[This Transcript is Unedited]
National Committee on Vital and Health Statistics
Subcommittee on Standards
Hearing on Adopted Transaction Standards, Operating Rules, Code Sets and Identifiers
June 17, 2015
National Center for Health Statistics
3311 Toledo Road
Hyattsville, MD 20782
- Welcome – Ob Soonthornsima
- Panel 4 – Health Care Claim or Equivalent Encounter 3 Information (Part 1 & 2) – Gail Kocher, John Evangelist, Melissa Moorehead, George Arges, Robert Tennant, Benjamin Miller Margaret Weiker, Sherry Wilson, Chris Bruns, Stacey Barber, Raemarie Jimenez
- Review Committee Q&A
- Panel 5: Coordination of Benefits – David Preble, Atul Pathiyal, Melissa Moorehead, George Arges, Gary Beatty, Robert Tennant, Sherry Wilson, Stacey Barber, Chris Bruns
- Review Committee Q&A
- Panel 6: Health Care Claim Status – Gwen Lohse, George Arges, Robert Tennant, Rhonda Starkey, Gail Kocher, John Evangelist, Sherry Wilson, Jean Narcisi
- Public Comment
- Review Committee Q&A
- Panel 7: Health Care Payment, Remittance Advice and Electronic Fund Transfer – Jean Narcisi, Gwen Lohse, Priscilla Holland, George Arges, Heather McComas, Robert Tennant, David Preble, Stephanie Eades, Merri-Lee Stine, Gail Kocher, Ruth-Anne Phelps, John Evangelist, Melissa Moorehead, Annette Gabel, Sherry Wilson, Stacey Barber
- Review Committee Q&A
- Review Committee Discussion of Key Themes, Findings, and Next Steps
P R O C E E D I N G S (8:00 a.m.)
MR. SOONTHORNSIMA: Good morning and welcome to the second day of the review committee. We are going to start on time. I think we have our members and audience on the phone already. The phone is working. Without any further ado, let me go around introduce ourselves. We will have everybody introduce themselves as well in the audience and the phone. We will start with committee members and then folks at the table.
(Introductions around table)
MS. DEUTSCH: Good morning, and for those of you who were here yesterday, this will be redundant. This will take a couple of minutes. We want to remind all of you to please speak into the microphone and identify yourselves every time that you speak so that our transcripter can have an understanding of who is speaking.
Yesterday, everybody was wonderful about the five minute limit. We appreciate the same thing today. We have 44 people testifying, so it is going to be a long day. To remind you, there is a clock in the front. It will turn yellow when you have one minute to go. When it turns red, it means you have gone over. I will be going like this. Just use that for your reminder.
At the end of each of the panels, we will have time for the public to ask any questions or make any comments that they have. That will be followed by the subcommittee asking the questions. You will respond to those.
At the end when everybody leaves the panel from the previous panel if the next panel can be ready to take their seats, then we will be ready to follow our agenda. We will begin promptly after each break and at lunch.
Any written testimony that has been provided will not be presented at the committee. We use the written testimony for our deliberations and the development of the report and recommendations. We will not be sharing that during the hearing.
Understand that there may be some difficulty with people getting here on time or some logistical issues. We will try to follow the order that we have on the agenda. We may have to do some switching, so we ask for your indulgence on that.
Finally, the review committee greatly appreciates your input and the perspectives on these very important issues. This should prove to be a very exciting day as yesterday was so thank you.
Agenda Item: PANEL 4: Health Care Claim Or Equivalent Encounter Information (Part 1 and 2)
MR. SOONTHORNSIMA: Alright let’s begin with panel 4, Healthcare Claims. Gail?
MS. KOCHER: Gail Kocher from Blue Cross, Blue Shield Association representing the association and the 36 independent community-based and locally operated Blue Cross and Blue Shield Companies.
With respect to the Healthcare Claim, we focused mostly on the institutional and professional in our comments. It is the transaction that we in the plan provide the most value, not only to the plans themselves, to the association, but the provider/customers that we serve.
The claim is the transaction with the most use across the plans. It data is used for adjudication of our inter-plan claims. We still find a much lower use of the 837 dental claim, while both the institutional and professional claims are almost all electronic.
For both institutional and professional, minimal submission via paper is generally a result of either providers not having electronic capabilities. We know there are still overall providers with limited or no access to electronic connectivity methods or the types of claims are simply not easily accommodated electronic.
The examples that we had of those are institutional claims with greater than 100 lines, or there are some secondary claims which are complicated. Providers still find it easier for them to submit on paper. The health claim attachment is both a barrier due to lack of having an adopted standard and opportunity by adopting a standard in the future. Our comments made yesterday with respect to the attachments and prior authorization around the attachments hold true here as well.
While the current claim standard does meet our plan needs, there are always instances of having to utilize workarounds to meet business needs. One of the examples that we have is the need to report present on admission. That was a workaround that we used during the 4010, and that was codified into 5010.
Examples of current workarounds that we anticipate will be discretely reportable in the future are the capability to report both the repackages and original NDC numbers and the dental readiness classification code. Those are all of the comments we have on the claims.
MR. SOONTHORNSIMA: Thank you, Gail. John, are you on the phone from Medicare. Let’s move on to Melissa. We will come back to John when we have him.
MS. MOOREHEAD: Good morning. Thank you very much. This is Melissa Moorehead, MPHI, a voluntary workgroup of state Medicaid agencies. I am commenting mostly from discussions and a survey that we floated for this review committee. Most participants agree that the 837 has good business value. They use it quite extensively. There hasn’t been a lot of discussion specifically about that transaction.
We did solicit and receive some very specific recommendations. I tried to copy faithfully into my written testimony. For example, there are really specific fields like gestational age or allowing receivers and submitters to input notes upon agreement to support specific business needs.
This is another standard, however, that many felt was most appropriate for fee for service claims. Gail mentioned workarounds. The feeling is that the workarounds encountered now have to do with the difference between the claims standard and encounters, the information that is captured for encounters.
A quote is the information on an encounter claim that is sent to Medicaid, which is information about what a health plan paid for Medicaid client. It is not always exactly the same information that is captured on the 837. Collecting claims and encounters is a bit of a workaround. There is a request for something for encounter reporting that will work better.
There is a post-adjudication format for managed care encounter that work perfectly and could use something similar on the 837. Calling this transaction claims and encounter has become problematic. This is a transaction that relies on a lot of different code sets and identifiers. The committee did ask for information about code sets and identifiers. We did receive quite a few granular comments on those as well.
An example is the National Provider Identifier, which has been discussed since its adoption. It is having some weaknesses including the fact that provider doesn’t have a really hard standard definition. It can mean different things in different contexts.
The NPI can have a one too many relationships with actual people, with many to many, which still doesn’t adequately capture the reality of an encounter, especially in a PCMH world or other areas in the new payment models. It is becoming more difficult to use.
NPI is used as a primary identifier by our participants, but there still has to be cross-walking to internal provider identifiers to the services locations. Request or a quote that we received is it would be ideal if both CMS and X12 relaxed their rules and allowed medical providers to submit a secondary identifier in 2310 REF segment upon request of the receiver in order to capture some of the nuance.
In addition, atypical providers are very problematic. Every solution that our participants have discussed creates angst on the implementer’s end that it is not actually compliant use of an NPI, if that is what they are using or not using the NPI. That creates problems for compliance. They have to pull a claim and reformat it and do further workarounds.
The other entity identifier in the health plan and other entity enumeration system does not adequately address those concerns, but we will be making comments on the HPID Request for Information that is out currently. We did get as I mentioned a lot of other comments on the code sets.
The specific comments on CPT codes are that they are cumbersome to change. They can take years. It is difficult for on-boarding staff and even experienced coders to really understand the governance structure of the code sets and how to make changes. We discussed that quite a bit on our calls. Our group actually tries to help our participants negotiate that where appreciate.
Of course this is an area where it seemed appropriate to ask about ICD-10. It didn’t actually generate a lot of discussion because although there is still plenty of angst about the impact that the transaction or implementation will have, everyone affirmed that it is critical that CMS stick to the current implementation to move forward. Thank you very much for hearing our testimony.
DR. SUAREZ: This is Walter Suarez. I am chair of the National Committee and member of the Standards Health Sub-Committee. I don’t have any conflicts.
MR. SOONTHORNSIMA: John Evangelist, are you on the phone?
MR. EVANGELIST: My name is John Evangelist. I am the Director of the Business Applications Management Group Opposite Technology Solutions and the Centers for Medicare and Medicaid Services. I would like to thank the committee for this opportunity to testify and provide information on the currently adopted standards, operating rules, code status and identifiers used in administrator simplification transactions, and the degree to which the aforementioned meet current industry business needs.
During the previous session with NCVHS in February of this year, Medicare highlighted three areas we believe are important in drafting and implementing operating rules. That is the flexibility of use, investment protection and process improvement. We believe it is important for NCVHS to consider these three areas as it reviews the currently adopted standards and operating rules related to value, volume barriers, alternatives, opportunities and changes.
Specific to this panel regarding healthcare claim, we believe the currently adopted standards, operating rules, code status and identifiers used in admin transactions do meet the business needs of Medicare in most cases, hence they provide value.
However, there are instances, where the 837 PR3s do not meet the business needs of Medicare. For example locum tenens and subrogation’s are examples. Medicare has submitted requests to X12 to change a future standard.
Currently, 99 percent of Medicare fee for service claim transactions are being conducted electronically. Time and funding constraints are barriers for Medicare in implementing standards as they would be for most payers in implementing standards, operating rules, code sets and identifiers.
The time it takes to adopt and implement a standard may result in the standard becoming obsolete by the time of implementation, thus not addressing all of the current business needs of the industry. We would suggest that there is a way to spend less time developing the standards and give more time to implement standards. That would be something very beneficial for Medicare as well as other payers.
Medicare continues to focus on process improvement when implement standards and operating rules. We strive to follow an enterprise approach in developing and updating our systems, serving as good stewards of the taxpayer dollars entrusted to us.
Medicare does not recommend any alternatives to the X12 at this time. Opportunities for improvement submitted through the X12 request for interpretation process in the designated standards maintenance organization change request process should be incorporated into the new standard.
RFIs often contain a recommendation for changes or improvement to the next implementation guide, which would enhance the standard. At this time, other than those for which CMS has made the appropriate change request to the RFI process, CMS is not aware of any changes that are needed to the X12 837 transactions or the proposed operating rules that affect the 837 transactions.
Medicare is satisfied with the quality of the clean claims being received. For Medicare Part A, clean claims are being achieved on an average of 99 percent and for Medicare Part B 98 percent. For our durable medical equipment or DME line of business, we are achieving an average of 95.6 percent clean claims. This concludes my testimony for the 837. Thank you.
MR. SOONTHORNSIMA: Thanks very much, John. George?
MR. ARGES: My name is George Arges. I am with the American Hospital Association. Again, on behalf of our members, I would like to thank the committee for the opportunity to testify in today’s hearing as well.
In terms of the adequacy of the claims transaction, clearly the claim that is probably the most successful of the HIPAA standards in terms of utilization, it is in the 90 plus percentage area in terms of volume being transmitted.
There are, however, areas where there can be some improvement. It is very difficult to pinpoint exactly how we go about doing this. However, I do think that operating rules must be able to plan an important role here in the ability to probably test whether there is adherence and whether the receiver has the capability to use all of the elements within the standard.
In yesterday’s discussion, I noticed there was some talk about trying to improve the transaction standard in terms of stabilization by moving to external code sets. Code sets play an important role in terms of flexibility of the standard and making certain that it basically can keep up with the changes in the marketplace. So too is the code sets within the claims transaction.
On the UB side, the institutional side of the claims transaction, it would be great if there was a mechanism that could test that there is the ability by all of the health plans to basically utilize a full array of the codes sets that are outlined within the standard.
Sometimes we hear that that not everybody is up to speed with respect to the UB, the value codes, or occurrence codes or condition codes that are an inherent part of the standard. It is important that that ability stay current with the code sets. That is an important piece.
There must be a way to basically test whether organizations have that capability. They are up to speed. They have the ability to recognize that code set and know what to do with it as part of their processing.
With respect to the existing operating rules, we know there was an effort to basically move forward. We liked the fact that they did move forward with respect to laying out some timeframes in terms of response time to the claim. There has to be the ability to test that everybody has the ability to use the external code sets that are introduced within the transaction standards and to test whether the iterations of the codes that are reported can be handled correctly by the people who convey those codes.
For instance, on the diagnosis side of the claim, not everyone has the ability to process all 25 diagnosis codes or the number of procedure codes. All of these are important as we move particularly with respect to quality performance and the like. It is amazing to see the number of claims that have really bumped up even to the 25 character position.
So you have a number of individuals with co-morbidities and complications that are identified within the claim. Yet, we have heard that some health plans only process up to three diagnosis codes and that is it.
If you are passing this information on, it is important that the health plan is able to handle all of the codes. Maybe they don’t need all of the codes to basically lock-down a payment. If there is secondary payer, they must have the ability to basically pass that information on and make certain that that is conveyed to the secondary payer as well.
So improving the understanding is an important piece here. It is important that the operating rules, not just at a very low bar, but it have to be a bar that is something that people just don’t walk over. It is something that has to be a goal that is set that basically continues to improve the utilization of the standard in a more robust manner.
The ability to handle the diagnosis and procedure codes is important, making certain that people are up to speed with the current release of the external code sets and the ability to handle codified information within the transaction standard I think is an important piece.
Again, we would welcome the opportunity to have a dialogue as part of a multi-stakeholder group to basically look at how to further improve the utilization of the claims standard. Thank you.
MR. TENNANT: Good morning Robert Tennant, Director of HIT Policy for the Medical Group Management Association. On behalf of our 33,000 members, we are very pleased to be here and provide testimony.
I wanted to mention again that this testimony is based off of a survey that we did last week. It was very quick, but we got a good response rate. Listening to the panel, it sounds like we can almost skip to the next panel that 837 has done. Thanks so much. Let’s check that box and move on.
I think what we are going to do is maybe peak under the rug a little bit to see if there is anything going on that we weren’t expecting. I wanted to share with you what I think is a very telling slide. What we asked is how you are submitting these claims. When I hear John tell us that 98 percent of claims come into Medicare are clean. 99 percent are electronic that is not how the real world is.
I think it is important for us to understand that 66 percent are submitting the 837 via a clearing house. It is not going to direct to health plans. Only 12.7 are always submitting direct. Almost half say they never send to a health plan directly.
If you look down and you look at the number of 4010 version claims being submitted, only a handful are submitted directly to health plans. If you add up the middle columns, you are looking at 25 percent. One in four claims are coming always, frequently or occasionally in the 4010 format to a clearing house. That is an enormous figure. I think it raises some concerns, which I will get at a little bit later.
Again, if you look down, we are still seeing a pretty significant number of paper claims being submitted in the industry. We are not quite to the point where we can say that all claims are moving electronically.
One of the things we haven’t mentioned yet is the acknowledgment transaction. We all shop online. The first thing you get when buy something from Amazon or Ebay, you get that acknowledgment that they received your payment. You get an acknowledgment usually when the item is being shipped so there is transparency. We understand clearly what is happening with the transaction.
You can see here the vast majority of the respondents said that an acknowledgment would be very valuable to have.
In terms of concerns with the 837 or with claims in general, obviously there is still significant variability in payer acceptance of electronic claims. We have not quite reached that level of standardization. There are still some unique payer requirements. Unfortunately the PM vendors don’t always support use of the 5010, and that is going to be even more critical come October 1.
When the claim doesn’t seem to be anywhere, and it has fallen into a black hole, the question is who do you blame. There is finger-pointing. You talk to your billing service. They say don’t blame us. You talk to the clearing house. No, it must have been the payer. Then the payer says they never received it. There is no chain of accountability. Obviously with no acknowledgments, there is no transparency.
I wanted to share some of the comments that we receive don our survey. Certain payers cannot accept electronic claims. Our old friend Worker’s Comp requires paper. Some of the smaller payers do not accept E-claims through our clearing house. Some local plans don’t accept electronic claims. Our carrier does not accept electronic filing.
Sometimes insurance plans have the wrong logic built into their claims system and it needs to be circumvented by manual view. As we referenced through the day yesterday, the CAQH Index indicates again a 91.8 percent use of the transaction with potential savings of more than $2.00 per claim.
In terms of our recommendations really what we are looking for here is obviously more education. I think the sooner the better, especially when it comes to ICD-10. There has to be a plan for those providers that are still using 4010. Obviously, the I-10 codes cannot be submitted either to a clearing house or to the health plan on 4010.
What is important about that transition is when you think back at the transition from 4010 to 5010, the clearing house was really the savior. If the practice management system hadn’t been updated or replaced, the provider had no way to generate a 5010, the clearing house had the ability to massage that even if it was submitted on a cocktail napkin.
They can massage that into a 5010 and send it to the payer and everything would go smoothly. With ICD-10, of course, they don’t have that ability. They can’t massage that 9 code into a 10 code and have the provider get paid. I think it is going to be incredibly important to let providers know as quickly as possible that their 4010 solution is not going to work.
As well, of course, as Gail said, we need to move forward with claim attachments. It is long overdue. In terms of claim attachments, again, the real-world of practice administration is when the payer requests additional documentation.
In many cases the practice has no idea what they are looking for. They literally hit print on the medical record. They print the entire record down. They put it in a FedEx envelope and send it to the payer and cross their fingers. That is the reality. It is incredibly expensive.
I think one of the things I would urge the committee to do is to really push CMS hard to get that claim attachment standard. With that, I will stop. Thank you very much.
MR. SOONTHORNSIMA: Thank you, Rob. Benjamin?
DR. MILLER: Thank you for the opportunity to provide testimony today around mental health and healthcare claim or equivalent encounter information.
As someone who has worked quite closely with many practices around mental health, I believe this is a timely topic in the age of health reform. I will structure my remarks today around the considerations for the committee for specifically mental health.
With the recognition that mental health must be better addressed there comes an understanding that this cannot occur in isolation. Clinical, operational and financial mechanisms must all simultaneously change to bring about a new model of care that tackles mental health.
To this end, more seamlessly integrating mental health in the larger healthcare milieu holds promise for improving outcomes, decreasing costs and enhancing our patients’ experience. The data are clear.
When we integrate mental health with certain dominant facets of delivery, like primary care, we have an opportunity to better treat and, in some cases, prevent mental illness.
Historically the mental health field has predominantly been paid through traditional fee for service mechanisms. In fact, until recently there has not been much emphasis placed on quality or outcomes in this field.
As a newer facet of the healthcare delivery system, traditional mental health services were often seen as requiring lengthy sessions or visits and continue for an extended period of time. However, when claims were submitted, these mental health benefits and payments were and, in many cases, still adjudicated through a separate financial channel other than that of the medical visit.
To this end, a separate system for claims was created to manage the quote/unquote, mental health benefits. Needless to say having two separate systems to address mental health and medical only exacerbated the already stymied fragmentation felt by patients and clinicians.
On the medical side, many times the codes used by non-mental health clinicians for patients with a mental health need were not paid. In some cases the desire of the patient to not be labeled as having a mental illness led the medical clinician to code the symptoms differently to hide the mental health issue.
For example, instead of diagnosis of depression given to a patient, the medical clinician may code symptoms of lethargy, stomach pain, insomnia and others. In essence stigma was somewhat perpetuated by a separate process for mental health codes and claims, making it different than medical codes or claims.
With more medical practices like primary care recognizing the inseparability of mental health for medical approaches that integrated mental health providers are emerging. These new approaches combine with new and novel payment methodologies and challenge the antiquated notion that mental health is separate and that volume-driven care improves quality and outcomes.
Healthcare’s increased emphasis on efficiency and value-based care opens up new doors to address the rule of claims in our systems. For example, in primary care practices where mental health is onsite and that practice has held some value-based arrangement that includes mental health quality and outcomes, the entire idea that coding or billing a separate mental health encounter may be very different.
Add to this fact that many of these practices may wish to integrate a mental health clinician on the team, and a new paradigm emerges for how we think about claims for multiple providers on the same team in the same practice.
For an alternative payment methodology like capitation of global budgeting, primary care practices may not have the mental health clinician code or a drop a bill since their service may be seen as the overall primary care visit.
Value-based payments will also likely usher in the need for different types of datasets, specifically in the area of mental health. We may start to see clinicians offer up different types of data to the payer for the services delivered.
Mental health visits like most other healthcare services have been encountered at each patient visit. In the context of value-based payments, there is a need to recognize that under some financial arrangements like a global budget, payers may not collect data from every encounter, but rather come back after a specified period of time, six months to 12 months, based upon the patient outcome or functional status.
The payment to the clinician may be given out at the end of that timeframe contingent on certain outcomes. The notion that not all payments will come through an encounter, but be based on other data is relatively new and novel. The committee may wish to consider how these alternative payment methodologies impact on historical claims and encounter information.
Most mental health systems and clinicians do not have as robust electronic health record technology as their medical colleagues. Some of this may be due to mental health not being included High Tech Act as eligible for financial incentives. However, even if there were incentives most of these systems still are collecting a very different kind of data than the rest of healthcare.
Add to the fact that these systems operate under different rules around data exchange and often are not easily able to share their data with others in healthcare. Mental health clinicians in practices outside of larger integrated delivery systems may not have the electronic infrastructure to support certain transactions.
Simply put, standalone mental health providers may not have the information technology and systems infrastructure to rapidly adopt electronic health record utilization of the standard transactions and operating rules except for billing.
When we consider clinical integration, bringing mental health into other settings, we must also consider where these data will be collected, stored and how they will be shared as well as how these data shift under non-fee for service arrangements.
Claims based on codes seem to be an artifact of fee for service. As our healthcare system moves away from individual claims to larger, more connected data sets built off of value proposition rather than a volume proposition, we must consider the impact this will have on mental health.
If mental health is integrated into more medical settings, how we track or manage our mental health encounters will change dramatically.
Separate specialty mental health service is still working to come into value-based arrangements and may have the need to operate under the older approaches to claims. However, this will likely shift dramatically as more practices integrate care.
In closing, I encourage the committee to consider studying how the claims process will shift as more novel payment methods are applied to practice. Specifically looking at the role of mental health in integrated and non-integrated practices may help elucidate the impact of integrated models and what role if any claims should play in holding the practice accountable for value-based care.
I also encourage the committee to recognize that regardless of where mental health services may be delivered, the mental health system has historically been behind the medical callings on systems infrastructure to rapidly adopt electronic health record and utilization of the standard transactions and operating rules. Thank you again.
MR. SOONTHORNSIMA: Thank you, Benjamin. We are doing so well with time. Let’s go ahead and move on to the next. Margaret?
MS. WEIKER: Margaret Weiker, Director of Standards Development at NCPDP. NCPDP members use the telecommunication standard version DCRO to submit claims and service transactions. Members also use the ASAX12 and 837 professional claim to build drugs and supplies that are covered under Medicare Part B and for professional pharmacy services covered under the medical plain.
For the most part, the NCPDP standards as well as the 837 professional meet the business needs for pharmacy. Workarounds have been developed to support the business requirements not met in the currently adopted versions.
Volume of transactions for using the NCPDP telecom standard 70 million to 228 million transactions are submitted per month using those transactions. A range of 38 million to 50 million use the 837 per month.
Barriers if they are identified we typically address them through our data element request form. We typically have to develop a workaround that goes along with that request form.
One barrier that has been identified was the use of quantity prescribed in the standard. The quantity prescribed data element is designated as not used and a business requirement to distinguish incremental cycle fills of a controlled substance prescription in long-term care claims from illegal refills was brought forward by CMS Medicare Part D to change the fill to a situational data element.
NCPDP addressed this barrier by approving a change to the standard during November of 2012. Today, it is manually done via a workaround.
I have included in my written testimony a timeline of requesting this change to be adopted under HIPAA. We submitted a DSMO request. We have come in front of the NCVHS Subcommittee on Standards asking this to be adopted. The last word I had was from April 2015. Keep in mind we submitted this in 2012.
This was from the National Standards Group. “At this time, the quantity prescribed issue is going through the regulatory process. We will try a revised target date for a regulation very soon.” I don’t have an update from that date.
Nearly three years have passed since the initial request was sent. The barrier that exists today no longer is a standard issue, but one of federal government regulations and process. These barriers must be addressed and removed. Otherwise, any new version of a HIPAA adopted standard brought forward for adoption will be outdated and require workarounds even before it is adopted.
Alternatives identified were direct-data entry via a web portal as well as paper billings.
Opportunities exist in the Worker’s Compensation Environment. They are a non-covered entity under HIPAA, but yet many states require them to use the mandated HIPAA guides to implement that program.
We have had many changes brought forward to the telecommunication request. The significant changes that we have made are listed in the written testimony, primarily around compounds, modifications to some data elements and adding some new data.
In addition to those that have already been completed there are three items that we are currently working on. One was to identify a payment/payer type. Another one is worker’s comp enhancements that are needed. Another one is additional codification of response messages.
At the present time, NCPDP plans to submit a DSMO request in February 2017 to adopt a new version of the telecommunication standard, that standard and Medicaid Subrogation standard. An additional question that was asked had to do with the degree to which clean claims are being achieved.
Since the pharmacy industry submits most of their transactions in real-time, the claim is either paid or rejected upon submission. We really don’t have statistics in regard to clean claims. Thank you.
MS. WILSON: I am Sherry Wilson, President of the Cooperative Exchange, representing the National Clearinghouse Association and Executive Vice President and Chief Compliance Officer of Jopari Solutions. I would like to thank you for the opportunity to submit this testimony on behalf of our Cooperative Exchange Membership, representing 80 percent of the clearinghouse industry.
Our testimony today is based on the 2015 Joint WEDI Cooperative Exchange Transaction Survey. Our results showed that 100 percent of the eight clearinghouses support the professional institutional claims with dental claim representation of 82 percent.
We look at the value of the claim. The Cooperative Exchange members are processing over 4 billion plus claims transactions annually. Based on our transaction expertise, we find these transactions have met the past industry needs. However, there are new and emerging business needs that are not accommodated in the current transaction that has already been referenced this morning by the panel.
When we look at the volume, the results of our survey were very interesting. I think Rob echoes some of the comments that you found in your survey as well. We found professional claims that were getting 61 percent support of the 5010 format in X12. We are still seeing 4010, with 12 percent coming from providers and still paper image another 17 percent.
Again, if you add up the 4010 and the image, you will see there is a difference in the discrepancy between the use of the X12 format. On the institutional, it is much higher. We are seeing 77 percent using the 5010 format. We are seeing 4010 at 8 percent. Again, we are still seeing and receiving images in the UB form.
