MR. BLAIR: Actually with a little bit of prodding by the subcommittee he
indicated gently that his preference would be that there not be bulk
enumeration, he felt that it would create more problems then it would address.
DR. FITZMAURICE: You’re talking about Kepa, Jeff?
MR. BLAIR: I’m sorry, Kepa, and so I think it would be worthwhile if you
have the opportunity to just let him explain why he —
MS. GREENBERG: What did the final rule say?
MS. TRUDEL: It left the door open, it did not specifically say that we were
going to do it and these were the partners that we would work with but it did
leave the door open.
DR. FITZMAURICE: There was also a point raised by Kepa and that is that
suppose the Medicare program, the Medicaid program, and a physician’s
association all three request a National Provider Identifier for a given
physician, could that lead to a problem? I can see that whoever gets their
first gets the identifier, everybody else that follows says well no, this looks
like a duplicate, but I think that could be handled but Kepa thought that there
might be a problem with that.
MR. BLAIR: Nobody’s hand is up? Raise your hand or forever hold your peace
DR. FITZMAURICE: George Argus mentioned that there’s a strong need for
central authority to respond to questions about the National Provider
Identifier to make decisions and particularly was concerned about the business
rules that some health plans used to make payment to physicians and Harry
elaborated on it further saying health plans would give out one, three, five,
15 provider numbers to the same provider and each number denotes a different
contract rate for a particular procedure and that they will have to find
another way to use the NPI and maybe a location site or some of their contract
number rather then the different numbers that they assign to the provider, or
maybe they could use their numbers in addition to the NPI but it sounds like a
little bit of overkill. And someone, I can’t remember, maybe it was Sheila
Frank, said that HIPAA didn’t, maybe require everybody to have the same
identifier but doesn’t require everybody to have the same business rules and so
different health plans may determine those payment schedules differently and
they would just have to learn how to do it differently with a National Provider
MS. TRUDEL: I think there were a few questions in there, I’ll do my best to
respond to them, but very good points. One is that every plan that implements
the NPI is going to figure out how, is going to have to figure out how to do
it, working around the constraints in the NPI rule and their own business
rules, that is what CMS is doing now, we’re trying to figure out, we have
internal systems that key on intelligence in a provider number that tells us
what kind of institutional provider it is and what payment edits and what rates
are applied to it. We have state codes that are imbedded in our provider
numbers, we’re trying to figure out how to work around those and still be HIPAA
compliant and utilize the NPI. And it takes an awful lot of people, it is not
easy, it is not a trivial undertaking and if I have to say something on the
record it’s that I encourage other health plans to be doing the same thing
right now as opposed to waiting until later.
As far as a central authority is concerned I believe that CMS and HHS have
an ongoing responsibility to put out guidance with respect to the NPI just in
the same way we have responsibility to put out guidance on security, privacy
transactions, code sets, whatever, and that we definitely will be doing that
and that that will include things like guidance and FAQs and as I said before I
think the subpart issue is a key one and also the notion of multiple
identifiers and when they’re appropriate and when they’re not.
DR. BICKFORD: This is Carol Bickford from the American Nurses Association, I
have two questions for Karen. One, you were just describing how CMS is going
through this process of evaluating your enterprise and determining what
questions you need to answer and what best strategies to attend, are you
recording that and providing that as lessons learned or think abouts for other
entities who might be engaged in such a process? So that there’s a sharing and
we don’t have to reinvent the wheel again and again.
And the second question is how are you going to be targeting the educational
institutions so that the new providers coming out of the educational programs
know that they have to get an NPI? I’m thinking about our nurse practitioners
who might be looking for a practice or whatever they need to be identified as
such, the physicians in practice, the PTs, OTs, whoever is going to be covered
under this rule, how are we assuring that the educational facilities are
getting the right content in the curriculum so that they are addressing that as
part of their professional issues piece so you start out with providers right
at the front end who know how to do it right.
MS. TRUDEL: Two good questions. The answer to the first one is that we
haven’t thought about providing best practices or lessons learned or anything
like that but I don’t see why we couldn’t do that, I mean Medicare fee for
service was very forthcoming in the implementation of the transactions and code
sets with the kinds of edit rules that we were using with our companion guides,
with the technical solution that we had using the store and forward repository
and I don’t see why we couldn’t share some of those same messages, perhaps
there’s going to be, I’m sure WEDI will have a venue for that sort of thing.
