[This Transcript is Unedited]
NATIONAL COMMITTEE ON VITAL HEALTH AND STATISTICS (NCVHS)
SUBCOMMITTEE ON STANDARDS
Administrative Transaction Standards, Code Sets and
Operating Rules Industry Status of Planning, Transitioning and Implementation
June 20, 2012
Doubletree Hilton Hotel
8727 Colesville Road
Silver Spring, MD 20910
CASET Associates, Ltd.
Fairfax, Virginia 22030
TABLE OF CONTENTS
- Panel 1: 5010/D.0 and 3.0 — Issues, Approaches to Solutions and Lessons Learned
- Panel 2: Operating Rules for Eligibility and Claim
Status — Preparing for Implementation
- Panel 3: DSMO Update – Stacy Barber
- Panel 4: ICD-10 — Strategies and Recommended Milestones to Achieve a Successful Transition
- Panel 5: Dental Code Set Updates and Considerations
- Panel 6: A Unique Device Identifier and Its Relationship to Administrative Transactions
- Panel 7: ACA Health Plan Compliance Certification
- Public Input
P R O C E E D I N G S (8:02 a.m.)
DR. SUAREZ: Good morning, everyone. Welcome to the early edition of NCVHS.
This is an early start for our committee. We work hard and try to make sure
that we use in the best way we can all the time that we have during the day.
Thank you for your indulgence in coming this early to our meeting.
My name is Walter Suarez. I am the director of health IT strategy and policy
for Kaiser Permanente and one of the co-chairs of the NCVHS Subcommittee on
Standards. We’re going to go around and do introductions. Then we’re going to
start our hearing and say a few introductory words. Then we will go to our
MR. SOONTHORNSIMA: Good morning. My name is Ob Soonthornsima, chief
information officer, Blue Cross blue Shield of Louisiana, and member of the
MS. KLOSS: Linda Kloss, health information management consultant, a member
of the full committee and a corresponding member of the Standards Subcommittee,
co-chair of the Privacy, Security, and Confidentiality Subcommittee.
MS. PICKETT: Donna Pickett, National Center for Health Statistics, CDC, and
staff to the subcommittee.
MS. DOO: Lorraine Doo, with the Office of E-Health Standards and Services at
CMS and lead staff to the Standards Subcommittee.
DR. WARREN: Judy Warren, University of Kansas School of Nursing, member of
DR. SCANLON: Bill Scanlon, National Health Policy Forum, member of the
MR. TAGALICOD: Robert Tagalicod, director of Office of E-Health Standards
and Services and the CMS liaison.
DR. CARR: Justine Carr, Steward Health Care, member of the subcommittee,
chair of the committee.
MS. GREENBERG: Good morning. Marjorie Greenberg, National Center for Health
Statistics, CDC, and executive secretary to the committee.
MS. SQUIRE: Marietta Squire, staff to the subcommittee.
MS. WEIKER: Margaret Weiker, Hewlett-Packard, representing ASC X12.
MR. DALEY: Jim Daley, Blue Cross blue Shield South Carolina, representing
DR. JOPP: Devin Jopp, WEDI.
MS. BUENNING: Denise Buenning, acting deputy director, Office of E-Health
Standards and Services, CMS.
MS. JACKSON: Janet Jackson, Blue Cross blue Shield of North Carolina.
MS. STRICKLAND: Debra Strickland, with TIBCO, representing WEDI.
MS. SPECTOR: Nancy Spector, from the American Medical Association.
MR. ALFANO: Bill Alfano, Blue Cross and Blue Shield Association.
MS. BANKS: Tammy Banks, American Medical Association.
MS. REIMERS: Mona Reimers. I work in Fort Wayne, Indiana, for Orthopedics
Northeast, and I’m with MGMA.
MR. HATCH: Keith Hatch, with Florida Blue.
MR. BURLEIGH: Bob Burleigh, representing HBMA, Healthcare Billing and
MR. FINERBROCK: Bill Finerbrock, here on behalf of HBMA.
MS. RIVERA: Sara Rivera, California Department of Health Care Services, here
to talk about the UDI.
MS. BURGESS: Marchel Burgess, California Department of Health Care Services.
MS. HAVENS: Deb Havens, with AAPC.
MS. BUCKHOLTZ: Rhonda Buckholtz, AAPC.
MR. WINKLER: Dennis Winkler, Blue Cross blue Shield of Michigan.
MR. HEBERT: Sid Hebert, Humana, representing America’s Health Insurance
MS. SLAKER: Lauren Slacker (phonetic), Department of Veterans Affairs.
DR. PREBBLE: Dave Preble, American Dental Association.
MR. BROWN: Tim Brown, National Association of Dental Plans.
MS. JACKSON: Debbie Jackson, National Center for Health Statistics,
MS. GABEL: Annette Gabel, Express Scripts, representing NCPDP.
MR. MCMULLEN: Tim McMullen, with Cooperative Exchange.
MS. MEISNER: Debbi Meisner, Emdeon.
MS. LOUIE: Holly Louie, HBMA.
MR. TENNANT: Rob Tennant, Medical Group Management Association.
MS. DARST: Laurie Darst, Mayo Clinic, representing WEDI.
MR. FIRFIR: Jordan Firfir, representing Florida Blue.
MS. CARTER: Cathy Carter, director of the Business Applications Management
Group in CMS.
MS. HOLLAND: Priscilla Holland, NACHA.
MR. LAZARUS: Steve Lazarus, Boundary Information Group, representing CAQH
MS. FOESTER: Rachel Foerster, Boundary Information Group, representing CAQH
DR. SUAREZ: Thank you very much. Again, welcome.
We have a very rich and very important set of topics that we want to cover.
We’re going to jump into the hearing right away.
A couple of logistics. Given the time that we have in each of the sessions,
we really want to make sure that we have enough time for the committee to have
Q&A, so we have asked testifiers to limit their time to about ten minutes.
I know Lorraine has some instructions in terms of color-coded warnings.
I think this is an exciting time for the committee and this subcommittee,
because we are going to be addressing and getting into some ongoing regular
activities that we do by virtue of listening to the industry and understanding
the status of implementation of current transaction standards and code sets and
identifiers and operating rules, in preparation for the first round of
operating rules coming up later on, at the meeting next year. We are going to
hear also, of course, some comments and remarks and testimony regarding ICD-10,
a very significant element in the administration standardization of health
Then we’re going to talk about three additional important topics, as you saw
on the agenda:
• Dental code set updates and considerations. We’re going to look at
some important points about dental code sets.
• We’re also going to hear about the unique device identifier and some
of the developments that have occurred over the last few years regarding the
identification and recommendations towards standardization of unique device
identifiers. Specifically, the idea is how it relates to the administration
transactions that we use in health care.
• We’re going to conclude the day with testimony regarding an
Affordable Care Act provision that calls for the submission by health plans of
certification of compliance with all the standards and operating rules that are
being adopted and that are in place. We’re going to hear about what the
perspectives are from the industry with respect to that compliance
MS. DOO: You all are very far away this time, and so I made it simple. The
last time we had several images which were very difficult to see, so I made it
very easy. It’s pink and green, because I like colors. The green will be when
you have five minutes left and the pink will be when you have one minute left.
For those of you who are speaking, your neighbors will help you. When they see
the pink, they will give you a little nudge. When it comes to the zero, then
I’ll probably put my hand up. I do have a utility that will help me help you
stay on time. That will give the committee an opportunity to ask questions.
Thanks very much. I think the order is okay with everyone. I think Debbi and
Tim are going to share their presentation. We’re going to start with Laurie.
DR. SUAREZ: Before we start, one last comment. I think we are utilizing for
those participants who are listening in on the Web a new WebEx phone system.
We’re hoping that everything is working well. We have staff monitoring the
process here. We’re very excited that all of you are joining us out there in
cyberspace. Thank you very much.
Overall Industry Update
MS. DARST: Members of the subcommittee, I am Laurie Darst, vice chair of
program and services of the Workgroup at WEDI and also revenue cycle regulatory
advisor at Mayo Clinic. I would like to thank you for the opportunity to
present testimony today on behalf of WEDI concerning the matter of 5010
implementation and lessons learned.
Just briefly, WEDI represents a broad industry perspective of providers,
clearinghouses, payers, vendors, and other public and private organizations
that partner together to collaborate on industry issues. WEDI is a named
advisor to HHS under the HIPAA regulation and we take an objective approach to
I would like to start by talking a little bit about a partnership on 5010
Throughout the implementation of 5010, WEDI has been working with the
industry to facilitate implementation and to identify and address
implementation issues. This spring, WEDI, CMS, and private industry partners
joined together to launch an online reporting tool and to hold a series of
webinars to address industry-wide issues. I first want to talk a little bit
about the webinars.
There were three webinars that were planned to provide a communication
vehicle to the health-care industry. These included live online presentations
that analyzed and discussed submitted 5010 implementation and interpretation
issues and worked to identify appropriate solutions. The goal of the
collaboration was to bring all stakeholders together to help bring the
healthcare industry into full compliance in the implementation of 5010.
Topics discussed on the first two webinars, which were April 19th
and May 23rd, included ongoing implementation challenges
associated with the following:
• First, inconsistent editing of not otherwise classified codes. A few
payers misapplied edits requiring descriptions for procedures codes that were
truly not otherwise classified. Therefore, claims were rejecting back to the
providers were for missing descriptions when descriptions were not really
• The second issue we tackled was the billing provider address change
impact. The billing provider address required changes to support the NPI
subpart rules. A physical address is now required in the billing provider
address field. The post office box and, most importantly to the providers, the
lockbox address is only allowed in the pay-to address field. What happened in
these situations — in one case vendors were not supplying the right fields. In
others, it was really a fear factor on the provider side, concerns that if they
did not have the lockbox and the physical address, their checks would be
• A third topic that we addressed on the webinars was acknowledgements.
Many payers included acknowledgements as part of their 5010 implementation.
However, a standard approach for use of these acknowledgements is needed.
• A fourth issue is interpretation and implementation of the 835 ERA.
Readiness issues and lack of standardized use of the data content within the
835 caused numerous issues with the implementation.
• Extra data and redundant data sent in the claim was the fifth topic.
New rules were written to reduce and eliminate interpretation differences
regarding when and where data should be sent in the claim.
• Finally, we talked about how to resolve other interpretation
differences o Outlined steps to resolve interpretation issues, including
researching the issue with the appropriate parties, such as ASC X12, CMS. Make
sure to collaborate with your trading partners, and finally, how to file a
complaint with CMS.
It’s important to note that each of these categories of issues was either an
interpretation or an implementation issue based on stakeholder decisions. None
of these were actually related to problems with the actual ASC X12
The third and final webinar is scheduled for June 25th and will
include the complaint filing process and addressing barriers to submitting
complaints and next steps on administrative simplification mandates on the
Just a couple of comments on the online reporting tool. The online issues
reporting tool allows users to submit issues associated with 5010
implementation and be able to search through a database of current documented
problems. WEDI and CMS triaged issues to the appropriate parties for
Based on feedback from these webinars and the database entries, WEDI feels
there needs to be a central location to log implementation issues, not only for
transaction implementations, but also for other future industry
implementations, such as identifiers and operating rules. Looking back, it
would have been ideal to offer these webinars and database tools early in the
implementation process to help facilitate the implementation of 5010.
Participation on the webinars was very successful for a number of reasons.
The webinar was a free service and cosponsored by CMS. Industry stakeholders
continue to seek guidance and a place to go with their implementation
questions. In the future, we recommend free-of-charge and early implementation
education. We also recommend there is a forum for discussion and a place to
have questions addressed. Strong collaboration with CMS, ASC X12, CORE, HL7,
and other entities is essential to ensure the questions are vetted through the
appropriate entities on future implementations.
Now I want to talk a little bit about other WEDI efforts and our lessons
In addition to the collaborative webinars and databases, WEDI has held a
number of forums and conference breakout sessions over the past couple of years
on 5010, and we identified a number of lessons learned:
• Many providers rely on their practice management systems vendors to
educate them on transaction business requirements and the delivery of the
necessary system upgrades. Not all practice management systems are providing
this education or delivering the necessary system upgrades in a timely manner.
• Greater communication is needed for all stakeholders.
• There was a general misconception that 5010 only included minor
technical changes. There were a number of data content business rule changes
that needed business review and had significant impact on the industry. Going
back to the example of the billing provider address was one of those.
• There were some health plans that took the opportunity to implement
major system changes as part of their 5010 project, of which these included
changes to the front-end editing systems. In some instances, health plans
decided to revamp their provider enrollment process in conjunction with their
5010 rollout. These additional initiatives, while beneficial long-term, added
complexity in isolating the problems when issues occurred during the 5010
• In addition to the system enhancements, many payers implemented
standard acknowledgments. Previous reports were proprietary and human-readable.
In some cases the acknowledgments were not in the standard format or providers
were not educated in how to read the new reports.
• There were a number of reports of call centers being overwhelmed with
incoming calls and difficulty getting through to report issues.
• Errata impacted the rollout of the 5010 implementation. Many
stakeholders decided to hold off on moving forward with the implementation
until the errata were finalized instead of assuming the changes in the errata
would be approved. Consequently, many stakeholders did not follow the CMS
recommended timeline for level 1 and level 2 testing
• Finally, stakeholders cited competing priorities as an issue. Many
providers and vendors focused on meaningful use, and this was a distraction to
In conclusion, we feel there are valuable lessons learned from the 5010
implementation process that should be applied to all future implementations.
Early and ongoing broad education is essential, in addition to a central
location to log implementation issues that are then vetted to the appropriate
entity for comment and resolution. WEDI’s strength is bringing all types of
stakeholders together to discuss opportunities and challenges in an open and
collaborative environment on issues that truly need to be addressed. We look
forward to the opportunity to do this with future implementations. We also seek
greater industry research on standards and operating rule implementations and
would ask NCVHS to recommend to Health and Human Services that they invest
funding into the industry surveys on all administrative simplification
provisions. WEDI, in its advisory role, offers our support to NCVHS and Health
and Human Services in achieving these goals and stands ready to assist as
Members of the subcommittee, thank you for the opportunity to testify.
DR. SUAREZ: Thank you very much.
MS. DOO: Rob Tennant, MGMA.
MR. TENNANT: Thanks so much. I’m Rob Tennant, senior policy advisor with the
Medical Group Management Association. It’s a pleasure to speak with you today
on a very important issue.
What I want to do today in the short time that Lorraine has given me is talk
about lessons learned from the 5010 implementation process, take a glimpse into
what’s happening currently. We did a survey, and I want to talk about some of
the results there and offer some short-term and longer-term recommendations.
A lot of what I’m going to say is going to mirror what Laurie talked about,
because I think there is a lot of commonality that the industry saw throughout
• Needless to say, practices rely heavily on their vendors to make
things happen. We saw a lot of issues with practice system and billing system
upgrades not happening in a timely manner.
• A lot of issues about claims that were successful in the test period,
but once they went into production, they were rejected.
• Certainly, problems with secondary payers and inconsistent claim
edits. We heard from many health plans they would accept the 5010, push it out
to a secondary, only to find it rejected.
• Certainly, a lot of issues that Laurie talked about — the pay-to
address obviously is a critical one for us.
• Crosswalk NPI numbers not recognized.
• Lost claims. We heard that a lot. Practices would call and they would
find out the claims were lost, and please resubmit. That slowed down the
• Old submitter validation information not being transferred.
• Sporadic payment of resubmitted claims with no explanation.
• Protracted hold times. We heard from practices that would literally
get on in the morning and have the phone on all day trying to get through to
clearinghouses, vendors, and health plans.
• A lot of what I would call 5010 fog, meaning the practice wouldn’t
know what the problem was. They would call the vendor, they would call the
clearinghouse, they would call the health plan, and everybody was pointing the
finger at someone else.
I can’t tell you how many calls we had to our office from practices that
weren’t paid for months — in some cases more than $1 million in outstanding
claims. In some practices, for the first time in 20-plus years, they weren’t
able to pay their rent, pay their salaries. We had, of course, advised them
long before January 1st of this year to establish a line of credit.
Many of them did that and ran out of that line of credit.
Practices did take action, of course. Many of them switched clearinghouses,
trying to get paid. Some went back to 4010 and some even dropped back to paper.
There are a lot of challenges faced with 5010 and other types of
• In talking to health plans, of course, a lot of health plan legal
teams are telling them to take a very conservative approach to avoid
• The insistence on perfection to be compliant, and that’s certainly an
issue with coordination of benefits.
• Other than Medicare, no delineated testing period.
• Certainly problems with Medicaid. We’re all aware of that.
• Delays in vendor deliveries.
• And we can’t forget the costs. Our surveys show that the average cost
per FTE physician to move to 5010 was in the neighborhood of $16,000.
We did perform some research over the last couple of weeks, understanding
that it’s not a scientific poll, but rather a self-selected survey.
We asked, first of all, had you experienced any cash-flow disruptions
related to 5010? You can see that an overwhelming number said yes.
We asked, are you currently experiencing any cash-flow disruptions due to
5010? Surprisingly, 40 percent said yes.
We asked, of course, what was the problem? They identified — my apologies
to the clearinghouses — they were singled out by the majority as still causing
some problems, certainly commercial health plans, a lesser number for Medicare
and Medicaid and practice management systems.
The average amount in outstanding claims according to the survey: $172,000
— pretty substantial.
Then we asked them, how confident are you that the claims you are submitting
are fully 5010-compliant? Forty-one percent, very confident. But you can see
here, 35 percent moderately confident, and it moved on from there.
So what can we do in the short term? Our argument is that CMS should extend
the discretionary enforcement delay period through the end of the year. This
would mirror what the industry went through for 4010. We had extensions
throughout the year. At a minimum, CMS should permit health plans to continue
to accept noncompliant 5010 transactions. As long as the health plan is willing
to adjudicate the claim, there’s really no reason to reject it because it
isn’t, quote, fully compliant.
I think one of the things that Laurie talked about was the feedback loop. We
really need for health plans and clearinghouses to let practices know what the
problems are with the claims as early in the process as possible. Obviously,
we’re coming up to the June 30 deadline. We need to know what the problems are
so we can fix them on the front end, so the claims will be adjudicated.
Longer-term, obviously we need to be looking at the overlapping nature of
the initiatives that many of us are going to be talking about here today. We
need to have a cost/benefit analysis of each administrative simplification
provision prior to its implementation. We need to pilot-test. I know there’s
some interest in the industry and CMS in piloting 6020, the next version. We
think that’s critical, and we’re certainly willing to work with the industry to
identify practices that would be willing to test these.
We also need staggered implementation dates. I think the fact that we’re all
vectored towards a single date creates a problem for the industry. For us, it
makes a lot of sense to have the health plans and clearinghouses be compliant
12 months before providers. Therefore, we can have dual use. We can test. We
can know what the problems are, identify solutions before the compliance data.
Again, Laurie talked about this — improving the feedback loop. We need
standardized acknowledgments. We need to have that feedback loop working in an
automated fashion so that practices know exactly what the problems are.
We are very strongly supportive of certification of each trading partner.
That means something akin to what Section 1104 calls for for health plans. We
need certification for health plans in all areas of administrative
simplification — 6020, ICD-10 if we go forward, and operating rules.
Clearinghouses as well should be subject to certification. Therefore, we
would know exactly which clearinghouses are ready and which need more help.
We also strongly recommend that the government start to work with private
industry to start to certify practice management and billing system software.
We have seen the success of meaningful use in their certification process. We
think the same process can be applied to the billing systems. The only way
practices can take advantage of these standards is if they have the software
and the capability, and they need to have the confidence to purchase those that
certification brings — and, obviously, creation of a national certification
registry, one-stop shopping, where practices can go to find out the
certification level of health plans, clearinghouses, and practice management
We need to improve the problem identification and resolution process. We
need to have surveys. MGMA is happy to do surveys, but we need robust national
surveys every quarter at least prior to an implementation so that we know as an
industry where everybody is.