What is important about this survey is the results indicate the critical role as clearinghouses we play in facilitating the transition from legacy and proprietary formats to moving the industry forward with implementation of EDI transactions.
If you look at the barriers, there are two specific barriers in addition to what has been mentioned this morning. We go into more detail in written testimony. One is providers and payers talk in different languages.
Many providers are still very paper-form centric from looking at discussions of the claim on the image, even to reconciliation still focused on the EOB versus the 835 transaction language. What we see is why payers are more EDI savvy. There is definitely a communication gap we see that is there.
The second barrier is the emerging business requirements and regulations are only supported in the future guides. So we look at bundle payments, ACOs and other emerging regulations and business needs. We really need to look at addressing the new version of the claims transaction.
With those opportunities and recommendations, there are three things that we want to bring forward. One is the timely adoption of the next X12 claims version. In that, we feel it is critical to meet the new and emerging business needs and that we need to address that.
Again the second component is the industry collaboration to identify the optimum ways to stagger the implementation of the net-set of transactions. This must be done based on the interoperability of these transactions, ensuring that the related changes are not negatively impacted by such an approach.
Lastly, we also support the adoption of the X12 acknowledgement reference model. This is a normal practice within the clearinghouse workflow to make sure showing the acknowledgement that the claim was received and has made a significant impact on first time claim submission. Thank you.
MR. BRUNS: Good morning, I am Chris Bruns, President of HATA, Healthcare Administrative Technology Association and head of Product Development for MedInformatix.
While the benefits of the healthcare claim are clear as the widely used EDI transaction, variances often contribute to confusion and misunderstanding of the standard by the provider. It often falls the PMS vendor and/or clearinghouse to configure those variances on behalf of the provider because of the complexities of some of those variances.
Many of these differences can be visualized in the acknowledgment reports and associated rejection codes where the language of the transaction set is often lost on the provider organization, requiring intervention by technical support staff from both PMS vendors and clearinghouses.
In 2015 where the CMS 1500 form is still frequently referred to as a HCFA 15 years after HCFA became CMS. I am not kidding. I can assure the terminology challenge exists for many providers. It is in troubleshooting the 837 where it is most evident.
While HATA does not have specific formal recommendations to the NCVHS for the current 837 5010 format, we would like to see the required adoption of the electronic claims format across the entire payer spectrum to include Work Comp, auto and PIP claims, which involves other topics such as the adoption of electronic attachments of course.
We do recognize that it is our segment of the industry that is most often responsible for producing professional, institution and dental claims and that the success of future formats depends on our collective ability as PMS vendors to develop and deploy updates or upgrades to conform to the new standards and operating rules in a timely manner.
Thank you again for allowing us to participate in this review process.
MR. SOONTHORNSIMA: Thank you, Stacey.
MS. BARBER: Good morning. I am Stacey Barber ASC X12 and chair. Again, thank you for the opportunity to allow us to testify on behalf of ASC X12.
As has already been mentioned the 837 is the most widely adopted of all of the required transactions. For the most part, it does meet the overall business need of the industry for submitting claims.
There are some barriers that have been noted, one of which we have talked about quite a bit yesterday and today. That is the lack of the adoption of attachment and the ability to provide additional information that is needed for claim processing in an electronic form.
There are also some issues from the standpoint of remark codes that are not able to be submitted currently in 5010 at the line level of a claim. When you are talking about secondary claim sometimes it is hard for the secondary payer to understand how the primary payer processed that claim at the line level without those remark codes and relying on the adjustment raising codes.
There are also sectors of the insurance industry that are not covered under HIPAA, for example, Property and Casualty and Workman’s Compensation, which results in inconsistent implementations of the 837s depending upon the industry, the entity submitting the claim and providing them and including them within the covered entity may help for a more consistent implementation of the 837.
Some opportunities that are note are also some of the barriers, as Gail mentioned earlier. The adoption of attachments will assist in adjudication. There are also changes that have been to the guide to allow for predetermination of benefits to be submitted. There are changes in functionality to better support Workman’s Comp and Property and Casualty.
As mentioned earlier by Medicare, RFIs clarify current implementations. However, RFIs that have identified changes that are necessary to be made to the transactions have been addressed and are being taken care of in the next versions.
Once again, the importance of acknowledgments and an opportunity in adopting the ASC X23 acknowledgment reference model, AKA ARM would be an assistant to the industry. Thank you for the opportunity.
MS. JIMENEZ: Hello, I am Raemarie Jimenez with AAPC. Thank you for the opportunity to provide comments on healthcare claims. AAPC is the nation’s largest training and credentialing organization for the business side of healthcare. Currently we have over 144,000 members who are coders, billers, medical auditors, compliance professionals and practice managers.
Our members play a vital role in the entire revenue cycle and have experience with the majority of the administrative simplification standards being discussed. I will be focusing on the healthcare claims.
When we surveyed our members, 98 percent reported submitting electronic healthcare claims 90 to 100 percent of the time. When we asked about efficiencies achieved with the electronic healthcare claims submission, the majority responded that the transmission of claims is more efficient. Requirements for systems to be set up properly to account for different payment requirements from different payers have been the burden.
We have an effective standard format for healthcare claims submission. The burden is knowing the correct data elements needed to comply with payer requirements, which do vary. The variations among payers requires research from our members to determine the data needed and proper placement of the data in order to successfully submit a clean claim and have it processed correctly.
The most significant administrative burdens for clean claim submission include capture and accurate eligibility information, determining the non-standard requirements from payers, setting up the practice management or billing system to account for variations and the accuracy of coding.
A few examples of variations among payer requirements include modifier usage, the use of a HCPCS level II code versus CPT codes and entering information in the correct field to provide clinical information when needed.
An example of differences in modifier use is the reporting of bilateral procedures. Some payers require one line item with modifier 50 and one unit of service. While others require two line items with modifiers RT and LT with one unit of service reported per line.
Although this is an easy concept to understand, the only way you know the payer difference is to research prior to claims submission and add the logic to the practice management or billing system or add that information when a denial is received.
When HCPCS codes are created that report the same services in existing CPT code, billing and coding staff need to research to determine if private payers are going to require the HCPCS code or CPT code. This logic must also be added to the billing or practice management system so that claims are submitted correctly.
With CMS local coverage determination and national coverage determination policies some medications administered required the provider to include lab values to be reported on the claim, to properly pay the claim. The field information that is required to be reported can vary between Medicare administrative contractors.
The determination of common reasons for claim rejection or denials and how to prevent them help with setting up systems to correctly achieve clean claims going forward. With each denial or ejection our members need to determine the reason and identify steps to be taken and fixes in the system to be put in place.
Because denial remark codes vary among payers, it also requires manual review. Some remark codes are so vague the only way to determine the problem is to call the payer. Between hold times and speaking with a representative, the average can take 20 to 40 minutes.
Most of the information can be found on payer websites through manuals, policies and education resources, but it is not consistent. It takes time to look for the information on the payer sites. Forty-six percent of our members indicate they spend four to three hours per week researching non-standard payer requirements.
Once the research is complete, systems are set up correctly. Accurate information is obtained and encounters are coded correctly. Members reported that they are able to achieve clean claims 90 to 95 percent of the time.
Opportunities improvement includes standardized claim edits and denial remark codes and consistent use of CPT coding guidelines and modifier use. We also support the need for a mechanism to attach medical records when requested for claim adjudication.
We have been provided with a standard format for submission that is working and code sets, but the rules have not been standardized. Thank you.
Agenda Item: Review Committee Q&A
MR. SOONTHORNSIMA: Thank you. Since we are doing very well with time, let’s go ahead and jump to public comment, committee members, questions? Alex?
MS. GOSS: Margaret, did I hear you correctly say February 2017 for your change request for the next version, like a year and a half from now is when you plan to put the next one in. It sounds like they are ready to go.
MS. WEIKER: We are doing some additional changes. We had the discussion. Originally, it was going to be the ballot out of August of this year, but members wanted additional time to take a look and see if there was anything else we might need, what was coming up for Medicare Part D. So we decided to push it off until next year to cut off the change request so it would be February 2017.
MS. GOSS: I was thinking about the statement that you made in the context of yesterday’s discussion in the segmentation of the SDO process versus the regulatory adoption process. Of course we shouldn’t forget the requirement we should have always in-between of piloting.
MS. WEIKER: Speaking of piloting that has got to be figured in as well into timeline, who is doing it, how it is going to be done, who is funding it, what is the requirement. So February 2017, I will come forward to say this is what we want to do. Hopefully between now and then we will have an understanding of what pilots mean.
MS. GOSS: I appreciate your optimism.
MR. TENNANT: Real quick on piloting. I could not agree more. I think one of the problems the industry has faced over the years is we have moved from one standard to another assuming there was going to be some positive outcome, and there rarely is. I think beyond just piloting, we need to establish return on investment. These are huge transitions for the industry. I agree that 7030 is probably the best thing since sliced bread. Let’s prove it. It does two things.
One, it proves the ROI so you get a little more buy-in from providers maybe more willing to spend the money, which means that the practice management vendors can say okay there is clearly going to be a need. We will move forward and support. I think ICD-10 is a perfect example of a standard that was never piloted, never established the ROI. We ended up with delays and push-back from providers.
MS. GOSS: What version are we talking in NCPDP land for 2017? I know the 7030 from X12 is the next version to be brought forward, but it is not D.0.
MS. WEIKER: No, there is the D.0 change that we would like to have adopted to accommodate the Medicare Part D. It would be ED13 or we might just go E0. I don’t have a firm version.
MR. SOONTHORNSIMA: Melissa.
MS. MOOREHEAD: I just want to chime in chime in since you brought up piloting and testing. It was hard to work that into the requested testimony questions. I considered not answering any of the questions in order to stress the importance of getting some more resources and a more forward-thinking approach before the mandated adoption of standards operating rules and changes to transactions and code sets.
It seems that there has been more attention paid to compliance testing, which yields only information about how well something is being performed. Very little information or resources particularly for Medicaid’s that don’t necessarily have the budgets to do that on their own to determine in advance how a change or an improvement could be made. Thanks for the opportunity to get that out there.
MR. SOONTHORNSIMA: George you want to answer because you have any question?
MR. ARGES: This is a unique opportunity really for the committee to basically take a look at from this hearing’s testimony where there are opportunities to improve utilization of the transaction standards.
I think it is more important to Rob’s point in terms of return on investment and where there are opportunities to bump up certain transaction standards to a level of performance or utilization that is much higher than where it currently exists today.
I think it is far more important than just moving forward with the adoption of another version of a transaction standard. Otherwise, we are going to be at the same point and find ourselves spending money to convert to a new standard without really gaining additional traction in return on investment.
I think it is important to consider how the problems that exist with the existing transactions can be overcome to basically improve the utilization. Take a look at what is being put forward by X12. They have done a Yeoman’s job of identifying areas for improvement. Some of them may have to move forward faster than others.
I think it is important to maybe select one or two transactions for fast-tracking and deep-diving into the process to basically bump up its utilization to a level that is far higher than where it is today.
MS. GOSS: George, yesterday, there were some commentary about covered entity status and providers have the flexibility to do it the way they want to do it today. If a provider asks a payer has to do it. How would you view what you just said in the context of modifying the covered entity provisions within HIPAA?
MR. ARGES: Well, I am not sure if we can modify the covered entity provision other than through a law or act of congress. I do think there has to be an educational outreach that has to take place.
I think if we can move forward with some level of education with employers, Worker’s Comp and others in terms of what they need to do to basically understand that the return on investment is by adhering to the standards, establishing business rules that make sense for them to basically communicate either with the health plans in terms of enrollment, the timeliness of that and also finding good business practices to manage that fairly well I think is important.
I think it is best to look at the Worker’s Comp issues and liability issues and also take a look at how education can reach out to basically move them along to embrace the standards the way it was designed. I think it is just an educational effort that really needs to be pushed.
MS. WILSON: I would like to comment as an industry advocate, especially on Worker’s Compensation. We have over nine states with mandates that have adopted the HIPAA transaction sets with the exception of prior authorization and a few other transactions. We worked very diligently with X12 over the last eight years.
Today we can use that same transaction. These are all pretty much the same providers that are doing government, commercial and Worker’s Compensation. The goal here is one button for all lines of healthcare business and we can standardize and automate the workflow process.
Through that we worked very diligently with WEDI, et cetera, with the X12 standards. Today, the provider can send that same 837 transaction. It is true Worker’s Compensation, and it accommodates the future version significantly enhances the information that is needed in Worker’s Compensation. Today, we can use those transactions to do that.
The other thing I would like to stress is a recommendation to take a step back, instead of looking at the transactions in isolation, look at the continuum of end-to-end or automation.
George, to your point, the opportunity of business process improvement. Not that I am advocating the Worker’s Compensation model, but since 2009, we have probably have another 12 states that are coming on with the mandates they have.
What is unique about that is the claim attachments are pretty much required for most of the claims that are submitted. When you look at our prior authorization issue we discussed yesterday there has been identification of the rules are upfront on what attachments are needed with the claim.
You already know it is either in the fee scales or in the state mandate. If you are sending in a claim for surgical, you need to send an attachment to support it. We have also adopted the acknowledgments as part of that process.
Part of that value proposition that we are seeing today is when front-end edits, we are seeing 75 percent increase in first-time claim submission by using those acknowledgments and those front-end edits to know what type of attachments need to go with the claim.
MS. KOCHER: I don’t disagree with my other panelists, but I would respectfully ask the committee to have that thought process and discuss not just within the context of the transactions, but we need to think about it in the broader roadmap of what is going on in the industry across the HIT landscape.
We can’t think about transactions without thinking about the impacts to providers on meaningful use, the impacts to the health plans and the provider community on health insurance exchange. We have got to think about it in the broader context across that larger continuum.
If we don’t, we will move forward with this, and we will have impacts on the other side. We are going to end up where we are today with everybody scrambling and trying to use resources for multiple projects. I think that is one barrier to all of our stakeholders in implementing and moving forward.
MR. SOONTHORNSIMA: Walter? I know Linda has a question, so we will go to her later.
DR. SUAREZ: This is Walter Suarez. It is a really good discussion. I have several points that I would like to make and get a few reactions. I will go rather quickly.
The first one is about the standard development process and its relationship with the regulatory process. There seems to be a need to improve that process significantly. Within the standard development process, my sense is that ideally one would be developing the standard, piloting it, testing it and evaluating it and ensuring that it works and then recommending it for the option and do the piloting before the recommendation comes to be adopted with documentation of the fact that the piloting was performed and all of those. I see it being hard to be done.
Then the other element is investing sometime and evaluating the return on investment. I think Rob mentioned this and the importance of understanding the ultimate benefit in a documented way. Those are going to be part and have been in some ways part of the criteria that we use to evaluate and determine whether a standard should be moved forward.
There is an interesting difference, and that is where I start drawing parallels with the process we are going through with EHR adoption and meaningful use. There is an interesting difference. While we in the administrative world jump from one standard to other every 10 years, in the EHR world, the movement is every 12 months.
It is almost like every year nowadays ONC is publishing a new additional certification with new additional standard, a standard that we adopted only a year or so ago. CCDA version 1.1 is now changed to CCDA version 2.0 in a matter of 18 months or so.
With the development being a very rapid development process in the standard development structure, I am not necessarily arguing that we could go in that direction with administrative transactions, but it seems like there is a middle ground where we could not have to wait from 5010 to 7030 and 10 years go by.
Perhaps there are some other improvements in the standard that can be adopted faster. That is my first question is your reaction to that type of approach. Certainly with the regulatory process my point would be with CMS. This is not Medicare. It is the CMS regulators that actually adopt the standards.
Looking at the mechanism that is used by ONC to do these updates every year basically, again, I am not arguing for doing major updates, but incremental small improvements that can be adopted. What is your reaction to that type?
MS. BARBER: This is Stacey Barber, ASC X12 chair. I believe I mentioned this yesterday. ASC X12 did develop and complete the development of version 6020 of the guides. We did not want to recommend adoption of those guides outside of the claims attachments and attachments in general because we knew that there were changes going into the next version.
We didn’t know at that time what the next version would be that would be of benefit to the industry. I think it has been noted that these implementations take time. They are costly. Going from one version and then 7030, we did not feel it would be in the best interest of the industry to recommend 6020.
The development process does continue every day. We have not done another TR3 since 6020. The 7030 is the next one we would create a TR3 for. Of course, there are other standard versions that have been published.
DR. SUAREZ: Let’s assume we are we moved to 7030. From that point on is there a mechanism to make smaller, incremental improvements to 7030 once rather than waiting until 9040. I am just arguing because I think I have been working on this for a couple of years.
I noticed and heard from the industry the importance of adopting changes that are needed and not having to wait until all of the changes get accumulated and then jump into a major new version.
MS. BARBER: There is a potential for that. We are hoping that after this next major release of the TR3s that the change request process will flow more rapidly and the updates will be made more frequently.
MS. WEIKER: Up until last year, I could create four versions of the telecommunications standards a year. These would be something that somebody could take and actually adopt and implement. We have since moved that to twice a year because we were cranking out versions for very small changes and nobody was implementing it. It is a lot of work to produce these documents.
As Stacy mentioned, any time you say I am going to move from version one to version two, there are a lot of things that have to be looked at. Resources are one, dollars, software, rollout. I think the industry is going to have to be pushed and pulled along to move it more toward like what we see with meaningful use and on.
It costs billions to move from one version to another. It is true. You had fewer changes to make, it would be cheaper because it wouldn’t take you so long. I think the industry has to be pushed and prodded along to do that, the carrot and stick approach. It is not going to happen overnight.
We have many entities that say they are not going to implement anything until they see it in the final role. You have that mindset with not expending any money or resources until you know it is going to be this version. Otherwise, you are not touching it.
MR. SOONTHORNSIMA: Robert, Melissa, and then go back to Stacy.
MR. TENNANT: Walter, I think you hit the nail on the head here with the problems. I don’t think we need to look at meaningful use as any example. In fact, I would argue that it may shed some light on some of the problems that we could apply here.
When you look at meaningful use, it was rolled out as a program for all EPs, but it was really primary focused primary care. You had psychiatrists required to measure BMI. You had radiologists and pathologists required to measure blood pressure. Of course, it makes no sense.
DR. SUAREZ: I want to distinguish. You are talking about the meaningful use metrics from CMS. I am talking about the certification standards.
MR. TENNANT: But all of the measures were folded into the certification. The EHR had to be able to capture that information as part of the certification. It is all intertwined. You are right in saying that the vendors have pushed back on this.
We have seen it with the modifications to stage two in 2014. They were pushing too fast, too hard, and finally got their wrist slapped and pulled back. As you say, there might be a middle ground here.
I would argue the failure of meaningful use was the fact that a group of individuals developed the standards without getting input from the end-users. I think an opportunity with X12, for example, is to say we are not going to assume we know what the problems are. Let’s go and find out what the problems are.
A criticism of X12 pushed to us is that providers don’t show up. We don’t get a lot of them. Of course they don’t. They are busy treating patients. Our argument is why don’t you set up some folks groups at an MGMA meeting or AMA and sit down and say what is working and what isn’t. To George’s point, let’s focus in on what needs to be fixed immediately. What is the biggest return on investment and fast-track that.
MS. MOOREHEAD: Speaking from the point of view of the entities that aren’t going to implement anything until it is mandated. I would like to point out that that gets back to what we were talking about in terms of compliance versus piloting testing.
There are very strong disincentives to not wait because losing compliance with upcoming penalties is a real concern and a barrier to improving adopted standards even through operating rules.
Walter, to get specifically to your point, I have often wondered when the regulations themselves would be better written as floors. The issue there is if people can start implementing newer versions or incremental versions, uniformity and interoperability is impacted.
However, particularly in the real-world workarounds whether they get to paper or different kind of ways to address an issue that isn’t working in an adopted transaction that may impact the uptake of the transaction themselves turns into this vicious cycle that we talked about a good deal yesterday.
An incremental approach that would allow for some investments upfront or less risky kinds of approaches to incremental changes I think would be very helpful. As a reminder in the Medicaid world where the investment cycle is impacted by a political process and has its own 12 to 24 month cycle that complicates all of these other timelines. It will make it a little bit easier for a Medicaid agency to start participating in an improvement process as opposed to just waiting to react to the next mandate.
MR. ARGES: Changes not matter how small is always difficult. I will give you an example. As people were testing ICD-10, you think the only variables that would have changed would have been the diagnosis and the procedure codes that report ICD-10.
However, we also learned that there are some instances where individual organizations fail to take into account the edit logic that needed to be carried forward with the testing of the ICD-10.
For instance, we have present on admission codes that are also a requirement. There are certain diagnosis codes that are exempt from present on admission codes. Yet, the organization failed to accommodate that. Those claims that contain those diagnosis codes were looking for POA and they failed, even thought it was correct on the part of the provider.
The key think is whether we can take the changes that have been put forward and laid out and develop a tool that can at least do a logic run-through, a test of what is essential as part of this process and validate whether your organization has accommodated that would be helpful.
Testing is important because you do learn how well people approach the standard and interpret it. I think greater dialogue is something that has to happen throughout this process and having the open lines of communication.
I also think to Gail’s point earlier, in terms of managing various IT developments is something that is very important. There is so much on the table at this point in time and to be able to logically stagger, I think is important for all organizations.
MS. KOCHER: Memory serves there are provisions within the regulations that accommodate pilot testing. There is paperwork to be done, but I think there are provisions that would allow the concerns around compliance to be put aside.
I think it really gets back to the barriers of dollars, IT resources, bandwidth and stakeholders coming together across the continuum. Health plans can’t do it if we don’t have support from vendors and we don’t have provider that are willing to test.
Providers can’t pilot if they don’t have health plans and vendors that are willing to support them. I think it is the bigger question that Margaret and George have both alluded to as well today. How do we get the stakeholder continuum participants and then work that in against all of the other IT resources and impacts that everybody is facing.
DR. SUAREZ: I have a few more comments, but I am going to yield my time to my esteemed colleagues. I wanted to mention one interesting thing that happened this time around. I don’t know how many people have noted that. Back about six, seven or eight years ago, we were talking about this. One term was used consistently as one of the big barriers. That was something called companion guides.
I have not heard the term in this hearing at all, which is very good, although I have heard the concerns that there are still differences imposed in existence from different payers based on some of the situational elements as well. That is something we would be interested in learning more about and to what extent some of those continue to need to exist.
The question I wanted to ask is really about the future of claims. What is the perspective of the group about how claims are going to have to change or a new version or new transaction will have to be created to accommodate for the changes in payment mechanisms?
Certainly, when dealing with bundled payments or dealing with other mechanisms of payments that are not based on volume, something will need to happen with respect to how that information got communicated. An invoice or a quality report that shows a combination of the two, what is your perspective about the future of the claim with respect to this new alternative payment model?
MR. ARGES: This is George Arges. I don’t know necessarily that the claim will need to necessarily change dramatically. I do think the emphasis on more of the clinical variables becomes more important than ever before.
The claim basically is a summary of the type of resources that were expended for the patient given the condition of the patient, their disease, their illness, any comorbidities that may exist, who was engaged as part of that process.
It really becomes a document of a summary of the core components that were rendered in the patient’s care. That is not to say that there isn’t other information that may be valuable. If other information is indeed valuable because we are moving away from the fee for service to more of a quality component, you still can expand on it.
I know the UB stepped forward with the present on admission codes as part of adding it to the dataset to basically further identify any issues that may have developed while the patient was in the custody of care. We added the patient’s reason for visit code so that we could identify what brought the patient to the facility. These are all key components.
There are going to be other pieces that we may need to know that currently aren’t a part of the process. Can we accommodate them? Yes. I think we need to know the rationale behind them.
I also want to caution people. The claim has been one that is the most common used transaction. It is the most reliable in terms of the summary of data that is collected. I know people want to piggyback and attach other information just because they want to do a research project. I think there is a need for them.
The question becomes whether the dataset should be used for that or if there should be another abstract that is developed that is also contains similar information as the claim does and moves a different route. I think those are things that need to be considered moving forward. I still think there will be a need for a claim.
I think that is the only piece of information that is routinely collected that is a good summary of what has taken place with the patient. I think it is what many health plans have currently relied upon as their basis to basically move forward with the ACOs and the like.
DR. MILLER: So two quick points to you question, Walter. I think one, we have to recognize that providers really are looking for things that are going to help them clinically. The clinical utility of things like claims has to be brought into question here.
We could talk about the business side of healthcare all day, but really at the end of the day, it is about what the providers are doing with the patients and what clinical utility is there in a lot of these transactions and things that we have discussed.
Number two, to George’s point, I do believe that as we look at more alternative payment methodologies and value-based payments, we are going to start to see the end of looking at specific diseases and just look at people and functional outcomes and functional status versus what your diagnosis is and how we did at treating that particular A1c for your diabetes.
I see some communities that are moving in this direction where they are looking at social determinants much more so than they are at just the diagnosis or the disease. I realize that is probably over three edges here. We are not there yet.
I think it would behoove this committee to at least consider as we look at payment reform that it is not going to be the same old diagnosis-driven interventions for our patients.
MR. TENNANT: Let me take it from two extremes. I don’t the announcement of the claim’s demise is quite accurate. When you look at PQRS, the Physician’s Quality Reporting System, that is one of these models of trying to drive quality, the vast majority of PQRS submissions are on claims. They use G-codes, even though you can do it from the EHR or the registry.
I think there is still going to be a need, especially for smaller providers, to use that mechanism, that lever to achieve the reporting requirements. We have been talking to some health plans about their vision for the future. Some of them are looking at the whole claims world from a completely different angle. It is a little bit Jules Verne, but they are looking at an abstract directly out of the EHR, so no more claims.
It really gets to the point of taking the information that is captured in the EHR and massaging it, not worried about codes or anything like that. They are pulling the data right out of the clinical notes and adjudicating it and delving into the quality world. I think there are two extremes.
Maybe it is not one or the other. Maybe we are looking at a system that accommodates multiple approaches from those that don’t have technology, those who are at the cutting edge.
DR. SUAREZ: Thank you all for those comments. In my closing, I think this comes back to this concept of a convergence into the future. I think one of the challenges among many is going to be how to handle terminologies and vocabularies. In the EHR world we use more SNOMED and LOINC than ICDs and CPTs. Having the health plan system be capable of understanding processing of SNOMED type codes would be a major transition. Thank you so much.
MR. SOONTHORNSIMA: Two follow up comments.
DR. SORACE: I think we need to look very careful on data quality on both claims and EHRs. We have been doing some work on complex patients at ASPE and reaching out across the field.