The second question is one that I don’t have a good clear answer to but I
would very much like to talk to you and to others who have linkages with
educational institutions so that we can figure out how to get that content in
curriculums. That’s something that we haven’t been real successful about so
DR. FITZMAURICE: Another comment made by Sheila Frank is that she would hope
that CMS will be very public about how users can access the NPI database to get
information for providers that they may have contracts with.
MS. TRUDEL: There’s a data use strategy being developed right now, I know
it’s circulating around in draft, so that’s already underway.
DR. FITZMAURICE: Good.
DR. HUFF: Any other comments? Questions?
MR. BLAIR: Karen, thank you very much and Carol thank you for your comments
MR. BLAIR: At this point I think we could go into our open discussion phase
of our day and my inclination if it’s okay with everyone else, do I hear cheers
and comments from the hall? I’d like to revisit all of the rich testimony we
received this morning on return on investment.
Number one I took some notes on my Dictaphone and I’m sure I missed an awful
lot, does anybody feel like they have good notes from the testimony we received
on ROI? Because if so maybe you all could just briefly summarize it and then
maybe send it in in email to everyone so that we could capture that and fold
that into subsequent committee discussions as we continue to explore this area.
MS. TRUDEL: Jeff, this is Karen, I took some notes based on Harry’s list and
then I think some of the rest of the group added to it, I think I had like five
issues that were significant and I’d be glad to do that.
MR. BLAIR: Great —
MS. TRUDEL: Do you want me to read them first?
MR. BLAIR: Yeah, I would and actually I’d like to capture them again even
though I did my best to record them at the time so yes, what are the five
issues that you —
MS. TRUDEL: Increased use of non-claims transactions was critical to ROI is
one, and that we would encourage vendors to implement those non-claim
transactions. There’s a need to reduce unnecessary variability. The issue of
varying timings of code set implementations. And a need for voluntary
implementation of the non-mandated transactions like the 997 and the 999. Those
were the ones I got.
PARTICIPANT: What was that last one?
MS. TRUDEL: Voluntary implementation of the non-mandated transactions.
MR. BLAIR: The other things that I heard, and this was kind of interesting
because it was almost like a thread and it evolved and it seemed to start off
as if to say that the companion guides was one of the reasons that was an
impediment to people receiving a return on investment, but then as Kepa began
to testify he indicated that there’s a lot of appropriate reasons why the
payers developed companion guides and that the experience Kepa with the tool
that he had developed which was the profiles was that when he identified
something that did not appear to be an appropriate requirement within the
companion guides and he went back to the payers, he had very high levels of
receptivity that they would eliminate a requirement or modify or adjust or
redefine a requirement if it didn’t appear appropriate.
Did you all hear this thread? Because it modified significantly the attitude
that I had about what action we might need to take to try to address
convergence of the companion guides. It left me with the feeling that the
industry is in a process of converging companion guides and when I asked if
there’s some incentives that we could use I didn’t get a complete answer, just
not a mandate, that wasn’t really what I was thinking of was a mandate, I was
thinking of incentives, but there was no incentives offered. I don’t know
whether we need to explore that further, because he was saying ten to 15 years
and maybe that is what he’s saying is the magnitude of the problem, the
complexity of the problem, and that the framework the industry has developed is
a balanced normal way of resolving that.
Is what I heard what you folks did? Or did you have a different observation
DR. FITZMAURICE: Jeff, this is Mike, I heard what you heard but I didn’t
catch the veil of a threat, I took that as industry is working hard to make it
work and sometimes when push comes to shove they may put out a companion guide
that will make it work better for them and so that’s why you have maybe 1,000,
1,200 companion guides is that each one of them may want slightly different
It was good to hear Kepa say that in his opinion these companion guides were
necessary to make it work. I like the idea too that he’s developing this
profile and making it publicly available, that lets people see the differences
and maybe there will be some harmonization, some coalescence toward a few
number of companion guides, that there can be a standard among companion
guides. At least what he’s doing is standardizing the reporting of the
differences among the companion guides so that people can see it and so that
practice management systems for physicians can pull that information into their
vendor system and if a physician says I’ve got a contract with this health plan
they know to go to that profile and here are the data you will need to submit a
claim to that health plan. Not exactly the way we envisioned HIPAA working but
it may provide a basis for reducing then the number of companion guides, being
more specific about the data elements and the situations in which they’re used,
and still let health plans experiment with how to do things, how to pay claims
and adjudicate them more efficiently. Maybe they do need some additional
variables in some cases to test out if we put this screen on it do we make more
reasonable and appropriate payments.