We recommend moving towards advanced payment policies so practices have cash
as they move into the implementation period and don’t experience the kinds of
cash-flow issues that we saw with 5010.
We recommend naming a HIPAA ombudsman, where you could have a centralized
point for problems and, potentially, an office of a national coordinator for
administrative simplification. We have that for HIT. Admin simplification is
just as important. It has the opportunity of saving the industry billions of
dollars. We need to be a little bit more aggressive.
Of course, a more proactive enforcement approach that is not driven strictly
by complaints — we need to have the types of audits that providers experience
with RACs and others.
In summary, the industry faced significant problems migrating to 5010 — not
a surprise. Protracted and expensive software, as I mentioned, the fog — we
experienced that. We continue to experience 5010-related problems, mostly due
to clearinghouses and health plans.
Short-term, extend the enforcement delay or at least allow health plans to
accept noncompliant transactions, and longer-term, revise the process.
Thank you so much.
MS. DOO: Perfect.
MR. FIRFER: Hello. My name is Jordan Firfer. I am the director of provider
connectivity services for Florida Blue, with primary responsibility for
managing and monitoring the effective and efficient processing of HIPAA
transactions and, of course, ensuring continuity for all the tools, services,
internal or external, that rely on those transactions.
To give you a flavor of where Florida Blue sits against other payers that
may provide you with their experience, Florida Blue is the largest health plan
in Florida, with approximately 102 million members, with 24 million included in
Rather than focus on a majority of the primary issues that many payers — in
fact, all of the constituents across all of the layers of submission — instead
of focusing mainly on the issues we faced, I’m going to focus a little more on
lessons learned and what worked for us. Relatively speaking, Florida Blue had a
pretty good experience with the migration.
Like all of us, we had the same challenges as everyone else. In addition to
the ones eloquently stated by Laurie and Robert, our goal was to:
• Ensure operational efficiency and effectiveness.
• Make sure that we continue to have quality reporting accuracy.
• Of course, maintain compliance with industry regulations, corporate
policies, and procedures, which was a challenge.
• Strategic alignment with the industry. I’m going to go into that. It
falls under collaboration.
• Ensuring confidence at the provider, trading partner, and member
Florida Blue took — I wouldn’t call it unique, but an approach that we
didn’t see very common in the industry, and that is a production validation
process, which is really a controlled migration. What this allowed us to do was
to identify that a certain percentage of our overall providers actually
accounted for a majority of our submitted claims. So we took that group and
allowed them to submit in chunks, if you will, 5010 claims, sometimes mixed
with 4010, sometimes independently. We were able to allow these to flow in what
we called flash cuts and evaluate any issues that might have occurred and then
report back to them through a very strong collaboration effort — again, a
controlled migration, which, of course, required a dual-mode production
environment, that allowed submitters to submit 4010 claims ahead of when they
believed they were ready to get a feel for us.
Why did we do this? We did this because one of the primary complexities was
that Florida Blue, along with a lot of other payers, did not have a true
end-to-end testing environment. We hadn’t been put through a circumstance where
we actually had to account for the time it leaves the health-care provider
until it returns back to them. The only way to really accomplish this
effectively was to actually push it through our production environment and
through effective monitoring and evaluation, business continuity efforts, to
ensure that that didn’t affect our actual product flow. Of course, we limited
the initial claims that they would submit to a very small number — it could
even be six to a dozen — and then slowly ramped those up through additional
flash cuts with specific providers.
We did have criteria for participating in this flash cut testing:
• Number one, the top submitters came first. When we say top, we don’t
mean VIP, we mean by volume.
• Secondly, they had to have some sort of ability to submit 5010 to us,
either in a mixed mode or be able to flip back and forth as necessary.
• Have their agreement that, once the turned on 5010, if we found any
issues at all, they would be able to effectively flip back to 4010 while we
resolved the issue with them and then turn it back on for another flash test,
until we knew we had it right.
Although we focused on our top-volume submitters first, we did actually go
back to smaller submitters upon request and/or provide confidence to smaller
submitters that we had gone through this testing with some of the larger
volumes to increase their confidence.
We did engage a reusable process that we called business continuity
monitoring. The primary purpose of this process was to proactively keep an eye
on our claims flow — I should say, transactional flow, because it’s more than
just claims. What does this mean? This means engaging in trending. As these
claims would flow through our system, whether it’s the 5010 claims that were
flash-cut or the 4010s and 5010s that were already going through our system in
live production — to actually look at the submission stats, look at the error
ratings and error volumes every day. We created a specific criteria evaluation
system that allowed us to rate them in a numerical system and determine how
critical they were to our continued production. So the ability to use data and
analytics to predict issues before they occur was absolutely critical to making
this flash-cut in production succeed.
We talked a little bit about the remediation management of business
disruption. One of the things we did through this business continuity process
was that we actually, every day, produced a list of the top errors we were
seeing across specific providers. We were able to single out, for example, the
PO box issue, ones that were industry-wide and were affecting every provider
that tried to submit through us and ones that related to specific providers
that we could hand-hold with them, their clearinghouse, their vendor, and walk
them through resolving some of the issues that they were facing.
We also had — which was very, very successful — open-line Fridays. These
open-line Fridays were open calls with all of our providers, vendors,
submitters, other health plans if they felt like they would find value in
joining the call — all of the layers between the provider and the payer and
back. They were heavily attended. We used that for troubleshooting sessions
across multiple folks. The calls were more complex at first, but after a few
calls, when people began to realize that everybody was facing the same
problems, including their vendors and clearinghouses, the calls became very,
In addition to that, we had internal-line Thursdays. These calls were for
all of our internal stakeholders to get together, understand all of the issues
that our providers were facing, what topics we were going to talk about on the
upcoming call, and also talk about the remediation efforts we were going
through to ensure that errors and issues were kept to a minimum and provider
were being given the most information possible.
Of course, we also engaged something called the dynamic edit management
process. We determined a methodology for being able to flip specific edits on
and off, sometimes for a short period of time, sometimes a longer period of
time. We would go through this analysis, this business continuity management
analysis. We would work with compliance to determine a plan to eventually flip
the edits back. This allowed us to get claims into the system at a high rate,
with a high success rate, while working the longer-term solution at a better
If there was one term that I would use for both past and successful
implementations of this type, it is “collaboration.” Collaboration
was absolutely key across the entire company. This included everything from
finance and clinical review, project management, to clearinghouses, provider
third-party billers, vendors, practice management systems, other payers. We
engaged in very serious, continuous collaboration and created a special HIPAA
5010 team that was doing the business continuing management and focusing on
this very, very high level of collaboration.
Additionally, we had a very strong governance process in place. It is
absolutely critical that you have buy-in from the top down and from the bottom
up. From the very beginning, we had an executive sponsor that was a high-level
executive within the company. We had a steering committee, where the majority
of folks were vice presidents and directors, governance committees, which had
the leaders from all the various stakeholders in the company. We had a special
HIPAA 5010 team under provider connectivity solutions that focused on this
every day. Then we had an IT project team. All of these levels of governance
that as we had issues in those flash-cuts, we were able to shoot up those
issues right away. If there was funding or dollars that were necessary to get
them fixed, there was nothing standing in our way, as long as we could
represent the issue clearly.
What were the benefits? We have a plethora of reusable processes, from the
PDP process, this controlled migration, to a criterion for rating issues, our
collaboration components, which will absolutely be in place for ICD-10, new
levels of trust and collaboration. We have already heard from providers saying,
when are we going to start up those calls again? We can’t wait. We learned so
much. All of these things really played well into what is to come, whether it’s
5010, ICD-10, et cetera, with the exception of how applicable a controlled
migration may or may not be, depending on the mandate.
Some of our results: At the beginning of the year, we saw results as high as
84 percent for claims, but now we’re seeing pretty much 100 percent across the
board. Unlike some of our payer peers, whether or not we have an extension may
or may not be as valuable, because we are also working with our clearinghouse
and having a lot of success with the up-coding process for those providers that
If I could state a few key components, the few key components for success
are — there are four of them. One and two would both be collaboration. Focus
on it once and then focus on it again, using data and analytics to monitor the
process, and make sure that you start early. We started in April of 2011. If we
could do it over, we would have started even sooner.
Thank you very much for the opportunity to speak about the lessons learned
from Florida Blue around the 5010 implementation.
MS. DOO: Very good. Thank you so much.
MS. CARTER: Thank you very much. My name is Cathy Carter. I’m the director
of the Business and Applications Management Group in the Office of Information
Services at CMS.
My general responsibilities, aside from the implementation of 5010 for
fee-for-service Medicare, relate to managing to all the systems that relate to
fee-for-service — the claims-processing systems, the eligibility query
systems, cost-report data collection systems, Medicare appeal systems, and
things like that.
Today’s agenda: I was asked to cover these points. Our agenda goes basically
in this order.
How well did the implementation go from a Medicare fee-for-service
perspective? I have heard lots of things here I could probably echo. I’ll go
through this really quickly. Like many payers, we leveraged this implementation
to expand all of our systems and databases and space for ICD-10. That was
really the most difficult initial piece, but that was not really so much the
public part of it. That was something that we took a couple of years —
actually, we started in 2008 trying to get ready, I believe, 2008 or 2009, for
Based on the timing, we had another challenge. The Medicare administrative
contractors, I’m sure you know, are being implemented. We are nearly at the end
of that journey, at least for the first implementation. So we decided, based on
the plan timing, that we would not upgrade the legacy FIs and carriers to do
5010. That was a good decision at the time, but it turned out to be a challenge
later, because we had some delays and we had to put in place contingency plans
more or less late in the process.
Medicare fee-for-service was one of those. We did eliminate the use of
proprietary acknowledgments for claims submission. We shifted to the national
transaction for that. That, in fact, was a challenge, but it was a benefit as
Medicare did also adopt a new front end for our claims-processing
environment. I’m sure many of you actually are aware of that. I think in the
long term, it certainly is going to be a good thing and, in fact, is a good
thing now. It did present some additional challenges. The goal was to actually
edit the claims as much as possible before putting them into the internal part
of our system, so that they could be rejected up front.
Medicare also adopted standardized companion guide formats across all of our
different systems, and we created quite an extensive testing process — 17,000
test and use cases — in order to do our internal certification process. We did
this mostly because we were trying to standardize our front end and we needed
to do those test cases to make sure that everybody was coming out with the same
result across all of the Medicare administrative contractors.
We would, actually, for Medicare, prefer that only one translator be used
for all of the Medicare administrative contractors. We didn’t get that far. We
did reduce it to three. That was a help, because we only had to deal with three
translator companies when we had issues to resolve as part of the
We also post our edit spreadsheets. We are being very transparent. That new
front end that I was talking about — we post those edit spreadsheets every
quarter, the changes to those, the updates to those, on our website.
The concerns: I think submitters generally, whether they were providers or
vendors or whoever, waited longer than they should have, in spite of all the
outreach efforts. We didn’t receive our first test files until May of what was
supposed to have been the testing year. The errata, of course, delayed things.
It delayed Medicare as well, not just everyone else. So we made a decision not
to actually be in production and ready until then, so that we could have a
consistent across-the-board readiness.
Industry interpretation — you have heard this already from others — varied
across the industry. People really do need, in fact, to agree on definitions
and usage of those definitions.
This was one of the benefits, but it’s also a concern. We were very
ambitious in our implementation of 5010 by changing a lot of business
processes. Again, I think it’s a good long-term result. It was definitely a
challenge while we were doing it.
Medicare did, in fact, use the same time period for re-verifying the
enrollment of clearinghouses and providers in our EDI enrollment systems. This
did cause some confusion. The communication on that was either misinterpreted
or not done correctly or whatever — a combination of those things. So that was
We received, of course, some congressional inquiries, as we always do, as
well as other kinds of inquiries. But overall I think it was really a very
small volume, considering the 1.2 billion claims that we process every year.
Many times — and again I hate to pound on the vendors and the clearinghouses,
but what we found was — we kept directing providers to their agents because
many times it was actually something we couldn’t deal with. It was something
the clearinghouse or the vendor had to help resolve. We would like to recommend
that more testing be done prior to adoption of new standards.
We were asked specifically to opine on the value of an enforcement
discretion period. There’s just one bullet there, which says, double-edged
sword. It’s always nice to have extra time. Every time there is a delay
announced, we would lose momentum, and it’s very difficult to get it back.
Important technical issues: You have seen these before. These were
challenges where we had to really do education over and over:
• Post office box issue for the billing provider. That was a huge
• The nine-digit zip was a big issue.
• The modification which allowed the new diagnosis codes.
• Present on admission. Medicare had an additional issue here, I think,
because we implemented that even prior to 5010, and so there was a change to
• The errata adoption process and the education around that.
• Claims payment advice, the remittance advice we had. There was a lot
of education that we did on interest and payment discounts through our national
• The advance payment and reconciliation process.
• We had to provide a lot of guidance about the claim adjustment reason
codes and remittance advice remark codes in order to standardize usage.
We had sort of a concurrent project that has actually been going on for some
years now. Those were also education al points that we covered.
Our lessons learned:
• Communicate early and often. We had lots and lots of calls. We
counted up a quarter of a million members of the health-care industry present
on those calls over that year-and-a-half-or-so period. We had internal weekly
status calls with over 100 participants in the program, all the vendors and all
of our contractors.
• We did obtain support at the highest levels of our agency in order to
implement the changes for 5010.
For lessons learned, one of the issues on D.0 — I just would like to say
that we have very little claim activity with this transaction, about 40,000
claims, compared t our 1.2 billion. We’re looking at that to see if we really
have to continue that. We spent a lot of money and effort upgrading everything
for that transaction, and we barely use it.
I think that’s it. Thank you very much for the opportunity to speak with you
MS. DOO: Thank you, Cathy.
Next, Debbi Meisner and Tim McMullen are going to do a joint presentation
from the clearinghouse perspective — I guess clearinghouse and vendors.
MS. MEISNER: Good morning, members of the subcommittee. My name is Debbi
Meisner. I’m the vice president of regulatory strategy for Emdeon, along with
Tim McMullen, who is the executive director of the Cooperative Exchange.
We would like to take this opportunity to thank the subcommittee for
allowing us to present the clearinghouse perspective in the 5010
implementation, approaches to solutions and lessons learned.
I’m not going to go through our bios. You can read those in our package.
What we’re going to try to cover today is our perspective on the need for a
transition period, the one-thing-at-a-time syndrome that we felt contributed to
the problems, policy changes that took place between one version and the next
that caused some issues, acknowledgments, some issues we faced with the MACs,
and then talk about the industry calls.
On the need for a transition, the main challenge that the health-care
industry faces is the number of regulations that must be adopted in a very
tight timeframe. However, another challenge is the asynchronous way that the
industry implements new versions. Typically, the large providers and health
plans are ready to begin testing long before their smaller counterparts are
ready. This creates problems when trying to account for new, deleted, and
modified elements, as well as code values. Much of the industry is dependent on
clearinghouses and vendors to help them manage the transition from one version
It is also important to note that in order to complete testing and
implementation with the vast numbers of health-care entities, trading partners
may choose to be early adopters, going into production prior to the compliance
date. This poses some challenges in the upward and downward compatibility of
There are two common flows used by trading partners. Certainly there are
other variations, but these are the two most common. The first is a direct
approach or pass through, while the second provides up-and-down mapping from
current versions to new versions. Each presents challenges during the
transition period from one version to the next. The current approach to
developing and implementing the new or modified business requirements assumes
that the changes will be implemented all at the same time without any
consideration for the asynchronous way the industry handles these changes.
This just depicts the direct approach, where both the receiver and the
submitter need to keep track of what version the other is on and make sure that
they submit the correct version. Each trading partner needs to keep both
versions going at the same time. The burden of knowing which version a receiver
is able to accept is placed on the submitter. In this case the receiver also
has to keep both versions up allowing submitters to send transactions on either
In the second version, there’s an intermediary or a clearinghouse in the
middle. The submitter and/or receiver of the transaction only support the
current version or the future version, but not both. In the case of a
submitter, a file is transmitted to an intermediary, or clearinghouse,
containing transactions going to multiple receivers. The transactions are
up-converted when received in the older version going to the receiver on a
newer version or down-converted when received in the newer version going to a
receiver on the older version. In the case of a receiver, a file is transmitted
from an intermediary containing transactions from multiple providers. Again,
the transactions are up-converted or down-converted depending on how they were
received and what the health plan expects. This approach allows for
implementers to go into production with the newer versions regardless of where
the submitter/receiver is in their implementation, thus supporting an
asynchronous implementation over a longer period of time.
Our recommendation is to allow for this staggered approach. To provide a
smooth transition and allow the industry to implement in a staggered way, there
should be a grace period to transition the change to span over two versions of
the transaction. When adding or modifying an element, the use must take into
account that the older versions cannot accommodate the new information until
the software is updated and the data entry staff is properly trained. Deleting
elements must consider the early adopters who will not have a place to put the
information if it is removed. Translator products should build the edits and
logic to take the transition period into account, making the requirements
Emdeon has presented this concept to the ASC X12 management team and it is
under consideration as guidelines for future versions of the implementations.
I have included the full recommendation in my written testimony in the
appendix, if you are interested in the devil in the details.
Our next issue is this one-thing-at-a-time. During the implementation of the
first set of transactions named under HIPAA, the industry was faced with a new
way to format the transactions, moving from flat files to the variable-length
formats, using qualifiers and syntax rules to govern the way the files are
created. Many stakeholders recognized the need to implement the transactions in
a phased approach, making it easier to test and determine the root causes of
The formatting is to ensure that the files are syntactically correct and
that the content is placed in the right place within the transaction, where the
content is based on the business needs to ensure that the new content and codes
are supported in the application systems and placed according to the
implementation guides. Then adding on the next layer of enforcing the logic as
the industry moved closer to the compliance date.
Focusing on each aspect independently allowed for the continued growth of
EDI and reduced the risk to provider cash flow. With the implementation of 5010
the industry was faced with multiple changes being implemented simultaneously.
I think we heard some from Cathy in her testimony. Not only were there changes
to formats, there were also new policy changes introduced along with additional
data requirements. To add to the complexity, the industry embraced the use of
acknowledgments at the same time.
Our recommendation on this is that regulations should establish milestones
for new initiatives that allow the industry to stagger the implementation over
a transition period focusing on one piece of the project at time. Focus on the
syntax: Did you get it right? Next, focus on rules for existing content.
Experience shows that not all products are equal. Finally, focus on the new
content when business use is applicable.
The next issue is the introduction of policy changes. The major problems we
encountered were the result of the 5010 transactions aligning with policy
changes that occurred between the publications of the two versions. We have
already talked about the billing provider issue that was really just aligning
with the NPI regulations that had come out years before. Unlike other changes,
this change was not one that could be fixed by the software vendor and required
the provider to become actively involved in the resolution. State regulations
occur on a different schedule, requiring workarounds in some cases, and health
plans’ policies changes over time to support their customers’ needs. All of
these changes that occur between versions can create the perfect storm.
Our recommendation is that when policy changes go into effect, the
transactions should be updated to align with the policy. For example, the 4010
guides did not fully support the regulations set forth under the NPI rule and
the industry did not make all of the necessary changes. We encourage HHS to
work with the standards development organizations to ensure that any changes to
the transaction guides are implemented at the same time as the new policy.
Although this will require errata, it will help the industry adopt the policy
changes in the expected timeframe and make the next migration easier.
What our experience showed was if the information is in the implementation
guide, the perception is the industry must abide by what is published. We will
be facing this with the HPID and should learn from this experience.