So far it is very difficult to find good examples of what maintenance of the problem was that was being done uniformly well that was being done across the health. We are still in our infancy in that. I think there is sometimes less correlation than you might think about in the amount of EHR use and ability to do that.
The other thing is in some ways the claim is an event marker. Another way of looking at a claim is not the stuff in it, but simply to put some sort of URL or information identifier as to where to go for the rest of it. That might be a better way to architect it moving forward. That way you are not always developing new attachments for this cause or this cause or this patient was seen.
I do believe it is some disease summary, by the way. I think there is a false dichotomy between some of these patient reported outcomes and other things than actual disease status. I think you need both to give good patient care.
You can have an event marker and then you can say some of these diseases and some very high level information. If you want more go here with security barriers to keep it appropriate going there. I think data quality turns out to be very important.
MR. OWENS: I just want to comment about some of the challenges that many of the members and many of the attendees have spoken about with the data content challenges, the billing challenges, the consistency between billing from one payer to the next on how to do that.
Some of those challenges can be addressed by adoption of operating rules coming together as a community and working towards the best way to do and sharing that with industry for potential adoption throughout rules as we wait for the different standards to catch up to those business models.
MR. SOONTHORNSIMA: Let’s go to Linda.
MS. KLOSS: Thanks. That was a perfect lead-in. Thank you for the excellent discussion this morning. My question was what opinions might the group have about how to reduce that variation in specific payer requirements that is costing a lot in terms of time, system resources and so forth?
What is the governance mechanism for seeing to it that there is a higher level of standardization? Secondly, have any of your organizations calculated what the cost of that variability is.
This gets at not the implementation or advancement of new standards, but once a standard is in place, what are our mechanisms for ensuring that it is being properly implemented? We aren’t seeing this kind of variation as a problem across the board. Thank you.
MR. ARGES: I think to some extent education has to be a big role here. Identifying those individuals or organizations that may be out of step in educating them about what they need to do to come back into what others are doing is part of a standard process.
I also think what Bob just described in terms of the operating rules tightening those up and moving forward with those is another important piece, making certain too that even companion guides. I will mention companion guides, as Walter wanted us to mention that.
In terms of approach, it has to be one that CORE has tried to at least identify a common look and field for the companion guides. I think they do play an important role in terms of laying out the requirements. I will give you a for instance.
We had an issue with respect to the institutional claim of trying to make sure that people understood the difference between the from and through date versus the admission date. We made a clarification that we have a separate field for admission date. That required people to change the edit logic because oftentimes they use the from date as the admission date.
The from date is where an inpatient admission is the date that the physician ordered the admission and not necessarily the start of care that may have begun in the emergency room and outpatient services that may have been provided a day or two beforehand. The claim may have more information than simply the admission period.
I think little things like is where we had to go back and educate people to basically change the edit logic as part of their process. It would be great if somehow we can streamline it and validate what people are doing with respect to that.
Trying to hold people accountable is something that is still a problem. If you file a complaint, I am not quite sure how many of those complaints wound up with an action that was a fine for people who continued to violate it. I don’t think that has happened at this point in time.
MR. TENNANT: I want to pick up on the last piece that George talked about. It was interesting. Yesterday, in the testimony, the lady from VA said that they lodged at least 13 complaints to CMS. To date, there has been no civil action. Den Nicholson yesterday raised the privacy issue.
The first fine for those who follow this was levied against the health system about five miles away from here in PG County, Cignet Health. They got slapped with a 4.3 million dollar fine. It sent shock waves through the industry even though it is one singular incident. There have been maybe a dozen fines issued over the last few years from OCR.
The fact that there were some fines raised the visibility of the issue. I think the fact that we have no fines, we have had no real strong enforcement action on the part of CMS allows a covered entity to sit back and say why should we spend the money and be compliant with these transactions. The worse scenario would be we get a letter from CMS asking us to move forward.
It is not just commercial plans, not to pick on the Medicaid’s. I believe it was seven Medicaid’s that were not ready for the transition to 5010. GAO in its report in January said that only four Medicaid’s had tested ICD-10. Will they all be ready, I highly doubt it. There are rumors that California is still not compliant with 5010.
Of course, being Washington, two rumors equal the truth. If these large institutions can’t be ready to handle the transactions there has to be some consequences. That is certainly one opportunity for the committee to argue that there has to be some lever on the federal government side to strongly encourage these covered entities to be compliant.
MS. KOCHER: I think if we talk about standardization and how we make it more uniform; we do need to remember that there is a difference between standardization of the transactions and that electronic exchange which is the purview of HIPAA. What happens in internal systems, either on the provider’s side or the payer side, there is a little bit of a fine line there that we need to be cognizant other.
George’s example of the admission and from and through date is a perfect example of something that is well-defined through the UB manual, and it was an educational opportunity. There are going to be instances inside a claim adjudication system that is related to medical policy, which becomes more clinical, as well as contractual arrangements with groups.
Sometimes groups have stipulations as to the limits and the levels at which they will cover and contract and pay. Those things are really going to be outside of that exchange of the information.
We need to focus on making sure the information that is moving from A to B and back is clear and both trading partners understand what the expectation is and what they should be sending and what they should be getting back in return, whether it is by acknowledgments or a response kind of transaction.
MS. WILSON: This is Sherry Wilson with Cooperative Exchange. This is also a clearinghouse concern just going off of Rob Tennant’s comments with CMS enforcement. Part of our concern is that when we do see noncompliant transactions or incomplete data that comes to a screeching halt within the workflow process even at the clearing houses.
One of our concerns is while the CMS has an enforcement system in talking with our clearinghouse members, we are finding that many submitters are not aware of the process. It is a published process.
They are still reluctant to file the complaint even though it is supposedly anonymous due to fear of consequences or damaging the payer relationship and reporting. This is definitely a barrier to the process.
One of our recommendations was to encourage CMS to provide additional educational outreach regarding their complaint process, making the industry aware of successful complaint resolution. We have not seen that. That would be very helpful as well.
MR. SOONTHORNSIMA: Let’s go to Vickie.
DR. MAYS: I want to start with Dr. Miller on the question, but I think if others have some comments, I would like to hear them.
I want to go to two comments that you made, Ben. One was about mental health systems as well as mental health clinicians were not included in the High Tech Act as far as any kind of incentive.
It would be helpful to hear you talk just a little bit more about the implications of that. Where are we in terms of those symptoms in the electronic health record and whether or not you think that incentives need to be in place?
Then the other was the two systems for processing claims for mental health. I would like to hear people talk a little bit about the cost of that and the burden of that. How do you deal with that?
DR. MILLER: What we have seen across the country in a lot of our mental health systems and practices is because there were not a lot of financial incentives to buy the latest and greatest technology for EHRs what they were able to purchase with what they could financially afford is relatively lackluster compared to the rest of the larger healthcare industry.
To that end, a lot of the data that are input in and going back to what was mentioned earlier on the quality of data are insufficient when compared to other providers that are out there in the medical arena. That is one facet here. The second is that catching up requires investment. Catching up also requires some ways of dismantling what has been built for mental health.
A lot of the data that has been collected has been in narrative fields not discrete fields, which makes extraction impossibility. That is fundamentally a huge problem that plagues mental health writ large. As some systems do start to collect more of those discrete fields or structured fields, there is still a very limited requirement at state levels as to what those data should be.
Because of no standardization of what data should be in those EHRs you are looking at discrepancies all over the board depending on whom you are and where you work. That is with regard to number one, which I do think is a huge hurdle as we integrate care we are going to have to face.
MR. SOONTHORNSIMA: Thank you
DR. MAYS: Can I get an answer for my second one.
MR. ARGES: I do think mental health is one of those issues that the current claims process needs to learn a little bit more in terms of how it handles it. I think integrating the care beyond local experiences from the hospital to a physician office or to a behavioral health center I think is important. We don’t really capture that continuum very well with the claim. They are very isolated episodes of care. I think the continuum of care is one that is something that we need to look at.
We as hospitals have become more acutely aware of this with the readmission policies in trying to make certain that patients who receive mental health services in a facility when they move to a different location or to home if they do require medications are they getting the medications that they need, making certain that there is that kind of follow-up care as part of that process.
I do think there is improvement for that process. I think we just need to know a little bit more about what to do with it. I think we probably would like to hear more from the health plans in terms of how they define the benefits and try and coordinate with them their informational needs so that it is a little broader picture of what we supply as part of the claim in that process.
MR. TENNANT: Just a real quick on that issue. Psychiatrists were not excluded from meaningful use. From a real perspective they were. Psychiatry and mental health typically when they buy an EHR it is a specialty-specific one. They are not going to be capturing all of the necessary data that meaningful use required.
From a practical standpoint, it really wasn’t worth the money investment for psychiatrists to spend money to be able to do immunization registry work for example. They were not excluded, but like a lot of specialties they found it very challenging to meet the requirements.
MR. SOONTHORNSIMA: Thank you. Michelle?
MS. WILLIAMSON: We have 59 participants on the WebEx, just to let you know, and one comment from Robert Hoffman. He states that VHA purchased care fully supports the addition of attachment standards to help increase our percentage of electronic claims. We have finally increased our EDI claims to 30 percent. We cannot move much past 30 percent until non-VA providers can send medical documentation to 75.
MR. SOONTHORNSIMA: Are there any other comments? Any questions from the committee? Okay, let’s move everything up. Take 20 minutes.
Agenda Item: PANEL 5: Coordination of Benefits
MR. SOONTHORNSIMA: Just a reminder to please speak into the mike and announce yourself. Coordination of benefits. We are going to begin with David.
DR. PREBLE: Thank you. Good morning. I am Dave Preble, Vice President of the Practice Institute at the American Dental Association. Thanks for inviting the ADA to testify and overall thank you for convening this forum. I think we have all seen the value of these panels of course with the real challenge being what outcomes we can achieve together collaboratively stemming from these testimonies.
Briefly, about the association, the ADA is an ANSI-accredited standards development organization and an entity aimed in HIPAA for code set development. As you may remember, we testified a few years ago regarding the updated process for CDT code set maintenance. You will be pleased to know that the new process being more open and transparent engaging all stakeholders in a true collaboration has been widely acknowledged as a vast improvement.
I have purposely limited my testimony to issues that could have the greatest impact on dentistry. There is quite a bit still to do in dentistry regarding electronic transactions, but we are only going to touch on the high points.
Regarding coordination of benefits, the 837D transaction supports automated payer-to-payer coordination of benefits. This is not being used in dental claim transactions. If we are going to take seriously administrative simplification in order to achieve the triple aim, this should be implemented. Manual COB processing by providers detracts from the patient experience of care and increases cost by diverting provider resources from care delivery.
The ADA believes if coordination of benefits was standardized and automated through the 837D, dentists could better communicate anticipated reimbursement and associated out-of-pocket expense to patients and decrease cost by focusing resources on care delivery.
MR. SOONTHORNSIMA: Thank you, David. Melissa.
MS. MOOREHEAD: Thank you. This is Melissa Moorehead, National Medicaid EDI and Health Care Operating Standards Sub Work Group. It occurred to me that coordination of benefits is a very complicated transaction to describe. As defined as communications between payers conducted electronically, it is a bright spot for our participants especially with the adoption of the uniform use of CARCs and RARCs. However, when it comes to communicating the information to providers, which I think is the result of this transaction, it is definitely seen to need improvement. I have some opposing comments from our participants.
Operating rules as alluding to or complicated to talk about in this context. Since, generally, they have been created to provide benefit in streamlined process for providers, one commenter noted that operating rules specifically for coordination of benefits would require a new approach in operating rules that would benefit health plans and not providers. This is why I think it is a complicated transaction in this context.
We did hear from a commenter that TPL, third-party liability, leverages the use of operating rules, currently applied in several different areas in MMIS to verify other insurers and to cost avoid and apply cutback of payments. And that the functionality has been supported to — or implemented to support posting of funds for post-payment coordination of benefits. And they don’t see any specific opportunities for process improvements to coordination of benefits identified. That is the good side. The coordination of benefits among payers I should say.
However, communicating this information to the provider so that they understand what to do next and sometimes even communications amongst payers can become complicated as well.
Again, we had commented that some partners request information that is hard to come by in the transactions as they are now in the 837. But more particularly, more explanation is needed when primary insurance is making negative payments where negative CARC codes — so that the secondary or tertiary payer can figure out what liability is. This came up earlier in the health claim discussion, which is why I think again it is complicated now to tease it out this way.
Also, there is a problem when some payers or providers receive paper, remittance advices or are still using proprietary codes and then the EDI is trying to use uniform CARCs and RARCs. There is a big disconnect there that makes it difficult for providers to understand what is going on. On the 835, for example, the forward balance does not give providers enough information in that segment. With the churn in the CARC and RARC codes right now and trying to applying different edits and different ways to combine CARCs and RARCs in different business scenarios, the fear is that the message going back to providers is that codes are disorganized and hard to navigate. It is hard for them to understand who is supposed to pay something. We will get to that more in the discussion on RAs.
The best I can do for a general take-a-way from discussion on this particular topic is that from the payer point of view, enforced use of the CARC or combinations and a national payer identifier would make coordination of benefits much easier, but that in general, EDI between payers has some good adoption right now. Thank you very much.
MR. ARGES: This is George Arges from the American Hospital Association. Again, on behalf of our members, I would like to thank the committee for the opportunity to be part of this panel as well.
With respect to coordination of benefits, overall one can look at the transaction standard as having the ability to basically provide information to help with the coordination of benefits. However, one of the things that one must note is the fact that in order for this to work, the remittance reporting information that identifies the adjustments made to the claim has to be complete and adequate.
Providers often find that the remittance, which is a topic for another panel discussion, does not always balance. You are missing information or sometimes it is forced to balance by using a balancing code that really tells you nothing other than the fact that this is the amount that ties it all out.
Nevertheless, one of the other things that seem to be problematic with the coordination of benefits process happens to be the workflow process between the entities. It would be great if we can again — this is probably my theme for all the panels — have a multi-stakeholder discussion to explore really rules for handling COB in terms of workflow process. You typically have the claim moving forward from the provider to the plan. There are two options whether it is from a secondary plan or whether it goes back to the provider and then a provider takes the information and goes back to the secondary plan.
Clearly, the workflow process should be one that is designed to be efficient. We would hope that it would be one that would handle it in the most expeditious manner with complete information moving it forward.
Clearly, I think the health plans seem to have a comfort zone in terms of how they work from the claim information and working with COB as a secondary payer in terms of the information that they are looking for. We would also would like to hear from them what additional information they would like to have that would improve their comfort zone for them so that they can move the information faster, sooner, better and process it as a secondary payer as part of that process.
Overall, I do think there is room for improvement obviously with COB. I don’t think it is one of these transactions that has really taken off as much as it should be. I think part of it is because it has to do with the business routines that have not been firmly tightened up. We would welcome really a deep dive into having this discussion with the other health plans. I will end it there.
MR. SOONTHORNSIMA: Thank you. Let’s go back to Atul. Welcome.
MR. PATHIYAL: Thank you for inviting me. My name Atul Pathiyal. I am Managing Director of solutions for CAQH. As I have discussed in prior sessions here, the process of coordinating payments on behalf of individuals who have multiple coverages is one that we think creates a lot of challenges for both health plans and providers.
Based on our research back in 2011, we believe that these inefficiencies associated with coordinating benefits cost the industry as a whole north of $800 million a year, $840 million a year, of which roughly 40 percent is born by health plans and the remaining 60 percent by providers.
More importantly in that, those costs are largely associated with tactics and strategies aimed at correcting COB claims that were already paid or about to be paid so very much a retrospective process.
In 2013, we launched a voluntary industry-wide initiative called COB Smart to address the root causes of these inefficiencies. The main thrust of that was to enable providers and health plans to be more confident and more certain around getting COB claims paid correctly the first time.
Just real quickly, what this initiative does is it enables health plans to collaborate to discover when individuals have multiple forms of coverage as early in the claim life cycle as possible so that they can use that information to transact claims and other forms of information as efficiently and effectively as possible. The initiative now covers 120 million individuals across the country.
What I wanted to do is provide some observations that CAQH has uncovered over the past three years, first of which is that traditional methods of collecting information about COB are largely ineffectively from our perspective. These include the patient registration forms, member surveys, some data mining tools that have been in the industry for a while. Based off of some of these newer data-driven approaches like what we use in COB Smart, we have been able to uncover much more COB than I think previously understood by the market, specifically or for example, we had one of our initiative participants find four times as much COB as they originally thought existed within their membership.
I know the focus of this conversation is about improving transactional processes, one of the core underlining problems that we see is that we need to improve the availability as a whole across the industry of high-quality information about COB. That is one point.
The second point is around what we see to be the inconsistent electronic exchange of COB information between providers and health plans. We know that health plans have varying policies about the supply of COB data in their standard eligibility and benefits response, the 271 responses. For example, some health plans will only include information if they are the secondary payer, but will by policy not include any information if they know they are a COB, but they are a primary.
In other cases, there is a lot of free form text in the body of those eligibility responses. For example, what we see often when looking at eligibility data or eligibility to response data information like blue or BCBS not precise enough or structured enough to really act upon in an electronic way.
And then probably most importantly, there are many critical pieces of information that are often omitted or incomplete. Things like subscriber’s name, member ID, start and end dates of coverage and detailed information about the type of coverage. That information is critical to being able to discover complete eligibility and benefits details on the secondary payer so that it can be used for subsequent secondary claim submission.
Again, what we have started to do is make that information more available through this industry-wide initiative here. Things that we are now making available across the market are information in a structured form about the full payer name, information about the subscriber and their coverage, information about dependence and the relationship they have to the subscriber, dates for the individual coverages, as well as the periods of overlap and then where possible information about the primacy itself. All of this is critical to being able to correctly diagnose a COB case, again, before the claim is submitted and then importantly enable correct transmission of the secondary claim using electronic formats, which brings me to my third point.
What we have seen mostly anecdotally right now is that there is a lack of consistent usage of the 837 format for secondary claims. Specifically, what we hear from health plans fairly consistency, but again anecdotally is that they rarely will find properly formed secondary claims from their submitting providers. And what that ends up causing is a lot of manual verification and also manual adjudication, which creates delays.
With those three points, I think we are just beginning to see what the impact of this broader, richer, more accurate set of data is in the market. I think in the next year or so I will be able to talk more specifically about what that data means in the hands of providers.
MR. BEATTY: Thank you for the opportunity to provide testimony before the committee. My name is Gary Beatty and I am the Director of Medicare and EDI Strategy with UnitedHealth Group and representing the America’s Health Insurance Plans.
I have been involved with administrative simplification in the EDI for a long time. That is where all the gray hair comes from. I have been involved since the early 1990s. Actually, when I got involved with X12, the very first committee I provided leadership to was with coordination of benefits.
Over the years, I have worked with both the provider side of health care, the payer side, as well as the governmental side, working with agencies in different groups including the Department of Defense, Veterans Affairs, Social Security Administration, and Medicare.
I am also very engaged with the standards development process and currently serve as the Vice Chair of ASC X12. Although my testimony today does not reflect ASC X12, but the members of AHIP and the over 65 population.
We are kind of a unique environment with the group that I am representing relative to the Medicare supplemental group and the 200 million Americans that are involved with employer-sponsored health care. We are always a secondary payer to Medicare and paying for the supplemental pieces of the Medicare Parts A and B coverage.
Currently, that represents over 800 million claims that a crossover from Medicare as well as there are other crossover claims that are received through clearinghouses and directly from health care providers both electronically and on paper.
Our observations and recommendations that we would like to report to the committee — I labeled this one. It is time for change. We look at the X12 transactions in the history that we have gone through with the original mandates back in 2003, the current 5010 transactions that were actually published in 2006 and will be nine years old as a few days from now.
The testament to those transaction standards — 9 years, the volume and transactions we have been able to exchange within the industry given the stresses and the changes within the industry especially the accelerated changes that we have coming up currently within the industry.
The length of time does present a challenge and that is becoming more and more difficult to support the ongoing business changes within the industry. We recommend that as we look to changes and inversions to evaluate the need for those changes based upon business requirements and regulatory requirements to meet those business requirements.
We also appreciate the testimony that we have heard on different things that we are looking at to be able to allow for adaption within the industry. We look at some of the activity within X12 as far as externalizing some of the codified data content to allow for the industry to utilize the external codes, which are not tied to versions of the standards that are required to go through the federal regulatory process for adoption and would like to encourage that.
We have heard a couple of different times within the testimony something that is not currently mandated dealing with acknowledgements. We strongly encourage the use of acknowledgements especially the use of the 277 health care claim acknowledgement, which is especially important especially of coordination of benefits. You think about the current world, the millions of health plans we have, all the different clearinghouses and the different reports that go back to providers. This one transaction all by itself can standardized those messages and help inform the providers in providing better customer service to them so they know where the claims are and what the status with those claims are as they move through the process.
Specifically for medical supplemental, I would like to point out a couple of different issues relative to the transactions and why we believe it is time to move on. With the eligibility transaction, we appreciate the operating rules although sometimes those operating rules don’t fit everybody’s business needs especially in the med sup world where we are totally dependent upon Medicare’s adjudication of processing those claims before we know what the patient’s responsibility will be. It becomes very difficult to provide that patient financial information in a coordination of benefits world especially for med sup.
In version 4010, the original version of the transactions we used to have a Medicare approved amount. As we move to the version 5010, we determine that at that point in time that we did not need to have that. That we could actually calculate the Medicare approved amount. But as we move towards newer models within health care especially with a value-based health care, it becomes more difficult to calculate that and almost into the point where it is impossible to calculate that amount. We are currently working with X12 to incorporate the Medicare approved amount again especially as we look at the different modifiers like the value-based modifier, the EHR incentives and disincentives and other things that will be put in place in the standards. We really do need that back into the standards as part of the next version.
Also, we have heard a couple of comments relative to the remittance advice and the different types of adjustments relative to the claims adjustment reasons code and the reason codes and the linkages between those and how they are adopted through both the TR2 from X12 as well as CAQH.
The problem is that CARCs and RARCs in the current version of the standards are not allowed at the line level. And there really is no way to link them together. This is especially important relative to some of those value-based adjustments that are currently occurring within the transactions.
We really do need move forward with the next version of the transactions that do support direct linkage of CARCs and RARCs both at the claim level and the line level to provide that information to both providers and supplemental health plans.
With that, I would like to thank the committee for the opportunity to testify today as well as thank all of my peers within the industry for providing input and to assist you in making your decisions and recommendations.
MR. TENNANT: Rob Tennant, MGMA and again on behalf of our 33,000 members. I appreciate the opportunity to speak to you about coordination of benefits. In our survey, we found that about 36 percent said the COB process currently is either very challenging or extremely challenging and another 40 percent considered it moderately challenging. The 4 percent who said it was not at all challenging simply don’t do it.
In terms of our concerns about COB, just to echo what Atul said, CAQH suggests that the cost per year is somewhere in the $800 million range. I would suspect that is underrepresented. I think it is probably even more than that.
We are going to see that the issue is going to be even more acute because more and more folks have insurance coverage under ACA. I think what we have also seen is the more sources of insurance coverage equates directly to an increase in the requirements for manual processes and ultimately the revenue cycle itself is protracted and error prone.
Again, we have heard from others. We have not really reached the standardization level that we want. Each payer seemed to have different requirements and of course, there is really inadequate communication between various payer types. I think that is most acute when you are going from commercial to government sponsored versus worker’s comp.
Just a few of the comments that we have received. Some secondaries are paper if COB is not enabled. Some insurance is requiring that if they are the secondary that it must be submitted on paper. Secondary claims are sometimes submitted on paper if the payer is requesting a copy of the primary explanation of benefits. Paper claims are commonly submitted to secondary payers or corrected claims due to payer restrictions on electronic claims. The picture is not one of automation.
In terms of recommendations and again we echo a lot of what the folks have talked about here. There has to be better education. That applies in general. There are some real good levers that CMS has. The open door forums, for example, which traditionally get thousands of providers to hear the message. That is a wonderful opportunity to have a series of educational events with CMS saying on Tuesday, we are going to talk about COB. Next Tuesday, we will talk about prior auth. But to ramp up the knowledge level I think is going to be very important. Obviously, we need to identify a more automated approach.
I will echo Atul and say that CAQH COB Smart is absolutely a step in the right direction. To make a general comment about this, we have talked a lot about the broken processes in the last two days. There are some industry initiatives like COB Smart that have come forward. But traditionally and Atul, you correct me if I am wrong, Medicare doesn’t seem to want to participate. They being the largest health plan in the nation should be a leader. I won’t pick on them too much.
The other transaction that is incredibly burdensome is the enrollment process. If you are enrolling in Medicaid or a commercial health plan, there is an industry solution called ProView. It used to be called the UPD, the universal provider database. And almost all the health plans are involved with the exception of Medicare. They consider themselves different. There is an example. If we wanted to have a recommendation to CMS, participate in some of these programs to drive out some administrative costs.
We would also encourage CMS to get on board with the EHNAC/WEDI practice management system accreditation program. COB is a requirement of accreditation. Again, that is one way that we can drive provider use of these transactions and dramatically decrease the cost for the industry. Thank you.
MR. SOONTHORNSIMA: Thank you. Sherry.
MS. WILSON: Members of the Committee, I am Sherry Wilson, President of the Cooperative Exchange. I would like to thank you for the opportunity to testify on behalf of the Cooperative Exchange membership, representing 80 percent of the clearinghouse industry.
Our testimony today is based on the 2015 WEDI Cooperative Exchange Transaction Survey results. In terms of value, we believe a significant value can be realized when coordination of benefits perform electronically and the payment information on the remittance advice is accurate and reliable.
The intent of the transaction we found in our survey results is lacking due to gaps and payer workflow and business processes, integrity of data content, and the non-compliancy use of the remittance advice transaction.
In terms of volume, we find Medicare of course performs a large volume of this transaction. However, we see minimal use as being realized by mid-sized and smaller payers whose contracts and formularies are more complex in detail.
In terms of barriers, several of our members had done surveys with their payers. Here are some of the reasons they reported for COBs being either rejected or not processed. One, payers do not have other payer information of the subscriber so the payer stops the processing to validate the secondary. Second reason, payers do not know how to handle zero dollar payments. That is a major issue. Third, providers receive remittance advice 835 transactions that do not balance. This, again, is a compliance issue.
Moving forward, other comments that were reported from the survey. The accuracy of the payment information coming from the remittance advice, again, is a barrier in generating a compliant outbound secondary claim. This is a huge issue with the clearinghouses in doing COB processing.
Another component is many providers still require the payer’s EOB as validation of the payment and do not adjudicate the paid amounts in the COB section of the claim.