MR. BLAIR: I was left with the feeling that there was no recommendations
that we should bring forward that could address the divergence in the companion
guides at this time.
DR. FITZMAURICE: No, I think Karen’s point about the timing of the code
sets, make all the code set changes at the same time so we can note when it is,
whether it’s yearly, monthly or some other time, that you hate to keep going
back every time somebody makes a code set change, make it effective as of a
certain date, that would be helpful to the industry.
MR. BLAIR: Yes, make effective date code sets, so okay.
The other thing that I heard that I thought was sort of an action item for
us was that it appeared as if we needed to invite a number of practice
management system vendors and hear from them their views on what barriers or
difficulties or lack of return on investment or whatever, why it appears as if
they may be having difficulty being compliant with the HIPAA transaction and
instead being dependent on the clearinghouses. Now that last way I phrased it
isn’t quite right, I heard someone saying that there’s either arrangements
between the two or in some cases the clearinghouses own some of the practice
management vendors, but in any event I thought that I was hearing that we have
to understand this part of the marketplace better and its reaction to HIPAA
compliance. Is that something that was shared?
DR. FERRER: Jeff, this is Jorge. I certainly would echo that but I think
it’s also important too, we heard some language on the cost shifting that’s
going on besides the practice management systems and the physicians and
actually individual action has to incur that cost and I think we should try to
get a handle on some of that cost shifting that’s going on because that might
allow us to get a better handle on, it might be just a business need for the
practice management software but if the physician has to incur that as part of
his operating costs he might just very well say no at this point.
MR. BLAIR: Right. Did anybody else pick up any other issues on our return on
investment discussion besides hearing from the practice management system
vendors that we need to follow up on?
DR. WARREN: One of the things that was sort of discussed and I think by the
panel and everybody else was outreach to the vendors to try to figure out a way
to motive them or to stimulate them to also produce some of these standards and
the reports and things like that. And I, at this point I don’t know how to do
that but I do know when talking with vendors a lot of them really don’t see a
need to adhere to standards because they can still sell their products, or
their clients are so invested with them that they’re not going to change
vendors in order to get a standard, to use those standards such as the 875 or
whatever it is. So I think that is an issue, I just don’t know exactly how to
go about it or what to do with it.
DR. BICKFORD: This is Carol Bickford again Jeff. It was fascinating from the
presentation about the significant shift to the clearinghouses having
accountability, responsibility, because the practice software wasn’t able to do
the direct billing to the third party payers. It would seem to me that that
group has not been attended to from the NCVHS perspective and find out exactly
what’s going on in that clearinghouse arena and why do they have such a market
share now and what’s proprietary that’s preventing the roll over orders that’s
selling that you have got to come to us because you can’t do it yourself —
MR. BLAIR: So you’re saying in addition to hearing testimony from practice
management system vendors we need to hear testimony from clearinghouses as
DR. BICKFORD: Right, and what’s the impact of the significant increase on
their work load and what are they doing to do the reporting, is there something
there that they’re creating artificial barriers, I don’t know, I’m just
thinking about it and looking after we’ve made a shift in the graphs that they
MR. BLAIR: You can tell, I tend to look to where the loud speaker is so you
can be sitting right next to me and I —
DR. WARREN: I think what Carol is getting at too is there was one slide that
was done by Joseph Smith that I thought was very telling that prior to HIPAA a
lot of people were doing their own direct billing, afterwards they were all
shifting over to the clearinghouses. So we created a market that wasn’t even
there before by adoption of HIPAA, which adds to the whole cost of processing
MR. BLAIR: Maybe I missed that, who’s doing the direct billing?