Finally, what I would like to talk about are the acknowledgments and how
they contributed to what Rob has named “the fog.”
We absolutely support the use of acknowledgments and encourage our trading
partners to return the acknowledgments for all transactions. We agree with the
need for standard acknowledgments and encourage CMS to adopt standards moving
forward. However, the industry must recognize that acknowledgments must be part
of the analysis, development, and testing cycles.
Our experience showed that many of our trading partners used the
pre-packaged 999 in their translator software without testing and had no idea
what the results were going to be. This added confusion to the issue resolution
in trying to determine whether the transaction had errors or the 999 was at
fault. During the 5010 testing phase, we found that errors in the 999 where
mandatory data content was missing prevented us from parsing and distributing
the acknowledgments to the providers, causing the fog. This issue was a
negative impact to cash flow while we worked with the health plans to solve the
We also experienced inconsistent use of the 999 versus the 277, and we found
that the 999 was used to reject files that contained claims where there were no
errors. Our implementation of the 999 for claims limited the rejection of files
only to catastrophic errors in the file, and we would encourage the industry to
do the same.
The inconsistent use of the acknowledgments required a lot of manual
processing of many of the acknowledgments until coding could be implemented to
account for the variety of uses, slowing down the move to production in many
Our recommendation: We encourage CMS to adopt a standard approach to
acknowledgments. When deliberating on certification, we encourage you to
consider certification for translator products to ensure consistent use of the
transactions. The industry guidance must stress the need for testing of the
acknowledgements as part of the implementation cycle. This testing should be
done internally prior to external testing with trading partners to avoid
Now I’ll turn it over to Tim for a few more issues.
MR. MCMULLEN: Thank you, Debbi, and thank you, committee, for having us here
My name again is Tim McMullen. I’m the executive director of Cooperative
Exchange, which is the recognized resource and representative of the
clearinghouse industry for the media, governmental bodies, and other outside
Today I am going to focus on issues our clearinghouse members had with —
one of the bullet points at the beginning was testing Medicare administrative
contractors, or MACs, and industry calls.
This is not a complete list. I do have in my written testimony an appendix
that will have a lengthy list of lessons learned.
Also at this time, I want to commend Lorraine Doo and her staff for bringing
Cooperative Exchange, WEDI, MGMA, SSI, Emdeon, and a lot of other stakeholders
together to conduct those collaborative webinars which Laurie was talking about
earlier. We really believe that this is a good model, and it should be
implemented in the future.
I’m going to talk, first of all, about testing in and of itself because of
the issues that happened during just regular clearinghouse testing with
In some respects, testing prior to the implementation date was a mirage.
Varying scenarios that payers accepted made testing inconsistent, and other
lingering 4010 issues complicated testing. Trading partners were unaware that
some payers tested 5010 transactions in the then-current 4010 platforms, and
provided approval for production. This resulted in high rejection rates once
the payers went live with their 5010 software updates.
All trading partners should have coordinated activities to allow
implementation and testing of internal software changes prior to the initiation
of external trading partners testing at least one year prior to the mandated
effective date. All trading partners should have tested systems in place with
the capability of conducting software/hardware tests, but also the capabilities
of simulating testing of the new requirements with trading partners.
Some of the payers utilized a ramp manager testing system which was not
identical to the production environment. Clearinghouses need the payers to be
forthright and confirm the actual platforms being tested.
Lack of communication from payers regarding edits and requirements impacted
successful 5010 transaction submission and compliance. Some payers don’t even
have testing systems at all, which further impacts prevention of issues prior
We also believe that the industry needs to include revenue management
systems in the testing process. As mentioned by Jordan, true end-to-end testing
through actual claim adjudication will be necessary for any regulatory
implementations, such as ICD-10, to be successful.
Let me talk a little bit about the testing days, which actually provided
important feedback. The data from testing days was used to refine
implementation approaches and reduce production issues.
However, there was a lot of ramp-up to getting ready for those testing days.
Reenrolling every Medicaid provider’s NPI and Tax ID with their state prior to
the test date for electronic submission stressed already stretched resources.
NHIC, Palmetto, and Trailblazer had an extra PTAN requirement, which is a data
field that clearinghouses don’t regularly utilize, and which caused delays and
added unnecessary work. The process of reenrolling took two weeks and added
additional workload to the personnel already managing the regular testing
We agree that testing days are necessary and bring value. We suggest a
collaborative effort with government and industry to begin monthly industry
test dates starting a year in advance until the compliance date. This is
similar to what Debbi was talking about.
It was nice to see that Cathy recognized that there were some
inconsistencies with the MACs. Some of the MACs accepted dual versions
4010/5010. Some did not. There were different acceptance days, and some are
still not accepting as of 1/1. Some may not be accepting at all still. There
were different enrollment requirements and different rejection codes. Medicare
fee-for-service, we believe, should do a better job managing the MACs by more
quickly addressing issues that were identified — i.e., phones not being
answered or providers not being paid. Also we believe that CMS/OESS and the
central Medicaid office should do more to manage the state Medicaid agencies,
and more quickly address issues that were identified with the states and hold
them accountable for noncompliance.
Just quickly, there were a number of Medicare fee-for-service
teleconferences regarding the status of 5010 implementation compliance. The one
thing that, of course, is very important during any of these calls, even the
calls that WEDI has, the industry calls that Laurie was talking about earlier,
is that the question-and-answer portion, which is very important, was never
transcribed or put up on the website, and so we never had a chance to really
follow up on those issues. We just would recommend for those to be done a
little more quickly.
Thank you again for giving us the opportunity to share our lessons learned
and present our recommendations.
MS. DOO: Thank you very much.
Next on the agenda is Holly Louie, with HBMA
MS. LOUIE: Thank you. Good morning, members of the subcommittee.
There’s one advantage about going last. I could just say, what they said.
But I do have some points I would like to make.
As Lorraine said, I’m with the Healthcare Billing and Management
Association. Our members process, as a conservative estimate, 350 million
claims per year. We think that makes us somewhat qualified to speak to these
Our organization would also like to extend a special thank-you to Lorraine
and Denise Buenning. They have really made themselves available, accessible,
and really worked hard to help our organization when problems arose. We do
thank you very much for that.
I suppose one could flaunt the “I told you so” mantra for all the
hiccoughs and hurdles that we have just heard discussed and that we
experienced, although I don’t know that that’s particularly helpful. I think
the more important message is that those of us around this table who live and
work in the operational implementation trenches foretold, knew, understood, and
were proven correct on virtually every concern we have expressed in testimony,
articles, publications, and also to this workgroup and subcommittee over the
last three years.
As you know, while some claims processing by some payers was very smooth,
there were also disruptions so significant, the provider or entity had their
very survival threatened. We have heard that some practices or entities simply
had to close because they could not survive for lack of cash flow. Even when
claims were eventually paid correctly, a delay of weeks or months created
untenable and unnecessary hardship.
So what could we have done better? It is our belief that the need for
contingency plans and delayed enforcement could have been avoided completely if
some solid business premises had been developed and required of the industry at
First, “5010-ready” was a completely meaningless term. It meant
any number of things that were idiosyncratically determined by whoever was
talking, and none of them, hardly, with few exceptions, meant through, as
Jordan described, full, real adjudication of a live claim, as it was going to
be processed in the real environment. As a result, the health-care industry had
no idea who was able to correctly process claims and issue payment using the
5010 standards until we were in that live claims environment. Unfortunately,
that was way too late to correct the problems and/or avoid the payment
We believe that anytime a complex, multistep process involving a series of
events this complex and numerous participants — the terminology has to be
clearly defined, clearly understood, and used accurately and consistently.
HBMA recommended then and will continue to provide a definition of
“ready” that we would like the industry to adopt so that we all are
speaking the same language and know what it means. That definition has been
provided for this group.
Next, successful testing was a misnomer. Testing was quantitative, not
qualitative. We heard over and over terms like 60 percent are testing
successfully, 10 percent aren’t going to make it. It sounded pretty good, until
claims processing started in the live environment — or didn’t. Because testing
was at such a high level and the test environment did not accurately represent
what would happen with real claims, many had a false sense of security. In many
cases, testing was, quote/unquote, successful, but ongoing payer programming
changes were not shared. Suddenly claims that had been successfully were denied
or rejected. Like “ready,” successful testing must be at the live,
claims adjudication level.
To compound the testing problems, most payers tested the 837, not the 835.
The final straw was the profound lack of transparency. What we have learned
is that multiple vendors, clearinghouses, payer hand-offs, et cetera, handed
off to another entity that was not disclosed or not known in the chain. It was
a hide-the-pea shell game. You though you tested successfully. Suddenly you had
a problem and subsequently learned there was another clearinghouse or another
vendor in the story that had not been disclosed.
All of those parties must be openly and honestly transparent, because each
of them could be the source of the problem.
While we recognize that progress will not always be simultaneous and
reasonable latitude must exist, allowing any schedule for testing, by default,
creates no schedule for testing. If real testing of live claims had been
required on a standardized schedule, these problems would have been known in
adequate time to remediate them and avoid the disruptions.
For all future updates and changes of this significance, we strongly
recommend allowing enough time to test adequately, correct problems, retest and
revalidate as many times as it takes before implementation. The process that
Jordan shared would be very effective, I believe.
The go-live date also was whatever any given payer decided they wanted it to
be. Although January 1, 2012 was the implementation date, we experienced actual
go-live dates that varied from significantly earlier to significantly later.
Obviously, this created myriad additional problems for the industry.
Mandatory changes should have one implementation date for everybody
involved, not whatever somebody decides.
5010 wasn’t a technical problem with a technical solution. We talked about
that at this committee several years ago. As predicted, many of our physician
clients did believe this was a technical problem their vendor or their
clearinghouse or their practice management system would just solve for them.
After all, what we heard was, how hard can a few programming changes be?
While we applaud the education CMS and others prepared in the diligent
efforts of virtually all of these professional organizations, the fact is that
most physicians did not really understand how 5010 or 835 or 837 or any of the
other technical lingo meant anything in their actual practice.
Major problems were not anticipated. We have heard about the post office
box as the practice address over and over. That was very common for physicians
who did not have an office or certain specialties, like psychiatry, who did not
want to use their home address on a claim. So the cry of “how could this
have been allowed to happen” came way too late.
We believe that too few stakeholders that really understood that environment
got to participate in the standards setting and resulted in these issues.
Specific to one of the questions Lorraine spent about eligibility, claim
status, our members are experiencing very few payers supporting these
additional standards at this time. Typically, it is just the minimum
Lastly, in addition, of the current standard remittance remarks and
explanations, many of our payers only use a tiny subset of the codes available
in the standards, so a denial for medical necessity could really be a
preauthorization issue, an exceeds-benefits issue, or any other number of real
reasons. While insurers are technically compliant by using standard codes, they
are tendering useless information that may have been more clear in their legacy
We strongly encourage mandatory of use of all of the standard codes and
accurate reporting in the adjudication determinations.
Thank you very much for your time and attention.
MS. DOO: Thank you very much, Holly.
Now we have Annette Gabel, who will talk about D.0 and 3.0, I’m assuming.
MS. GABEL: D.0, 5010, and 3.0, right.
Good morning. My name is Annette Gable. I’m with Express Scripts. I’m here
today representing NCPDP.
We submitted two documents to the subcommittee. One went into a little bit
more detail. I’m going to be going through today the presentation, which pulled
some of the items from the detailed documentation.
For those of you that are not aware of who NDPDP is, we are an
ANSI-accredited standards-development organization. We’re particularly focused
on health care as it relates to pharmacy business solutions.
We have a committee at NCPDP. We still maintain our SNIP committee, which is
the Strategic National Implementation Process Committee. We got together to go
through the information that NCVHS was asking for so that we could provide the
information to the subcommittee.
As we looked through how the implementation was actually going forward, the
5010, the D.0, and the 3.0, unfortunately we did not have a survey that was
sent out to the industry, so what we are providing here are our best estimates.
So far what we know — and this is a little out of date, so I think the numbers
are a little better — is that the industry information indicates that greater
than 96 percent of pharmacy claims are being submitted in the D.0 standard. I
think that number has increased in the past few weeks, and we are probably
closer to 99 percent. What is interesting to note is that what we have heard
from some of the pharmacies is that they will be submitted on July 1, and they
are not submitting sooner. Even though the percentages look like, we have
indications that they will be compliant by the first of July.
As far as the 5010, we have found that the majority of trading partners have
completed installation of 5010. For my organization, we actually stopped
processing 4010 back in December, which I think helped push the industry into
where they needed to be for the January 1 compliance date. I think by us
forcing that, a lot of the entities then started to get on the ball and move
more quickly to implementing the 5010 standards.
As far as the Medicaid subrogation standard, which is the version 3.0, we
have indications that everyone is processing and using that standard.
We were looking at one of the questions. It was related to what we thought
was the most important business or technical issues that might still be
remaining for the transactions. The only one that has been brought to our
attention is related to multi-ingredient compound submission. Basically what
the change was from — and it’s not really a change, because it was available
in the 5.1 version — it was available in a method where there were two other
methods, and the method that was being used in the 5.1 standard was actually to
pull the most expensive legend ingredient and submit that on the claim. With
the D.0 transaction standard, that opportunity went away, and the pharmacies
were required to submit all of the components, all of the individual
ingredients that went into the compound.
That provided some interesting situations, not so much from the standard,
because the standard accommodated what needed to be submitted, but it was more
around the business practices. There are still to this day a lot of different
business practices which occur between the pharmacy and the processor-payer.
The pharmacies are having some issues related to what the rules are for the
submission of compound billing.
NCDPD has been providing guidance to the industry, basically related to what
the correct use of the transaction standard is. We put together some questions
that have come into us from our Frequently Asked Question Task Group. We have
been discussing compounds, providing recommendations back to the industry as
those questions are coming in. As a result of that, the NCDPD version D.0
editorial document has been updated to reflect those questions and answers that
have been approved by NCDPD, so it gives an opportunity for those individuals
who are still struggling with the transaction to go and look at that
information. Hopefully it will help them with processing.
We’re also going to be working on a white paper to assist the industry with
additional guidance. That’s one of the things that they have asked us to do. We
formed a new task group which is specifically concentrated on specialty and
compound pharmacy work items. Later on, after we get all this information
together, the NCPDP SNIP committee will be holding another webinar to see if we
can get that information out to the industry.
Then we were asked to discuss the two or three lessons learned from the
transition. Obviously, we went a little bit beyond the two or three lessons
learned. I’ll quickly go through this.
One of the things that was observed by NCPDP was that the entities that
actually participated in the meetings, those that attended the webinars that we
held, and those that participated in the workgroup and task group meetings had
a higher level of success in installing the revisions that were required for
the new standards. Those that participated in the development had a better
understanding, broader knowledge of why the changes were being made, what was
required for implementation. Where there was lack of participation, it resulted
in a lesser degree of success and a higher incidence of complications while
implementing the standard.
Basically, what we’re recommending is, from a CMS communication effort
standpoint, we need to engage all entities, and specifically those that were
identified this round as outliers, to get them involved earlier in the process.
Although the regulations included different stages of compliance, some
entities within the industry did not adhere to the stages. This resulted in
those entities not working through the transition period and subsequently were
not ready prior to or as of the compliance date.
NCDPD had created a payer sheet template, which is similar to the companion
guide on the X12 side of the world. We updated it and spent a lot of time on
it. We thought that would help the processors communicate the requirements in a
standard format to the providers, but what we found was that we could
potentially provide more instructions than we had actually provided when we
created these payer sheets.
You asked, is there anything we would like to bring up as it was related to
the implementation of the new standards? What we have, as a group, determined
is that — and I don’t think this is anything that anyone else probably isn’t
aware of — due to the other industry required implementations that were
occurring at the first of the year, some of the entities were not ready to
comply, because they had other existing priorities. It was recommended, if
possible, that we stay off of a compliance date that’s associated with a
January 1 date.
NCDPD’s education and outreach for the new standards did begin in 2007. We
started very early. It consisted of surveys, webinars, presentations at
industry events. We did create white papers.
The NCPCP telecommunication FAQ and coordination of benefit task groups has
responded to a significant number of questions, and we continue to respond to
questions that are now related to implementation issues.
As a result of industry education and communication efforts, as well as the
defined stages of the HIPAA transaction standard regulation, the industry
achieved a better rate of compliance. I believe at this time we are in much
better shape than we were for the last round of HIPAA. I think that’s pretty
As I mentioned earlier, we created a payer sheet template, which we thought
would help to communicate the information that the payers were looking for the
providers to supply on the claim. As I said, we believe that a lesson learned
for the industry was that, although we tried really hard to make this an easier
process, we made it a little bit more confusing than it needed to be. We will
be updating the implementation guide and providing additional guidance about
how to complete those payer sheets.
The other recommendation we came up with through the SNIP Committee was that
maybe — because we know that everyone has to purchase the implementation —
maybe we should add some language to the front of the implementation guide that
encourages the individuals to stay involved in the industry discussions, to be
aware of the implementation issues and resolutions as it regards the industry
implementations. The editorial document, we believe, will provide guidance on
industry and implementation issues.
NCPDP, with their next version — whatever version we determine we will be
moving forward with for the next recommended standards — we will update the
implementation guide to include this information.
That’s all I have today. Thank you very much for allowing me to present.
MS. DOO: Thank you, Annette.
That is the end for this panel.
DR. SUAREZ: Thank you again very much for preparing this very comprehensive
review of perspectives of where we are with 5010 and D.0 and 3.0.
I’m going to open it up for questions from the committee members. Go ahead,
DR. WARREN: This is for Rob Tennant. In your presentation — and other
people mentioned it as well, so after you respond, if anybody else wants to
chime in, that would be good — you mentioned that you had completed successful
testing and that, after the testing, when you went to go live, you still had
problems. Could you talk more about what wasn’t covered in the testing that led
to those problems? I’m trying to get a handle on — we thought we tested, and
it sounds like we did, but it still didn’t work.
MR. TENNANT: That’s a good question. I think it had a lot to do with the
edits in terms of what the clearinghouse and the health plans were accepting.
Things may have changed. Plans may have changed their policies. Again, it get
backs to the point that it’s very confusing to the provider to try to
understand what’s happening with their claim. I think we heard from a number of
folks that the acknowledgment issue is going to be critical, because that’s the
feedback loop that we need from the clearinghouse and the plans.
But the critical point is, a lot of practices can’t even accept the
acknowledgment transactions, especially the smaller ones. Their software just
simply can’t handle them. So I think, A, we need to mandate them, we need to
standardize them, but again we need to allow the practices to have the
capability of actually leveraging transactions, meaning that we have to certify
the software, so the buyer has some confidence that when they purchase that
software, they can accept the acknowledgments and then fix the problems long
before they become a problem.
MS. DARST: One of the things that I testified with WEDI was the NOC codes.
If we were testing 5010 and everything looked good, the transaction looked
sound, but once we actually go into production, if a payer changed their edits
— in this case, very large payers changed their edits to include needing
descriptions on codes that really didn’t need them. They maybe misinterpreted
what they read in the implementation guide. We didn’t see this coming, as a
provider community. It really went to the point that once we went live with the
claims, live with the transactions, that’s where we saw the problems.
DR. WARREN: So, really, what happened was that you had good test plans and
then when you went live, you found out people had changed policies, had changed
requirements that you didn’t know about during testing.
MS. DARST: Right. They implemented additional changes in conjunction with
their 5010 rollout. At least that was our experience.