Another reason we are finding as barriers. The complexity and detailed contracts increase the challenge for payers to provide accurate payment information.
Lastly, we look at transparent, complex information can be programmed, but ambiguous information cannot. This really creates a barrier to the use of this transaction.
In terms of opportunities, we see this need and agree with the panel’s suggestions for further industry education and also recommend further study to address some of these barriers that we had mentioned as well as the panel this morning.
Lastly, we advocate again for the adoption of the acknowledgment transaction to provide a transaction verification audit trail. We think this will help significantly with this workflow process. Thank you.
MS. BARBER: Good morning. Stacey Barber, ASC X12N Chair. Thank you again for the opportunity to provide testimony on the coordination of benefits, which is supported within the 837 transaction. However, there are other transactions that do play a role in the coordination of benefits.
For the most part, the business needs are supported within the transactions. As we have heard yesterday and today, however, some of it is the implementation and knowledge around how to use the transaction in that part. However, we do note that there are some changes that will be going into the next version of the transaction that will help facilitate better uses of coordination of benefits, one of which is being able to directly link claim adjustment reason codes and remark codes together, as Gary mentioned earlier. Also being able to report remark codes at the line level, which is not currently supported. And being able to associate the payer payment when there are more than two payers associated on that transaction with who the payer of the particular item is.
Some other barriers that we note are that and Rob mentioned this in his testimony is that many payers are requiring the coordination of benefits to be submitted on paper along with the explanation of benefits. With the adoption of attachments, we feel that that could assist in that process in getting the coordination of benefit data that is not directly supported within the 837.
Another area that causes issue is that payers do not always consistently follow the rules within the 835 transaction itself in reporting adjustments in balancing requirements, which causes issues further down the road when that data has to be reported to secondary and tertiary payers.
There is also issues in how different payers process claims. In some instances, a payer may need the information at the claim level or the line level and another payer may need it in the opposite direction. That causes issues in the processing in the crossing of other claims.
There are some alternatives that are available. As I mentioned earlier, the changes that are being made to the transaction will help facilitate better use of the coordination of benefits.
Mentioned it before. Mention is again. The adoption of acknowledgements as well as the attachments will help facilitate. If we could get an increase usage of payer-to-payer COB that could help in the industry as well. It takes the burden off of the provider in having to determine how to format that secondary or tertiary claim with the coordination of benefits information.
As Rob mentioned also, there needs to be some educational efforts that take place in educating the industry on the use. This begins not just when that secondary claim is created, but when the primary payer is processing so that they know how to process and create the 835 correctly so that the data could be forwarded on to other users.
We also encourage the use of other transactions to facilitate coordination of benefits. One is the eligibility response and providing other insurance information when it is known. There is also another transaction. The ASC X12N 269 health care benefit coordination verification, coordination of benefits, verification request and response, which allows for payers to inquire with other payers to obtain coverage information.
And again if there are changes that are noted, ASC X12 does have a change request system where changes can be submitted for consideration in future versions. Thank you.
MR. BRUNS: Thank you. Chris Bruns, President of HATA and head of Product Development for MedInformatix. For the PMS software vendor, COB and provider-based secondary claims production are tightly intertwined. I am going to talk about them both interchangeably here.
From the PMS vendor and provider perspective, improvements in secondary and tertiary COB claims processing particularly since the implementation of 5010 format more or less clearly demonstrate the potential for COB with increasing volumes of secondary claims being paid by way of payer-to-payer claims. What was once an entirely manual process that involved high-volume printing of secondary paper claims and redaction of an EBO is now much more automated by way of COB, which we also refer to as a crossover claim.
However, provider organizations continue to exert significant manual effort producing claims from the practice management systems where coordination of benefits did not occur, but could have. Frequently, the reason COB does not occur is mainly that the primary payer, which is often Medicare, does not have secondary payer information for the patient when processing the primary claim. HATA members understand that COB success relies heavily on many databases maintained by multiple stakeholders and that it is a complex process. However, COB can also not occur when a claim does crossover with zero or negative payment and the secondary payer denies the claim, requiring additional information from the provider to understand how the primary payer processed the claim. For example, this can happen when a claim level remark code doesn’t convey enough information about the line items for the supplemental payer to process the claims. That is where the billers get involved.
At a functional level, when the primary payment occurs, via an 835 and the secondary claim must be produced, it is most efficient when it can be performed electronically. However, when that secondary claim requires submission via a CMS 1500 form or HCFA, as I mentioned earlier. For example, when a supplemental payer doesn’t have an agreement in place with CMS’ BCRC, they are thereby preventing COB or the primary payment as posted via a paper EOB, the amount of labor required to produce that claim increases significantly.
When the average provider organization manages a list of anywhere from hundreds to sometimes thousands of payers, many of those being small to medium size, this can result in significant inefficiencies. Any collaborative industry efforts to continue to drive down that manual process by way of increased COB adoption and accuracy would be welcomed for HATA members and their customers, the providers, and we would enthusiastically be part of such a process. Thank you.
MR. SOONTHORNSIMA: Any public comments? Questions from the committee?
Agenda Item: Review Committee Q&A
DR. STEAD: Just one clarification. I believe maybe, Stacey, it was on your remark. What is the balance between the effectiveness or potential effectiveness of the coordination of benefit transaction for communication with the payers as removing pressure from the providers to get it right in the first place? I was trying to really line up maybe George’s comments with yours to understand the degree to which what we are really trying to do is help the providers get it right versus the degree to which what we are trying to do is help the payers get it right in the way the providers don’t need to know anything but status.
MS. BARBER: There are two different models. Stacey Barber, again. There are two different models. There is the payer model of coordination of benefits and then there is the provider-to-payer model. Right now, we see a large volume of the payer to payer with the Medicare crossovers. It is used quite a bit. However, even with that model being used and Medicare crossing the claims over to other insurance, there is still a high volume of duplicate claim processing because the providers also submit that secondary claim.
If there is a larger adoption of the payer-to-payer model then the primary payer or the secondary to tertiary or whoever the payer is that is crossing the claim over is creating that 837 and putting their payment information as they adjudicated the claim within the 837, not making the provider have to do that, which should simplify it for the provider. But there is obviously not a comfort level with the providers that it is crossing over where we see in Medicare where they turn around and submit the claim as well and in the majority of cases on paper along with the Medicare EOB.
MS. STINE: Merri-Lee Stine from Aetna. Stacey kind of touched on where I was about to go. One of the things that I have heard through this panel was referenced to the coordination of benefits transaction. There really isn’t a coordination of benefits transaction. There is coordination of benefits that happens within transactions. We are talking about an 837 claim. We are talking about payment within an 835. But there is not a magical coordination of benefits transaction that is separate from the process. This is all things that are happening within the process that we are using today and making it happen within that process of submitting a claim, submitting that claim to a secondary payer, et cetera. For those of you who are not as embroiled in the X12 world as others, I just wanted to make that clear. Thank you.
MR. ARGES: I just wanted to comment a little bit about — I know there are different models that are out there. For the models to work efficiently, it gets back to what Atul was talking about in terms of improving the core information that is necessary to basically communicate the information in a reliable manner to the health plans. It may even begin with even standardizing enrollment cards with the proper name of the health plan that is involved. If there is a secondary health plan, you get this information that that information too is something that is acceptable to other health plans in terms of being able to identify that health plan, that individual who is part of that process.
I think just kind of cleaning up some of that information would go a long way to improving the understanding that one would have with respect to information flowing through a secondary payer’s files. But also cleaning up the remittance advice too so that the information is detailed enough to basically help the secondary payer understand how the primary payer handled that information whether it was in or out, whether it is a patient responsibility amount. That sort of thing.
A lot depends on really just working to improve some of the data in a consistent manner that currently does not exist. It begins really I think with enrollment information.
DR. CHANDERRAJ: There seems to be a wide discordant that the people are setting the standard and operating rules and end user. I think a lot of end users are having a lot of problems in submitting the claims and getting the proper reimbursement. I think there must be some kind of way it can evolve so that this discordance will disappear and will be a smoother flow of information. I think that is the main point that I am getting out of this.
MR. BEATTY: Just to follow up a little bit what Rob was talking relative to education and some of what Stacey was talking about. The 835, the remittance advice that does go back from Medicare to the providers does have an indication that says that their claim has been crossed over.
Again, there is a level of trust from the provider’s perspective. We find this in providers even though they get that indicator that says, the claim has been crossed over. They still file a duplicate claim. That is part of where one of my comments came in is that with the acknowledgements, one of the uses of the 277 could be that the secondary payer does receive the claim. They can send a status message back to the provider to reassure them that the process and the flow of the transactions is continuing and that will help eliminate a lot of those questions that come up and the duplication of claims within the industry which will help also reduce the cost.
MS. WILLIAMSON: We have a general observation from Jim Wicker on the WebEx. Jim says that the payers make errors in the 835 as well as in applying appropriate contractual amounts. Payer-to-payer COB can be a big problem for providers. They may have the second payment in house before they have been able to finish reconciliation —
DR. SUAREZ: This seems to be one of the transactions where I hoped would get a lot more detailed recommendations about how to improve the adoption of it. It sounds like there is a lot of value in it. There is a lot of important benefit in terms of the cost and efficiencies. I was trying to extract some of the more concrete actionable recommendations. I have a couple of questions. One is very targeted actually for dental. I was wondering what would be the reasons why there isn’t more coordination of benefits between payers of dental benefits. It sounded like the argument that you provided was more about the lack of coordination of benefits. I did not quite get the reason why there is no coordination. There is not activity around coordination of benefits in dental claim processing.
DR. PREBLE: Actually, I think some of the payers in the room might be better qualified to answer that question. But from the provider standpoint, what happens is even if a provider has all the information on both the primary and secondary even if they submit that on an 837D commonly the provider is in a situation where they have to make an educated guess of who is primary and who is secondary because what is going to come back is either a payment without coordination generally or a denial because they will say we are not primary submitted to someone else. That payer-to-payer automated coordination is what we are looking for. It is not within the provider to be able to answer the question. It looks like maybe somebody from my own staff has some of the answers.
MS. NARCISI: I am Jean Narcisi from the American Dental Association. What we have heard is that there are some issues with the vendors, the practice management systems, but also not all payers even take claims in electronically and do not offer electronic payments. It is a different ballgame there with dental payers.
DR. SUAREZ: That brings me to another point. When we get to the compliance certification process, we are going to expect that payers are going to realize that they must accept and process electronic claims when sent by a provider. Unfortunately or fortunately whatever does not have a choice. They have to be ready. Wherever I was looking at statistics that showed payers don’t do claims or payers don’t accept claims or send claims electronically or claim payment, it sounds like it was a payer deciding not to do it. In reality, this is a strong message that payers don’t have a choice in this type of structure that we have in HIPAA. I think that is going to have to be one of the strong messages. I expect again that when we get the final rules on certification and compliance for health plans, payers —
MR. SOONTHORNSIMA: Can I add on to that? What I heard, however, is not necessarily accepting electronic claim, but EOB additional information like attached EOB paper to facilitate that payment. Maybe they are two different things. Can somebody clarify that?
MS. BARBER: I think one of the primary barriers that we have today within the 837 transaction for coordination of benefits is not being able to link the adjustment reason code with the remark code. That is where the paper EOB comes into play because that gives you more detailed information about how that other payer processed the claim. Like I said, that issue is being addressed in the next version. There is a new segment that was added to the 835 transaction and subsequently the 837 transaction. That allows the adjustment reason code and the remark code and the adjustment amount to all be reported together.
When we can move there, which unfortunately cannot be tomorrow, but when it does happen, that may increase the use of the electronic submission of coordination of benefits claims and decrease some of the paper. But we all know that that takes a little bit of — even after it is adopted, it is going to take a little bit of an adjustment to move into there.
MS. STINE: Merri-Lee Stine from Aetna again. Actually speaking back to the dental comment, the difficulty that the provider has understanding the different payers may be involved in the patient’s care and their coordination of benefits. Atul could probably speak to this better than I. There is an effort in the industry to create a central COB database. I think that there is a little bit of dental involvement in that, which might be of great benefit to the industry. We cannot mandate that people participate, that payers, providers participate in that, but we can encourage and get as much information into that database as possible so that we can tell who has coverage with which payers. That would definitely go far as far easing that pain.
MR. PATHIYA: Just real quickly. To clarify, our initiative is currently focused on medical benefits. We are very eager to get into dental and other forms of specialty benefits to create a complete picture irrespective of the type of care that a patient might receive or the types of providers that a patient might go to. There should be a complete picture of where that coverage is so that all these transactions can work effectively downstream.
MR. ARGES: This is George Arges. In terms of the database, I think it is important to keep in mind — hospitals currently do a Medicare secondary payer questionnaire. It would be great if somehow that questionnaire can be standardized so that you are getting the most current information from the patient or the enrollee as part of that process. It can be utilized by the health plans as a means of an affidavit that the subscriber is indicating that this is the most recent information because the database is only as good as it is being kept up to date.
MS. STINE: The information that we have as a payer is only as good as the information that we have received in the same way as the hospital.
DR. SUAREZ: There seems to be a couple of points I guess about the source of data. My next question was going to be about —
MS. MOOREHEAD: I didn’t know where you were going with that. In our discussion of — I was surprised to learn that most of our Medicaid participants actually had preserved an RA method that was proprietary in nature. I am not sure if that is the same kind of nomenclature as the EOB. But this gets to the comments I was making earlier that our participants have really struggled with the uniform use of CARCs and RARCs as applied to the 835, the remittance advice because they don’t feel that they are descriptive enough and the overly granular level of linking them was not working to meet the local explanations that the providers were not able to understand the information they were getting. The feeling is that the operating rule in this particular instance has actually made the situation worse although it was acknowledged that if trading partners are allowed to still use proprietary edits instead of the CARCs and RARCs, we will never really get anywhere because providers lack the education again to crosswalk a proprietary code to a CARC in order to then to admit to a secondary or tertiary payer. I think that gets at why there is still paper. In our case, it is because I think provider education and the unfamiliarity or the uniform use of CARCs and RARCs is not robust enough yet to really deal with this.
DR. SUAREZ: My question was really about the process for capturing and conducting the coordination of benefits. Stacey, you mentioned that there are two methods: provider-to-payer and payer-to-payer. David, you mentioned the automated payer-to-payer process that is probably most effective or efficient way or one of the effective ways. My question is what is ultimately the source of the coordination of benefits in terms of who is covering the patient. Certainly, the patient sometimes mostly knows who the patient is covered by whether it is one or two or more payers. They are in many cases the source to whoever collects that information whether it is the provider at the point of care that then has to send it to the first payer and then the second payer or whether it is to the payer if the payer is actively collecting that information. The question becomes really what is the most effective way to capture and maintain that information because at the end, it is becoming — the provider-to-payer process becomes more of sending the claim twice to the different payers. Really, my question is how do we — can we make the process for capturing and collecting that information about the secondary payer from the patient side more effective.
DR. PREBLE: Walter, you bring up some good points. Again, from the dental standpoint, we are in a much more rudimentary phase than in medical. As a starting point, providers in dentistry would be satisfied if they even provided the information on the 837. For instance, it is usually two payers. It is usually not more than that in dental. Of both of that, we get that information from the patient submitted. We would be satisfied if it got processed automatically through the transaction at that point and then a remittance advice came back other than a bulk payment where you have to go again onto one of these web portals to even reconcile the transaction. It is impossible to figure out what was going on.
As a first step, the dental providers would say we will even accept the burden of getting that information from the patient and submit it on the 837, but then we would like that payer-to-payer communication to get that transaction process so the patient can in a secure way know what their out-of-pocket is going to be.
MR. BEATTY: To Walter’s question, over the years, a lot of different methodologies have been used within the health care industry relative to how the sequence if you will of payers is determined. In a lot of cases, it is usually determined within the insurance commissioner’s office in various states whether it is birthday rules, birth sequence throughout the years and so forth. When HIPAA and subsequent legislation came out, they were silent relative to how we deal with that or could we standardize it. It is really one of the things that would help improve I believe the process for coordination of benefits within industry if we did have a standard methodology for us to determine what is the payer sequence, which would also aid in a national database that would be used to determine that sequence and disseminate that sequence so that we could facilitate more payer-to-payer coordination of benefits.
MR. PATHIYA: Our perspective is that the patient as a source of information is fraught with many challenges. Historically, that is the way the industry has tried to solve this problem. If you actually think about what the problem is, we would submit that there are two problems. One is how does — when you know all the right information, how do you get that claim from the provider to the primary payer to the secondary payer and back as efficiently as possible.
I think there is a larger prefacing problem and that is do you even know. It speaks to the correct primacy rules. It speaks to understanding when the secondary payer or who is the secondary payer is and it speaks to how much information does the provider or even the patient have prior to that claim being submitted. If we look at historically we have not been able to get information from the patient effectively — that is patient registration forms. That is member surveys. Tying it back to maybe Rob’s comment about the problem is probably going to get worse as more people get coverage and different forms of coverage. Surveying from a payer’s perspective once a year or even if you were to do it more than once a year is an effective, inefficient way with response rates and the quality of the responses.
And then probably most importantly, I don’t believe it is patient friendly. I think at the end of the day the data already exists. It is available electronically and it is available in as structured a way as possible. Going backwards to ask a patient to try to free form enter that information into a piece of paper so that it can go back into a database when it already exists is we are going around the problem instead of solving it at the root cause.
DR. SUAREZ: Where does the data exist?
MR. PATHIYA: In the case of these voluntary initiatives, like what CAQH is doing, that data is available. The payers know the detailed eligibility information. We just have to help the provider navigate when to access that secondary information. Right now, we are looking to the patient to instruct the provider that there is a secondary payer.
Similarly, Medicare has processes as well that work reasonably well. Now, granted they are disjointed from what is happening on the commercial side. But there is precedence in the market for discovering secondary status without asking the patient.
MR. ARGES: Just a quick comment. I just wonder to some extent whether having a national patient identifier is something that should be considered because it would help with the database obviously as part of that process.
The other thing I wanted to comment on was the fact that there has to be some level of trust that can be generated. All too often, there are some health plans that really want to see the E1 B with the corporate logo of the primary payer. If they don’t see that, they don’t believe it. Unless they see that, that becomes a problem.
You are talking about an attachment having to be handled by the provider and having to collect the E1 B as part of that process and then ship it off to the secondary payer. Whereas I think if we identify the variables, identify what needs to be done, have a database then there are some things that could improve the efficiency of that process.
MS. GOSS: Picking up on the theme that Bill started yesterday regarding pay for performance, our methodology, our transactions that are in place now, but the emerging business models of tomorrow. I appreciate some commentary from the panel on how COB is either going to be needed or not needed in the world that is emerging.
DR. PREBLE: Obviously, again, dentistry is way behind medicine in this regard and particularly in the whole idea of global payment versus fee for service is going to be behind in that as well. But that being said, there is still needs to be a mechanism somehow of coordination of benefits because patients are still — patients are employers or whoever is buying this insurance are still going to be paying for multiple coverages. There will be liability for multiple payments. I don’t know how to figure it out. There will still be a need for coordination of benefits.
MS. GOSS: I am trying to figure out the risk aspect and the liability and if there is an emerging business function that we need to be thinking about.
MR. SOONTHORNSIMA: To clarify, I think David is alluding to — you have two issues. One is the business model, the payment model. The other is coverages, which it is a choice of the consumer if I want more than one.
DR. PREBLE: I think the collision of those two things is what the question was getting to.
MR. SOONTHORNSIMA: However, I am not sure if there is actually a bleed over. Have we solved the issue of coordination of benefits regardless of how many benefits they have or whether it is pay-for-performance model, ACL model or otherwise that would solve both types of coverage?
MS. WEIKER: Margaret Weiker with NCPDP. You hit upon it. It is coverage versus payment. They are two different things. What will happen though is if people start adopting these different payment methods and now I have to coordinate benefits with another health plan, they may have some issues and concerns about how that was actually done. Can they process it if you paid for value and there is still fee for service, how do I marry those types of things together in a coordination of benefit transaction? Those kinds of things could get problematic with how you report it, how they recognize it, that type of thing. But I don’t think coordination of benefits will go away unless we just have one payer pay everything in this country. I don’t think you are proposing that.
DR. STEAD: I am just still trying to process the previous conversation. I hear us trying to solve problems by really clear transactions instead of going back to the root cause. Walter and I had a conversation last night walking back to the metro. Has anybody laid out an idealized process map where we would start with every plan having computable contract terms? As an employee when I register for — when I enroll in a plan, the plan has terms. What would it be like if those terms are in fact computable?
Second, if I then enroll in that and that is then captured in a way that is accessible for eligibility questions and for coverage — benefit questions and for provider registration. All of those workflows could go away I believe if in fact we started with standard plan terms and then rolled our way through those. Has that ever been mapped out? If so, would that give us a way to reconceptualize which transactions are really important and which are just non-scalable?
This is the thing that has plagued interoperability and electronic health records, which with all due respect, we have not touched. We have are moving things around, but it is not understandable because we have not actually built the standards into the inside as a foundation. I am beginning to sense we have the same problem here. I just don’t the degree to which that has been laid out in a way it could guide us.
MR. ARGES: You actually bring up an interesting dilemma. In a sense that obviously the new models that are being put forward in terms of all inconclusive bundle, payment models, the whole idea of interoperability, the continuum of care being spread outside the walls of various facilities into communities. All that brings about the need to basically step back a little bit and look at what works, what doesn’t work, what needs to work as part of that process. I don’t mean to be facetious about the National Patient ID, but the continuum of care as you are moving from site to site is important because health records need to be coordinated among various caregivers and others who are basically managing that patient’s care. And the need for coordination of benefits may vary depending on other types of supplemental insurance that you may have as you move from site to site. That aspect of it needs to be looked at as these new models are being developed.
It was kind of a joke when I first heard about. Somebody described trying to solve health care’s problems as trying to change a tire on a moving vehicle. In some sense, I think that is pretty true.
MS. BARBER: George touched on this earlier. Merri-Lee touched on it as well. Coordination of benefits is not a single transaction. It goes across many transactions starting with enrollment. The 834 transaction does support coordination of benefits. The issue that rolls in there is your users and a large group not being covered entities and required to use that transaction to enroll their members. We touched on that yesterday during Panel 1. I just wanted to bring that up again.
MR. SOONTHORNSIMA: Just to echo what George was saying, while it is difficult to change the wheel while the cart is moving, what you are asking maybe you are not implying reengineering. What I am hearing though is industry is also evolving their business models like bundled payment and so forth using existing capabilities where they can, for example. And then they begin to evolve that way. What I also heard is wholesale change. It is not going to happen realistically overnight.
I think perhaps the model, the drawing out of what the process flow would look like were driven largely by the business model that is continuing to evolve and then how they actually piggyback on existing standards or otherwise. That is probably where the opportunities lie.
DR. STEAD: In clarifying and communicating to people that if they externalize information and use other people’s information, they can make things much simpler maybe even within things that — it is hard for me to believe that modern plans do not have the terms computerized. If so, then why shouldn’t that be accessible? Why it could be used by whoever has to work with that.
MR. SOONTHORNSIMA: To follow up on that, that is why we are very interested in the SDO’s evolution of these new requirements, new capabilities and whether or not they dovetail with some of these evolving business models.
DR. SUAREZ: My comment was just — there are a number of factors that play on how complex this ability to do computable policies is. There are the benefits and the benefit packages. That varies even within a single health plan. There is a medical policy around what is needed. Each health plan has different policies. There is a reimbursement policy and each one has different ones as well. There is very limited harmonization between them. And certainly not a lot of interoperability of medical policies and reimbursement policies. And that is why we are seeing cases where — in one instance, I have to send this documentation. In a different instance, I have to send a different set of documentations for supporting a transaction. That reality will continue to exist.
We are seeing even more complex developments with new programs and packages like insurance reform and the marketplace and the insurance exchanges and on top of it of course the new payment mechanisms and all that. Things are getting even more complex. It will be an interesting exercise to see what would be the effect of trying to computerize or make computable all these elements so that they can be hit by an API externally to extract the information and be able to process it. We are really far away from there, I think. That is the challenge. The variety of benefit packages, policies, and reimbursement and medical policies is such that I think is very difficult to get to that point.
I think a lot of providers have to map the different policies of the different payers they do business with in order to interact with them. As I mentioned years ago, we had the things called companion guides. We still have some of those. That was an expression of really this is the way I want to do business with my providers. I think it is an interesting challenge.
I don’t know if people have other comments.
DR. PREBLE: The idea that Bill proposed I think has some real merit, this idea of codifying the contractual terms in a way that can be used in an electronic transaction. As an analogy, if we think about what providers are engaged in trying to implement much more now, taking diagnosis codes through SNOMED CT or SNODENT and taking the information from the medical history and the physical examination and codifying that to then provide clinical decision support, which then translates into procedural codes and behind the scenes ICD codes that get put out into the claim. The whole process now is trying to be codifying in a way that it can be used in an electronic world. When you look at SNODENT with the 7000 diagnostic codes and SNOMED CT with 60,000. A daunting task to be sure, but not one that is not worth really investigating. Bill, I thank you for that comment.
DR. MAYS: I think that what Bill is proposing has some merits. I think there are two sides of it. One is if it really is going to work, you really put it out I think to the much more entrepreneurial world and see what they can develop.
The other side of it that we get concerned about is what is the cost, what is the maintenance. I think it is worth thinking about it. But I think what you have to think about is about how much can we get to like can you come up with a system where it covers about 80 percent or so. What you should do is establish some point that you wanted to do and then you have to think about what is the cost going to be. It is almost like we are creating another epic to some extent. And then somebody has to constantly be there to keep it going. To me, that is the real question. Can we have financial independence from some of this? Because then you start getting these costs, those costs are such that not everyone can continue to do it. I don’t think it is something the federal government will support. I think it is worth discussion.
MR. SOONTHORNSIMA: Thank you. Are there any more comments?
MS. NARCISI: Jean Narcisi, American Dental Association. Dental claims are not as complex as medical claims and we all know that. We have gone on record for real-time adjudication of dental claims. That is something to think about in the future. I know some of the payers are doing that. That would be a great pilot to try.
MR. SOONTHORNSIMA: Any other comments? It is 11:30. We can come back at 12:30. Thank you very much.
A F T E R N O O N S E S S I O N
Agenda Item: PANEL 6: Health Care Claim Status
MR. SOONTHORNSIMA: Good afternoon. We are going to continue with our panel six, Health Care Claim Status. We’ll start off with Gwen from CAQH CORE.
MS. LOHSE: Good afternoon, everyone, and thank you for having us today. I am Gwen Lohse, CAQH CORE Managing Director and we’re respectively submitting this testimony. You should have a written testimony and it says Panel Six and I know each of our panels look similar so it says Panel Six on the top.