DR. WARREN: Joseph Smith had a slide on there that talked about prior to
HIPAA there was direct billing and I think he quoted something like 60 percent
or 40 percent of the people were doing their own billing and sending it direct
to payers. After HIPAA though that decreased down into like 30 percent and the
amount that was then forwarded on to clearinghouses increased dramatically. So
basically it was the people could no longer put out data within the standards,
they had to go a third party or these clearinghouses to do that. What slide
number is that?
DR. FITZMAURICE: Number nine.
DR. WARREN: Number nine.
MR. BLAIR: Okay, so we need to understand that better.
DR. WARREN: Because if one of our requirements actually increased health
care costs because we add a new entity, a new business model in there, then I
think we need to know that too.
DR. FITZMAURICE: I think a lot of this is a matter of economies of scale and
that a large clearinghouse may be better able to keep track of all of the
requirements of the health plans then individual providers. What Kepa is doing
with putting out those profiles is kind of evening the playing field, that if
practice management vendors want to take that on they can do that by accessing
this information assuming that it’s accurate and up to date. I think the health
plans gain by having more electronic interchanges with the providers, the
providers would gain, and maybe at the expense of the clearinghouse if I’m
guessing the market right. But that would be a very important tool for letting
providers be able to achieve the savings, the return on investment, that health
plans either are or getting.
Those that, we heard from Intermountain Health Care and I thought they’ve
done an outstanding job of making a point to incorporate electronic
transactions wherever they can and so they’re getting up to 40, 50 percent even
on the non-claims transactions and saying we’re reducing costs, we’re able to
move FTEs to other parts of the business because we’re doing this
electronically. But that’s a large organization with a lot of providers, a
small physician’s group may not have the same economies of scale and so some
things you can do by combining with other groups and other physicians to bring
about concerted action, it doesn’t seem to exist the group that represents
physicians wanting to get better return on investment from their administrative
transactions but if they did they would be pushing hard for what Kepa is
already doing. It’s just a great tool.
MR. BLAIR: There was one other thing I heard, I’m not sure whether this is a
follow-up item for us or not, did I fail after that or was that more, I think
we understood, was there something that I —
DR. FITZMAURICE: No I think that’s probably understood.
MR. BLAIR: You asked a question at one point, Michael, this morning and it
was with respect to what entities or organizations need to educate the vendors
and when you were saying that I was thinking of the practice management system
vendors and the users, end users, of the benefits and value of the HIPAA
transactions and being compliant with them and I don’t remember that we got a
clear definitive answer and I don’t know whether or not this is something where
this is something we need to pursue in terms of exploring —
DR. FITZMAURICE: Jeff, I don’t remember asking that particular question
because I think the vendors are very smart about knowing their markets and I
think it’s providers who are behind the eight ball, they practice medicine,
they don’t do administrative transactions, that’s not why they went to medical
school, although you do like to get paid it’s understanding how they can deal
directly with health plans and you need things like a directory of all health
plans to be able to send it their, you need to know what their profiles are so
you know what data elements there are, and you’d like to have a practice
management system that you feed the data into your clinical system and it turns
it into administrative data. Barring that you’d then have the clerk who turns
in whatever data she has or he has into the practice management system that
generates the bill and it’s compliant for that particular health plan.
Judy raised a good question, did we create an industry and did we make more
work then existed before HIPAA. I’d like to think that we’re transitioning
toward a system that eventually will be smoothly running and the marketplace
recognizes most of the costs and the benefits and right now the providers say
we get bang for our buck by dealing with our existing practice management
systems without changing them and going through clearinghouses or billing
services to put our transactions into HIPAA compliant for a particular
provider. And I think it has to go back to those economies of scale and they’re
not built into the software at the site of care of the physician, they’re built
into the clearinghouse process.
So to answer your question I don’t think that practice management system
vendors need to be educated, maybe they could educate us further about how to
make the system work better and why they haven’t made the move that we would
expect them to to be able to provide direct billing from provider to the health
MR. BLAIR: Karen.
MS. TRUDEL: I apologize, I just wanted to let everyone know that I have all
this down in notes and I’m afraid I have to go but Donna has agreed to continue
to take notes and she and I will now touch base with Maria to make sure that we
have a complete record of everything that’s being discussed here. I’m sorry.