MR. FIRFER: I think, though, that as we think about why those changes might
have been made, part of the issue was that there certainly were no mandated
levels of communication. In the flow between the provider and the payer and
back, you have folks that work together cooperatively and you have entities
that may even be in competition with each other that would not communicate. In
fact, Florida Blue probably spent most of its time in the communication process
being a moderator between all these different layers, trying to get them to
talk to each other so we could understand an edit that was either changed at
our level or at the clearinghouse level. It could be at a PMS vendor level.
Some of the ways that they change the processing of the claim to make it more
successful may hinder other efforts that had already complied with the first
wave if they were doing it.
I think there’s a lot to be learned in identifying the best way to ensure
that communication occurs, and it may be useful for CMS to become involved in
helping to push that that process is both warranted and required.
MS. GABEL: I just want to add that we actually did software testing. We did
software testing during the certification period, which was in our test
environment. One of the things that we found was really important was to do the
transition testing — actually, doing production testing with the vendors — so
when we went live, we had that year to do transition testing before we were
required to move over to the new standard. It gave you the opportunity to test
completely the transactions in a real-time production environment. Because you
had that transition period, if you ran into issues, you could back out and go
to the prior version. So I think it was very important and helpful that we had
that transition period.
MS. MEISNER: Judy, to your question, the biggest issue we found — and we
have talked about it a little bit — we tested heavily, and we used
production environment data to test — the reenrollment in association with the
clearinghouse did not show up in the test environment. As a matter of fact, we
went into production for several weeks and the claim cleared production, and
then all of a sudden we started getting rejections.
To add to that, several of the translator products had issue with the 997,
so we were unable to read them, unable to parse them, and unable to deliver
them. So the providers weren’t even aware of the fact that the claims were
rejecting for the provider linkage problem.
So it was a compound problem that didn’t show up in the testing, but showed
up as soon as we went into production.
The other thing, I think, that’s important for people to understand is that
software vendors, big software vendors, typically will test with their
clearinghouse trading partners and make sure that their software works
properly. Then they go out and they deploy it. The Mayo Clinics will do their
own testing. The large providers will. The small provider doesn’t test. They
get their software delivered. They go into production. They don’t understand
the new rules. They start getting rejections. It causes phone calls to come in.
Then you have to troubleshoot to say why it is rejecting, what the message was,
who rejected it. You have to follow the bouncing ball.
But a lot of times the small docs aren’t doing the testing. That, to me, is
problematic, and I think it’s going to be very problematic moving forward with
ICD-10, because that is not something the software vendors can test. I think
this is a big challenge that we’re going to be facing with our next big
MS. DARST: Can I just make one other comment? When we talk about end-to-end
testing — and we did test with Blue Cross blue Shield of Florida in that state
— one of the things, too, that we find is that there is a difference in
definition between payers and providers in end-to-end testing. The reality is
that providers’ nirvana would be, I want to send you in a test environment, I
want you to process back a remit in a test environment, and I don’t have any
kind of risk associated. The reality is that payers can’t do that.
I think there’s an assumption on the payer’s perspective that providers —
just send us a day’s worth of claims in 5010, switch it back to 4010. It’s not
that easy to do that. Even as a large provider that has control of what
environment we’re in, this is no small process. For the smaller provider, this
becomes even more difficult.
So I think we fundamentally have a problem when we talk about end-to-end
testing. We need to come to an understanding as a community of what that means
and what’s really doable by both parties. I think we’re at a crossroads right
MS. MEISNER: To that point, too, I understand that a lot of payers don’t
have end-to-end testing. We don’t get acknowledgments back. We don’t get 835s
back. But on the same token, many of the small providers have no test
environment at all. It’s going to be very interesting to see how they can test
their ICD-10. They are given a software upgrade. It’s a production system. They
have no way of testing. They rely on their vendor to do the testing for them.
We need more conversation.
MR. FIRFER: In addition to collaboration, to Rob’s point, if we could at
least be saying to providers, look for this specific certification from your
vendor, obviously they will know whether or not they are at that right version,
at least to alleviate a lot of the issues.
DR. SUAREZ: Thank you very much for that.
Any other questions from the committee?
I do have one. We heard a lot about the situation with transactions, but a
lot of them really related to claims and claim payment. We heard a lot,
actually, about acknowledgments, which was very good. But I want to explore the
status of the other, not so well known or used transactions, particularly two
that I’m interested in, eligibility and prior authorization. Could you say a
couple of words about what your perspectives are on how those transactions are
going in terms of 5010?
MR. FIRFER: At least at Florida Blue, once we had gotten through the primary
claims transaction, although we did experience issues with other transactions
— probably more so for E&B — they were not anywhere near in the realm of
However, I would also say that some of the issues in testing those other
transactions were that other people in the chain, other entities in the chain,
were so focused on claims — and rightfully so — that there was very little
time from the time they finally got their claims issues sorted out to test
Another point I would make regarding off-referrals is that we have 278-C,
which is covered, but we have a 278-I, inquiry, which is not covered. So we
have a lot of entities that are saying, we’re going to continue to send 4010
for the 278 inquiry, and you had better not reject it because it’s not a
DR. SUAREZ: Any other comments? Laurie?
MS. DARST: Just going back to my testimony for WEDI, there were a number of
reported 835 issues. It really came down to just interpretation issues, that
type of thing. I think that was definitely another spot that especially the
provider community struggled with as far as getting what I guess I would say
probably are noncompliant 835s, and that continues to be an issue.
DR. SUAREZ: Other comments about eligibility or prior authorization?
MR. SOONTHORNSIMA: A real quick question. I heard some comment themes around
testing and nuances around testing with various trading partners, vendors,
payers, and so forth. Another thing I heard consistently is the test period.
I’m not sure whether there is some consistency around what you think, in an
ideal world, that timeframe is to do this testing, and otherwise.
MS. LOUIE: I don’t know what my colleagues are going to say, but our
organization thinks there should be at least a year of full testing, to have
time to identify problems, remediate problems, retest — similar to what you
described. It’s not just throwing a switch and six weeks later you can go live.
We really think a full year is needed.
MR. TENNANT: We would agree with that, with the caveat that there has to be
a start point. That start point would be when health plans and clearinghouses
have proven their readiness level. I think the theme that I have heard here is
that there were problems during the test process. Medicare didn’t even get
started until May. We need to get a full year where everyone is ready on the
front end and then do the end-to-end testing throughout the next 12 months,
then go live with production. That’s what I would say.
MR. MCMULLEN: Really, the errata changes threw a wrench into it. When you
asked partners if they were going to test before that, they all said, no, they
were just going to wait until after that. So you really had a May to December
MR. FIRFER: I would also highlight that as we move into some of the other
mandates, in particular ICD-10, and we’re talking about a flash-cut, a single
point of time before which you do one, after which you do the other — as we
talk about the complexities of end-to-end testing, and even the ability to use
a production environment to do small chunks — because we want to test all the
way through if we don’t have an end-to-end testing environment — for ICD-10,
we exclude that possibility by enforcing a flat flash-cut that will not allow
us to do any kind of parallel production.
MS. CARTER: I would just like to echo the need to define end-to-end testing.
Medicare doesn’t do end-to-end testing. We actually never have, with one
exception, back in, I think, the year 2000, when we implemented the outpatient
prospective payment system — or maybe it was home health prospective payments,
one of those two — right after Y2K. It was quite an ordeal to do. Not that it
can’t be done, but that is not the way we’re set up. So I think that getting a
common definition of what we mean by end-to-end or what is done — we went so
far into the system to be able to process through the front end and give back
an acknowledgment. That piece we did, but end-to-end all the way through —
that’s just not the way it’s set up. I think that people really just do need to
understand that. I’m not saying we can’t do it any differently, but it would be
quite a reach to go beyond that. We just need to all be clear on that.
DR. SUAREZ: Thank you again. Thank you so much for these very rich
presentations and for your graciousness with the time that we gave you. We are
exactly at 9:45. I thank you again.
We’re going to move to our next item, which is a break. We’ll be back at
DR. SUAREZ: Panel number 2 is going to focus on the preparatory work that
the industry is undergoing for the implementation of the operating rules for
eligibility and claim status. As you all know, the deadline for the first set
of operating rules is approaching. We have about six months before the start of
that compliance. What we want to hear about is how things are going. Now that
we just heard about the importance of preparatory work in testing and
transitioning and all the significance of starting early and doing it sooner,
it’s important to, of course, hear from the industry about how things are going
in terms of preparing for these operating rules.
I’m going to turn it over to Lorraine for the start of this new panel.
MS. DOO: Thank very much.
We’re going to be starting with Tim Kaja, from United Health. You will look
at me once in a while and look for the green when you have five minutes left
and the red when you have one minute left.
I heard you are very passionate about this subject, from someone who works
with you. So we’re going to enjoy listening to your passion.
MR. KAJA: Thank you, everybody, and thanks to the committee for allowing us
My name is Tim Kaja. I’m senior vice president with UnitedHealth Group and
president of Network Service Operations for the UnitedHealthcare.
I think you are all familiar with UnitedHealth Group. We service more than
75 million Americans in the health-care space and are highly focused on
creating solutions that modernize our health-care system. I’m going to talk a
little bit about that today.
Let me begin by focusing on the transition relative to operating rules.
UnitedHealth Group made the decision to voluntarily more to CORE Phase I and
Phase II certification influenced, based in part — actually, in most — on the
benefits that EDI would bring to both payers and providers. We were able to do
that during our implementation of 5010. The combined two-year project also
included the transition to the operating rules.
As part of this process, we did develop a business case around the process.
I’ll talk a little bit more about this in a few minutes. But the business case
revolves heavily around adoption in the industry, by the provider community, of
both eligibility and claim status transactions. The driving force behind that
business case sits around the conversion of phone calls to EDI. I think that’s
really important for us to recognize.
A couple of concerns out of the gate:
• It’s recognized that there are some entities that submit 4010
transactions today and their clearinghouses upgrade those 4010 transactions. We
are not in favor of that. If the data is not there in the beginning, we can’t
return the data.
• Secondly, we are concerned about the non-covered entities’ practice
management systems and their ability to perform to the connectivity and the
performance rules associated with system availability, publishing regularly
scheduled downtimes, and providing a week’s notice for non-routine downtimes.
• Thirdly, and probably the most important item here, is adoption. Can
the industry really align around this, all the way up and down the chain, to
take advantage of the significant opportunity that sits in front of us with
eligibility and claim status?
What’s our experience on the internal side relative to preparations? This
is all pretty textbook stuff. You review your requirements. You put the
resources together. But I think that one of the keys here is associated with
the ability to leverage the broad experience of CAQH and their resources and
tools, their lessons learned, and their staff, to help us identify — we didn’t
know a whole heck of a lot going into this — what we actually have to do in
order to get the operating rules to a point where they can be deployed and,
beyond the business case, to be sure that we don’t interrupt cash flow for
Our biggest challenge at UnitedHealthcare was the complexity and number of
systems. We have 22 systems and over 150 applications that we had to put in
place. That was from the technical side of things. From the business side of
things, it was really around how you ensure that you are going to get something
out of this.
I think it’s important to note that from a 5010 perspective, the combination
of 5010 and the operating rules is really important. Without the operating
rules, there is very little value in 5010 from a payer perspective. The
operating rules bring all the value to 5010, because they are focused on what
happens inside of the physician office and the hospital back office.
So from a business perspective, implementing 5010 alone would have been a
significant loss of valuable healthcare dollars, but combining it with the
operating rules — that’s where the value is.
A couple of recommendations: We do highly recommend that as we get into the
next version, 6020, the payers, the providers, X12, and the operating rules
entity, CAQH, work closely together to ensure that there is value there from a
Some of the business and technical issues that we identified and advice for
other entities — I’m going to jump right to the advice. UnitedHealth Group
continues its commitment to CORE CAQH and the processes that revolve around it.
We do encourage both covered and non-covered entities to go through the CORE
certification process that is voluntary today.
We have participated in a whole bunch of industry presentations to share our
lessons learned. It’s important, at least from our perspective — we are unable
to find another entity that can get us into the same place with the same set of
standards so that when we all say we comply, we all know what that means. Today
the CAQH process gets us there. In absence of that, I think the consequence is
going to be years of calibration that will happen with HHS as we go through the
enforcement period. We don’t have years of calibration in front of us in order
to take advantage of the opportunities that are there.
Relatively to eligibility, let me just give you a couple of facts here. The
combined operating rules and 5010 activity get us to a 70 percent solution to
why providers call UnitedHealth Group today. That’s really important. I’m going
to talk about that in a couple of minutes. Getting to 70 percent is one point,
but getting that last 30 percent, from a lessons-learned perspective, and
focusing in on the physician practice and the hospital acknowledge office to
get rid of all of the transactions is important. When you go to buy something
at your merchant, they don’t do the electronic transaction part of the time and
then call the Visa company and say, can I make this transaction happen for the
other 30 percent? It’s a full solution. We need to figure out how to get there,
meeting the needs of the physicians and hospitals’ back office.
From an operating rules and 5010 perspective on claim status, it’s important
to note that only 27 percent of the calls that we get into UnitedHealth Group
today will be remediated by the current rules that are in place.
A key point for both eligibility and claim status transactions is that
their value around non-covered entities is such that the non-covered entities
may not necessarily be incented — we don’t believe they are incented — to
actually make this whole system work. The practice management system vendors
and clearinghouses need to make it easier and less expensive for the provider
practice to submit EDI transactions. We need to have EDI transactions submitted
out of the practice management systems in order to drive efficiency. If we
don’t get to that point and those EDI transactions aren’t transacted across
clearinghouses, payers, and back to providers, we’re going to have a hard time
Even with the 70 percent solution that we have in place today, our
experience so far is that 40 percent of that 70 percent is only being taken
advantage of today, even though it’s available, and the usability of that 40
percent is only a fraction that sits inside of the physician’s practice today
and how they are using the transaction. We have a long way to go.
A couple of opportunities: Relative to industry-wide implementation, we
would recommend a mandatory registration process of readiness by covered
entities. We would also recommend that covered entities go through the
voluntary CORE Certification process. It would be our preference that the
testing process be mandatory for both covered and non-covered entities to
ensure that the significant investment made by those complying entities can be
realized and that cash flow is protected at the physician office level.
The considerable fines outlined in the Affordable Care Act should be based
upon fines for not registering or passing certification. We also believe that
entities who hold CORE Phase I and II certification should be grandfathered
into the voluntary CORE certification process.
Practice management sand clearinghouses should be required to create, pass,
receive, and post standard X12 transactions with the regulatory mandated
operating Rules. Without this, we believe it is hopeless that adoption in the
industry will get to adoption.
Relative to milestones, if you chart out all the milestones around putting
business rules in place, system design, system code change, testing, trading
partner testing and certification, et cetera, we believe at this point in time
all entities should be at the system code change and be at the point where they
are testing internally. If we’re not there now and if all the entities aren’t
there now, we’re going to have a hard time meeting the 1/1/2013 date.
Just a couple of other pieces of feedback. I have three of them.
UnitedHealthcare fully supports CAQH CORE as the authoring entity for
operating rules. We also support work that CAQH CORE is doing relative to a
multi-stakeholder conversion. The work completed by X12 and CORE can really
create a meaningful environment to drive change in how health care is
transacted in this industry.
UnitedHealthcare does not endorse or recommend layering other parties into
the already collaborative operating rules process, either in the role of
decision makers or with special authority. The established working relationship
with that exist between payers and providers and CAQH CORE is really important
that we protect.
Secondly, UnitedHealthcare recommends that we put a beta testing group in
place relative to how we realize the benefits of pulling through these
transactions so the industry to more broadly utilize them all the way up and
down the chain. We volunteer to participate in that process, and we would like
to see the entire industry participate in this process and ask the committee to
put together a white paper around what it’s going to take for us to get there.
Thirdly, we have learned that the pure implementation of just the technology
doesn’t make things work. In order for a physician practice to change to what
we are looking for her, the physician practice has to be able to utilize these
transactions across their entire space. That means the commercial space, that
means the government space, Medicare, and state Medicaid agencies. Without all
these entities participating for enabled transactions in the operating rules,
it’s going to be a far fetch in order for the physician offices to convert
their business of calling today, which is an expensive transaction, to one that
should be implemented.
In conclusion, UnitedHealth Group is highly supportive of the operating
rules created for eligibility and claim status. We remain complimentary of the
CORE operating rule process for their discipline around industry collaboration
and sensitivity to the needs of physicians and hospital back offices. We
recommend that future iterations of operating rules for all HIPAA transactions
be authored by CAQH CORE. From a business perspective, it is the operating
rules that create value. Our activity really proves that out.
We encourage HHS to apply the same standards of compliance to all entities
that exchange HIPAA-based transactions, not just health plans. It’s unclear why
only health plans are being held accountable to this. While UnitedHealth Group
will be ready on 1/1/13, we are concerned that the industry will not be ready.
We also encourage the NCVHS Subcommittee to recommend a registration and
certification process that recognizes the investment that entities are making
operating rules, while protecting provider cash flow.
By this time, all covered entities should be in the programming phase, with
internal testing completed at the end of July. Sufficient time is needed to
ensure that trading partners can exchange transactions in a 5010 CORE
environment prior to the January 1, 2013 date. We don’t see any testing process
today in the regulation.
We request that the NCVHS Subcommittee support joint surveying of covered
entities to gauge where the industry is at a number of points between now and
the end of the year for the continued viability of a January 1, 2013 date.
Lastly, it would be advisable for the NCVHS subcommittee to recommend a
white paper study that would review the rules around claim status and
eligibility transactions to ensure that the industry can adopt those
transactions and we can make this thing work.
Thanks for the opportunity to present today.
MS. DOO: Thank you.
Next we have Janet Jackson, from Blue Cross blue Shield North Carolina.
MS. JACKSON: Good morning. My name is Janet Jackson. I am the director of
document operations and Electronic solutions at Blue Cross and Blue Shield of
North Carolina, where my responsibility includes implementing, enhancing, and
supporting our HIPAA solution for providers.
I am speaking on behalf of our plan, an independent licensee of the Blue
Cross and Blue Shield Association. We are a leader in delivering innovative
health-care products, services, and information to more than 3.7 million
members, including approximately 900,000 members served on behalf of other
Blues. We appreciate the opportunity to offer our comments on the operating
Blue Cross and Blue Shield of North Carolina has a history of participating
with CAQH and CORE. Members of our management teams actively collaborated with
the other health plans, providers, vendors, clearinghouses, and
standard-setting bodies in the creation of the voluntary CORE Phases I and II
operating rules, which are now the mandated operating rules for eligibility and
claim status. We also actively participated on the proposed rules for HIPAA 835
remittances and electronic funds.
We believe the existing CAQH CORE process meets industry needs and should
serve as an effective framework for the remaining sets of operating rules.
Blue Cross voluntarily adopted the CORE Phase I operating rules and some of
the then-draft CORE Phase operating rules in 2007. We became CORE Phase
I-certified at the end of that project to demonstrate our compliance.
Our project costs then exceeded $2 million, but the results were great. At
the time of our implementation, we were only receiving approximately 100,000
eligibility inquiries a month. Today we’re receiving 2.8 million eligibility
transactions a month, which represents about a 300 percent increase in just the
last two years. We realized a growth of 15 to 20 percent per month for a while.
Providers are realizing the benefit of the enhanced content of the eligibility
transactions, and many are also executing the transaction as a demographic
check prior to submitting a claim and have built this into their claims work
stream. This helps to reduce the number of invalid member ID and member ID and
member ID/name/date of birth claim error rejections, which streamlines the
claims submission process and helps to reduce accounts-receivable days.
Additionally, the system we constructed for this effort is now leveraged
throughout our enterprise for almost all applications performing member
validation checks or returning member benefits. As a result, we have realized
significant cost savings, and the value has been and continues to be spread
across our enterprise.
Our experience with CORE Phase I has been extremely beneficial in the
transition to the new operating rules. There are enough of us still around with
the scars from our 2007 project.