I’m going to go over some findings from the last few years since the mandate did roll out. Those findings come from a range of sources like polling we do free webinars with 14,000 attendees in 2014, a public survey, CORE certified entities that include claim status and then also the CAQH index which you’ve heard about before.
As a reminder, as requested, you asked for requirements about the claim status operating rules. There are no data content requirements for the claims status operating rules. Please note when the ACA started, the Committee asked for some additional operating rules beyond the ones the CORE had. We did do a tiger team and created data content operating rules. It was decided at that time that there was enough already mandated. They weren’t included so we do have draft ones.
There are infrastructure-focused rules that are mandated and they do things like real-time requirement for claim status, turnaround time, system availability and also voluntary acknowledgements which any CORE-certified entity has to use. There has been business needs achieved that have been reported.
Recently, on the May survey with 123 entities, nearly half reported productivity improvements due to the operating rules, also rapidly responding to health plans requests and then many are just using real-time. They are not using the batch. And we’re seeing that with the certifications that many of the vendors are only getting certified on real-time claim status.
What are current usage and adoption trends? According to the 2014 Index, for the first year of operating rule mandate, which is 2013 data, there’s been an 18 percent increase in the claim status inquiries, and they’re often again doing it in real-time. For adoption rates, we’re seeing around 70 percent. That said, that’s the average with the plans and the providers reporting. The providers are reporting a lower rate in the mid-50s. So we’re continuing to see adoption but we need more.
Voluntary claim status certifications are increasing but there is still more to be had and there’s a lot in the pipeline for people that have pledged. We’ve recently seen some Medicaids that have come to offer claim status and then cost savings – just as a reminder and a comparison, for claim status there’s millions of dollars to be saved, there’s not billions. So some of the other transactions we’re talking billions, we’re talking millions here. Where the real benefit for the claim status is the indirect cost savings for the provider to know where the claim is so they can act on it. It’s not the manual piece although there is savings and they are outlined in the testimony.
Challenges and opportunities for broader adoption. One is the non-HIPAA covered vendors. We’re seeing that some of them have not yet offered the capabilities and the providers don’t know to ask. One example is there was one large academic medical center, very large, I think five or six billion dollars a year. They asked their vendors to get CORE certified and then they realized they didn’t have access to claim status. They actually had to build it. So just a story there.
Additionally, we’re acting and going out and asking all the vendors to get voluntarily CORE-certified practice management systems as well as clearinghouse. There is a lack of content, I mentioned earlier. The operating rules don’t include it, although we did draft it in response to the requests for you all and we do have a draft rule and it supports the ASC X12 standard of course.
Another piece is competing projects that is a challenge. And then I’m going to move on to the opportunities because I know I have five minutes so I’m almost up. Opportunities for improvement and alternatives. There is data content that’s needed. Now that we actually have entities using this, we can track it. There’s been more experience specifically around claim status codes and that’s actually what the draft operating rule that was created back when requested covered and then the recent surveys reaffirm that draft claim status codes are needed.
And there was recommendation to have an ongoing maintenance process for that. So they are not included as in the regulation for no maintenance but you actually have, as part of the regulation, an ongoing maintenance like you have with the EFT ERA enrollment sets or the CARCs and RARCs, which is allowing for incremental progress and tracking to meet evolving business needs.
Then additionally the other piece, the CAQH CORE Board did write a statement of support that the operating rules can cover content, infrastructure and maintenance. That statement is in the back of your testimony and they are ready and able to support the CORE process should you want us to look at putting content into the rules. They stand ready to help with that process.
And the last, to wrap up, lessons learned. Education continues to be an essential part of this and there’s numerous case studies. We’ve actually had actual implementers present on free webinars and then certification that requires testing, not just attestation but actual testing of the entities and independent testing by independent organizations. So there’s resolution of the actual issues and not finger pointing about who’s not doing what.
And then lessons learned for the federal consideration, just another point here and I know we keep repeating this, the non-HIPAA covered entities, for some of the providers, the practice management systems are just essential to be part of the process. So making sure they’re part of the process and they’re at the table because whether you have infrastructure only or data content and infrastructure, those vendors are needed to make the providers see what everyone’s delivering.
MR. SOONTHORNSIMA: Thank you. George.
MR. ARGES: I am George Arges of the American Hospital Association and again, I want to thank the Committee for allowing us to comment on behalf of our member hospitals. The claim status. Gosh, I feel like I’m talked out lately but – here we go.
One of the things that we wanted to convey is the fact that the claims status transaction standard is not utilized as much as it should be. Oftentimes there are web portals are used in lieu of the transaction standards which contain more information than the transaction standard currently provides, at least from the health plan perspective.
One of the other difficulties that we’ve heard is the fact that oftentimes that the way the flow occurs between the provider and using, let’s say a clearinghouse, it becomes difficult for determining where the claim is with respect to status. Oftentimes if it goes through a clearinghouse, it is not something that you get back a response. The response may go to the clearinghouse and oftentimes the provider may not have that information made available to them.
There are concerns as well that sometimes when you do use a clearinghouse that the information gets altered in terms of identifying the tracking of the claim number itself. The claim number is somehow indexed based on what the clearinghouse may utilize as part of that process.
Clearly, I think operating rules that can detail how health plans search for and identify claims is an important step. I think that would help the understanding in terms of how to basically identify the claim and track the claim and having rules in terms of standardized processes that are clearly understood. And then you could do educational efforts around that which would make it clearer for both the provider, the clearinghouse and the health plans in terms of what they need to do as part of that process.
More importantly, I think the acknowledgement standard is one that would really benefit the utilization of the submission of the claim as part of this process. I think that would at least ease many of our concerns with respect to the understanding of whether things that were transmitted did get accepted. If something did not get accepted, identifying which ones they were and the reasons for them would be very helpful.
So by and large, those are the key items that we’ve identified. And I think it’s one, I think as Gwen indicated, it may not necessarily be the high volume, high dollar return but it is something that does improve the efficiency in terms of making certain that the cycle of submitting the claim and seeing it to its fulfillment in terms of payment is understood in terms of where it’s at. So you don’t want to lollygag in terms of making certain that you have to resubmit or correct something and find out that that happened five days later in terms of it being rejected.
So fundamentally, that’s all our comments that we have at this point in time.
MR. TENNANT: Rob Tennant, Director of HIT Policy for MGMA and again on behalf of our 33,000 members, we want to thank you for the opportunity to talk about the claim status transaction.
I wanted to start with kind of a snapshot of where our survey respondents came down on the issue of how they actually check the status of claims and you can see here that a pretty sizeable percent use the phone which is not the most efficient. Not that many use the fax.
But when you add up the numbers, almost 93 percent use the web portal either always, frequently or occasionally. So the web portal seems to be the place to go to check the status of your claim. You can see here that use of the 276 really we’re looking at around 50 percent and that’s again probably more so weighted towards the larger practices.
We also asked the question, well, if you don’t use the standard, why not? And it really gets to Gwen’s point earlier that their PM system does not generate claim status transactions, almost 23 percent. Another 20 percent say that their health plan does not support the transaction and a further 22.6 percent say, well, we don’t get it back within the required 20 seconds. So things aren’t working perhaps as well as they should.
So in terms of concerns that 276, has George alluded to, it doesn’t always provide exactly the information that we hope or expect. And what we’ve heard is that the transaction is used as almost a replacement for the acknowledgement. So they submit the claim and then hit send on the claim status to try to get a sense of where the claim is and make sure that the claim actually arrived at the destination. And, of course, the codes are not used as consistently across payers as perhaps they should. And again, it forces providers to go to a manual process to try to figure out exactly what’s happening.
And again, the index suggests that around 50 percent use and significant savings. Again, it’s hard to pinpoint the exact costs for some of these transactions because if it forces a provider to go onto a website, that’s one thing, but if you’re a typical medium to large size practice you have contracts with potentially 100s of different plans.
And each of them have their own website which means you’ve multiple log-ons, very confusing and so it adds additional time. So what happens of course when you have that kind of burden, they simply don’t bother. So I think that’s something we heard as well from our members. And in terms of the savings of course $1.23 approximately.
So in terms of what we’re looking for, obviously something simple, automated, cheap, all of the things we’ve talked about over the last day and a half. But there really needs to be an encouragement to use the transaction and not just drive everybody to a web portal. And I think that’s a theme we’ve heard over the last few days, which is well, the web portal works just fine but it’s really not the optimum workflow.
And, of course, this 276 has to be part of an automated workflow. I think, George, you talked about it. It’s got to be the flow from sort of stem to stern of the revenue cycle. And obviously again back to education. We would argue that it’s a huge opportunity for CMS to step up and, we would argue, sort of a series of open door forums or webinars aimed at provider offices, letting them know about the 276 and the other transactions and to jump on everybody else acknowledgements. That’s clearly a huge opportunity obviously left out of the operating rules.
We’re not sure why but it’s again another opportunity to drive out some of the cost to stop providers from picking up the phone, using the fax, getting on to a website, getting that acknowledgement, letting transparency rule the day. And again, to tout the EHNAC/WEDI accreditation process, the 276 is a required element of accreditation and I don’t think, as much as I appreciate Walter’s suggestion of making the business associates, that may be a longer-term solution. A short-term one is for the industry to coalesce around a certification process which would at least use market forces to drive adoption of the transactions.
Thank you very much.
MS. LOHSE: I want to make one clarification, Rob, the acknowledgements aren’t part of the mandate. They are part of every single set of operating rules and every CORE certified entity actually gets tested if they use acknowledgements and they cannot get a CORE seal to be certified unless they do use acknowledgements.
MS. STARKEY: Good afternoon, Rhonda Starkey, Harvard Pilgrim Health Care, Boston, Massachusetts. I’m providing testimony on behalf of Harvard Pilgrim in coordination with America’s Health Insurance Plans. Harvard Pilgrim has supported the use of the 276 transaction for 15 years. That’s both real-time and batch. We have observed a marked shift in our claim status experience beginning in 2009 with our CORE I and II certification.
Prior to certification, our provider web portal use represented 82 percent of our transactions. During the first two years under CORE certification, our portal use rate fell and we had the corresponding increase in the rate of 276 claim status use to 38 percent of our transactions. And then as of year-end 2014, the portal was down to 49 percent, 276 had now increased to almost 46 percent. The increase in use rate of the 276 claims status experience was driven entirely by the volume increase of the 276 transaction and that was done largely through new trading partners that were using CORE connectivity.
So portal, paper, phone, fax have remained relatively constant throughout the time. The ability of the health plan to sustain that increase in transactional volume with no corresponding increase in resources really underscores to us the administration cost effectiveness for us as a plan.
The second tangible benefit we had of operating rule implementation was the efficiencies gained in onboarding our trading partners to conduct both eligibility and claim status. Prior to the use of the operating standards, our onboarding with trading partners averaged 50 days, almost two months. In our first experience onboarding a CORE-certified vendor using the defined connectivity standards, the implementation time was a record 15 business days so we reduced to less than one-third the average that we experienced. From that time forward, we are still sustaining an on-boarding time that’s less than half of the original 50 days and we also have fewer documented issues with the connectivity and connectivity maintenance than we do with our other types of connectivity.
The challenges we’ve observed in impacting the adoption of the 276 with our providers is first our business users have raised concerns about the differences in the adjudication reasons reported in the claim status transaction compared to those in the electronic remittance advice. So the differences in the code set really causes them to not understand why a 276 reports one thing and an 835 reports another, even though they are the same thing reflected in two different code sets.
The second biggest issue we’ve had with increased adoption is business users’ misperceptions about what is part of the information communicated in the claim status response. Providers have looked to that claim status response transaction to post actual claim adjudication items that are communicated in the 835. In particular, we have them looking for items that are communicated in the provider level adjustment such as interest payments.
And we’ve received frequent questions as to why patient responsibilities are not included in the claim status response. So there looks like a need for a lot of education and alignment across the education about the standards and the difference or more alignment in the code sets.
Harvard Pilgrim’s primary recommendation is to adopt the 277 health care claim pending status information transaction. Many states that we service mandate that we service mandate that pended claim information be provided, including requirements that information occur through written communication.
However, with the increase in the use of the 835 electronic remittance and with EFT, reporting the pended claim information becomes the last vestige of the paper-based activity still remaining in the claim cycle. Adopting the pended claim transaction would further reduce administrative costs through timely notification to providers of pended claims while reducing paper management costs of printing, mailing, scanning, filing.
For industry perspective, AHIP recently conducted a survey of its member plans on the status of adopted standards and operating rules being evaluated by the ACA Review Committee. The survey found that most health plans do not think the current 276/277 standards meet their business needs – 56 percent indicating it only somewhat meets their needs and 11 indicating it does not meet their needs at all. Plan responses specifically focused on the need for additional specificity in the standard and the existence of other electronic alternatives that are more robust as barriers to broader adoption.
Twenty percent of plans who responded to AHIP’s survey cited lack of specificity as one of the primary barriers for the standard. Currently, stakeholders use and interpret claim status responses differently, especially when they use real-time things such as the portals.
Plans specifically noted that the transaction does not indicate to providers when the claim will be paid if it is in a pended status, resulting in phone calls when the expected response is not received. Code sets need to be developed to allow more specific status reasons and additional clarification in responses.
Plans recommended that use of the standard would increase if operating rules were developed with guidance and business scenarios to standardize code uses on the response which would be similar to the code standards set under the CORE for the 835 CARC/RARCs.
Because of lack of specificity in the response, plans indicated that stakeholders are trending toward alternate options, both manual, i.e., phone and fax and electronic. The survey respondents commented that existing payer-specific tools offer more search options and proprietary information on why a claim is pended.
In closing, we strongly recommend the Subcommittee focus its recommendations on the need for new operating rules on claims status inquiry content and to implement the health care claim pending status transaction.
We thank the Subcommittee for the opportunity to provide the testimony today.
MS. KOCHER: Good afternoon, Gail Kocher of Blue Cross Blue Shield Association and again thank the Committee for the opportunity. I think you’ll notice over in our written testimony and over our verbal testimony, the one thing that we have not commented on is the volumes.
I thought I would offer that the reason for that is there is just some complexities in capturing that data in a consistent fashion across the plans as well as there were some time limitations. And then even if we attempted to compile it, we again would want to make sure that there are going to be differences due to plan size so that’s kind of why we stayed away from attempting to do any volume reporting to you at this time.
With respect to the health care claim status, it’s another transaction that the plans indicate is a very value standard to them. They indicate that its use parallels that of the eligibility request and response and they do indicate, in most instances, seeing a reduction in phone inquiries.
What we also found was that plans offering the 277 claim acknowledgement to their training partners find the claim status transaction is used less. So this does indicate that usage of a claim status as a means to determine whether the claim has been received. Not always necessarily to inquire the status of the claim within the payer system.
The most significant opportunity associated with the claim status is the mandating of the claim acknowledgement standard. We believe this will enable a more efficient use of the claim status transaction reports intended purpose of obtaining the actual status of the claim in the adjudication system as opposed to identifying whether or not the claim has actually been received by the payer.
While we support voluntary adoption of acknowledgements and we believe they are important, support for business transactions, as we have testified previously, adoption as a HIPAA-mandated standard must occur through the federal rule-making process. This would ensure that all stakeholder impacts, needs and implementation timeframes have been considered.
And those are our comments on claim status.
MR. SOONTHORNSIMA: John, are you on the phone?
MR. EVANGELIST: Yes I am, thank you. Again, this is John Evangelist from the Centers for Medicare. I appreciate the Committee giving us an opportunity to speak.
During the calendar year 2014, CMS transmitted almost 9,000,000 claim status responses for institutional claims and almost 93,000,000 for Part B Professional claims. Medicare does not currently capture the percentage of claim status so getting back to just what Gail was referring to, we don’t currently have a great deal of statistics on this but we currently do not capture the percentage of claim status requests received electronically versus via the things like IBR’s help desk and our internet portals.
Medicare is already using this transaction pair and sees no additional issues at this time. Medicare recommends that previously adopted operating rules be amended to permit batch as an option rather than force real-time claim status. Based on Medicare policy for electronic claims, Medicare has a 14-day payment window from the receipt of the claim. After initial processing, claim status does not change frequently during that period. The point here is that batch or real-time claim status will often render the same result.
Additionally, Medicare feels it would be helpful to make current requirements optional when they have been placed in later operating rules. An example of this is a connectivity requirement with Phase II and Phase III operating rules requiring SOAP WSDL and HTTP MIME. With Phase IV it appears the industry is moving toward only one method, SOAP WSDL. For consistency, it would be best to have the same connectivity and security across all transactions, therefore, moving the second connectivity requirement from Phase II and Phase III.
And that’s all I have. Thank you.
MR. SOONTHORNSIMA: Thank you, John.
MS. LOHSE: I just want to clarify the operating rules do have requirements for both batch and real-time. You do have to offer a real-time but you are not forced to do real-time. You need to offer it out but there’s still operating rules around turnaround time for batch because many entities do offer it out. Thank you, I just wanted to make a clarification on that.
MS. WILSON: I am Sherry Wilson, President of the Cooperative Exchange representing the National Clearinghouse Association and Executive Vice President and Chief Operating Officer for Jopari Solutions. I’d like to thank the Committee for the opportunity to submit our testimony on behalf of our Cooperative Exchange members representing 80 percent of the clearinghouse industry.
With that, our testimony is based on the 2015 WEDI Cooperative Exchange Clearinghouse Transaction Survey. And as you can see from our survey results, 94 percent of the clearinghouses support this transaction. In terms of value, when we looked at the WEDI Cooperative Exchange Survey it really showed significant variables in the use of the transaction which creates a barrier to automating business processes and directly impacts return on investment.
However, we feel the transaction value could be enhanced by payers complying with response timelines, the adoption of acknowledgements, improved specificity of code explanations to mitigate other methodologies for communication. We also, in terms of volume, have the same issue in really defining the accurate volume usage, as Gail mentioned so that’s shared across the board.
With that and barriers, there’s really four key barriers that we identified. One is the quality of the claim status response is not granular enough to stop the provider from picking up the phone or simply just resubmitting the claim.
The second barrier that was noted with the survey is many payers continue to offer more complete responses on their web portals or IVRs. They can be carried in the 277 claim status response. Or the payers are not providing the information that the transaction can support.
A third barrier is some payers have not mapped their claim status rejection are pending proprietary codes, the most detailed standard codes to provide detailed information to assist the provider to identify the current status of the claim. So we saw that as an interesting component and barrier to the adoption of the transaction.
And the fourth barrier is many practice management systems, as you stated before, Gwen, do not support the transaction.
Another barrier that has been mentioned this afternoon is the lack of transaction audit trails resulting in delays and are duplicate communication between the payers and providers. Once again, we highly advocate the use of the 277 CA Health Care Claim Acknowledgement transaction. There is this lack of audit trail. There is no way to verify the communication was received and therefore impedes workflow automation.
In terms of opportunities and recommendations, we again, the industry as a clearinghouse industry as well as the property and casualty for many years have adopted the unsolicited X12 277 CA Health Care Claim Acknowledgement transaction to provide file status reports from clearinghouses, payers and vendors, to George’s comment, I think it’s very interesting. We need to go back and look if we’re applying that and we do it for claims and other transactions, but maybe not with the 276/77 as much as we should so that’s something to take back to our organization. In doing this though the transaction is used and we feel it’s very important to have this audit trail to reduce phone calls, duplicate claims and facilitate workflow automation.
The last thing, so as far as recommendations, we encourage continued educational outreach in the use of the transaction and to really look at the workflow impact. The second thing is further research be completed among the industry and WEDI and CORE and other organizations participating to address the barriers before we move forward with adoption of another version of this transaction.
And lastly, we also look at recommend NCVHS work with WEDI and other standards to determine the use of the 277 CA as an alternative to the 276 or 277 or an augmented transaction based on identified business scenarios and again staggered approach to adopting the transactions. And we strong message throughout for the Cooperative Exchange strongly advocate the adoption of the 277 transaction.
Thank you for the opportunity to testify today.
MS. NARCISI: Good afternoon. I am Jean Narcisi and I’m chair of the Workgroup for Electronic Data Interchange and Director of Dental Informatics for the American Dental Association. I’d like to thank you for the opportunity to testify on behalf of WEDI for the claim status 276/277.
And as you know, WEDI represents a broad industry perspective of providers, clearinghouses, vendors and payers and other organizations in the public and private sectors that partner together to collaborate on industry issues. WEDI is also named as an advisor to the Secretary.
As mentioned yesterday, to support our testimony, WEDI conducted a national survey of health plans and clearinghouses, and that was previously summarized in previous testimonies.
Feedback from health plans and clearinghouses suggests that the 276/277 standards and transactions could deliver greater benefits and return on investment through more automated processes in alignment with implementation timelines of other standards development bodies.
Despite not presenting significant challenges to date, there is significant perceived or qualified variability in the use of claim status transactions. Efficiencies could be improved by standardizing minimum requirements for responses, acknowledgements and explanations of codes.
Opportunities for improving claim status should educate users to reduce confusion, balance the need for more granular accurate data with the need for more transparent data that is easier to interpret. Survey respondents perceived that health plan use claim status operating rules is very varying with 31 percent report significant usage, 31 percent reporting moderate usage and 19 percent reporting slight usage. Compared to others measured in the survey, there is less variability in usage of claim status transactions and operating rules with 19 percent of respondents reporting extreme variability, 28 percent reporting moderate variability and 25 percent reporting slight variability.
Since the survey was only conducted with health plans and clearinghouses, some of the WEDI Board members representing providers believed that operating rules may need to be developed that detail searching and filtering mechanisms in order to prevent improper “claim not found” issues from occurring and further burdening stakeholders with the resulting review processes. Currently, some health plans direct providers to portals that you’ve heard consistently throughout yesterday and today but there would be much more valuable transactions once there is a clearer understanding of how to submit, consume, review and respond to a claim among all parties so that educational materials are as universally clear as possible.
Regarding the value, claim status transactions are reported to be meeting industry needs by 83 percent of respondents, and 67 percent believe that the transaction and corresponding standards, code sets and identifiers are achieving their intended benefits. While 65 percent of respondents believe operating rules are meeting industry needs, 47 percent believe intended benefits are not being achieved. Our qualitative research suggests that 276/277 transactions are generally not as difficult to use and interpret, though significant variability in adoption and content may be hindering the return on investment for stakeholders.
Some health plan and clearinghouse respondents suggested allowing the provision of multiple adjudications in the 276/277 transactions to allow a full claims history. Some of the WEDI Board members representing providers indicated that claim status codes are not being used consistently across payers. This lack of consistency means that the providers must refer to different tables of codes in their systems for each of their payers.
Survey results suggest that significant cost savings could be achieved if manual processes, such as claim status calls, are reduced and/or eliminated by using electronic transactions. Given the confusion on data interpretation, workflow could be improved with clearer explanations of codes, particularly for rejection and resolution.
Based on a letter WEDI sent to the Secretary in 2012 on Lessons Learned for 5010 Implementation, HHS should encourage the consistent use of acknowledgement transactions. And I know I sound like broken record but we’ve been on record several times that we believes it should be mandated and using the acknowledgement transaction in order to provide a trail that can be used more easily to triage any challenges.
Our survey indicates that there may be significant confusion and variance in adoption and use among stakeholders, particularly around the 277 claim status response in 835 remittance advice information. Moderate to extreme difficulty in adopting and expanding usage with claim status transactions and operating rules is reported by 31 percent of the respondents. WEDI recommends that HHS work collaboratively with us to develop educational briefings and webinars to help key stakeholders learn about the transactions and standards.
In recognition of the value of the electronic transactions, operating rules, standards and code sets discussed today, we would urge you to strongly consider the items we have noted.
Thank you for the opportunity to testify on behalf of WEDI.
MR. SOONTHORNSIMA: Thank you. Let’s open up for public comment. Questions?
MS. STINE: Merri-Lee Stine from Aetna. When I think of the 276/277 claim status inquiry and response, it’s not necessarily a transaction that I think of in wanting to make it grow. It’s actually a transaction that I think of wanting to eliminate volume because it’s an exception transaction. It’s a transaction that a provider should only need to use if there’s a problem with the claim flow.
In the perfect world, provider submits a claim. They get back a 277 claim acknowledgement so they know that I’ve gotten it. If I have to pend a claim, because I haven’t paid it for some reason, I should send them a 277 pending claim status which of course we all use. We do but not everybody does. When I pay the claim I send them an 835. If that perfect world happened, they’ll never have to inquire on that claim.
So just a thought is this is not necessarily a transaction that you want to grow the volume but if we do have to send it, yes it needs to be clear. I absolutely agree with the statements about the codes needing to be clear, the code combinations needing to be consistent but not necessarily looking for growth. Thank you.
Agenda Item: Review Committee Q & A
MR. SOONTHORNSIMA: Additional comments. Questions from the Committee?
MR. RUBENSTEIN: Sam Rubenstein, from Montefiore Medical Center. We make extensive use of the claim status and creating response in our organization as a means of doing both acknowledgements as well as accounts receivable follow up. And just in response to the prior comment, we do normal routine follow up at given intervals based on our experience with payers to follow up on claims. So even though we may receive a 277 status inquiry that says that the claim is pending, we will on a routine basis follow up every X number of days to get the most current status because as the receivable ages more and more we are concerned with that.
So I just wanted to make that clarification from an organization that does make extensive use of this transaction and we have been able to accomplish significant cost reductions in our follow up area as a result of using that information. I also just wanted to say that I agree with a lot of the comments that were made about the effectiveness of the transaction is in many ways dictated by how well the response from the transaction is embedded within the receivables management system, the practice management system or the hospital’s AR system. Because what we found is that there are many systems out there that will manage the transaction bringing the results back into the system but don’t position it in a way that it’s conducive for the user to get to the information and then of course to follow up and they ultimately just pick up the phone and call for the status or get on the website.
Lastly, I just wanted to also say that our findings with the status transaction across payers is that there are instances, I won’t say that they’re frequent but there are instances where we do need to get on to the website to go look for the status of the claim because of the detail that comes back in the claim status inquiry is not sufficient in order to know what the next step in the management of the ARs.
MR. SOONTHORNSIMA: Thank you. Walter.
DR. SUAREZ: I have a few questions about this one too. The first one is it seems like there is an opportunity and perhaps a need to improve the information in the actual standard. And I think a couple of presenters or testifiers talked about how much sometimes the standard transaction, the current version doesn’t provide enough detail so there’s a need to go into web application and all that.