MR. BLAIR: Is there any other issues with respect to the return on
investment discussions that we ought to capture or take action on or schedule
testimony for? Not hearing anything then can we move on to our discussion on
derivatives of clinical information? And Stan, maybe if you would summarize
your feeling about where we were on that and what the next steps would be from
your standpoint we could then react to it.
DR. HUFF: My summary is that what we want to do is schedule some educational
session so we can find out what people, actually two things, get educated about
the theory and potential opportunities and then actual activities that people
are doing. And there were a number of people who, organizations and people who
were mentioned so we need to know from AHIMA, their computerized coding
initiative, we need to know from the NLM, they’re doing a bunch of mapping
activities that would be integral to this and other things as well that I’m
sure we don’t know about. The mention of the FDA, of NCHS, a lot of quality
initiatives that pertain to this, things that I’m sure I don’t understand. We
could also invite Chris Shute and other folks like Jim Campbell to just come
and say what’s happening at their institution as well as what’s happening
academically about those things, that we needed to consider the ONCHIT and
activities that they may have that pertain to this area. And so once we’ve both
gotten some education and sort of a survey of the activities that were going on
as a committee we would prioritize what those things were, what we thought were
“the low hanging fruit” and focus on those areas and take testimony
about NCVHS could recommend or do to encourage or support or enhance the
highest priority activities.
MR. BLAIR: Thank you. I don’t have anything else to add, does anyone else?
DR. FITZMAURICE: No, I think Stan summed it up very well.
MR. BLAIR: There was this talk about Harry and yourself and myself and Maria
having a call to discuss this a little bit more in terms of who we might begin
to schedule for maybe the July timeframe or a joint meeting with the full
subcommittee, my inclination unless you feel differently Stan is to wait until
after our Executive Subcommittee conference call on the 19th, is
that okay with you?
DR. HUFF: Yeah, that’s fine.
MR. BLAIR: Well, I’ll tell you what, why don’t I just very briefly summarize
where we are and what we’ve done so that if you have anything to say or any
questions before we adjourn, because we’re just about to adjourn, we just heard
from Karen who explained to us what some of the plans were with respect to the
NPI and answered a number of questions. We then wound up revisiting what our to
do’s were and what our major points were from the return on investment
discussion, and then Stan gave a summary of the major next steps for the
derivatives, clinical data derivatives discussion. Is there anything that you
had a question on or you wanted to add before we adjourn?
MS. FRIEDMAN: No, it sounds like a very full afternoon and sounds like we
have some meetings to plan.
MR. BLAIR: Okay, there’s one thing I’d like to say because I know it was
very frustrating pulling together this agenda but I would have to say that this
was a very productive day despite all those frustrations, very useful and very
helpful day and thank you, Maria.
MS. FRIEDMAN: You’re quite welcome and thank you.
DR. FITZMAURICE: Jeff, I would agree with that and you’re whistling for the
next productive day, do we anticipate that we will probably aim for hearings
and educational efforts in July? The July meeting of SSS?
MR. BLAIR: Yes.
MS. GREENBERG: Not sure about the educational efforts because those may be
done with the full committee.
MR. BLAIR: That’s one of the open issues that we’ll hear on the Executive
Subcommittee meeting on the 19th as to whether it’s in a third day
to the Executive Subcommittee or how we’ll divide it up.
DR. FITZMAURICE: Okay, thank you, Jeff.
MS. FRIEDMAN: We’re actually not meeting again until July.
MR. BLAIR: Well, there’s an NHII meeting later this month, there’s Privacy
meetings, Executive Subcommittee —
MS. FRIEDMAN: We’re back to our regular schedule.
DR. FITZMAURICE: Well if there’s an educational meeting that we want to plan
for June, I don’t know if the agenda for June would cover it but that’s
something that we would discuss in the executive meeting on the
MS. FRIEDMAN: See how much of a chunk for the full committee time we want to
take or an add on.
MS. GREENBERG: July meeting is July 26th and 27th
MR. BLAIR: Yes. Any other last minute comments or questions? We stand
adjourned, thank you very much.
[Whereupon at 4:03 p.m. the meeting was adjourned.]