Somebody in my organization said I needed to say “experience”
instead of “scars.”
We knew we needed to begin work early on the operating Rules project, which
we did, in July of 2011. Our project budget is $2.8 million. For ease of
implementation, we broke the project down into three manageable work streams,
one each for our two adjudication systems for eligibility and then a work
stream for claim status. We implemented one of the work streams this month and
are in application development for the other two work streams. Both are on
track for a November implementation.
From an enterprise perspective, timely completion of this project is
critical because our plates are very full, including implementing two new
adjudication systems, additional operating rules, product enhancements for the
health benefit exchange, ICD-10, and health plan ID, just to name a few.
We currently have two EDI front ends, as a result of a merger several years
ago. To eliminate this redundancy, we have taken the opportunity in our project
design to streamline the support of the HIPAA eligibility and claim status
transactions and to receive and respond through a single front end. This will
simplify the EDI interaction for our trading partners, as well as reduce our
administrative costs for these transactions.
We also took the opportunity to start the transition to new EDI translation
software, so that when our current one goes unsupported in 2017, we’ll be
ready. This allows us to maximize our cost-savings opportunities through
We currently do not offer real-time claim status capability to our local
trading partners. Therefore, the claim status operating rule changes represent
new functionality and will enhance our ability to meet our providers’ business
need. We have wanted to do this for a number of years, but getting it put on
the project books has been a challenge, so we are glad that the mandate is
forcing us to do it.
Clearinghouse and practice management vendor interfaces will be able to
automate our on-demand claim status inquiries and reduce customer service phone
From a technical perspective, for the real-time claim status, we will
leverage the connectivity channels that we built for our eligibility real-time
services and then also the web services that were used for our batch claim
status, to streamline support and maintenance costs for this capability.
One of our lessons that we learned when we implemented the real-time
eligibility, and especially with the subsequent growth of our real-time
transactions, is that we needed to utilize a governing device for the real-time
transactions to ensure that the systems are available for all trading partners
and does not allow one trading partner to consume all available system
resources. Our internal goal is to have highly available systems that can be
leveraged in our service-oriented architecture to reduce the implementation
costs for these capabilities in other applications, including provider and
member portals, VRU, customer service, et cetera.
The biggest challenge that we have found so far is the 86 percent system
availability operating rule. Our claims adjudication systems are the source
systems for the eligibility and claim status data. These systems are designed
for batch processing with more loosely defined availability service levels and
have traditionally operated in an online mode during the day and a batch
processing at night. To address the needs of the operating rules, we needed to
build surrounding systems and services that enable 86 percent availability
compliance, which has been both challenging and resource-intensive. We have
worked closely with our technical teams on the system design and in developing
more robust support processes to ensure our solutions support both the
operating rule availability requirements and continue to support our enterprise
needs for batch processing.
As we begin this transition to operating rules, it is important that we, as
an industry, adhere to published compliance dates for eligibility and claim
status operating rules. Any change of compliance dates only creates a domino
effect, increases the cost of each project along the way, and also damages our
internal credibility when we are negotiating for already over-allocated
resources. Think of the little boy who cried wolf. Internally, people think
that we just say, oh, it has to be on this date, and then when it’s extended,
they just think we don’t need to comply.
We have already begun our project initiation process for the HIPAA 835 and
EFT operating rules, so if HHS is going to make a change to future operating
rule compliance dates, we recommend that they make them at least year to 18
months in advance of the already published date.
We support the current CAQH CORE process for authoring operating rules. CAQH
CORE conducts outreach to all industry stakeholders to encourage participation
and collaboration in establishing the rules that will further functional use of
the transactions. If more than one entity is responsible for authoring the
operating rules, we are concerned about the additional requirement of
stakeholder resources that will be needed to ensure that we are actively
participating in driving change.
While we are implementing our solution for eligibility and claim status
operating rules in 2012, we do not yet know what will be required for
certification by December 31 of 2013. We participated in the development of the
multi-stakeholder approach to CAQH CORE certification and believe that it is
valuable. We have encouraged our trading partners to get CORE-certified over
the last five years and have been exchanging CORE Phase I compliant
transactions during this period. We encourage CMS to recognize CORE
certification as being sufficient for certifying operating rule compliance for
the administrative simplification certification.
As an industry, we need to continue our education and outreach efforts to
include all stakeholders. Blue Cross of North Carolina actively works with CAQH
CORE and other industry groups to share our experience with implementing CORE
Phase I. We will continue outreach with our trading partners and providers to
ensure they understand our plans for meeting the mandated operating rules, what
tools we have available, and, as importantly, that we understand their growth
patterns to ensure that our systems will support the additional transaction
We see demonstrated value and firm ROI from the current sets of operating
rules. We recommend continued thoughtful evaluation of future operating rule
opportunities. Our commitment to partner with all stakeholders in this process
remains firm. We encourage all providers to expand their use of electronic
transactions beyond claims and for clearinghouses/practice management vendors
to expand the interfaces between their applications and the transactions to
allow for seamless integration and use of the information. Otherwise, we will
simply add costs and complexity to an already overburdened system and those
costs are ultimately passed onto the consumers of healthcare.
I thank you for the opportunity to testify, and I am happy to answer any
MS. DOO: Thank you.
Next we have Tammy Banks, with the AMA.
MS. BANKS: Thank you, Lorraine.
Good morning. I’m Tammy Banks, director of Practice Management Center with
the American Medical Association. The AMA would like to thank the NCVHS
Subcommittee on Standards for inviting our input on the implementation of
operating rules to increase the value of the HIPAA standard transactions.
The AMA strongly supports the administrative simplification provisions in
the ACA, which are designed to fix the problems associated with the
transmission of health-care information. The AMA supports the work that X12,
WEDI, and CORE have undertaken to identify and remedy the hurdles which have
been encountered to date, and urges NCVHS to implement the ACA administrative
simplification provisions in a fashion that leverages and enhances those
The AMA is gratified by the increasing industry-wide commitment to
addressing the problems associated with the transmission of health-care
information, and particularly by the increasing sensitivity of the national
commercial health insurers to the automation needs of the physician community.
Administrative simplification is a team sport. It simply cannot be achieved
without the coordinated efforts of all the trading partners and all the
standard, operating rule, and code-setting bodies. Health care is often
compared to the banking industry. However, we need to realize one of the main
differences between the automation efforts of the banking and health-care
industries is that the work of creating electronic transactions is distributed
among a number of separate entities in health care, while in the banking
industry it is consolidated in a single entity, the Electronic Payments
Association, commonly known as NACHA. This undoubtedly reflects, in part, the
greater complexity of the health care system, but it also makes the standard
setting and operating rule process more complex. Indeed, as between X12 and
CORE, the process is iterative, with the potential for each organization to
build on the work of the other as operating rules are incorporated in the
implementation guide for the subsequent X12 standard, which then creates the
opportunity for further refinement in the subsequent operating rule. The work
of X12 and CORE must also be harmonized with the pharmacy standards created by
the NCPDP and the work of the various code set developers.
The physician practice experience with the implementation of new versions of
standards and operating rules should be seamless and incorporated within their
daily workflow, using their practice management, or PM, system. Physician
practices look to their PM system and clearinghouses to implement and be
compliant with the mandated standard transactions and operating rules. Without
PM systems, trading partner, and payer compliance with the transactions and
operating rules, we as an industry will not realize the cost savings being
touted today. Physicians simply cannot establish separate workflows for each of
the many payers they typically work with, not to mention the different product
lines. When the electronic standards do not work industry-wide, physician
practices must drop to paper.
I must reemphasize the importance of enforcement if we are ever to get to
the fully automated health-care system envisioned by HIPAA and now mandated by
the ACA. Lack of compliance by health plans is slowing the adoption of
electronic transactions by the provider community, as the value of these
transactions is dramatically reduced to the extent that they cannot be
implemented within a physician’s practice management system consistently to
provide an integrated and automatic single practice workflow across all payers
with which a physician or other health-care provider does business. It is
extremely difficult for organizations, particularly smaller practices, to
implement multiple workflows. They will almost certainly not adopt new versions
of standards or operating rules if the industry-wide functionality will not be
forthcoming. Unless all of a practice’s trading partners use electronic
transactions which meet the practice’s needs, the practice will likely find it
more efficient to continue to use manual processes which cannot be used
consistently and effectively.
This is the same issue we messaged out in 2008 and remains equally relevant
today. We must increase enforcement, accuracy, and functionality of existing
transactions, and this should also apply to the upcoming eligibility operating
rules and future operating rules. Fully compliant implementation of all
the standard transactions has not been completed by many HIPAA-covered
entities, let alone third-party administrators, PM systems, and other agents of
those covered entities. Moreover, some covered entities using standard
transactions have implemented them with variations of interpretation. Thus,
true standardization has not yet been attained, despite the transaction rules.
Even though the industry has experience with the transactions through both
the 4010 and 5010 versions of the standards, realizing the full potential of
administrative savings, as we all know, has yet to become a reality. The
primary barrier to maximizing savings is the gap between syntactical compliance
and functional compliance. Functional compliance, for purposes of this
document, is defined as meeting the business requirement that the transaction
supports. It is all too common for a transaction to be syntactically correct,
but fail to meet the business requirements. For instance, the payer has a
critical business need to know if a physician who has submitted a claim is in
the patient’s network or out of the patient’s network. The payer may be
syntactically correct in selecting a status code of in-network relating to the
patient’s in-network benefit plan, but the physician may in fact be out-of-the
patient’s network. The resulting error and rework for one or both parties
cancels the expected efficiency of the transaction standard.
The AMA strongly recommends that mandated functionality testing of the HIPAA
transactions and operating rules be conducted by all payers and trading
partners, including PM system vendors. PM system vendor certification
should also be considered to encourage the increased functionality that will
benefit all stakeholders.
In addition to our advocacy efforts to improve the value of the electronic
transactions for physicians, for the past five years, the AMA has rolled out
the national “Heal the Claims Process” campaign, focused on
encouraging physician practices to use the HIPAA transactions, and will include
this year preparing for the upcoming eligibility operating rules. The AMA and
MGMA have partnered to create the practice management system software vendor
directory that complements the online resource, Selecting a Practice Management
System toolkit. Thirty-three vendors currently comprise this vendor database,
and the majority of the self-reported information was compiled in 2011.
However, of these PM system vendors, 23 percent provide the functionality as
contained in the CORE Phase 1 and 2 operating rules, 7 percent made the
functionality optional, 33 percent were under development, and, more
concerning, 37 percent did not provide this functionality at all.
The AMA and MGMA will continue to raise vendor awareness of the
functionality needs of physician practices and will also continue to educate
physician practices on the functionality that they will need to succeed in the
21st century. They have also partnered with WEDI to host two vendor
and practice engagement conferences.
The AMA is committed to the administrative simplification objective within
the physician practice and is pressing for point-of-service pricing through
automated real-time health plan transactions, single integrated workflow for
all lines of businesses, and increased transparency and reduced ambiguity
during the health insurer claim payment process. The upcoming operating
rules that cover eligibility, health claim status, electronic funds transfers,
and others, as well as future mandated standards — specifically, attachments,
acknowledgements, and identifying of those entities who perform in the claims
process — are critical to achieving these goals, but only if they are
We look forward to continuing to work collaboratively with NCHVS and
respective stakeholders to bring about administrative simplification for
physicians and others in the industry.
Thank you, Lorraine.
MS. DOO: Outstanding. Thank you.
Next we have Deb Strickland. You are representing WEDI today, right?
MS. STRICKLAND: Yes, I am representing WEDI.
Members of the subcommittee, I am Debra Strickland. I’m co-chair of the 835
and EFT workgroups for the Workgroup for Electronic Data Interchange, and I’m
also a solutions architect for TIBCO Software. I would like to thank you for
the opportunity to testify on behalf of WEDI concerning the matter of operating
rules for eligibility and claim status.
WEDI represents a broad industry perspective of providers, clearinghouses,
payers, vendors, and other public and private organizations that partner
together to collaborate on industry issues. WEDI is a named advisor to HHS
under the HIPAA regulation, and we take an objective approach to resolving
On May 29th, WEDI released a brief poll that sought to gain
insights into the industry’s readiness for eligibility and claim status rules.
The goal in this effort was to assess how prepared organizations are for
eligibility and claim status operating rules. The methodology was to collect
responses. We collected 71 responses as of June 12. Entities were able to
select that they were more than one of these entities. They could be a payer
and a provider. The method was a Web-based poll using SurveyMonkey. It was sent
to general media, WEDI, member companies, health IT, SmartBrief subscribers,
and also WEDI partners.
The limitation was that the poll was meant to just be a snapshot of the
readiness of the industry, and not really generalizable.
A summary of the poll, what we found:
• As far as awareness of the operating rules effective 1/1/13, there is
• Not all of the operating rules, however, were understood by the
respondents at the same level.
• The level of effort in order to meet these needs was medium-sized,
for most organizations surveyed.
• Two-thirds of the respondents had started assessments.
• Half of the respondents knew where to go for questions regarding the
Looking at the participant response, the results show that 60 percent of the
respondents are payers, as we would expect, as they are the most impacted by
the operating rule implementation effort. The majority of the respondents who
completed the poll were not CAQH participating organizations. This is pertinent
because CAQH members would likely have already been well aware of the
requirements, may also be certified, and have worked with CAQH on these
requirement efforts. So they would have potentially been having to be compliant
before the implementation date.
The poll showed that the large majority of the responders were aware they
had to comply with the operating Rules. This is positive news. The rules have
existed for a long time. They do align with the HIPAA 5010 transaction in many
ways. We do need to make sure that we consider that success and relative base
knowledge when we consider the next round of operating rules. The next set will
be less circulated, so more education and outreach may be necessary.
As far as readiness, the majority of the responders did say that they had
been in the assessment stage of the operating rules. That might not be good
Of the 71 responders, we wanted to get a general idea where they had heard
about the operating rules and which communication vehicle was getting the word
out to the broader audience. This will help us to leverage these communication
avenues for the next set of operating rules. What we found was that CAQH, WEDI,
and government communications were the highest and most impactful communication
vehicles. This should be considered as the next circuit of rules comes you, and
these vehicles should be used in a similar fashion, or even greater fashion.
As mentioned before, two-thirds of the respondents said that they were in
assessment. It is somewhat concerning that there is less than six months left
before the mandate, and even those in assessment will have to get through that
assessment into development and into testing in six months.
So the good news is that that are some folks who are in development and
there are some that are in testing.
A little over half of the respondents reflected that the rules were clear
and easy to understand.
In light of this result, WEDI attempted to determine which, if any, of the
operating rules were more difficult to understand than others. The responses
received reflect that for five out of the 11 rules, 30 percent or more of the
respondents indicated that they had some degree of difficulty. This highlights
areas that would benefit from additional industry education and clarity around
the documents and requirements. We need to increase education around the rules
for future versions and documentation.
On the plus side, two-thirds of the responders felt that the requirements
were clear enough to complete assessment of the impact of these operating
rules. So they could get to the assessment completion.
One area that was identified to be a gap is the area of locating guidance,
as well as where to go to ask questions. WEDI is prepared to facilitate this
process with an evolving question online form service, which will facilitate
getting the industry the answers they need during these times.
Overall, the majority of the responders felt that the implementation of
operating rules effort was a medium-sized effort. WEDI believes that there was
significant awareness of the operating rules ahead of the Federal Register date
of 7/8/2011. Additionally, a compliance date of 1/1/2013 has allowed industry
adequate time to prepare their efforts. We need to understand, for future
operating rules, that they will likely have less socialization time than the
eligibility and claim status rules. Thus, there will be a need to adjust the
implementation dates accordingly.
On to the NCVHS questions:
As far as the transition to the new required operating rules for
eligibility, how is that status going?
It appears that there are some who are ready for the operating rules and
clearly on track for the 1/1/2013 date. However, it will be key for us to
supplement education and push the rest of the industry to be on track and
continue to monitor this as the date nears. Additional surveys, educational
tracks, and forums will help the industry to meet this date. Based upon the
results from this poll, it appears that additional, earlier education and
clarity around operating rules requirements is a good idea for the next set of
The perspective: The survey group felt, again, that it was a medium effort.
Comments that were obtained from some of the survey results indicated that it
was actually greater than they had originally expected.
Gaps include a central location for operating rules questions and answers,
separate documentation of just the what those requirements were for the
operating rules that can be clearly interpreted by different audiences., and to
start education earlier in the operating rules process.
In the process of implementing this first set of operating rules, what are
the businesses or technical issues you’ve identified? There is a subset of the
industry that had issues with the documentation of the rules. Communications
rules were found to be the most difficult for some to interpret.
As the approach to handling these issues and advice for other entities, WEDI
has the following tools and sessions planned:
- Partnering with CAQH CORE on online webinars in order to train the
- Call for best practices in implementation of operating rules. WEDI will
compile those and highlight the best practices in a town hall series.
- Call for volunteers on WEDI workgroups that have experience in implementing
these operating rules.
- A full day of content planned for operating rules as part of WEDI’s summer
forum jointly presented by CAQH CORE and WEDI members.
Anything else? WEDI feels that there is a need to continue to educate the
industry on the new operating rules and to continue to engage the industry to
learn what methods are most helpful as we near the implementation date.
In closing WEDI would like to thank the committee for allowing us to comment
on this important topic.
MS. DOO: Thank you.
Now we’ll have Gwen Lohse with CORE.
MS. LOHSE: I’m Gwendolyn Lohse, from CAQH CORE. Thank you for allowing us to
testify today. It’s nice to see many of you.
It’s an exciting time. The earlier panel was very informative.
For the outline of the testimony that I’m going to try to keep to, there is
a written submission that we gave you that has a lot of detail. I’m going to
try to keep it at a very high level and let you know what we have been doing
- Just a quick background on CAQH CORE.
- The role of authoring entities from the perspective of CAQH CORE.
- Activities that we have done to date, and others have done.
- The status and the key challenges.
- Some other things we plan to do.
- Next steps and some recommendations.
That’s just a quick flow of the outline.
On the background, I think most of you are familiar, but just as a reminder
CAQH is a nonprofit catalyst for administration simplification. It was formed
in 2000. CORE was formed in 2005 solely to work on operating rules, to develop
operating rules and then promote their adoption and maintenance, and also track
their ROI, which I’ll talk about in a minute.
Operating rules support other efforts. I think we have heard a lot today —
for instance, supporting 5010, supporting aspects of the NHIN, which is out
from ONC. How do we make sure that we’re integrating and coordinating?
The integrated model is how we have presented CAQH CORE to date. CORE
participants have really held us to this. This particular presentation is about
implementation of the operating rules, and that starts from the very beginning
through each of these steps. Whether we’re developing the rules and making sure
they align with other industry efforts — again, the underlying standards, ONC
efforts, policies, doing straw polls to make sure there is support — it starts
from the beginning, designing and testing a certification process — I think
you heard from some of the CORE participants that started from the beginning —
all the way through building awareness and creating an implementation base.
Without an implementation base, there’s no one to lead. With any people that
have said they have done it, it seems almost insurmountable — then promoting
the alignment, tracking the ROI, maintaining, making adjustments, and then
reporting out status.
So across the board, this is really a layered process. It’s integrated and
obviously fits into a bigger picture. The implementation — from the
perspective of CAQH CORE, without these steps, we’re not going to have strong
What have the activities that CAQH CORE has done to date? We have thrown
ourselves in to say, what can we do to help with this implementation,
considering all those steps that need to happen in the process?
One of the things to think about, too, is that operating rules are new to
the health-care environment. Even though we have an implementation base, they
are new to many people. So how do we educate both on awareness and then also on
the drill-down to the individual rules? We have been doing quite a lot of
education programming in a variety of venues, different modalities, and
evolving in-depth tools. They have to change constantly because what the
industry needs is changing constantly, and how people learn varies.