So I wanted to ask, and I thank Stacey for standing because I wanted to ask this, to what extent the next version, and maybe this was mentioned I didn’t necessarily hear, but to what extent the next version is actually already taking into account those changes and need to expand the content.
MS. BARBER: Stacey Barber, ASC X12. Again, like with many of the transactions, the eligibility 278 that we discussed yesterday, it’s not that the transaction doesn’t support the data, it does. It is the level in which a plan responds to the information. So actually from the 276/277 perspective, there are some changes that are taking place around predetermination of benefits, some other changes, but they’re very minor from the 276/277 perspective from the claim status request and response. The transaction, like I said, does support it.
I did hear a few things today, like potential pay date. I’m not aware that we have any kind of change request on the table for that so that may be something that somebody wants to bring forward. There’s been a lot of talk about the 277 claim acknowledgement. We do support that.
As we’ve said in all of our testimony with the adoptions of attachments through the arm. So it’s not a matter of what is already published in 5010 not being able to respond, it’s the level in which somebody responds and uses the transaction.
DR. SUAREZ: So it’s not also either the level of granularity in the transaction itself because that’s what I thought I heard. There was some need for more granular information that is not currently carried in the 276.
MS. BARBER: I think some of that may be around the usage of the status codes potentially and getting better usage out of that. ASC X12 offers technical report types 2 which are guidance documents and educational documents and that is something that maybe we could pursue around reporting status codes.
MS. WILSON: I would just reiterate what Stacey’s saying. I think the granularity is really in to the response from the code set and being able to use those effectively to communicate the information. And again, I think the recommendation is additional educational outreach using WEDI, CORE, and the other standard organizations and X12, coming together to educate people about the use of this transaction.
Again, I think it’s very fairly thorough but I think people don’t understand, based on different maybe business scenarios, would help clarification of the use of the transaction. I think we have a huge industry gap and again the quality in which the information the payers are reporting may be also a lack of education.
MS. LOHSE: In response to your question, Walter, we have been told is there is a need for the claim status codes and the tracking that George mentioned and that the version 5010 has that capability but it’s not required and so you have an opportunity to try to require it now and you can do it through updated operating rule or you can wait to have an overhaul of the next standard. So there is that capability within the 5010 but because it’s not required, it’s not being used as much and not consistently. I just wanted to put that perspective around it. Thank you.
MS. STINE: Merri-Lee from Aetna. There’s a couple different things when you speak granularity when it comes to the claim status inquiry response. One is the codes and the codes being able to describe what the payer is trying to communicate. But there’s also a different level of granularity in reporting at just a claim level, the status of the claim at the claim level, or the transaction has the ability to report on each individual service line. So there’s two different pieces to the granularity discussion and we’ve been talking a lot about codes but not about the level of granularity as it relates to the claim and the service lines themselves.
DR. SUAREZ: Do you see the need to go more granular into the –
MS. STINE: I suspect the providers would like that. We actually do, as a payer, report down to the service line for our main businesses.
DR. SUAREZ: So the current version supports that ability to report at the –
MS. STINE: It does. The transaction is a beautiful, rich transaction that supports a lot. And those codes that we’re talking about can be updated up to three times a year. Come to the meeting. It’s Sunday before the X12 Conference. Anyone can enter a request. So get those codes updated.
DR. SUAREZ: My next question was about the code set. So this is an external code set to the transaction so this gets updated and doesn’t require –
MS. STINE: And anyone can make a request to that codes committee.
MS. WILSON: Just to comment on the code sets. It would be very interesting again, industry collaboration with WEDI, CORE and the different entities to really try to identify what is the gap analysis and looking, Rob, from providers where are you not, or George, getting the specificity which is they’re going besides the content information, the codes. And there’s an opportunity to do a gap analysis and maybe collectively look at what’s the 8020 rule and do a better job at coming together to provide that communication tool.
MS. NARCISI: Jean Nacisis. I’m Chair of the WEDI Board. I just wanted to mention, I know a lot of you have talked about education and I think WEDI would be the perfect group to pull together, convene some type of a program and it would be a huge opportunity for all the stakeholders to come together and learn and kind of help to resolve some of these issues.
MS. KOCHER: I guess two points, one, I really agree with Jean with regard to education. I think we would not be wise if we assume that the issues are all related to what the payers are or aren’t sending back. There is always a component of the receiver and whether they understand the information, what their system is or isn’t inputting.
The other comment I would make is with regard to granularity. I think that it’s not as simple as it sounds. Institutional claims are often adjudicated at a claim level and so you can’t put something – you can’t report something at a line level if it’s being adjudicated at a claim level. So I think we just need to be cognitive of that when we talk about granularity with respect to claim status.
MR. SOONTHORNSIMA: So to clarify Gail’s point, there are some differences between professional claims versus – so when you’re talking about at the claim line level, are you talking about mostly professional claims?
MS. KOCHER: Professional claims, dental claims.
MR. SOONTHORNSIMA: Okay. Not institutional.
MS. STINE: The transaction absolutely supports the reporting but many payers. And that was the point I was trying to make.
MS. STARKEY: Rhonda Starkey, Harvard. To comment on the discussion about education. One of the places I would give some of the vendors real kudos is that this is actually a place where, as I said, the CORE-certified vendors that we have worked with to implement this are ones who are often application service providers that do both – do the full range of billing, status, posting. And so they kind of understand the sweet spot that the claim status inquiry has in the middle of that transaction set and use it the most effectively. So I think that’s the one place where they would be good partners in education potentially because they have understood that and put it in a good perspective.
MS. WILLIAMSON: We have a comment from Karen Shutt(phonetic) with respect to granularity. The 276/277 does not support reporting provider contractual obligations in patient responsibilities amounts for posting. That would require detailed balancing rules, et cetera, which are the role of the 835.
MR. SOONTHORNSIMA: Are there any other questions from committee members?
DR. SUAREZ: I want to ask this question because I think it’s important to cover it. And this is for Gwen. I think one of the topics that you covered in your testimonies is of course data content versus infrastructure and when you mentioned data content, the thing that I was thinking about was the balancing and really the issue between the standard adopted and the operating rule adopted and the extent to which the operating rule would modify data content of the standard in the sense of either changing a data content element in the standard or adding something new and to what extent that could create a conflict between what I have to comply with under the HIPAA standard transaction rule versus what I have to comply with the operating rule? Could you address that point about the data?
MS. LOHSE: Absolutely. And I’m going to use some really bad analogies here. So CAQH CORE, Gwen Lohse, for those on the phone. Think of the investment that the industry has made in the 5010 which I think you all have, as NCVHS has held hearings about the investment that has been made both by plans, vendors, practice management systems and providers. There are aspects to the 5010 that if we turned on the button, the lever – we’ve made the investment, now we need to turn on the lever. They can add value to the industry.
What the operating rules have done, for instance, within the eligibility operating rules, is turned on some more levers. So it’s complimenting and furthering that use of an investment that the health care system in America has made to adopt the standard. And through a balance multi-stakeholder voting process, looking at business needs and cost reduction, figuring out which of those items in that tool that the industry as a national system has decided to invest in would add the most value. So I actually don’t see it as a conflict at all because it’s encouraging more use.
When we talk about alternatives to the standards or the portals I think you’ve heard loud and clear here today the providers don’t want to hop between the portals. They want a standard and there’s been a lot of – there’s a lot of aspects to that investment that we have made that we could then implement within the operating rules now rather than waiting. So hopefully that answers your question.
I know NCVHS did ask the ACQH CORE, when the reform bill was passed in 2010, to see if there was some additional things within eligibility or within claim status that could be added to the existing, what was back then the existing non-mandated operating rules. We created tiger teams, did public surveys and created draft rules that added more content, both the eligibility and the claim status and those still stand. So I don’t see it as a conflict. I see it as where do we want to put our investment within the national health care system around IT. Thank you.
MR. SOONTHORNSIMA: Very good, any more comments?
Agenda Item: PANEL 7: Health Care Payment, Remittance Advice and Electronic Fund Transfer
MR. SOONTHORNSIMA: Okay. Last but not least, Panel 7. So let’s start with Jean please.
MS. NARCISI: I am Jean Narcisi, Chair of the WEDI Board of Directors and Director of Dental Informatics for the American Dental Association. And, as you know, WEDI represents a broad industry perspective of stakeholders and, of course, it is also named as an advisor to the Secretary.
To support our testimony, WEDI conducted a national survey of health plans and clearinghouses with Cooperative Exchange that was previously summarized in prior panel testimony so I won’t go into that detail.
Feedback from health plans and clearinghouses suggests that EFT transactions and operating rules are delivering a high value and achieving the intended benefits with low barriers of entry, while ERAs still hold room for improvement. Given the existing use and ROI of EFTs, opportunities for improvement primarily lie around ERAs, such as expanding the granularity of coding and data, accelerating the enrollment process for providers and more consistent use of CARC/RARC.
Survey respondents perceived that health plans use EFT operating rules to varying degrees, with 38 percent of respondents reporting significant usage, 31 percent reporting moderate usage and nine percent reporting slight usage. In addition, usage was of ERA operating rules was perceived by 50 percent of respondents as significantly used, 31 percent as moderately used and six percent as slightly used.
Unlike other transactions measured in the survey, there is significantly lower variability in the usage of EFT and ERA transactions and operating rules. For EFTs, six percent of respondents report extreme variability, only eight percent report moderate variability and 33 percent report slight variability, while for ERAs, six percent report extreme variability, 17 percent report moderate variability and 44 percent report slight variability.
Regarding the value, among the transactions measured by the survey, the highest percentage of respondents find value in the EFT standard. EFT transactions are reported to be meeting industry needs by 94 percent of respondents, and 91 percent believe that the transaction and corresponding standards, code sets and identifiers are achieving their intended benefits.
ERA transactions are reported to be meeting industry needs by 78 percent of respondents, and 83 percent believe that the transaction and corresponding standards, code sets and identifiers are achieving their intended benefits. While EFT transactions are generally not found to be as difficult to adopt and expand usage, survey respondents have greater levels of moderate to extreme difficulty doing so with ERAs. In part, a percent of respondents believe EFT and ERA operating rules are meeting industry needs and achieving intended benefits.
Some of the WEDI Board members representing providers indicated that the EFT and ERA transactions are not balancing with the payments. In addition, the provider adjustment segment of the transaction is in some instances becoming a “catch all”. This could also be an issue with practice management software vendors, as the information in the segment must be taken into consideration for auto-posting of payments to patient accounts.
While we understand the need and desire to move the industry forward with the adoption of standards, operating rules, code sets and transactions, we urge more consideration on the total cumulative impact of changes. In addition, based on a letter WEDI sent to the Secretary in 2012 on “Lessons Learned for 5010 Implementation,” pilot testing of standards should occur before adoption and before final implementation.
Data could be more comprehensive by increasing the specificity and detail of professional claims data content to be at a line-level rather than claim-level. While some respondents suggested standardizing CARC and RARC codes because there is inconsistent use of them, others noted that greater focus be also given to Medicaid to ensure consistent use of CARCs and RARCs across health plans. Additional support was suggested for corrections and reversals.
And again, with acknowledgements, the survey results suggested that significant cost savings could be achieved if manual processes are reduced from ERA transactions. Some survey respondents suggested an electronic response/inquiry mechanism for exceptions. As I mentioned in my previous testimony, based on a letter WEDI sent to the Secretary in 2012 acknowledgement transactions should be encouraged in consistent use of them. Furthermore, WEDI we urge HHS to consider mandating the acknowledgements.
HHS needs to further evaluate the process for return on investment and implementation cost analysis to ensure these estimates are realistic and based on quantitative evidence. Evaluating the ROI and cost of implementation are crucial to determining the true impact and benefit of adopting future standards.
As was the case with 4010 and 5010, the total cost of implementation and reaching full deployment far exceeded the initial cost estimates. WEDI believes that these analyses must be thoughtful and realistic. While a determination may be made that although costs do outweigh the ROI, a decision may still be made to proceed, but the industry as a whole or those stakeholders with projected higher costs will be better prepared to manage the costs of the implementation. We urge HHS to study these critical metrics.
In conclusion, thank you very much for the opportunity to testify and I also wanted to just state that we would really appreciate more advanced notice of the type of details that you would like because we think that we could really do a solid survey. It was kind of a quick turnaround time on our survey.
MS. LOHSE: Good afternoon, Gwen Lohse from CAQH CORE. Thank you for inviting us to testify today. As a designated operating rule author, you had asked us to answer a few questions so I’m going to walk through the written testimony that you have and is also posted on the website.
Our testimony comes from a range of sources, ongoing multi-stakeholder input which I’ve highlighted before, CORE certifications, the CAQH Index, and then also a public survey CAQH CORE conducted for the hearing and then two separate things specific to EFT and ERA. And an online awareness campaign that we did, including blogs by CAQH board members like the AMA Board of Trustees Chair and the CEO of Marshfield Clinic and that went on for three months and provided 2000 views per page on a landing page that was electronic with a number of tools. And there’s a link to it in your testimony.
You had asked what the operating rules cover. They are both content and also infrastructure. The content is around the denials and the CARCs and RARCs for the claims, business scenarios and commonality around the code combinations, uniform EFT and ERA enrollment sets and then re-association of the EFT and the ERA through some trace numbers and data.
Then for the infrastructure ensuring enrollment is available online and also in paper and some timelines around that, establishing system availabilities, response times between the two transactions and then acknowledgements for voluntarily certified CORE certified entities. They were not included in the mandated.
Business needs have been achieved and reported. Fifty percent of the May survey respondents had productivity improvements. Additionally, 40 percent of the May survey respondents specifically indicated the CARCs and RARCs have added value and there’s case studies that have been reported. There’s a link in here.
Emory reported that they are using those to now identify high volume and high cost CPT codes to better manage their revenue cycle and it’s a very good case study. You should go in and look at it. And then more timely receipt of the payments electronically I think building awareness and trust because we’re very early in the lifecycle.
About the adoption trends, overall, again it’s very early in the lifecycle. We’re moving in from awareness and planning to implementation. Everyone is not done yet. And we did lay out some stages in the testimony. The Index Report from 2014 actually does not include data from the year 2014. It’s the previous year so there’s no data on the first year from the Index on the mandate.
There are some numbers from NACHA which you’ll see in the NACHA testimony for the EFT. There’s very good numbers they track because all the EFT transactions have to go through their clearinghouses, their two clearinghouses. The ERA from previous years is in the 50s so we’ll continue to track that and report it out.
For voluntary CORE certifications, we’re actually seeing – we went from 25 certifications pre-mandate which started in late 2013 certification to now we have nearing towards almost 100, I’m sorry, 50 large health plans and then vendors slowly focused on EFT and ERA. And then that includes two Medicaids that just actually pledged to become certified in the last two weeks.
Two notes about the large health plans. Many of the health plans are needing to coordinate with their trading partners and that means a lot of the vendors have to get certified first because the trading partners rely on their agents to meet the operating rule, the data content and the infrastructure requirements. So trading partner coordination here is critical and we’re seeing it within the certification.
Projected cost savings is in the billions and you showed there are some other links to case studies and take a look at that. So it’s billions for manual as well as indirect and a whole lot of other reasons for both the health plans and the providers.
Challenges and opportunities for broader adoption. One is provider knowledge base and required action. These operating rules for EFT and ERA require the providers to contact their banks and their health plans. So if they don’t get contacted, they need to do it and be proactive. Many of them are just learning about the benefits of these so that is a challenge.
We have created a CAQH CORE free implementation tools and you have a link to an example, a two-page letter that they could send to their health plans, the providers or to their banks. So continuing that process and we’re partnering with many of the entities around the table to do education on those.
Vendor challenges. Many of the practice management systems are not updated yet so we have providers that want to take advantage of the adoption with the CARC and the RARC but their practice management systems don’t have those capabilities at this point. So we are encouraging CORE certification which checks it and tests and also checks manually as well as electronic testing.
With virtual bankcards, I am going to leave this to the providers. They are going to talk about this. I think it’s a very highly controversial topic within the industry and, moreover, if entities do use the virtual bank cards, they are not going to get the advantage of the operating rules. They won’t get re-association. They won’t get the CARCs and RARCs. They are not going to get any of the required infrastructure. So there are concerns beyond those that we’re going to talk about today that you can’t even get the full benefit.
We do want to make sure that providers learn their rights and we’re educating them that they can require EFT. And HHS, it would be in the interest of everyone if they educate the providers also on potentially do an FAQ on what are reasonable fees for EFT and what is the role of virtual cards.
The CAQH Board is looking at potentially voluntary operating rules for virtual cards, whether they be a benefit or a detractor.
Current delivery. The next item under challenges is content delivery via the transaction and what’s on the web. The industry is still adopting this so content is going to be a challenge right now until adoption is done and then we have the same web problem which is not as intense with some of the other transactions but still a challenge.
And then competing priorities, to move to the final stage of the testimony, improvements and alternatives and potential changes. We’re too early in the life cycle to act upon potential improvements. The industry wants more time to determine what the best improvements and changes would be based upon more experience. There is a big focus on ongoing maintenance to ensure that maintenance is done in a high quality manner and that it meets the industry needs. You’ll see on page four of the testimony, we go through in some detail about the ongoing maintenance for the CARCs and RARCs and also the enrollment sets.
Three things here. This is significant work. It asks for evaluation criteria, business cases, supporting real work data, real usage data and it takes many hours from staff participants and then other resources like CAQH CORE had to purchase a tool to collect all the data and do the voting because it’s all public. You’ll see the analysis is significant and there is a slide here showing some of the analysis.
We’ve gone through from what could be 1000s of codes down to a focus on about 1800 that are the high volume from the industry. That’s a lot of scrubbing within two years and there’s more to be done. But anything with ongoing maintenance is significant resources and work and it must be taken seriously that the entity that’s going to do it has the resources to get it done.
The enrollment sets. There was a decision through the multi-stakeholder group, no substantive changes in 2015. They are planning for substantive changes this year but we’ll see when their analysis is done. It’s not finished.
The last point on the testimony, you asked about lessons learned. Those are highlighted on page five of the testimony. Education is essential. Everyone needs really to know their rights and their roles. So we’re doing significant education again in partnership with many of the entities at the table and plan to continue to do that and there should be new methodologies like this online digital campaign. We need to get creative about how we’re going to do this and get the word out to build trust and awareness and action.
Additionally, certification, if entities get tested and then they certify, they really find out if they’re ready to go and if their trading partners are ready to go. And then we would ask again HHS to comment on the role of the virtual cards and also the role of the non-HIPAA covered entities.
Thank you very much.
MR. SOONTHORNSIMA: Thank you, Gwen. George.
MR. ARGES: Thank you again. This is George Arges. I’m with the American Hospital Association and again, on behalf of our members I want to thank the Committee for allowing us to be on this panel.
Before I comment on the remittance advice, I wanted to kind of give you an overview of what we’ve been doing over the past several months at the AHA. We’ve undertaken an examination of the Admin Simp provisions of HIPAA as well as ACA and we’re working on a paper basically to help hospital leaders better understand the importance of Admin Simp.
The idea is to basically reignite their interest in these activities because what we learned in some of our interviews with hospital members is there is so much to be gained with the adoption of these transaction standards, not just from an Admin Simp perspective but from another perspective as well in terms of really standardizing core information as part of routine within the hospital, whether it’s for EHR, whether it’s for admin data going out the door to health plans. So the idea here is again to get them to understand the importance, engage them to become more active in this process.
So let me start out with respect to the adequacy of the remittance standard. Fundamentally, I think the transaction standard has the ability to basically carry the information that is necessary to help people understand what is taking place with respect to the adjustments. However, and it’s a big however, many hospitals currently do not get a balanced remittance advice or if it is balanced, sometimes they use a default code that basically forces the balance in which case it still causes a great deal heartburn for the provider to basically follow up with a phone call or other means to basically figure out exactly what the other type of adjustment entail.
The idea of the information in terms of the CARCs and RARCs are not always user friendly. Additional edit logic is necessary for the information to have meaning to the provider but here again I think greater outreach in education is a necessary component moving forward and I think that’s something we would want to convey as part of that process.
The operating rules really are an important piece to this. We think it would help and I think the code combinations needed to explain adjustments is a good starting point. And I think more work will be needed to basically get people to understand how they need to basically handle this information. The old Paul Simon song 50 Ways to Leave Your Lover, seems pretty simple and pretty straightforward but there’s a lot more CARCs and RARCs to basically adjust your claim. And I would say the former is probably more important.
The next version of the standard we think could also provide more specific information on the adjustments so I think that’s an important thing to acknowledge. Is that the next version of the remittance standard will be an improvement. We do acknowledge that the EFT is the preferred method for receiving payment unless a provider ops out.
Virtual cards, while I think useful, I think one thing – it should only be used when the provider ops in but I would also say that in reality Admin Simp was meant to basically reduce administrative costs. It wasn’t intended to shift costs. So while it may allow somebody to reduce their costs, the idea isn’t to pass on more costs to somebody else. And so I think that’s an important piece that should always be looked at when you look at the other options that people are looking at.
With respect to improving the processing and understanding, we do think that if there could be frontend edits that could help with the remittance advice and the balances I think that would be a good step. If providers install frontend edits that rejected the remittance advice I think a lot of them would be rejected. If that would affect the clean claim timeliness, I think there would be more interest on the part of the health plans to basically make certain that they do balance and balance without the use of default codes.
The issue of lump sum or take back adjustments, those are something that when especially they’re not patient specific should be handled separately. They shouldn’t be included with the same remittance advice that pertains to patient adjustments.
So again, greater education and outreach, that’s what we think is the solution and that’s how we try to improve the utilization of that standard.
I’ll end there.
MR. SOONTHORNSIMA: Thank you, George. Heather.
MS. MCCOMAS: I am Heather McComas from the American Medical Association. Thanks so much for the opportunity to speak with you this time on ERA and EFT. As we’ve all been hearing about electronic payment and remittance offer all of us a lot of opportunities to save time and money, but the adoption of these transactions probably not quite as high as we’d like it across the industry.
As Gwen referenced, the CAQH Index from 2014 does not reflect the implementation of the new operating rules but the adoption rates were hovering about 50 percent so we do see some opportunity for increased savings and adoption across the industry.
In terms of barriers to provider adoptions of the ERA transaction, there are enrollment challenges. I’ll talk about that a little bit more when I talk about EFT because there are similar issues for both transactions. Issues with inefficient reconciliation between the ERA and the EFT transactions and issues with health plan compliance with the standard and operating rules.
So first of all, looking at reconciliation, as Gwen referenced, these transactions were designed to work together synergistically. There’s a reassociation trace number that should allow them to be easily tied together. However, that’s not what we’re hearing from providers. It’s not as easy as we think it should be. There’s a lack in some cases of vendor automation allowing for this easy reconciliation of the ERA and the EFT. We’ve heard reports that some banks are truncating that reassociation trace number which is a problem for providers.
And Rob and I are both going to be talking about this, AMA/ADA/MGMA survey that we did on EFT and virtual credit cards but thing referenced in that and some of the text comments was it’s really hard for providers to link up the ERA and EFT and they say we prefer the check. We want the check. And as someone who is supposed to be working in automation that was kind of a rough thing to hear but I can understand it. If it’s hard to match it up with the electronic transactions, they just want to go back to a check which is now where we want people to go but right now it’s too hard for them to do otherwise.
In terms of compliance issues, we’ve heard reports that some plans are still not offering ERA upon physician request. That’s of course a compliance issue. As George referenced, our balancing issues with the ERA, that’s a real challenge for physician practices to figure out.
Portals, portals, portals. We’ve heard that for the last two days. Issues with portals providing better, more accurate information than in the standard transaction. It’s an ongoing concern with a lot of the transactions we’ve been talking about.
And there’s also issues with sort of getting back to the 50 Ways to Leave Your Lover, the improper or perhaps not suboptimal use of the reason codes and using them to give the best message to the provider, not just one of the 50 ways but the best, the best way to dump your boyfriend, the nicest way to your boyfriend perhaps, putting it in George’s terms.
So in terms of recommendations, we do think there is some room for additional operating rules on the ERA. Again, providing some more guidance on kind of optimal use of the codes, not just valid codes but the best way to convey the message to the provider to be the most intelligent and understandable.
And then also, as George referenced, the issue of these dummy codes that are used to kind of jigger balancing. We really feel like that should be prohibited in operating rules because it’s a huge issue for providers. And again, we feel that compliance is a huge issue and right now our compliance system is very complaint driven and we’ve heard a lot from providers that they’re frightened to bite the hand that feeds them.
They don’t really want to lodge a complaint against a health plan out of fear of retribution. So they’re not willing to do that. And also practices, particularly smaller ones, need to get paid and so they might not reject a noncompliant ERA because they need to get paid and so we would really urge HHS to look at increasing compliance enforcement.
Moving on to EFT and the standard EFT transaction. Our survey did show pretty strong provider adoption of this transaction. Eighty percent of providers indicated that they are using the electronic funds transfer with at least some of the plans that they do business with. Again, there is room still though for potential for more savings here.
Reconciliation of course is an issue, again, as it was with ERA. We’ve heard concerns about issues when Medicare contractors change, that sometimes the banking routing information is not being switched to the new contractor so that requires another enrollment for the provider which is a burden obviously.
Enrollment challenges are a concern on EFT and ERA. First of all, health plans all require separate enrollment processes which is very burdensome for providers. CAQH CORE does of course have the EnrollHub multi-plan enrollment functionality which is great but not all plans are signed up to use that right now so we would really encourage more adoption of that centralized enrollment process. It would help providers a whole lot.
There’s also some concerns with the standardization of the information required in the EFT enrollment varying a lot between plans which is a provider burden. Sometimes, if a plan uses a vendor for EFT enrollment, the vendor requires separate form from the plan and that’s duplicate work for the provider.
And then we also heard a lot of variability in the amount of time it takes for the EFT enrollment to be processed by the plan. It could be anywhere from one to five weeks. And again, for a small provider, five weeks to wait for the EFT to start is a huge cash flow problem for them.
Again, there are some compliance issues with EFT. Forty-four percent of our survey respondents indicate they didn’t enroll in EFT because the plan said they didn’t offer it. Again, health plans are supposed to offer it upon provider request. There’s also report of some plans saying that a provider had to use a specific bank to enroll in EFT which sounds quite puzzling to us and not correct certainly.
And then we’ve also heard reports of percentage based fees being assessed for standard EFT payment and this is concerning, particularly given the fact that the providers are indicating that in many cases there was no minimal charge option offered to them when they were enrolling in standard EFT.