We’re collaborating with other organizations — WEDI obviously, the Medicaid
organizations, and the also NeHC. NeHC has a whole new audience. We need to get
to those people that aren’t at the usual venues.
Low or no-cost — a lot of people out there just do not have the dollars to
attend sessions that cost money. How do we get to a critical mass?
We have been putting out interactive tools based on lessons learned. For
instance, there is an analysis and planning guide. For those of you on the
diagram 2 in the detail shows what’s in that analysis and planning guide. That
is solely based on the 60 entities that are already CORE-certified. What did
they feel the challenges were to identify what systems were going to be
impacted? I think you heard from Tim Kaja, 60 systems, so making sure you are
looking at that first, then drilling down to the next level what
vendors you need to work with, how many, what the timing is going to be, who is
going to do what, and then drilling down to each of the rules.
We have held open public calls on that guide. We have a request process
that’s open. There have been about 300 requests to date. We refer a lot of
people to ASC X122 and CMS. Conference calls, FAQs that are constantly being
added to, and then polling evaluations — and I’ll give you an example of one
of those — on content, knowledge base, challenges, the voluntary CORE
certification, and then also ROI tracking and business case awareness. Then
there are other things, such as publications by other organizations that we are
distributing, repackaging the rules for usefulness, and then updating CMS OESS
office on a monthly basis.
As we think about all of these activities — and we’re talking about three
to four activities a month, plus all the interactive tools — pricing, quality,
and evolving depth — again, just to emphasize, CAQH CORE and other
organizations are bearing much of the cost of the education, because there are
just not the resources out in the market. If we want it to be a critical mass,
someone has to bear the cost. As we move forward, we just need to think through
Also collaboration — there’s more than the capability to have 300-plus
people on every single call that are varied and new and different types of
entities. That’s going to take collaboration to do that.
Also then assessing what we do — we constantly look at every opportunity to
say, are we going to get to the right number of people? Are they going to be
diverse? Are there going to be those people that aren’t at the table yet? How
do we get experts? People volunteer their time, without entities that have
already gone through it. We can’t learn and then we pass along information that
may not be accurate. How do we get the experts to the table that have been
through it? They are a key resource.
Our statistics also show that you have to dig down into the depths of the
rules and show that. I’ll talk about that again in a minute.
Statuses and key challenges: Just before I go into the key challenges, a
quick overview on the status. There is awareness of operating rules. It appears
that it’s strong.
There are a few things to note. Many entities are moving from planning and
analysis into implementation. The Medicaid agencies are very engaged. NCVHS
asked CAQH CORE to reach out to the Medicaids. We have placed a lot of time on
that. They seem to be engaged.
Health plans are especially interested because of the certification
requirements in the ACA. We have shared questions with the OESS staff so they
can understand exactly what is being asked.
Specific operating rules are more challenging for specific audiences that
may be lacking knowledge of things like SOAP, and others may have major system
upgrades to make, like response time.
The early adopters are key. We have 60 percent of the commercially insured
that have adopted. We need to take advantage of that and get their business
cases out there.
Programming and venues must speak to where they are. Some people don’t want
to be in a public setting. Other people do. How do we keep that variance
Then there’s a growing appreciation, now that we’re moving to
implementation, about operating rules and standards working together, which is
There are two levels of challenges. We have system-level challenges and then
implementation challenges. On the system-level challenges, these have been
spoken about by others, so I don’t want to spend a lot of time here. The
providers are not required to use the electronic transactions. The practice
management systems aren’t HIPAA-covered entities. There is a gap in the
There is also a lack of a coordinated network. I’m not talking about a hard
network, a system IT network, but a network that connects us to all of those
people that are out there that actually need to get the job done. We all need
to work on that. We need an ability to really educate those — where are the
loci for specific tools, education, business cases, for each of these types of
requirements? And there is a lot of expertise. Like clinical, if you think
about the rec centers, you think about other efforts, how do we continue to do
that into administrative simplification?
On the next slide are implementation-level challenges. Reaching a critical
mass — this is again through collaboration and building out awareness in all
the areas. Then we really have the challenges of new venues, the impact on the
revenue cycle, getting those business cases out there so they are clear and
consistent, making sure there are costs that are good — if the costs are the
barrier to educating, we’re not going to get the implementation we need — and
then quality and evolving, and then testing.
Then an underlying of the standards — certain rules are more difficult than
As we move forward, I think you all had issued The Tenth Report to
Congress, and developing meaningful metrics, identifying incentives, and
harmonizing — these all ring through. There’s no doubt — the testing,
We gave an update on CORE, where we are. I’m going to skip over that and
move to the next slide.
Where are we? We’re going to expand our venues, promote information and
tools from others, utilizing more feedback mechanisms, and document strategic
drivers to change things, and update OESS.
This is an example of the type of metrics we’re looking for. Where exactly
in the rule do people not understand? How do we drill down our education to
focus there? We’re doing a lot of this polling. We have a lot of good data on
all efforts. It’s in your appendix of the written document. We have a lot more
for those of you if you did want more.
- CAQH CORE recommends that NCVHS itself — obviously, anything you want to
recommend that we do additionally — you consider the system challenges that I
had talked about and others had talked about. You really can have a policy and
strategic — moving the needle in those areas, whether it’s the practice
management systems or it’s the providers.
- Requesting updates from us.
- Recommendation that OESS — they have been fantastic. They have been
involved — continuing to see more of that.
Thank you for having us give this update. We’re excited to move to the next
stage. This gives us — and I think you said in your Tenth Annual Report
— a chance to get it right. We’re looking forward to figure out how we do more
innovation to get it right.
MS. DOO: That was great. Thank you.
DR. SUAREZ: I think we are ready for some questions from the committee.
Let’s open it up for any questions.
MS. KLOSS: I guess I just have one observation. Tim, your comment was that
we should be here, in that very compelling diagram, but it doesn’t sound like
we are. If the group could discuss the short term, other than the awareness
building — what can the committee do to underscore the urgency?
MS. STRICKLAND: I agree. I think that, besides those entities that are very
involved in the CAQH CORE efforts, we have a critical mass of people who, at
least on a first blush, from a poll perspective, don’t appear to be ready to do
this. That’s a little scary. But I don’t think that means that it’s critical
stuff. I think we need to do some additional surveying, some detailed
qualitative and quantitative analysis to make sure that we really, really
understand where everybody is within the industry, and then provide them with
the tools that will help to get there, and make sure that we do that
incrementally so that we can make that we can have a 1/1/13 implementation
date, or at least set ourselves up for understanding where we need to go next
MR. KAJA: If I can comment, I think the point of where I think we all should
be at — it might be advisable for HHS or whatever vehicle or mechanism of
communication happens — there is so much on everybody’s plate right now, with
just reacting to 5010, with the development of ICD-10, with the other activity
that’s out there — it might be advisable to put a communication out to the
CIOs or the COOs of the health plans that clearly states, are you aware that
1/1/13 is an important date, and are you also aware that there’s an enforcement
period and an enforcement action that is very expensive for health plans if you
are unable to comply?
I think there is some communication that we could do, just in light of
everything that’s going on in the industry right now.
MS. JACKSON: One of the battles that we have fought internally is, the date
is 1/1/13, the fines don’t take effect until 1/1/14, and so one of the messages
I have had to repeat over and over and over again is 1/1/13. It doesn’t matter
that the dollar per day doesn’t truly start until April 1 of 2014. 1/1/13 is
the compliance date. I think as an industry, that’s what we have to continue to
emphasize, and we have to stick with it. If we blink again, every compliance
date — everybody is going to think we’ll continue to blink.
MS. LOHSE: I’m just going to add one other thing. I think the testing piece
is an excellent tool. We could educate people to use that. It is free. They
don’t need to get certified. They could use the testing tool without getting
certified. Obviously the certification is great because it lets you know —
your trading partners — that you are actually done.
With regard to what Janet said with the education, there is a penalty for
January, as we all know, the 1.5 million due to high tech. We are getting a lot
of questions on it and have information to educate people that there are two
penalties. We need to educate more on that and get the word out.
With regard to distribution of information that already exists, on
drill-down on the individual rules and experiences, how do we get out two
different audiences? I think new entities like NeHC will be very important to
that. They are bringing in people that aren’t typically in this fold.
MR. KAJA: If I can add just one more comment, the overarching objective here
is — and Rob stated this well during his testimony — we have between now and
1/1/13. Being sensitive to Janet’s comments here, if we get to 1/1/13 and we’re
not tested and we’re not fully understanding the nature of how these
transactions are going to flow, the overarching objective is interruption in
cash flow in the physician’s office. We cannot let that happen. We saw the
consequences of that with 5010. We don’t want to see that happen here with
operating rules. While we’re not talking about an 837 in this case, we are
talking about eligibility, which has the potential to interrupt whether or not
I’m sending the claim to the right place, whether or not benefits are covered,
and claim status, whether or not I’m getting paid on time.
MR. SOONTHORNSIMA: Going back to Tim’s comment and maybe some others
will chime in on this as well — the dependency on the non-covered entity —
you gave some number, 40 percent something to that effect. Can you just speak
broadly about how big that is in terms of adoption and getting to the goal?
MR. KAJA: The nature of the transactions is such that a transaction has to
first flow in, and it has to be easy enough to flow in, from the practice
management system. So the transaction, ideally, is created right out of the
practice management system, whether it’s the appointment book or it’s the
accounts reconciliation activity that sits in the practice management system.
If we were to survey the practice management systems today and look at where
those capabilities exist for the installed base, I think we might be surprised
to see how many practice management systems can actually support a 270
transaction directly out of their appointment scheduling system, much less the
ability to promote a 276 transaction out of their accounts reconciliation
That’s point one.
Other than that, they are relying on anything that sits outside of their
practice management to submit those transactions. When we look at what the
capabilities are — I talked about a 70 percent capability with a 5010
CORE-enabled I and II transaction base. The 30 percent that sits outside of
that is really based upon benefits that are not covered in the operating rules
today, which physician offices would find helpful. It’s different by specialty.
Take a look at PT, OT, ST. You might find differences in what the actual uptake
can be. But 70 percent is the optimal today, given what’s out there. Forty
percent today of those transactions, even though they are out there, are only
being utilized, in our experience. Even though those 40 percent of transactions
that are coming in from an EDI perspective, when you go back and look in the
physician’s practice at whether or not they are using just the EDI transaction
to update their activity and use their activity, we’re finding that only a very
small percentage of those actually are using those transactions to update their
practice management system about eligibility and claim status. We are getting
the calls, even though the EDI transaction is still coming in.
We talked about this white paper analysis around what it’s really going to
take to move this industry to full electronic adoption in these first two
transactions. I don’t know that we understand that. We certainly don’t
understand it well enough at UnitedHealth Group. We’re trying to. But it’s
clear that the industry doesn’t, or we would have better uptake on what’s
MS. LOHSE: I would like to add to what he said. We have been retaining IBM
to do retrospective studies and look at markets where there is a percentage of
CORE-certified entities — 60 percent at least, because then the providers
offices have a certain payer mix that we can look at. There is no doubt that
they have walked into offices where the version of the practice management
system is not updated to show the information that the health plan may be
providing. You need end-to-end, and the practice management systems are a major
gap. IBM probably found several offices — and we do have the data or you could
talk to them directly — where there was that gap. We weren’t actually able to
study the impact because the impact didn’t get to them. That’s a pretty clear
finding, I think.
MS. STRICKLAND: I’ll just make one quick comment. Based on some experience
that we have had with the payment systems, especially around the remittance
advice, as well as the other response transactions, the PMS vendors do not
update even to the current HIPAA standard transaction in content. As much as we
push forward these standard transactions, anything that has a response that has
to go back to the provider — if we not mandated for those entities, those PMS
vendors, those vendors in general to be content-compliant, we’re missing that
entire loop. That is our response loop. We can assume that the providers are
not getting the complete content coming back to them, because they are not
required to do so, and they do so upon request of their customers, who don’t
know to ask for it.
MS. LOHSE: One thing to just add. You have heard a lot about registries and
certification. It’s not just the product. It’s the version also. Keep that in
mind. We track the version, as well as the product on the CORE certification.
It’s very time-consuming to get down to the right version.
MS. BANKS: Just one last comment. I don’t think we can just look at this
from an operating rule perspective. We have to look at it from an end-to-end
moving of information across the cycle. So it also needs to be for several of
the standard transactions, as well as operating rules, because many,
unfortunately, do not offer all the HIPAA-mandated standard transactions. That
should be at the back end of the seamless workflow so that the provider doesn’t
have to send and receive these transactions. It should be integrated within the
DR. SUAREZ: Thank very much. That was really terrific testimony. We very
much appreciate the time that you took to come today and comment.
By the way, I want to acknowledge that we received some written testimony
that will be incorporated into the record. I just want to acknowledge that
there is some written testimony that we will not hear in person, but that
certainly, as always, will be incorporated and considered in the preparations
of our observations and recommendations.
MS. LOHSE: And if there is any data in the written testimony that you want
more detail on, we’re happy to share that with you, as well as with the OESS
staff, on the findings from the education sessions or other polling.
DR. SUAREZ: Thank you very much.
We’re going to move to our next panel, which is not much of a panel. It’s an
update from the DSMO. As a brief background, every year we try to receive at
least one report from the DSMO, the Designated Standards Maintenance
Organization, to learn and to understand the process and the activity that has
gone on at the DMSO in terms of input that they have received about the
standards questions and other areas that they are addressing.
I think we have Stacy Barber on the phone.
MS. BARBER: Good morning. I’m Stacy Barber. I am the ASC X12 primary
representative to and the immediate past chair of the Designated Standard
On behalf of the DSMO, we would like to thank the NCVHS for the opportunity
to present our 2011 annual report on the changes, challenges, and opportunities
affecting the HIPAA Transaction Standards. This reporting period covers the
period of January 2011 through December of 2011.
As you know, the DSMO includes three ANSI-accredited standards-development
organizations — ASC X12, HL7 International, and NCPDP — as well as three
non-ANSI-accredited data-content organizations, the ADA’s Digital Content
Committee, the NUBC, and the NUCC. Collectively, the DSMO reviews change
requests to the HIPAA-designated standards and for new standards and code sets
to be adopted.
A change request can be made by anyone in the industry by completing a
change-request form that is found on the HIPAA-DSMO website. Once change
requests are entered, each DSMO organization can opt in and review the change
request and discuss its merits within their own organization. Normally, each
organization has 90 days to review change requests. However, there is the
opportunity to request a 45-day extension if additional time is needed for
Once the organizations complete their review, we collectively meet to
discuss the actions that each organization has made toward the change request.
As the DSMO reviews each of the responses, a final DSMO recommendation and
response is made and published on the DSMO website.
For the period of the 2011 reporting timeframe, there was a total of 40
change requests that were entered. Seven of those change requests were
withdrawn by the submitter and one was withdrawn by the Web administrator
because it was not a valid DSMO request. Thirty-two were subsequently approved
and reviewed by the DSMO. Of the 32 change requests that were reviewed by the
DSMO, ten were approved for adoption. Two of the approved change requests
pertain to one or more of the HIPAA transactions, one pertains to the
health-care professional claim, six pertain to the payment of a health-care
claim, and one pertains to the health-care eligibility request and response. A
detailed report was provided with the annual report that gives detailed
information regarding the outcome of each of those change requests.
There were other activities and challenges that we faced during this
reporting period. During the past year, the DSMO continued to discuss
provisions of the health reform legislation, particularly the provisions in the
administrative simplification sections calling for the creation of operating
rules for the HIPAA transaction standards. At the April 27, 2011 NCVHS
Subcommittee on Standards meeting, the DSMO reviewed the current process for
industry-requested changes. At the November 18, 2011 NCVHS Subcommittee on
Standards meeting, the DSMO provided ideas on improvements that could be made
to the current process to make it more efficient. As a result, we were
presented with four problem statements to which the DSMO provided
recommendations and other observations and recommendations to the NCVHS.
One of the problems noted was that the industry was unclear about how to
request changes. The DSMO developed an educational presentation which is now
available on the DSMO website that provides the industry with valuable
information on the DSMO process and the HIPAA regulation process. The DSMO also
began discussion on how to implement some of the recommendations of
streamlining the change request process. We plan to continue this work during
the upcoming year.
In addition, in February 2010, the DSMO made a recommendation to adopt
standards for acknowledgement transactions. During the April 2011 hearing,
virtually all testifiers were supportive of a mandate for acknowledgment
standards because of the time and cost-saving benefits associated with their
use. In the September 2011 letter to the Secretary, NCVHS recommended the
adoption of the ASC X12 TA1, 999, and 277CA acknowledgment transactions as
standard transactions. To date, no activity has occurred, nor has it appeared
on the HHS regulation schedule. The DSMO recommends that NCVHS submit another
letter to the Secretary calling for immediate action for the adoption of the
Thank you for allowing me to present the DSMO annual report for 2011.
DR. SUAREZ: Thank you very much, Stacy, for that very short and succinct
Let me open it up for questions. Are there any questions from subcommittee
members about the DSMO report?
DR. CARR: I think at one of our hearings we heard that there were additional
changes that were talked about that were not going through the DSMO. Am I
remembering that correctly? Is 40 the right number, or 32? Do we feel like
that’s the appropriate, expected number of requests that would come in in a
MS. BARBER: Forty is the number that were officially submitted through the
DSMO process. It is possible that people within the industry could go directly
to the standards-development organizations and request additional changes.
Those would have been made outside of the DMSO process.
DR. SUAREZ: That’s a good point. I think we heard that, progressively over
the last five years or so, or since the start to the DMSO, there has been sort
of a progressive shift from entering and processing change requests through the
DSMO and, instead, going directly to the SDO — for example, X12. Is that your
sense as well, Stacy?
MS. BARBER: Well, I think what we saw in this past year, the 2011 reporting
period, is that the DSMO change requests were much greater than they have been
in the past several years. I think that’s a direct result of ASC X12 6020
development and a press release made by ASC X12 in the fall of 2010 giving a
deadline cutoff date for when change requests could be made for the 6020
development cycle. I think that did help the increase of the number of change
requests that we received during this reporting period.
I can tell you that ASC X12 is working on a change request system where, if
the change requests are made directly to ASC X12, we will evaluate those
changes to determine if they need to be moved into a DMSO change request as
DR. CARR: I think that was my question. What determines which requests go
where? Is there any guidance as to where they should go?
DR. SUAREZ: The organization that is making the request can go —
MS. BARBER: Either place.
DR. SUAREZ: Either way, can go directly to the DSMO to file the request or
they can go directly to the SDO to file the request. Those are two open ways.
The person really decides in all the cases. There’s that possibility. Is that
MS. BARBER: That is correct. It really is up to the individual who is making
the request for change and where they go. We do try to encourage that if the
change is in relation to one of the HIPAA-covered transactions, it should be
made through the DSMO change-request system.
DR. SUAREZ: And the other, related point is that when one thinks of the
change requests that come to the DSMO, pretty much all of them — for example,
in the 2011 year, the 40 changes were all related to the X12 transactions, even
though, in reality, change requests can come to the DSMO for any aspect of the
standards, including, of course, NCDPD, for example. A code-set change request
could come as well to the DSMO. They can come to the DSMO. It’s a matter of
whether there is a — probably except medical codes. The medical codes would
have to go to the — ICD-9, ICD-10 changes or CPT changes.
Remember, in the codes that were under HIPAA, there are external medical
code sets, which are ICD-10 and CPT, and then there are non-medical external
code sets, which are code sets like the taxonomy codes and things like that.
But it is my understanding that the non-medical code sets — the DSMO could
also receive requests for changes, but in most cases people go directly to the
maintainer of that code set. Is that your sense, too, Stacy?
MS. BARBER: Yes, that is true.
I think we did a good job of putting together the educational presentation
that explains a lot of that. That is available on the DSMO website now. I
encourage everyone to go out there and review that.
DR. SUAREZ: Thank you. Just for the record, could you remind us of the DMSO
website? Is that dsmo.org?
MS. BARBER: It is hipaa-dsmo.org.
DR. SUAREZ: Thank you.
Any other questions from any of the committee members?
All right, thank you very much, Stacy, for the report.
MS. BARBER: You’re welcome.
DR. SUAREZ: We’re almost on time, about three or four minutes late, which is
unusual for our committee. So I don’t know what to do.
No, we’re very fortunate, actually, because that will give us more time to
spend with our next panels. Panel number 4 is our panel on ICD-10. We invite
all the testifiers to come to the table.
What we want to focus on with the ICD-10 discussion is primarily considering
the fact that there is a very likely possibility of having an extension, as the
proposed regulations have stated, of a year. Rather than debating about this
extension and all sorts of other things, more important is, what are the key
strategies and milestones that we really need to focus on to achieve compliance
by the date? That’s the real important part. That is one of the things we
wanted to focus on.
Of course, your insights and your comments about all sorts of other aspects
related to ICD-10 will be very much welcome and appreciated.
To start us off, we are very fortunate to have a former member of the
National Committee, and chair of the National Committee for several years, Dr.
Simon Cohn, from Kaiser Permanente. We’re going to invite him to open up our
panel with some overview remarks.
DR. COHN: Thank you. Hello down there.
I want to thank you for inviting me to be here today. I’m not going to use
PowerPoints, which is actually very unlike me, but I thought that probably by
this time in the hearing, you would have seen enough PowerPoints to enjoy the
As Walter described, I am Dr. Simon Cohn. I’m the associate executive
director with The Permanente Federation of Kaiser Permanente. I also serve,
among other things, as our national medical group leader on the transition to
As Walter commented, I was fortunate to be a member of the committee from
1996 to 2008 and gained a firsthand understanding of the important work this
public advisory committee. I would just observe that during my tenure, we
talked about this being one of the hardest-working public advisory bodies,
though I do have to say, Walter, that starting at 8:00 in the morning with your
hearings does set a new bar.
I am testifying today on behalf of the Kaiser Permanente Medical Care
Program. We are the nation’s largest health maintenance organization and
integrated health-care delivery system. We provide comprehensive health-care
services to nearly 9 million members in nine states and the District of
You asked us to share our experiences and challenges in the transition to
ICD-10 and offer recommendations on how the federal government can facilitate a
successful transition to ICD-10, in view of at least the proposed one-year
delay. A more comprehensive overview of our experiences and our recommendations
is included in our written testimony. Obviously, because of time constraints,
these comments are going to be necessarily abbreviated, so hopefully we’ll have
time to talk.
In a sense, Kaiser Permanente is a microcosm of the entire health-care
system. We are a health plan. We have hospitals and we also have physician
groups. Our experience with the ICD-10 impacts, as you know, in all three
ICD-10 impacts us in another unique way. That was really the reason that I
decided to come out today for the testimony and discussion. We have
successfully implemented our electronic health record, which we call KP
HealthConnect, throughout our organization. We have also developed a
SNOMED-based terminology solution for use within our electronic health record,
which we call convergent medical terminology, or CMT. It is mapped, of course,
to industry standard codes, and both CMT and our electronic health record must
be updated for ICD-10.
It is important to recognize that using an electronic health record in the
ambulatory setting changes the process of coding. It is no longer just a manual
function performed retrospectively by coders. With the electronic health
record, clinicians have a significant role, through the process of
documentation and diagnosis selection, in, actually, determination of the final
code. Because of this expanded role in the clinical process, it is important
for a broad group of clinical stakeholders to review proposed changes to codes.
It is an issue that I will come back to at the end.
I would like now to talk briefly about our experience preparing for ICD-10.
First, of course, is technology readiness. We talked about that a lot with the
5010 earlier today. For us, it has represented a really major undertaking that
started in 2008. From a technology point of view, we have actually compared the
ICD-10 readiness activities to those of Y2K. We think the costs are also
We have nearly 200 IT applications that are in the process of being
remediated and are being impacted. They include clinical, administrative, and
ancillary systems. KP, of course, like the rest of the industry, has a
combination of internally developed systems that we are having to remediate,
but, like everyone else, we depend a lot on external vendors to actually
upgrade their systems. Really, we can’t begin to do end-to-end testing until we
have received ICD-10-compliant updates — again, an issue and a dependency.
Readiness also, of course, involves updating our convergent medical
terminology. This process involves hundreds of clinicians across Kaiser
Permanente systematically reviewing ICD-10 codes and our CMT terms and
determining the changes and the many additions that are needed.
To address the increased detail in ICD-10 codes, we had also had
vendor-developed electronic health record workflow tools that can assist
physicians. However, determining when and where to use these tools, then
configuring them, does involve significant work. Of course, in all of this, we
actually have the migration by all of our regions to install, test, and upgrade
our electronic health record system to make it ICD-10-compliant.
The transition to ICD-10, of course, also impacts people and processes. I
know you know that well. This has required targeted communication, and we’re in
the process of working on job-specific education and training. For coders, one
of the groups most impacted by the ICD-10 transition, preparations include
refresher courses, courses on medical terminology and anatomy and physiology,
as well as a course preparing for the ICD-10 training. We are also considering
piloting dual-coding functionality and the use of computer-assisted coding to
facilitate the transition and mitigate any possible reduced productivity.
Among clinicians, who are also another impacted group, those most
significantly impacted treat injuries, manage pregnancies, and care for
behavioral health conditions. This includes, like myself, emergency medicine,
urgent care for clinic physicians, but also providers who cover OB/GYN,
orthopedics, podiatry, mental health, and primary care, among others.
We obviously have established workgroups to guide and support
We will, of course, to be compliant, complete the education and training
processes before the date of ICD-10 compliance.
KP submitted comments to HHS in support of the proposed one-year delay of
the ICD-10 compliance date. We also support the extension of the ICD-10 partial
code freeze to October 1, 2015. The additional year, from our perspective, will
give us more time for testing with trading partners and also more time to
prepare the people at Kaiser Permanente for the change, plus it will also give
us more time to explore automated solutions in our electronic health record to
support some of the more recently introduced code details.
I will close by summarizing our recommendations on how NCVHS and HHS can
facilitate a successful transition to ICD-10.
First and foremost, we recommend that HHS announce a final ICD-10 compliance
date as soon as possible. Uncertainty about timing impacts planning and
resourcing efforts. I think it’s an issue that the entire industry has been
Second, we recommend that HHS establish and fund trading partner testing
pilots. We recommend that these pilots begin about ten months prior to the
actual implementation — in other words, January 1 of the year prior to
Third, health plans and providers are facing multiple HHS initiatives and
deadlines that may compete for time and resources with preparation for ICD-10.
We recommend that HHS comprehensively review other upcoming and proposed
deadlines, many of which you heard earlier today, determine critical
priorities, and consider extensions or delayed implementation for
Fourth, we recommend that HHS modify the medical loss ratio final rule to
allow ICD-10 conversion costs in 2014 to be included in the MLR calculation.
Fifth, we recommend that HHS assure appropriate funding for developing and
testing ICD-11. This code set is designed to integrate the SNOMED and has the
potential over the longer term to be a more functional and powerful code set.
It’s something we need to begin to look forward to even as we talk about
Finally, HHS should use the opportunity presented by the extended code
freeze to reevaluate the current ICD-9 coordination and maintenance committee
process, in particular to provide more advance notice and to engage a broader
group of clinical stakeholders in the review of the proposed changes. This is
important because of ICD-10’s greater granularity, the increased adoption of
electronic health records, as I discussed, and the expanded role of clinicians
in the coding process. We actually believe that NCVHS has an important role in
assisting HHS in this review.
As I mentioned, there is a more complete overview that we have submitted,
with much more detail on all of this stuff.
I would like to thank the Subcommittee on Standards for the opportunity to
provide this testimony.
DR. SUAREZ: Thank you very much, Simon.
MS. DOO: Thank you.
Next we have Dan Rode, with AHIMA.
MR. RODE: Thank you very much. On behalf of our over 64,000 members, I would
like to thank you for the opportunity to testify this morning and talk about
AHIMA is an 84-year-old not-for-profit professional association, and our
members are working in over 40 different employer groups and in 120 different
functions. Think of us as a group working with health information and data, and
do not pigeonhole us into any one particular function, like coding, because
we’re trying to look at this in a much broader fashion.
To explain that a little further, we are part of the Cooperating Parties
associated with setting up the rules and regulations and guidance for ICD-9-CM,
ICD-10-CM, and ICD-10-PCS. I’m going to listen to Simon’s one recommendation
after I’m done here.
We also serve on the editorial boards for the guidance of not only the ICD
classifications, but also CPT and HCPCS. We’re a part of the World Health
Family of International Classifications and working on both ICD-10 and ICD-11,
and we are part of the IHTSDO, the International Health Terminology Standards
Development Organization, which is working on SNOMED CT. Of course, if you have
been following this, we’re looking at the convergence of SNOMED and ICD-11. In
our work with ICD-10, recognizing it as the first foot in the door toward that
process, we have been very active in seeing where this goes. Obviously, this
committee will be talking about this for some time to come.
Finally, I will just mention that we are the designated secretariat for the
ISO 215, which is also looking at the integration of terminologies and
classifications into the international standards.
We’re making the assumption in our testimony today that the one-year
extension that CMS is proposing will be the final rule. I say that because if
it is not, then a number of the things that Simon said and that several, I
suspect, will say will have to change, because there will be considerably more
change necessary and a much greater amount of cost to the process. It has been
estimated by some of the folks we have talked to that the one-year delay will
cost about a third of what they have already put into implementation and a
two-year delay will almost double the cost of the current implementation
activity that has gone on. So we not only have the loss of not having the
ICD-10 data available, but we then have the cost of implementation increasing.
Today is one of those milestones that you asked us to talk about. We have a
significant portion of providers that have moved ahead, have gone on with the
implementation of ICD-10 since 2009, when the rule came out. We have groups
that have failed to move forward because there has been confusion on a variety
of different activities that they need to follow and what the due date is.
There are groups that have been told, don’t worry, there will be an extension.
You have time. Just stay the course.
I think it’s very important for this committee, in its letter to the
Secretary — we do need a definitive, final date. The idea that dates can
continue to be changed, we have already heard this morning, causes confusion,
causes a belief that when you’re dealing with HIPAA, you can always get a
delay. If we keep that up, then we don’t have a date. We have to have a date
that moves on.
We have milestones for a variety of covered entities because we’re engaged
in so many different things associated with electronic health records, health
information exchange, other health systems that have to be integrated —
laboratories, pharmacies, and the like — and, of course, systems that
organizations need to put in their own place to stay up with the industry.
We also have the meaningful-use incentive milestones. I can get money for
this, but do I get money for ICD-10? Maybe I have to go for the incentive
payment right now.
Our concern is that in all of this process — and Simon alluded to it a bit,
too — if we’re not also thinking ICD-10 and the need to implement this as we
are looking at implementing electronic health records and the rest, then we
have lost something. We have increased our cost. We think it’s very important
that HHS consider putting ICD-10-CM and PCS, appropriately for different users,
in the criteria for the 2014 meaningful-regulations associated with criteria.
If we can get the ICD-10 requirements in the software associated with EHRs,
whether or not someone is going in that direction, that’s one thing less they
have to worry about. We think it’s extremely important that they look at this
and put it into that certification criterion for meaningful use. We hope that
this committee will recommend that as well.
We have to look at the final rule, which becomes the next milestone. As
Simon has already indicated, it’s that final rule that’s going to give us the
dates that we know we have to work within. The longer CMS delays in putting
that date out, the longer the delay. We already have a delay. We’re not talking
about whether we are going to have a delay. The notice in February created the
delay. Now the question is, how much longer are we going to be delayed one year
or beyond, because people are waiting? The momentum has ceased. There needs to
be a movement to keep going. AHIMA has called since 2009 that entities keep
moving. Do not consider the delay. Do not consider the implementation date
something you should stop and wait, but keep moving through that process.
I think we have heard this morning in previous testimony — and I like the
way you had that all set up — of the need of organizations to keep looking
forward and to work together. That certainly becomes part of the implementation
process that we have to look at.
They are not the only things coming into place right now. We have got to
integrate our privacy and security information. We have to look at the programs
that are causing the confusion and clarify the confusion. We have to try to get
a coordination and a strategy roadmap, as Simon mentioned, across the HHS
programs, not just in silos that cause problems for our providers.
One of the concerns we have — and hope that this committee will agree — we
have asked in our comments on the delay that HHS put out a strategic roadmap on
the implementation of all the programs that are associated with the HHS’s
providers and certainly with the MACs and other groups that integrate across
the board. That would then bring along, of course, all our health plans that
are not associated with Medicare and Medicaid, and bring the industry to a
point where we can move together on these different pieces — and Simon added
one more piece — and establish some priorities. The priorities are not there
We should ask, and hope that you will ask, for a single strategic plan from
HHS to assist the industry in doing this. After the rule, we have to put that
map in place and move forward. That’s something that I think every provider and
certainly health plans need to consider as well.
We can devise our guidance. We have lots of tools out there for
implementation. But the question is, how do I use the tools? What’s the
education? How does this all work together? We’re looking for a coordinated
process, not only a roadmap, but then how we educate. We heard this loud and
clear this morning.
We also heard this morning about testing and the serious need for
coordinated testing. I had to think, as I was listening to Florida — one of
the things they mentioned was, hey, we were the big guy in Florida. If I look
at Pennsylvania, I can think of a couple of health plans, plus Medicare and
Medicaid, that, if they took the coordination responsibilities on in that state
to work with all the providers and other health plans, could be doing some of
the same things that were done in Florida with the process that we’re looking
at for ICD-10. We have to have that cooperation.
We need that timing. The timing and the lessons we have learned from 5010,
from our early-on HIPAA implementations — we ought to be taking those lessons
right now and putting them into place.
If we continue to move in our implementation now and not wait for a date to
be given, one of the things we can also do in our various locations is begin to
build a testing map, a means for the organization to do very similar — and
Florida could give us their plans — to move along and put that testing piece
into place. I think we now know how important that is, but it still takes a lot
of effort. You have heard in the last two panels, especially with physician
offices, small entities, getting them involved, getting them involved with
their vendors, becomes a very significant part of this process.
So in looking at the lessons we have learned from implementations under
HIPAA, hopefully we can take the delay that we have had put forward by HHS and
begin to move that forward as well to a coordinated testing process. Taking the
education efforts of CMS, which have been very good, and expanding them across
the industry so people actually see them and get involved with them becomes a
The last thing — and it kind of bounces off of Simon’s comment — we need
to come up with a data-governance process. We need to look at how we are going
to coordinate our terminologies and classifications, and move forward in this
process. We cannot continue to segregate these so that we’re dealing with some
issues over in ONC, other issues at CMS, other issues at CDC, but a coordinated
effort that says how we are going to bring the terminologies and
classifications we need in this country forward. How do we have a
public-private partnership to make that happen?
This is the beginning. ICD-10 is the beginning. We’re going to be talking
about SNOMED implementations. We’re going to be talking about link with the
laboratory reporting process. We have other classifications and terminologies
that we are going to have to face. I think that’s a role that this committee
can very well play to move that issue of governance forward.
A lot of recommendations, certainly more in our written testimony. I want to
thank you for the time, and especially for the lessons learned that we have
built across this morning.
MS. DOO: Thank you so much.
Now we have Stanley Nachimonson.
MR. NACHIMONSON: Thank you. Good morning.
It has been several years since I had the opportunity to the committee.
Looking at all the people here, I feel like I’m at a high school reunion.
Frankly, you all have gotten a few years older.
I want to thank you for the opportunity to testify. I’m here today on behalf
of HIMSS, as a HIMSS member, as a participant in a recent HIMSS G7 meeting,
which I’ll speak about, and as the incoming ICD-10 task force co-chair for
HIMSS, starting in just a month or so.
Just a few minutes about what HIMSS is, for folks that may not know about
the organization. It’s a cause-based, not-for-profit organization focused on
leadership for the optimal use of IT and management systems for better health
care. We frame and lead practices and public policy through content expertise,
professional development, research initiatives, and media vehicles designed to
promote information and management systems’ contributions to improving the
quality, safety, access, and cost-effectiveness of patient care. I want to
underline “patient care,” because that’s really the bottom line here.
The HIMSS G7 is actually a World Bank-endorsed thought leadership council.
We don’t quite get the same level of demonstrations outside the HIMSS G7
meetings that the World Bank gets outside their meetings. They meet three times
a year to discuss critical health-care industry topics and work in a
collaborative effort on potential projects to address some of those issues. The
idea is really to design the health-care financial network of the future,
combining thought leadership and action around key projects that have the
potential to transform critical path areas in health-care — i.e., the
implementation of ICD-10. Each meeting is captured in an advisory report that
comprises a thoughtful discourse of issues and a series of industry
recommendations. That’s what I will be discussing today.
In April we had a HIMSS G7 meeting to discuss creating a smooth glide path
to ICD-10 implementation. At the meeting were representatives of providers,
payers, financial institutions, government, consumers, employers, and
technology firms — a wide variety of folks in the industry. We feel that we
got all the different perspectives in discussing this particular issue,
focusing on smoothing the ICD-10 implementation.
We came up with a series of recommendations that I’ll discuss today. When
the final report is approved by the HIMSS Board of Directors, we will submit it
to the committee for the record. But I want to talk particularly bout the
several recommendations to smooth the ICD-10 implementation. Actually, we feel
that these are things that could occur no matter what the particular date
that’s finally chosen by CMS is.
The first of the recommendations had to do with vendor readiness and
self-reporting. What we did in the meeting was discuss the key risks to the
industry and then come up with ways to address and mitigate those risks.
There’s no real, true definition of vendor readiness. We have heard a little
bit about that already today. No provider necessarily knows if their vendor is
ready. It’s very difficult for organizations to determine if their vendors are
ready, so that they can go ahead and move in their ICD-10 transition.
Our recommendation is to accelerate and encourage vendor self-reporting, the
key to supporting payers, providers, and other vendors in the ICD-10
implementation. HIMSS already had some efforts using a company named
VitalVendors as a tool on the HIMSS website which allows self-reporting of
vendors to tell their status of where they are in developing their ICD-10
products. A similar tool is on the MGMA website in terms of vendor readiness.
We really feel that we want to promote those existing efforts.
Secondly, a pilot program, including end-to-end testing. One of the key
risks for ICD-10 implementation — again, we have heard it today — is that
there is not a true ICD-10 testing process that’s agreed upon in the industry.
There’s a lack of test data. There’s a lack of test partners. Plans are
uncertain of how to set up end-to-end testing, especially if an organization
has not even developed their electronic remittance advice transaction. We have
heard of a number of health plans that, as of today, still do not support
electronic remittance advice.
Our recommendation is that HHS provide financial and staffing resources as a
participant in the creation of a national pilot program that will include
end-to-end standardized testing and monitor the actual processing environment.
Program participants will include associations, payers, providers, vendors,
financial institutions, government, and clearinghouses. We actually convened a
multi-stakeholder meeting just two days ago — nice timing — in Chicago. The
slide says we will share results with NCVHS during our testimony. I’m going to
do that right now.