And then the final thing I’ll point to is the virtual card issue that Gwen so nicely kind of teed up for the providers here. As we all know, virtual credit cards are a nonstandard form of EFT that assess a significant, up to five percent, interchange fee on physician practices. They’re being used quite a bit in the industry right now. Our survey showed that 67 percent of our respondents indicated they had received a virtual credit card payment and 86 percent of folks out there felt that the use of the cards has gone up in the past year. So the use is growing.
And we would really argue that there is an impact on the virtual credit card use and the adoption of the standard EFT. I think a lot of it has to do with the way it’s being implemented and rolled out in industry. It’s almost exclusively an opt out model and so providers don’t know that they’re going to get paid this way until the first virtual credit card payment shows up.
Eighty-seven percent of our survey respondents indicated that they had no prior warning of this payment method until the virtual credit card payment showed up. And there’s also a lack of suggestion in the virtual credit card information about the other options available to the provider.
Forty-six percent of our respondents indicated that they weren’t aware that they could switch away from virtual credit cards to another payment method and that also there’s no information oftentimes in how to switch from the virtual credit cards to another payment method which would ideally be the standard EFT. So we feel that the lack of choice and the lack of information about alternatives is causing detraction from the adoption of the standard EFT.
In terms of recommendations, we would recommend some new operating rules on standardized enrollment processing time and also perhaps in the information in the enrollment form. We address some of these compliance issues with the percentage-based fees.
And again, we would urge there to be increased guidance on the usage of virtual credit cards, particularly we really would urge that these programs be required to be opt in for providers and also that providers receive clear instructions on how to switch payment methods if they don’t want to use their virtual credit cards for payment.
Thank you so much.
MR. SOONTHORNSIMA: Thank you. Priscilla.
MS. HOLLAND: My name is Priscilla Holland and I’m currently Senior Director of Health Care Payments at NACHA. I’d like to thank the Committee for the opportunity to testify on behalf of our member financial institutions.
NACHA is the not for profit association responsible for the administration and enforcement of the NACHA Operating Rules for the ACH Network. NACHA’s CCD+Addenda was identified as the format for the health care EFT standard.
In response to some of the questions that were posed to the panel, we do believe that the health care EFT standard is meeting the current and near-term business needs of the industry, allowing the health plans to utilize a safe, secure, ubiquitous and efficient electronic payment process to automate their payables process and reduce their costs.
Providers accepting the Healthcare EFT Standard and ERA for claims reimbursement reduce their receivables cost by $7.21 per payment, according to the 2014 CAQH Index. Some reported benefits of the health care EFT standard include improved cash flow, ACH payments are received faster from health plans than checks and allow providers to bill and collect remaining patient payment responsibility sooner and to speed up secondary billing. Improved automated claims payment reassociation between EFT and ERA using TRN reassociation trace number and reduced manual posting errors with automated reassociation and posting of transactions.
NACHA has documented case studies representing three different provider segments on the benefits received using EFT and ERA. A micropractice with Performance Pediatrics, a midsize physicians group with Midwest Center for Women’s HealthCare and a large hospital group with the HCA. Copies of the case studies were included with the written testimony.
Additional benefits highlighted in the case studies include Midwest Center for Women’s HealthCare has achieved a 90 percent adoption of EFT and ERA and has reduced the days of claims and accounts receivable from 25 days to 13 days. In 2014, HCA processed almost 89,000 EFT payments worth $3.8 billion and reassociated the EFT and ERA perfect payment posting. With EFT and ERA, HCA has reduced their processing costs by 70 percent.
Volumes. NACHA made changes to our operating rules incorporating the requirements of the health care EFT standard and included a standard identifier for those transactions allowing NACHA to quantify the number of health care EFT transactions processed through the ACH network. In 2014, there were a total of 149,300,000 health care EFT transactions processed through the ACH network with a total value of $876,000,000. The monthly health care EFT volumes increased 104 percent from 8,100,000 entries in January of 2015 to 16,700,000 entries in December of 2014.
Barriers. There are three barriers generally identified by providers when considering adoption in the health care EFT standard. Enrollment, that was mentioned earlier, of the EFT and/or ERA with each individual health plan, the mandatory acceptance of virtual credit card payments and additional percentage of transaction fees being charged by some health plans or vendors that deliver the health care EFT standard.
Alternatives. NACHA does not feel there are alternatives that can electronically deliver funds and the reassociation trace number to any provider that has a bank account. We do feel that HHS should fully treat the HIPAA standard transaction for EFT as it does all other HIPAA standard transactions as an actual required standard, thereby eliminating ambiguity in the costs that are being imposed on providers. Should HHS continue to treat the health care EFT standard as one option among many, it should give clear effect to the providers’ right to choose to use the health care EFT standard. When a provider chooses to use an alternative to the standard transaction, it should be only with the provider’s explicit and informed authorization.
Opportunities. We do not feel that there are alternatives to the current health care EFT standard that provide greater efficiency and effectiveness at a lower administrative cost. The use of virtual credit cards for claim reimbursement payments adds significantly to the provider’s overall costs to provide health care services.
We do feel it is critical that if alternatives to an existing HIPAA standard transaction are considered by the Review Committee a value proposition for all parties to the transaction should be reviewed. Alternatives that do not add value to all parties should not be considered.
And finally, with changes we think the Review Committee should require health plans offer the health care EFT standard to providers for the same cost the providers pay to the health plans today to receive their claim payment via check.
MR. SOONTHORNSIMA: Thank you. Robert.
MR. TENNANT: Rob Tennant, Director of HIT Policy for the Medical Group Management Association and again, I think you for the opportunity to speak on this transaction.
I think from our perspective, this is probably the most disappointing of the transactions in some ways and it’s good that it’s last on the agenda. Because I think this one was seen by a lot of us as an absolutely low-hanging fruit, a huge opportunity to drive out needless cost in the system yet some bad actors in the industry looked at it as an opportunity to make a fast buck. And I think that’s what’s most disappointing about it. I think George hit it right on the head when he said that they were simply passing the costs on. And he was nice to say, I’ll say to the providers, it wasn’t to anyone else.
But just to spread the happiness, it’s not just health plans. It’s our friends in the clearinghouse industry who have also done this as well. So I think people have seen this as an opportunity to make some money.
And I think it not only doesn’t achieve the success that we were hoping for but it sours the whole concept of Admin Simp for providers. It says even if I do go ahead and spend the money on a PM, my trading partners are simply going to find a way to get around it. And I think that’s why I think we, as an industry, and specifically CMS, needs to really step up and say, no, this is unacceptable, unacceptable business practices and try to push the industry to actually try to save some money.
But Heather walked through a number of the results from the research so I’m just going to focus in on a couple that I think are absolutely telling. And I think the fact that eight out of ten providers are hearing about virtual credit cards when they get it in the door. So it’s not like they’ve had that dialogue with their payers and given the opportunity.
And again, it’s not all payers and I’ll give you an example. The good folks at Aetna reached out to MGMA a number of months ago and said, we are planning on shifting away from paper checks and taking advantage of this new standard to save the company money and potentially to save money for providers but we want to make sure that communication goes out to providers.
So we were able to message out to our members, give them a date and tell them, okay, here’s how you go about getting your EFT. And if you don’t want it, for whatever reason, fine, you can always opt in to the virtual card. And I think that’s the type of communication that should have been done by every single major health plan in the nation. But, of course, it was not.
So one of the things of course we ask is why do you accept them but less than four percent say we accept virtual credit cards because it really helps us and it helps our workflow. So it’s been pushed on providers and if you look at the brochures that some of the vendors have been pushing out, it’s seen as this value add for providers but clearly I think that’s not the case.
Again, in terms of how to change, in terms of revenue, all of the signs are very positive in terms of acceptance of EFT. Providers do want to shift over to this. They use direct deposit to pay their employees. This is a very common way of banking. So they want to switch over. But again, there’s so many barriers to use of this transaction.
In terms of sort of overall concerns and you’ve heard these. It’s the cost and it’s really, if you think about it, it would be the equivalent of if we, as employees, if Kaiser Permanente sent your paycheck on a virtual credit card and you had to go to a terminal and get an immediate three, four, five percent decrease in your pay, that would be unacceptable but apparently, it’s acceptable for providers.
So I think we have to get away from the mindset that because practices accept credit cards for copays that they should be forced to accept credit cards for health care payments. I think that’s been told to us by some as a legal requirement, that they must accept the virtual credit cards and so I think that one has to be dispelled. And, of course, the fees are not transparent.
It clearly doesn’t take advantage of the transaction as well. I think Gwen, you brought that up, that all of the positive aspects of the reconciliation are all gone. So now it’s back to manual and no costs are saved.
And then I’ll say just a couple of things. We’re obviously very supportive of EnrollHub. I think it’s disappointing that more plans have not stepped up. Their argument when we’ve talked to them is oh, we have our own system and our penetration rate is so high we don’t need that.
But I would push even back a little bit further and say there’s absolutely no reason why we couldn’t enroll for all transactions one time. Because I think that’s one of the barriers to use of these transactions and why not expand that single sign on to all the transactions. I want to take advantage of 276, 270, 271, click, click, click and you’re done. Again, it will drive acceptance of the transactions.
So with that, I will stop.
DR. PREBLE: Dave Preble from the American Dental Association again.
So many of the comments that have been made are similar to the ones that we have in our written testimony that I’m going to try to make my brief comments even briefer. To suffice it to say that the ADA does agree with this whole idea that the 835 could be much better used with automatic reconciliation between accounts receivable and payable, the virtual credit card issue and the issue of the portals being used as a mechanism for reconciliation is costing a lot of money on the provider side.
And this is compounded by the fact that the 835 is not adopted at a rate anywhere near medicine than dental. So whatever problem that you’ve heard from the medical side, it’s even worse in dental.
One issue that they haven’t really talked about that we have with the remittance advice too is the message is used by payers on explanations of payments to dentists and explanations of benefits to patients. They’re not consistent with narratives associated with the CARC and sometimes the language used is inappropriate and misleading.
To be clear, there remain issues even with the CARC language but we’re working to correct that and if the CARC is used as a source of remittance advice language, at least we have the ability to have one place to go to remedy that problem instead of to each and every payer.
ADA believes that all such narratives should convey information in an accurate and non-prejudicial manner and by working with payers and CMS to get the CARC where it should be and the universal of CARC narratives, we feel that’s the best way to achieve that goal.
MS. EADES: My name is Stephanie Eades. I’m here on behalf of AHIP and specifically the Long-Term Care member companies of AHIP.
As I mentioned in my comments under Panel 2, and as I provided in AHIP’s written testimony, long-term care is a unique product. We struggle with how we fit into these standards and being able to use them effectively. So I’m not going to revisit some of those items but you can refer to that in my written testimony.
But I would like to speak to two specific topics relative to this standard and how they relate to long-term care. The first being the CARC/RARC codes. Long-term care finds it very difficult to map those codes to the uniqueness of the long-term care adjudication remark codes. In fact, we find that in a review we did of one carrier and how they were mapping their current EOB paper remark codes to those standards, we found that more than 40 percent of those codes were mapped to a CARC/RARC that said additional information will be sent separately.
Obviously, that’s not the goal of the standard and we are concerned about having a mechanism where we’re just communicating call us or wait for us to send you something in the mail. We know that that’s not the objective of the standard and we recognize that we need to find a way to utilize the CARC/RARC codes more effectively. But right now that’s not working real well and that might be a combination of an education issue, although what we’re hearing from our member companies is they feel like they don’t have the language that they need within those codes today.
The second issue which actually we feel like is of more concern relates to the utilization of the standard in the long-term care payment model. The vast majority of benefits for long-term care are paid directly to the insurer themselves. There is very, very little assignment of benefits that primarily is driven by the nature of the services that are being received and the service providers but that is a challenge obviously when we are obligated under the Admin Simp and the associated operating rules to build a standard when we know that providers are not going to utilize it. The reason being is they’re not on the receiving end of the payment transaction.
We find we’re in this scenario where we feel like there are times people say, well, if you build it, they will come. They will never come because they don’t have any vested interest because they’re not receiving the benefit payment. Obviously, that’s a concern within the industry where we’re having to make this kind of significant investment in building a standard that doesn’t really fit with the unique payment model of our product.
So we would ask the Committee to consider additional guidance on application of the standard and how that might or might not be applicable to long-term care or other types of supplemental health coverages that have similar challenges. In addition, we encourage the Committee to think about the uniqueness of the long-term care product, the payment model as they look at code development and maintenance of code sets.
Thank you very much.
MR. SOONTHORNSIMA: Thank you. Merri-Lee.
MS. STINE: I am Merri-Lee Stine, as I introduced myself earlier on the earlier panel, I am with Aetna and I am appearing today in cooperation with America’s Health Insurance Plans.
The ERA, the electronic remittance advice 835 transaction, and the associated EFT generally do meet the needs of the industry. However, as we’ve heard, the broken record, there are some barriers. I don’t know that I’m going to say anything particularly new or different that you haven’t heard today but my discussion will be around the barriers that we’ve seen and we’ve heard from our providers.
One of them, and it kind of went back to something that Rhonda mentioned during the claim status discussion, is around reporting pended claims. We have a gap in the reporting of claims, the overall lifecycle of a claim because the ERA doesn’t report them. In the 5010 transaction, pending claims were removed from the remittance advice.
So as we talked in the claim status, the perfect life cycle of a claim, I would use a 277 transaction to report pending claims but that 277 transaction is not an adopted standard today. And in today’s world, many payers have not implemented that transaction. So providers are experiencing a gap in the reporting of the lifecycle of that claim. So they’re using other avenues to try to get the information.
So with that information not in the remittance advice, we think that a gap could be filled by adding that additional reporting through the 277 pending status transaction because that is kind of a companion to the 835 where the 835 reports paid claims, the 277 pending status can report the associated claims that weren’t paid but were pended for additional information.
The last thing that I’d like to talk about in the barriers is the codes. There’s a lot of talk today about codes, the code lists. When we talked yesterday on the eligibility transactions, we talked about the benefits to be found in the externalization of the code lists and this transaction did that long before the eligibility did.
The claim adjustment reason codes, which are the CARCs, the remittance advice remark codes, which are the RARCs, are external. They’re handled by committees, two different committees that are outside of the organization that creates the transaction. They each serve different purposes in communicating the sentence, so to speak, that tells you what happened to that claim or line.
But they are two different committees so they kind of work independently to decide whether a request should be approved as a claim adjustment reason code or a request might go through as remittance advice remark codes. Independent requests are submitted to each. But unfortunately because they’re two different entities, sometimes a request will bounce back and forth between the two.
So we really do need to take care that when – and I sit on the Committee that does the claim adjustment reason codes, for those of you who don’t know – we do need to take care as those Committees to make sure that we’re thinking about the requester and not bouncing people back and forth.
But also once those requests are made, those changes can happen to those code lists up to three times a year, just like with claim status codes. We now have another entity who is CORE and they maintain the combinations of those code lists so the combinations of CARCs and RARCs for the uniform use rule.
If the Committee that I sit on makes a change to a CARC and that CARC is in that combination that CORE maintains, it’s like a set of dominos, that needs to be changed. There’s also, out of X12, an educational document that actually is a much more comprehensive list of the use of code combinations that they also have to maintain.
So there’s a lot that needs to go on around those code lists. I would just like to encourage everyone to be an active participant in all of these organizations although the remittance advice remark codes it’s a little hard to participate in. But the rest of it is pretty open and we encourage a lot of participation.
And I’m out of time but – I apologize, thank you for letting me testify today but the codes are very important to this. You’ve heard a lot of it today. So get out there and participate in the maintenance and upkeep as well as the code combinations through CORE and X12.
MS. KOCHER: Gail Kocher, Blue Cross Blue Shield Association.
Plans have reported that there is a significant use of the remittance advice in the electronic funds transfer and they see these again as very high-value standards. We do have plans reporting that their providers are using them less. And they again kind of attribute that back to the mandate on the provider side to adopt the 835 and the EFT is only when the providers choose to conduct those functions electronically.
In terms of barriers, just an additional comment to Merri-Lee, the CARC Committee is open from the perspective of people can come and be present in the meeting. The voting is a defined membership.
And Rob, your comment related to enrollment and disenrollment, I think we would want to be a little careful with saying you should be enrolling for an 835 at the same time you enroll for a claim status. It’s very different to enroll for where your dollars are going to be going than to say I want to conduct these other transactions. I think we can look at that but I think we wouldn’t want that to just be an automatic checkbox because of the dollars involved and there’s a greater possibility that something could be routed where you don’t want it to be routed. So just more of a – I think we need a little more exploration around that topic.
The other barriers that the plans report with the remittance advice is really related to provider behavior on operating rules. What they find on the provider side is some providers, not all, have a resistance to supplying banking information and the continue to have a preference for paper checks and remittances. This then results in plans having to supply paper checks and remittances to those providers that choose not to move to the electronic.
And plans do continue to be challenged by the co-combination operating rule, mostly from the frequency of the updates and the time limitations from update to effective date is often a challenge because these changes into the systems often impact multiple systems and the updates often are off cycle of other system updates that they’re working on.
And I would ask the provider group, let me finish my whole paragraph before you gasp, the plans would like to retain the flexibility for innovations in electronic payments. But that would be for when providers say I don’t want to move. It’s they are saying I don’t want to do this, they are opting, they are making the choice.
Plans really want providers to use 835 and the EFT but they see the credit cards as a viable alternative when the provider says, I’m going to opt in to that because I don’t want to conduct 835 and EFT. We also see that these alternate methodologies need to be based on full transparency, such as a mutual trading partner agreement including giving providers advanced notice before any new payment method is implemented. And that concludes our remarks.
MS. PHELPS: Ruth-Anne Phelps, Department of Veterans Affairs as a provider.
These remarks are organized in two sections. First VA’s successes and challenges with the operating rules and second our view on efficiencies moving forward.
As the largest integrated health care system in the US, VA sent and received over 65,000,000 health care transactions in 2014, with nearly 800,000 EFTs received, representing 81.1 percent of the revenue as of last month. Thanks to our partners, PNC Bank and the US Treasury, VA developed the electronic payment system across all 128 VA Medical Centers in 2003. We began receiving ERAs and EFTs from our first electronic payer, Aetna. In 2004, VA was awarded the NACHA’s Kevin O’Brien ACH Quality Award for nationwide implementation of VA’s health care remittance and payments processing system complying with the HIPAA electronic transaction standard.
When the industry began implementing ERAs and EFTs, VA experienced great success with the ERAs but until the operating rules were published, struggled with EFTs. To prepare for the 2014 compliance deadline, nearly 200 payers were contacted by us to determine their readiness. The success from this payer outreach program was significant, resulting in over a 164 percent growth in the number of tax ID numbers from which we receive EFTs. Smaller growth was seen for ERAs, but growth was realized nonetheless.
With regard to our view on efficiencies moving forward, perhaps the most frustrating aspect of the current operating rules is that they continue to allow too much discretion on the part of the payer and health care clearinghouses. Instead of providing for administrative simplification, some of these discretionary aspects actually create further work for the provider.
First of all, one example is how payers and clearinghouses are continuing to partner to provide credit care payments to providers, even though the CCD+ EFT is named in the operating rules. When questioned about this practice, the VA has been told that credit card payments are electronic so these payers are meeting the ACA mandate. Credit card payments don’t allow reassociation to occur and therefore don’t allow auto-posting thus requiring many manual interventions. And most importantly, providers are charged for payments with credit cards, either a percentage or a flat rate. This is not Administration Simplification and it is not cost effective.
There is also a need to further clarify the CARC and RARC codes as you’ve heard from other people as payers continue to utilize discretion in the use of these codes.
Finally, enrollment with health plans for ERAs and EFTs also remains challenging. Requiring separate enrollment processes for different tax ID numbers at a payer is arduous. Once a provider submits enrollment forms for a payer, all TINs that payer utilize for payments should be automatically enrolled for EFTs. Some payers are even requiring re-enrollment when the payer makes an internal system change. This often occurs without even notifying the providers and the only way you know that that’s happened is when your ERAs or EFTs stop flowing.
So the VA encourages NCVHS to continue to refine future operating rules to prevent payer discretion around the issues highlighted.
I hope these remarks have been helpful, and I thank you for the opportunity to address the Committee.
MR. SOONTHORNSIMA: Thank you. John.
MR. EVANGELIST: This is John Evangelist again, CMS. Specific to the remittance advice, we believe the currently adopted standards, operating rules, code sets and identifiers used in the transactions do meet CMS business needs. Medicare fee for service issued 62,500,000 electronic remittance advices during the calendar year of 2014. The current Medicare fee for service percentage of remittance advice transactions being conducted electronically is 70 percent.
We’ve not identified any barriers in implementing the remittance advice. At this time, there’s no specific to the 835 remittance advice Medicare does not recommend any alternatives. Medicare believes the continued collaboration with future versions of the X12 835 standard will yield greater opportunities for improvement.
Medicare fee for service is in the process of ensuring that all CARC/RARC code combinations included in the X12 835 remittance advice comply with the operating rule 360 uniform use of CARCs and RARCs. Medicare is abiding by the CAQH CORE 360 rule for use of the CARC RARC code combination and is using the most recent version of the CORE code combinations.
That’s all I have to say on the 835. Thank you.
MR. SOONTHORNSIMA: Thank you. Melissa.
MS. MOOREHEAD: Hi, I am Melissa Moorehead, National Medicaid EDI and Health Care Operating Standards, otherwise known in the context of this discussion as Opposite Land.
I’m going to concentrate entirely on lessons learned because I do hope that we can use this opportunity to focus on some of the real differences between Medicaid as a payer and commercial industry. Medicaid was actually ahead of the game generally when it came to offering EFT and in fact had gotten some flack in states where they were actually requiring providers to accept electronic funds transfer payments.
So most of our NME OS participants had the capacity in place and 835s in place, sometimes even required before the adoption of the standard and the operating rule and this is why it’s a good case study in the difficulty of mandating compliance with standards and operating rules up against other regulations and in the system development life cycle. Because for every single one of our participants who already offered EFT and ERA, there systems had to be changed in order to comply with the operating rules. And not just the Medicaid systems but other state systems such as treasury had to be changed to meet rule requirements in order to meet those rule requirements and not anything about the business process itself. And this was often very costly.
The minimum enrollment data requirements – well, I’d like to say I have no doubt that the enrollment process for Medicaid is a barrier for many provider. The 100s of pages of regulation that Medicaid agencies have to read through in order to set up provider enrollment processes and systems is indicative of that. However, in that world, Rob, the enrollment in EDI was a check box situation. At any time you could come back to your enrollment, decide what you wanted to do EDI.
So there is already a streamlined process in place. Implementing the EFT ERA enrollment requirements meant investing in an unneeded layer of complexity to make it in format requirement because the minimum standard – the minimum data rules became a de facto standard. It did not alleviate the need for the rest of the enrollment process.
States are also concerned and continue to report that the requirement to collect some data that they are not able to use, such as the provider preference for payment rollups further confuses the enrollment process and increases call center volume. Since neither is an option for some rolling up to NPI or tax identification number is usually a requirement in a state and not an option. The requirement to collect the preference seems unlikely to result in administrative simplification. It is confusing.
So there’s also a lesson to be learned regarding the make up of the bodies and processes involved in making the standards and operating rules that occur in response to a mandate instead of market forces or business needs. In the case of EFT enrollments, the operating rule may work when the relationship is between a provider and a payer of health care but the relationship between a provider and a state is much broader with most providers being also citizens of the states and taxpayers. State Medicaid agencies are often governed by laws regarding subrogation as well as the multiple regulations regarding how to qualify providers to provide Medicaid services.
So some states never needed to segregate the provider population in their vendor tables but the operating rule there again required them to do so in order to offer the proper EFT enrollment process as opposed to just enrolling to receive payments from the state. And in general, many participants reported that their provider populations had not expressed that EDI enrollment was, in itself, any barrier to adoption.
The late stage in these cases implementation of the standard and operating rules has caused much undo confusion, increased cost in outreach and call center support and all to respond to a change that was intended to benefit providers but didn’t address any actual need in these particular arrangements.
So I went into this level of detail in order to underscore my hope that the Review Committee, HHS and all the bodies involved with carefully consider differences between SMA, state Medicaid agencies as payers and commercial payers in their relationships and within the regulatory environment. We are all investors in Medicaid and we don’t ask for any return on that investment other than increased access to health care and improved health. We should demand that our money be not spend on required compliance projects just for the sake of compliance.
Thank you very much for hearing my testimony.
MS. GABEL: Annette Gabel, ACAG Consulting, representing NCPDP today. The NCPDP members use both the 835 and the NACHA ACH CCD+ records. The 835 is typically created by the processor PBM and sent to the pharmacy only for the sole purpose of the pharmacy to reconcile to the EFT because the point of sale claim response that goes back to the pharmacy provides the information about the payment of the claim.
We surveyed our membership, also had some conference calls with them so I’m going to provide you some of the information that we received. As far as value, overall they find that the 835 and CCD+ meet the pharmacy business needs. We actually had one member report to us that his cash application labor had been reduced by 90 percent as a result of the implementation of the 835 and the EFT.
NCPDP developed specific implementation guidance that assisted the pharmacy industry. We were required to use the 835 through HIPAA but NCPDP had its own pharmacy remittance. So in order to help the industry we created guidance documents. I’m not going to read through all the documents, they’re listed in the written testimony.
As far as volume is concerned, we’ve received the following information about monthly volume. The X12 835 we were told there’s about 31,000,000 to 37,000,000 transactions conducted a month and as far as the CCD+ records, 17,000,000 to 24,000,000 transactions per month.
The request for changes, there were no changes identified that needed to be made to the current transaction standards or the mandate to use them. As far as the status of the CARC and RARC code sets, NCPDP had actually developed a mapping document that contained recommendations on the use of CARCs. NCPDP uses reject codes and the mapping that we created gave them the information about how to use the CARCs and RARCs and reject codes in the 835.
As far as the operating rules go, we had participated with CAQH CORE in Phase III and included some pharmacy-specific scenarios so we’re fine with they provided because it met our needs.
As far as barriers are concerned, there did not seem to be any barriers. The only thing that was reported to us is that some of the independent pharmacies found the modifications that were required to be cost prohibitive so they weren’t all onboard with using it. So we do have some small independent pharmacies that are still getting checks and paper statements unfortunately.
And as far as alternatives were concerned, there were no known alternatives to the process that’s in place today.
MS. WILSON: I am Sherry Wilson, representing the President of the National Clearinghouse Association, the Cooperative Exchange and also Executive Vice President and Chief Compliance Officer with Jopari Solutions. Thank you for the opportunity to submit testimony on behalf of our membership representing 80 percent of the clearinghouse industry.
The results of our testimony today are based on the 2015 WEDI Cooperative Exchange Clearinghouse Transaction Survey. As you can see, 100 percent of the clearinghouses support the ERA transaction.
In terms of value, the clearinghouses are seeing a considerable number of ERA and EFTs being exchanged which has been increasing in recent years due to the standardization and the requirements that support the EFTs. We’re also seeing return on investment to perform ERA and EFTs together is really motivating increasing provider adoption. However, our findings indicate the value of the ERA transaction is still not fully realized due to gaps in business processes, data content, integrity and compliance issues.
When we look at the volume from the survey that we did, you’ll see the remittance advice formats, that 75 percent of the provider, which is a significant increase over the past years, are using the ERA and we still have some web format portal users at 14 percent.
In terms of barriers, what we’ve identified is that again a theme that reoccurs through our transaction utilization we still see practice management systems not supporting the auto reconciliation resulting in manual workflow a process which impeded adoption.
The other key finding we saw was the reconciliation process between ERAs and EFTs is still an issue for many providers, in many cases, due to noncompliant activity such as multiple ERAs for single EFT or failure to supply the required reassociation data in the file.
The other issue we found was payer systems may create the payment and/or ERA files grouped differently than needed by the providers. They are using TINs versus NPI.
And the other really major industry issue we see to adoption is the balancing of the ERA transactions. There is no recourse and what we’re seeing is as clearinghouses we may be getting ERAs coming that are not balanced and there’s on way to return those often to the payer. So now you’re stuck, are you processing those or not processing and often they are going to the provider where it’s not balanced and then the provider cannot do auto reconciliation on the back end.
What I would like to do is jump very quickly to the CARC/RARC opportunities and recommendations. What our findings are here is to achieve the ROI of the ERA, the reason and remarks for adjustable denials must be assigned to the most specific actionable codes and programmable to remove the cost associated and manual provider intervention.
So what we’re seeing is providers are still reporting issues with code combinations not being actionable. To that, as was already stated, that the X12 has an X12 Technical Report Type 2 as called the Code Value Usage and Health Care Claim Payment and Subsequent Claims. This is the encyclopedia of CARC and RARC co-combinations and what we’d like to recommend is we encourage that CAQH CORE and X12 work together in collaboration to begin to develop joint comprehensive instructions on how to use these CARC/RARC resources in order to obtain, one, the most comprehensive set of codes, scenarios and actionable mapping.
Second, the additional data can assist payers and vendors with determining the most appropriate codes. And that may be outside of the current business scenarios in CARC/RARC code combinations.
And third is actionable CARC/RARCs applied to the highest specificity that can automate payment reconciliation for all lines of business. Now part of our concern is the recommendation of the coordination of this effort between CORE and X12 to leverage industry code application resources, to enhance the transaction value and facilitate an automated workflow reconciliation.
And part of the issue may be, to help move this forward, is the need for funding. So we’d like just consideration to look at funding to bring these organizations together to maybe help increase the value.
And lastly, looking at practice management systems becoming business associates or under HIPAA to make sure we have the providers enabled to have automated workflow reconciliation. And lastly, as an industry, we address the barriers that we’ve talked about today prior to adopting a new 835 version.
Thank you for the opportunity.
MR. SOONTHORNSIMA: Stacey.
MS. BARBER: I am Stacey Barber, ACS X12 Chair. I have said that many times over the past couple of days and I will probably say it again later when we go to questions.
I want to start with barriers and one thing that I want to note with barriers is a lot of the barriers that I’m going to bring up have already been noted by others on the panel. And many of the barriers are not due to deficiencies in the 835 transactions but as I have said with other transactions, and sounding like a broken record again, deficiencies in the way the transactions are implemented.
So we’ve heard about the balancing issues and the 835s are out of balance. We’ve heard about, from Sherry, that payments are a mixture of being based on NPI and tax ID and this causes confusion within the provider organizations on being able to post and work their payments, often resulting in having to manually split a payment between multiple providers.
There are also some deficiencies in the current provider level adjustments because the reason codes are not always detailed enough for providers to be able to apply it resulting in manual application of those adjustments at the provider level, again, from the reassociation of the EFT not formatting the TRN02 correctly in order for the payment to be associated with the 835.
Another deficiency, and now we are moving into some transaction deficiencies that are being addressed and corrected in the next version, and one is for dental reporting, it’s not real good currently for dental reporting and some more specificity has been added to the transaction to allow better processing for dental payments.
Another item is sometimes providers have issues with the posting of the 835 because they can’t determine what the claim type is based on the transaction. Is it an inpatient outpatient dental professional and also how was that claim originally submitted? Was it on paper or was it submitted electronically?
We’ve heard talk about these virtual payments. One of the deficiencies in the current transaction is there’s no way to indicate that that payment has been made by a virtual card. So when that virtual payment shows up, guess what, you’re not going to know it. As a standard setting organization, we need to be able to support the different methods for which payment can be made regardless of what outside of any other requirements of how payments should be made.
And Merri-Lee pointed on this point is that the transaction doesn’t support pended claims. So there is the accompanying 277 pended claim transaction that if implemented would help augment the 835 in providing claims that pend out of adjudication.
So with that being said, some of the changes that have been identified and that we’re working on that provide opportunity for the future version is – we talked about this earlier under the COB setting, is that we have created a new segment within the transaction that will allow CARCs to be associated with RARCs which will make the processing more friendly to be able to understand what happened with the adjustment.
The PLB adjustment reason codes have been moved to an external code set as many other code sets have been moved to external which will allow for more timely updates and be able to be more specific in nature which will hopefully facilitate being able to post those provider level adjustments automatically. There have been changes to the base standard that allow specifics for dental reporting to allow tooth information to be provided within the 835 on payment.
There’s also an indicator that has been added that would indicate claim type as well as the method in which the claim was submitted. And finally, on the improvements from the virtual card perspective is we have included a payment type for virtual cards. It’s in the development for the next version.
One thing that I do want to note is that there was a comment made, and I believe it was by Gwen, that if a virtual payment is made then you can’t report CARCs and RARCs and that is absolutely not true. The 835 does still support the ability regardless of what method the claim was paid to report the adjustments.
And then we do also see the opportunity that many people have already talked about with the educational opportunities are available. ASC X12 supports two published technical report types two for the 835 transaction. One of them already being mentioned which is the CARC/RARC encyclopedia which provides education on the use of the CARCs and RARCs and there is also a real time processing TR2 that is published that gives guidance on how to use the 835 in processing real-time adjudications.
Again, broken record, but as people identify gaps within the transaction to data content there is the change request system within ASC X12 that can be used for those gaps to be filled. And we do feel that if it is data content related it does need to reside within the actual transaction, the TR3 and not be filled through an operating rule.
And I thank you all for the opportunity of spending the past few days with everyone.
MR. SOONTHORNSIMA: Thank you very much. Wow. Let’s go ahead and get to the comments. No comments.
MS. GOSS: Maybe we need a five-minute break and then maybe come back and do that. There was a lot of content there. I know it was a lot of similar content but –
MR. SOONTHORNSIMA: Okay, let’s do that, 10 minutes.
Agenda Item: Review Committee Q & A
MR. SOONTHORNSIMA: Okay, comments, questions.
DR. CHANDERRAJ: This is Raj, I want to make a comment. The thing is from going to this Committee hearing, what I realized is that the business end is okay but the medical end is like trying to fit a square peg in a round hole. We’re not there yet. I think going through the process, however will get us there but it may take five, six years or ten years to get there to achieve all – to correct all the things that we addressed today.
But I think we should move forward with this process. But in the process also not penalize the end user, the provider, who is taking all the burden from all these regulations. It’s the end user that is suffering and we need to prevent the end user from suffering to encourage them to participate so we can move forward with the whole process. Thank you.
MR. SOONTHORNSIMA: Thank you, Raj.
MR. BRUNS: Chris Bruns, President of HATA.
Had I been sitting on this panel, I would have merely been an echo of your collective, extremely knowledgeable voices. It’s great to hear you all speaking on this topic. HATA does understand the importance of the low adoption in general of ERA and especially EFT processing. And early this year, we issued a call to action on this topic.
And so our call to action states that HATA will be working toward the creation of a nationwide public education campaign to one, raise the awareness of the benefits of electronic remittance and electronic funds transfer. It’s all very obvious to us but adoption rates still aren’t as high as we want them to be. To increase awareness and remove the barriers of provider adoption, and number three, actually increase provider adoption.
And so we’re taking the following steps. The first, we’re sharing industry best practices of increasing ERA and EFT reconciliation and improving the efficiency of an automated end to end workflow process. So that’s just sharing knowledge.
Two, in April, on the Sunday before HIMS, we convened an industry ERA/EFT Summit in Chicago. Several of you in here were there. We had about 30 participants. It was a great afternoon that we spent in Chicago, prior to the kickoff of HIMS where we identified strategies to encourage industry adoption of the ERA and EFT standards and supporting CAQH CORE operating rules.
And finally we’re partnering with NACHA to raise awareness of the ways banks and practice management vendors can collaborate to increase ERA and EFT matching. So it is an important topic to us and we’re going to kind of work on our own here to see what we can do to help this effort that we’re all undertaking.
MR. SOONTHORNSIMA: Thank you, Chris. Are there any more comments?
DR. PREBLE: Thanks, Dave Preble for the ADA.
I just wanted to make a comment on something that Gail said about – first of all, I acknowledge and even sympathize with that idea that providers have a persistent preference for paper. And I just wanted to make the comment that the way that the virtual credit card thing is being rolled out, maybe it could be done differently but the way it is being rolled out is only going to entrench them in that. That’s what we’re seeing. It just makes them – they’ll opt out to paper and then they’ll say I don’t want to deal with electronic anymore. So I sympathize with where they are but I think that the way that this electronic card thing is being done, it’s just going to entrench them.
MS. KOCHER: Thanks, Dave. I completely understand that and that’s why we support that being done only again with teat full transparency that the provider having the opportunity to opt in as opposed to opt out because we share those same concerns that providers are being forced into it, aren’t aware in some instances of the fees so we do share those same concerns.
And we’re doing what we can to educate our plans or the Blue plans. I can’t speak to how other plans and especially non-AHIP plans might be approaching it. But at least from the Blue perspective, we would only want that to be done in a collaboration, a mutual agreement, not something that’s forced upon providers.
MR. ARGES: I think the discussions the last few days have been very important and I think the takeaways from my perspective are there needs to be greater collaboration, multi-stakeholder involvement. We have a wealth of organizations that are out there that do a Yeoman’s job of their perspective work whether it’s CORE or whether its X12 or WEDI, there’s a role for each one of them.
But as organization, we need to basically sit back a little bit, take a look at what is working well and with whom it’s working well and can we then begin to showcase to those who are having a struggle with embracing what others are doing very well and show it to them because I think this CAQH Index that shows perhaps a billion dollars that’s left on the table is something that is not chump change. It’s something that we can basically get engaged with and improve the Admin Simp activities in a way that benefits everyone involved.
Although I think the CAQH Index indicates benefits to providers a little bit more but nevertheless it benefits the patients because inasmuch as we can drive down costs that means that there are opportunities for other things that providers can do to help patients. So from that perspective, I think it’s kind of a rallying call.
I mean we’re trying to do our job with respect to educating our leadership to basically not forget about Admin Simp. And I think it would be beneficial for us, and if the Committee can send a loud clear message that it might be something that we do by deep diving into one or two transaction standards as a starting point. See if we can’t notch up the utilization of those in a way that does benefit and then showcase what others who lag behind were able to do and the improvements that were made.
Because when we interviewed some of the people on the remittance advice side, they showed that they saved 15 FTEs on the remittance side. That’s remarkable. And so I think these are things that we need to kind of collectively not work in independent silos a little bit but really kind of partner a little bit more than what we have in the past and just educate, educate, educate.
MR. TENNANT: Rob Tennant. Gail mentioned something that reminded me that the problem with electronic payments is not just virtual credit cards but to my knowledge, it’s the only HIPAA transaction where a payer or vendor is charging for the privilege of the provider getting the transaction. So our survey showed that more than one in ten are getting charged a fee for accepting EFT. And again, that flies in the face of Admin Simp.
And it’s interesting, Gwen, you mentioned that there shouldn’t be excessive fees charged for the transaction. What’s most telling I think is that CMS actually had an FAQ on the website which said you should not charge excessive fees but somehow it has disappeared. So it’s now gone. And I’m not sure if they’ve decided that folks can charge whatever they want to charge or it was simply a clerical error but we’re certainly trying to find out what happened to it.
And I’m reminded, not to go into another area of HIPAA but in the preamble to the privacy rule, providers are told that they can only charge cost based, reasonable cost based fees for patient getting a copy of the medical record. And the same thing should apply to the transaction standards.
If a health plan wants to charge for EFT it should be cost based which NACHA tells is somewhere around 14 cents. So if they want to charge 14 cents for the transaction so be it but I think we need to get out of the, again, the mindset of taking advantage of providers who simply want to take advantage of Admin Simp.
MS. GOSS: So Rob, when you were – Gail jogged your memory, you just jogged my memory along a similar line and I’m not sure this question is for you or maybe you and Chris or others. So I am one who will use either my HSA or my credit card to pay for my copayment. And if I go to maybe a clothing vendor or a food vendor, I know that for them to enable me to use my credit card, they get charged a fee or some kind of service fee for having that capability.
Is that true in doctor’s offices? Is it the two to four percent – in contrast, it’s not like the virtual cards are doing like two to four percent of the total fee so that’s a little bit different but I just wanted to see if there wasn’t a fee to a provider to have that feature and is it similar to other ones. How big of a charge is it providers to have that capability?
MR. TENNANT: It is the same. There’s no difference between running a credit card for a patient copay or running a credit card for virtual credit card payment from the health plan. So the fees are the same. But the argument is that you have a service for the patient to allow them to pay either with check, cash or credit card as a convenience for the patient but when it’s the health plan giving this credit payment then it’s essentially cutting off four percent from the payment amount.
But what makes it more potentially nefarious is, again, the rumor is that some of the health plans and vendors have cut deals with the credit card companies so they’re sharing the profit so to speak. And that’s again very, very unfair.
MR. PREBLE: The other part about that, particularly in the dental world, is that again when you do this with the patient, it’s a convenience to the patient as part of doing business. But if you’re already accepting a deeply discounted fee from a PPO or something like that and then you add anywhere from two to five percent, or whatever it is, on top of that, it’s just not fair. It just drives the providers crazy.
MS. HOLLAND: This is Priscilla with NACHA.
I would like to respond to one of the statements on the virtual card. And when you’re looking at a provider taking a credit card from a consumer or their patient, what you’re looking at is them paying an interchange fee or a fee for accepting the card that shifts the rest from the provider to the card issuer. So if the patient doesn’t pay the bill, it’s the card company that is running the risk and it also guarantees that that card number is good.
If a provider is accepting a virtual card from a health plan, that interchange fee is paid for the same reason, to shift the risk associated with nonpayment and be guaranteed that the card is valid. So you’re asking the provider to take or lose three percent of their $5000 payment for something that they really don’t need to pay for because there isn’t risk between the provider and that health plan.
MR. SOONTHORNSIMA: Thank you. Merri-Lee.
MS. STINE: The topic I was actually going to comment on was around making improvements to the transaction and working collaboratively. It was really back to George’s comment about working collaboratively together and finding the best practices, showcasing what works but also – and we see this in the standards development industry –
We get together, we talk about how the transaction should work but sometimes different entities are a little uncomfortable sharing their shortcomings because maybe it is a compliance issue or maybe I don’t want to share that I have this compliance issue.
And having – I’m going to blue sky for a moment – it would be really great if we had this nice little safe zone where we could all go and say, look, I’m not doing this well. I need to come together and I need your help but without retribution or without judgement. And I think that entities are afraid to do that.
I think they’re afraid to come and say, look I can’t balance my ERAs, can somebody help me with this? Because you don’t want to come out and say I can’t balance my ERAs, for lack of a better way to put that. But it’d be really nice to have a collaborative place where people could go to get that education or to get those suggestions from people who do it well.
MS. NARCISI: Jean Narcisi, WEDI Chair. I just wanted to offer up again that WEDI is here to help. We could convene something with stakeholders and we actually have a conference coming up in this area at the end of October so hopefully we can pull together the industry.
MS. LOHSE: We want to echo that too. Collecting ROI, case studies, making them free and I think we all need to be more creative about how we share things. Social media drives different people getting to those that aren’t at the table.
We joked about the SERMO site, which is a physician only community site online. I think they have over maybe 130,000 only physicians and we had some tweets from what was then the CEO of MGMA and that’s a new way to get out to different folks. So how do we get more creative for the people that aren’t at the table because there are other ways to communicate than the ones we’re using today.
MS. GOSS: I like what you’ve suggested because one of the other themes that we’ve all been talking about or maybe even some of us talking around, is the issue with the dollars and the resources, regardless of the environment. And I’m talking from the SDOs to the vendors to the plans to the providers and associations and everyone in between, it’s challenging to try to get out to those who I would call not the usual suspects at the tables, the standards development, et cetera.
You want to hear from them but how do you do that? How do you get that feedback that Rob mentioned? X12 can’t afford to do a roadshow. They’re a volunteer organization. So I think the creative aspect and pushing of information and tapping into sort of the channels that all of you have is a really good idea.
MS. LOHSE: I know we ended up using a firm for the social media site because we had to build a landing page that was interactive and what we would have created versus what they created was vastly different. They used the tools that the early adopters created but they presented it and made awareness happen in a much different way.
MS. GOSS: So maybe one of the things, back to WEDI and CORE’s willingness to help educate and advance this along with the other parties, maybe it’s about how do you get together and leverage the limited dollars and resources you already have to try to have that big effect because I don’t know that the government dollars can be found or stretched any more than they already are.
MR. SOONTHORNSIMA: Questions?
MS. KOCHER: With respect to the education, I think part of that message is always important because you need to get to the business. So many times I think we find when people see the word HIPAA, they immediately go, oh, that’s EDI and they turn it to the technical folks and the technical folks are important too but if the technical folks don’t understand and engage the business we can’t figure out if the technical is going to support those needs.
And I would imagine that that thought process happens across the whole spectrum of stakeholders, not just at plans or providers or whatever. So I think if we can figure out a way to hopefully message that a little better, it would help us as well.
MR. SOONTHORNSIMA: Let’s go to Michelle real quick.
MS. WILLIAMSON: Some advisers stating regarding charging for standard transactions, there are several provisions in the rules which actually prohibit this.
PARTICIPANT: Thank you, Stanley.
MS. WILSON: I just want to follow with Gail’s comment and also with WEDI with education. A group that we don’t have at this table are the compliance officers within all of our organizations and when you look at compliance with the transaction and especially with the transaction not balancing, it’s a huge issue, especially because they just continue to get passed down. They can’t be processed often by the clearinghouses or the practice management systems. But there’s no recourse sending it back to the payer rejecting everything.
But I think there’s an opportunity with the WEDI, we have security and privacy committees and working together to bring and educate the compliance officers within all of our organizations of the importance of compliance with these transactions and business processes. Because when we talk sometimes I’ll call a compliance officer of another organization, it’s amazing how all of a sudden, oh, we definitely want to make sure that those transactions are balancing, how can we do this. So I think there’s an opportunity. That that’s a missing component that we do not have at the table that WEDI could help facilitate that education.
MS. KLOSS: Bob, this is Linda.
Two comments on that. It also occurred to me today and yesterday that the other group we didn’t have at the table was the HSMA, the revenue cycle management group which are real key to this and I think in terms of future review committees we should bring that group in.
But it’s been occurring to me as we’ve talked about education that we sometimes approach it as a one-off activity and we have so much turnover in health care that across all educational challenges, we need to think about this as ongoing, almost like we’re continually adding to the competencies and assuring competency assurance around all of these complex topics. Not just do a seminar. So I think we may need to rethink our recommendations for education.
MR. SOONTHORNSIMA: Thank you, Linda. Are there any other comments?
MS. WILLIANSON: Just one additional, Nakasin, he just said that he can provide those to the Committee if you want those provisions.
MS. PHELPS: Ruth-Ann Phelps, Veterans Affairs.
I just want to make a comment about compliance. Nobody here has mentioned the fact that when a payer is noncompliant you can report to CMS. And while I realize that small providers may be reluctant to do that, I do believe you can do it anonymously. We don’t do it anonymously. We just report.
But we reach out to payers. We have an active payer outreach for all of the transactions and we reach out ahead of the standard to see if they’re going to be ready, when they’re going to be ready, we will work with them. We find that education is the first thing. We find so many payers, in this room, at WEDI and all the national organizations, you see a lot of payers represented but there are a lot of payers that aren’t represented.
You would be surprised the number of payers we reach out to. They never heard of the law. They don’t know the requirement. So the first phase we educate them. We send them copies. We educate them. We work with them if they will work with us to comply with whatever the standard is, EFT being the most recent one.
But, if they don’t work with us at the business level, we send a letter to the CEO of that organization and if they don’t work with us to comply or make some progress toward complying, we send a second letter. After the second letter, if there’s no movement we report them to CMS without fail.
And I just want to say, on a positive note, CMS has never failed to accept what we submitted to them and the payers always comply. We have had 100 percent success rate with CMS. And I realize that because we’re the VA we don’t care if there’s retribution or whatever, we’re not afraid. But I would encourage reporting. CMS has been very supportive with us once they made the comment to us I don’t understand why you’re the only one reporting. Well, probably because we’re not afraid. But it is an avenue to achieve compliance that people aren’t using.
MS. MOOREHEAD: Melissa Moorehead, NPHI.
I am very interested in the usage of that too because Robert made some comments yesterday about increased use of fines to help catch the attention of noncompliant plans. But I would like to point out that I think it’s the fines associated with noncompliance that are a huge barrier to some working toward compliance once the implementation dates have come and gone, the risk involved in trying to air an issue and work on it is really really great. I know this is why the NME does operate under the cloak of anonymity on calls and things because it is very very hard to share those kinds of issues in an environment where you don’t want to be the one to bring a $4,000,000 fine down on your agency.
And then there’s also, in my mind, it’s complicated by the fact that this is a government paid services so the joke is do you write your fines into your APDs to make sure that you’re covered for your implementation projects going late –
I think there’s more at the education and the working toward compliance issues because we have been stressing the fact that whatever OESS turned into hasn’t levied fines yet as a facilitator toward using the system to help work toward compliance. In the face of increasing fines, it’s just I think it’s going to be a little harder even to do root cause analysis and help people toward that.
MS. WILSON: Just real quickly to your point, we mentioned yesterday this is also a concern with the clearinghouses, working with the payers and reporting even though it’s anonymous. And we also advocated the publication more of CMS of successful remediation that comes out that really needs to be heard so people are more encouraged to use the process and again more awareness of the industry about the process I think would help tremendously. Very encouraging.
MR. TENNANT: Melissa, I certainly hear that it’s a concern for Medicaid. But frankly, if the Medicaid agencies and other health plans can’t be compliant with the standards then there’s something wrong with the process and you shouldn’t build in fines to your budget but you should build in to your budget some capital that allow you to meet the standards.
And another way, we talked about fines, I tell you one thing would change the industry in about 30 seconds would be qui tam suits or whistle blower suits, where the whistle blower would share in the award. That’s what they do in Medicare fraud and that’s what they’re going to do with privacy. They’re going to share the fines with the individual who brought the complaint forward. So for those payer representatives around the table, certainly a huge opportunity.
MS. PHELPS: Ruth-Ann, VA again.
I just want to say that we actually received a whistle blower complaint, anonymous, had no idea who it was, reporting a payer that wasn’t complying. We already knew they weren’t complying and there was no way to get back to the person, obviously. And they didn’t realize that they could file an anonymous complaint with CMS which I would like to have shared with them. But it was interesting, we’ve never received anything like that. It was sent actually to the Secretary of Veterans Affairs about this one payer that was not complying with the standard.
Agenda Item: Review Committee Discussion of Key Themes, Findings, and Next Steps
MR. SOONTHORNSIMA: No comments? Okay, we have heard a lot obviously over the past two days. Certainly, we need to be able to memorize all of our names. But there are some words that we kept hearing over the past couple of days and I’ll just rattle them off.
I don’t mean to say these are themes but it will be interesting to see the contrast as well as some things that are complimenting like adequacy, standards adequacy versus usage and implementation. We kept hearing that. Regs, rules and business models, that sometimes are opposing one another as well as new business model. Priority, cost, returns on investment.
Sufficient information for conducting business versus alternative venues, like portals. Covered versus not covered entity. Compliance and education and awareness. Compliance versus choice, we heard that too I think. Collaboration, boy there was a lot of love here. And we can go on for days and hours with songs. Making Admin Simplification work, make that work. Making the Admin Simp work is really the passion that we can feel in this room and really genuine. You guys are very genuine and passionate people.
So lastly, I just want to thank, on behalf of – well, before I say anything else, Alex.
MS. GOSS: I think you’ve summarized it well.
MR. SOONTHORNSIMA: On behalf of our Committee, Subcommittee, we just want to thank you for your time, your energy, your passion and how much time and dedication and your membership who came together and provided very valuable input and feedback. So how about a round of applause for all of you. Thank you so much. And we did it with how many hours left on the agenda.
We also want to thank the members of the audience who joined us and how many have we had over the past couple of days now?
PARTICIPANT: About 70 each day.
MR. SOONTHORNSIMA: So really thank you for your interest and for participating. And we do want to thank our staff.
MS. DEUTSCH: I did this yesterday and I’d like to do it again today please. So I understand the point of being repetitive but I think that it goes without saying that they deserve to have the repetition.
So I’d like to acknowledge Marietta Squire who even though she’s not here today, she did a lot of work on this before she went on vacation. And we have a wonderful group of Jeannine Mtui, Jacqueline Clark, Gwen Mustaff, Katherine Jones, Debbie Jackson, Jeff Agnew and Chanda Chhay. If it wasn’t for them, we would not have been able to go through all we’ve done with having everything available in the media, the copies of all of the written documents that you all sent. We had a lot of issues with people not being able to connect and they’re dealing with it and the questions they dealt with. So I’m going to ask you if you would all like to give them an applause.
MR. SOONTHORNSIMA: Okay, very good. And of course last but not least – yes, Suzie.
MS. BURK-BEBEE: I would like to say in the 16 years that I’ve staffed NCVHS, I think Terri is one of the best lead staff I’ve ever seen.
MR. SOONTHORNSIMA: Kudos. Thank you, last but not least, thank you our members of the National Committee and Subcommittee on Standards as well as the Review Committee. With that said, thank you very much, have safe travels and enjoy the rest of your time. Meeting is adjourned.
And the meeting adjourned at 4:00 p.m.