At the meeting, where we had over 40 people attending, representing a
variety of organizations, a mix nationally of plans, providers, vendors, and
organizations, the group clearly is interested in moving forward to develop a
pilot program, with possibly four regional solution centers, representing
different mixes of plans, providers, clearinghouses, and vendors, and different
approaches to implementation and testing for ICD-10. We see these as groups of
early-adopter participants so that we can find out the obstacles to ICD-10
implementation and the solutions for others to learn from.
There clearly will be a need to publicize the results of these pilot tests
to a large audience, the nation as a whole, and the group would like to ask CMS
for help in disseminating that information.
There is a recognized need for CMS to participate through a variety of ways
— funding, the endorsement of these, in-kind resources, and certainly both
Medicare and Medicaid entities joining the solution centers. This is really for
the purpose of perception, in that it’s a supported effort, and to give
providers some sense of trust that, yes, CMS does view this as a worthwhile
effort. The contributions from CMS may not necessarily be tangible things, but
it’s clear that CMS backing builds credibility for the initiatives rather than
this being a solely privately funded entity.
Seed funding is necessary. The group will be developing budgeting and
participation options. There is a fervent wish for government funding for these
efforts — at least some participation.
So that’s the pilot program.
The next recommendation, as we have heard today, is the enhancement of
ICD-10 education, with the risk being that messaging for ICD-10 has to shift
from what we have put out so far in information — that it costs, there are
very complicated implementation tactics, and what the exact timelines are — to
some very pragmatic pieces of information — the impact on providers, why the
changes are critical, and why, especially, they are beneficial to not only
providers and health plans, but to the industry as a whole. Small provider
groups, small hospitals, and, frankly, small health plans are still largely
unaware of the ICD-10 impact on their revenue cycles.
Our recommendation would be to increase and improve ICD-10 education
targeted especially at small provider groups and small hospitals, talking about
the benefits of the new code set and financial risk assessments. Our idea is to
leverage a number of existing organizations, like state and national specialty
societies, regional extension centers, practice management system vendors,
clearinghouses — those folks that already have direct connections to providers
and that providers, at times, rely on for critical information.
Our last recommendation is the CCDI awareness campaign. Like any good group,
we wanted to come up with our own new acronym, so we developed CCDI, the
Campaign for Coding and Clinical Documentation Improvement. The risk here is
that — in fact, Dan just mentioned it — health-care organizations have
differing methodologies around coding and mapping that will clearly result in
Our recommendation is that we have a campaign to broaden awareness
and leverage the existing Cooperating Parties who maintain ICD-10. Those are
the AHA, AHIMA, CMS, and CDC’s National Center for Health Statistics. We want
to make sure that we are providing education on coding resources, the roles and
responsibilities of the Cooperating Parties, and credentials for HIM
professionals. We think it’s critical that this group provide timely answers.
We can’t wait for weeks or months for an answer on a coding question. It has to
be days. We want to prepare for a large volume of inquiries, certainly before
go-live date and right afterwards.
Moving forward, we certainly recommend that implementation continue, that
folks move full steam ahead and not worry about what the final date is going to
be. HIMSS’s current engagements include hosting a comprehensive, credible, and
timely website, the ICD-10 playbook. We convene ongoing education nationally
and at the regional level. We will be hopefully initiating the
multi-stakeholder visioning of the ICD-10 national pilot program. We will
continue to work with many organizations to create more robust educational
tools and programs. And we will be encouraging vendors to use the VitalVendors
self-reporting readiness tools.
MS. DOO: Excellent. Thank you very much.
We have next Rhonda Buckholttz.
MS. BUCKHOLTTZ: First of all, on behalf of AACP, I want to say thank you for
allowing us to provide testimony and to speak today.
Our focus on this was to point out, since the announcement of the intent to
delay, what it has done to existing providers that have already begun the
AAPC is a membership organization. Currently we have about 114,000 members.
Of those 114,000 members, we represent not only coding, but compliance,
auditing, and practice managers as well within our organizations.
Our focus so far in working with ICD-10 is getting the word out about
implementation and working on that piece of it, not just on the code set piece,
but all of the implications of what ICD-10 really is going to be in a provider
practice. To that end, we do a lot of implementation training. To date, we have
trained over 7,000 individuals on ICD-10 implementation for the business
aspects of ICD-10.
We sent a survey out to all of those that had received training from us on
the implementation. The people who represent our implementation training
largely represent physician offices. However, we also do have vendors that
receive the training and health plans, as well as some educators and
consultants and those types of things. The positions from the people who
responded to the survey that they hold include CEOs, administrators, IT,
billing, coding and claims, compliance and auditing professionals. We had about
948 people respond to our survey at the time that we had to get it ready.
The first question that we asked of those people was, when the notice came
out with the intent to delay, how many of you had already begun implementing
ICD-10? Actually, 818, or 86 percent said that they had already begun working
on ICD-10 implementation in their practice when the announcement came out.
We asked them what their efforts were, where they were in the industry, so
that we would have a good feeling of, when they say implementation and what was
started, what exactly they had been doing. Two hundred thirty were performing
impact assessments, 78 had gone past that and were working on budgets, and 314,
or 37 percent, had begun actual training of internal staff, and about 26
percent were “other” responses. From those responses, we gathered
that they were working with their vendors or else they were working on
curriculum, consulting, working with clients, and those types of things, so
they just didn’t fit into those caveats.
Then we asked them how the announcement of the delay had impacted their
ICD-10 implementation. Surprisingly enough, only 5 percent said their budget
money was reallocated and that they had to stop implementation efforts.
Twenty-four percent indicated that they lost physician attention, which is
interesting because when we get into the comment section and we go through the
comments, most of the comments were how they had lost the attention.
Forty-seven percent, though, said that even though there was an intent to
delay, they were going to continue moving forward with implementation efforts
and they haven’t stopped. We found that number a little bit surprising. About
24 percent said they lost momentum and credibility. Their committees were put
on hold, and they had to stop where they were.
Many additional comments that were received but didn’t quite fit into some
of the survey questions were that they feel that the physicians believe now
that ICD-10 would never happen and that there is actually on reason to prepare.
Many believe that delays will continue, and they can’t allocate funds that are
needed elsewhere when they are not sure that the ICD-10 is really going to
happen. They want to make sure that everybody knows they don’t want to prepare
for something that may never happen. A lot of our respondents felt that they
were making progress, but now they have lost all momentum.
I did find it interesting that we actually had several people say they
consider the ICD-10 the code that cried wolf: We have talked about it a lot,
but when it comes down to it, it just keeps getting postponed over and over
We really are facing some tough times here in trying to get the attention of
the physicians. We have heard a lot of people testify about collaboration and
those types of things, but I don’t think anyone realizes the ramifications when
it comes to the small providers. They only hear certain things. When we talk
about testing and those types of things — I personally live in a rural part of
Pennsylvania, and I have worked with a lot of providers that just don’t even
understand the need to keep up the maintenance on their practice management,
because they don’t understand the initiatives that are coming down. When people
say they don’t think the providers are listening, it’s true, because they are
not hearing the messages. They are not up to date and they don’t understand.
When we put mixed messages out in the marketplace, it really sets us back, I
think, further than people anticipate.
Then we asked them the question, what was the cost of the delay if they had
begun implementing? Thirteen percent said it was more than $100,000. We would
expect that number to be lower because most of the people that attend our
implementation boot camps aren’t from the larger organizations, although we do
have some of that representation. Thirteen percent said that it was between
$50,000 and $100,000, and then 74 percent said that it was less than $50,000,
what the impact of the delay would be.
The one question that I didn’t ask that we probably should have was, was it
less than $50,000 or was it zero? We did get those. I did get several emails
from people that said that as of right now, their costs were just in the
thousands, moving forward.
Other concerns that were mentioned included that they believed that
sufficient documentation would still need to be the largest focus for the
implementation strategy. We at the AAPC believe that as well. We do what we
call documentation-readiness assessments, ongoing, and overall we find that
with the clinical documentation, only about 40 percent will actually make the
transition to ICD-10. So I think that’s a real concern that’s out there.
Many said that they were still struggling to try to understand the EHR
initiatives and make them work in their practices. Others said they were still
reeling from 5010 and the lack of vendor coordination, as well as the costs to
now have to complete retraining because of the delay. Many were frustrated that
they have already paid for training, and now they may have to get retraining
because of the intent to delay.
We asked, not only with our poll, but through our local chapters — we have
close to 500 local chapters across the United States, and we routinely go out
and make visits to them, through our executive team and speakers and those
types of things. They kind of mirror what the survey results were as well. Of
course, our coders — if that’s all they are involved in, if they are not
involved in implementation — don’t have much to contribute to that. But with
everyone else, they said the same across the board: We need clear, concise
messaging. They feel that a lot of the messaging that’s out in the industry
right now is giving them conflicting information. They are not sure where to
turn, and so they are going to sit and wait.
They would like to see some accurate cost estimates for what it’s really
going to cost to implement in a smaller provider’s office. They feel that that
would help their practice and help them to be able to make the decisions and
Of course, comprehensive education on how the data that we collect is
actually going to be used and how it really is going to impact a physician —
how are the codes going to benefit a physician? They want that type of
information. This is what they are indicating to us. Moving forward, here’s
what is going to get them moving. They want clear, concise information. They
want everybody to agree on what’s going to happen and how it really is going to
impact a physician moving forward or what benefits it’s going to be to them
That’s all I have.
MS. DOO: Thank you, Rhonda.
Next we have Mona Reimers.
MS. REIMERS: Thank you for inviting me to give input today to this very
challenging initiative. I hope that I’m able to make clearer what’s going on in
the struggles of the average physician practice and what we might have going on
with ICD-10, trying to implement it.
I know this section is supposed to giving the high-level physician — what
physicians want for milestones to make a successful transition. But I feel a
little bit more like Joe the Plumber, because in my practice I actually do the
work — I come from an orthopedic practice in Fort Wayne, Indiana. We have 37
physicians, a variety of midlevel providers, therapists, one ASC, and one MRI.
My practice, I feel, represents a middle-sized practice, but it could also be
within an integrated delivery system.
We have a variety of the software that you would expect to find in a medical
practice. All of these are nationally recognized vendors.
To understand what’s going on in the medical practice, I think it is
important to understand where we are right now, except for ICD-10. We have to
understand that we have had an economic downturn. It has required patients to
have more personal expense. Some of that turns into bad debt. We have had
increased billing costs. We have multiple competing federal mandates, incentive
programs, such as ICD-10, ACA administration simplification, et cetera. These
all bear down on us with a lot of competing, for our time and energy,
initiatives. We are at the mercy of the software developers to redesign and
update our software to meet these mandatory specifications.
Just from a personal perspective, we received an update for our billing
software with probably less than a week in advance for 5010. We had gotten
other upgrades along the way, but our first actual 5010 go-live that we could
have really practiced was delivered to us at the last minute. Had we had the
software delivered earlier, it’s important for you to know that we would have
not been able to really test it, because of our trading partners would not have
been able to test with us, at least not end-to-end, as we have been hearing.
There is also tremendous uncertainty with ACA and the flawed SGR. I think
where this is important to the relevance of ICD-10 is that every year it’s
nearly impossible to create a budget. If you don’t know your revenue, how can
you budget? In the CMS documentation on the ICD-10 implementation guide for
physician practices, on page 18 and 19, it tells us that we should be prepared
to not have our claims processed directly and we should be prepared for
cash-flow interruptions. It’s very difficult to want to budget that. I don’t
mean to be flip, but that’s just true.
With all of this stage setting, MGMA would like to present to you the
strategies to help you get to ICD-10.
One of them is to conduct a cost/benefit analysis so that the community at
large can see the benefits and the costs of what’s going on with ICD-10. They
include several of these bullet points here that I won’t read to you, as you
all have them. Our first recommendation obviously is to conduct this
On the cost/benefit analysis, there is the second page of these, which will
get you through the entire strategy in that regard.
Getting on to strategy 2, we would need to:
- Analyze the impact of the overlapping federal initiatives. I think that has
been spoken to a time or two by several other people, both in this panel and
otherwise. There is current industry fatigue from the numerous ongoing,
overlapping federal HIT initiatives.
- Recognize and harmonize the programs.
- Review and understand the impact of having overlapping compliance deadlines
- Recognize that each of these requirements requires significant staff time
and significant practice management investment. It takes implementation down to
the grassroots of everyday workload and patient care.
Leverage the experience of other nations and consider any one of these
options or any combination of them:
- Number 1 would be to implement ICD-10 only in the inpatient setting, at
least to start. This was done in Australia and Canada.
- Option 2 is to implement a smaller subset of ICD-10. Every other nation
uses a much smaller subset of ICD-10. Germany, for instance, has 13,300 GM
codes. Explore developing a smaller subset of ICD-10-CM for use in settings
and/or exclude certain providers and specialties, again as is done in other
- Number 3, delayed adoption of ICD-10 for the outpatient setting. Begin
again with inpatient. In Germany there was a three-year delay in implementing
in the outpatient setting.
Strategy 4: We also are recommending pilot testing. Pilot testing, we think,
should be conducted prior to national implementation.
- It should include a wide range of practice types and sizes, those using
electronic and those using paper health record, and safety net providers.
- Pilots should also be completed in a production environment to better
replicate the transactions being used in the industry.
- To expedite the piloting process, we recommend that CMS participate and
provide funding for all participants.
- The ONC could play a role, including leveraging RECs and HIEs.
Strategy 5 asks that certification in ICD-10 be required of the major IT
stakeholders — again, this was spoken of several times today — including the
health plans, the clearinghouses, EHRs, practice management, and other billing
software. HHS could partner with the existing meaningful-use certification
entities. As we have seen with the meaningful-use certification, certification
can drive implementation, standardize software, and leverage market forces to
ensure that practices can meet the federal requirements.
With strategy 6, we are recommending that health plans continue on the path
of transparency for all parties. This will necessitate the need for much
granular information before the go-live date with ICD-10. For example, what
level of granularity will the federal health plans require? What if a physician
treats a patient in the emergency room and never learns enough details to give
the granularity required of the payer? Since every health insurer and
self-funded health plan can determine their own requirements, those
requirements need to be made available to the necessary parties in advance.
Approximately half of the patients in my practice are covered under the
Department of Labor self-funded health plans. This means every employer can
create their own rules. These rules need to be available to the patients in
their plan descriptions and to their third-party administrators quite some time
before go-live with ICD-10.
How will the many different public and private quality rating
systems be maintained? How will unspecified be viewed? Will there be true
To continue on the topic of health plan transparency, the industry will need
to know how predetermination, pre-authorizations, and pre-certifications will
be affected, and whether the providers will have access to payment policies
prior to the time of the service.
Finally, it is essential that the industry determine whether each health
plan will adopt its own proprietary crosswalk or if differing crosswalks will
impact payment policies, and CMS should lead the way.
In strategy 7, we are suggesting staggered implementation by business type.
We recommend that the clearinghouses and health plans be required to comply a
full 12 months before providers are required to comply and to allow dual use of
ICD-9 and ICD-10 during testing year, minimizing the disruption of health-care
delivery and claims payment. During this staggered implementation timeline, CMS
could also implement a problem-resolution and cash-advance process to minimize
the impact on practice cash flow — again, spoken about several times today.
There are additional considerations, which I won’t read due to time. They
are part of the record. We would like to point out one important aspect, and
that is that clearinghouses cannot serve as a conduit to fixing a problem
between ICD-9 and ICD-10, because it requires data from the health record that
they don’t have. Although clearinghouses have been a part of the problem and a
part of the solution, this is one problem they really can’t solve, other than
to help pass along the information. In the past, they have been able to help us
bridge into 4010 and 5010.
To review, there are ten critical milestones that we think are essential to
- Conduct a cost-benefit analysis.
- Review experiences in other nations.
- Complete a comprehensive pilot.
- Move forward only with those sectors that provide real benefit.
- Only then, set implementation dates.
- Stagger implementation dates.
- Certify health plans, clearinghouses, practice management software.
- Establish processes to financially assist providers.
- Create ongoing problem/conflict resolution.
- Conduct extensive and ongoing provider health plan and vendor outreach
with follow-through to investigate, education, and enforce uniformly.
In summary, unprecedented change and potential for disruption exits.
Significant pushback from physicians and outpatient providers on ICD-10
necessitates a new approach. The impact/cost/pathway must be established prior
to moving forward with ICD-10.
The traditional single-date implementation approach where providers rely on
clearinghouses will not work. HHS should explore code set and timing
alternatives. Too many unknowns at this point are out there to set a firm
On behalf of MGMA, thank you for inviting me to speak.
MS. DOO: Thank you.
MR. WINKLER: Good morning. My name is Dennis Winkler. I am the director of
technical program, including ICD-10, of Blue Cross Blue Shield of Michigan. On
behalf of Michigan, I would like to thank the committee for inviting us to
present a payer’s view of what it takes for ICD-10 to be successful.
Up until Mona’s discussion, I would say, I couldn’t ask to be in a better
position relative to the agenda. But even then, I think it will really
elaborate or confirm some of the recommendations we would be making.
Starting with 5010, the lessons learned, the discussion on testing, what do
we have to do for end-to-end testing to be successful, including on the
operating rules, Kaiser’s discussion that it really affects what’s going on in
the doctor’s office and the facilities’ billing back office activities. All
those things really come together, I think, in ICD-10.
With that, we were asked to respond from a payer’s perspective to four
questions. I think, even though what we’ll talk about here differs as far as
what the answers are, there is a common overriding theme, and that is the need
for collaboration between the payers and the providers. Again, that message is
very, very consistent with, I think, everything we have heard this morning.
The first question asked, what needs to occur for a successful transition?
From our perspective, the most critical milestones have to do with the
implementation date. It must be solid. It must be firm. As we heard earlier, we
need to have a definitive date defined. It has to be adequately enforced, and
really needs to be all or nothing. Three, four years ago, five years ago, had
we talked about a split implementation of maybe the procedure codes, diagnostic
codes separate, small physician offices one conversion date, large physician
groups second — we probably could have had that discussion, but a lot of time
has gone and I think a lot of efforts have been geared towards building this on
a single data service conversion date, with an all-or-nothing mentality and
mindset. To change that now would cause significant impacts in the entire
industry to recalibrate everyone’s architectures and approaches.
Is it doable? Yes. Is it costly? Yes. Is it going to be done in the
timeframe that we’re all talking about? No.
So I think it’s something that we really need to get our arms around. But
once that decision is made — and I think there’s a consistent theme — we need
to anchor on it and we need to enforce it. Once that date is made, we really
can’t go back and start talking about other issues for it.
The penalties of noncompliance need to be firmly understood, communicated,
and enforced. What I really would love to say is, is there a way that we can
get a carrot in there? At some point in time, you can only pound and pound and
pound on the penalties. That’s the stick aspect of it. But is there a way that
we really can deal with carrots in this process? I don’t have an answer to
that, but I just know it’s an opportunity for us to consider.
If we don’t address all those components, there will be groups of people —
payers and providers alike — that say, it’s going to be delayed again. So long
as you have that mindset or that thought, there will be a group that will not
be as committed to moving forward and hitting the date as others.
That closely ties with the next question, which centers around how it is
that you can maintain the momentum and avoid slowdowns. One of the views that
we think is associated with a slowdown is noise in the pipeline. We understand
that you will never ever stop noise in the pipeline. Whether it’s the multiple
opinions of the industry, both payers and providers alike, special interest
groups, the political aspect of it, it really doesn’t matter. There’s noise in
the pipeline. But if that noise in the pipeline is heard and people believe
that there is a possibility that that noise will result in a slowdown, you are
going to get more and more people listening to it. You can’t eliminate it, but
the question is, how can you create an environment in which that noise,
everyone understands, is discounted, it’s just noise in the pipeline?
Really, from our standpoint, we are asking, is there a way to basically get
consensus and get a collaborative working environment between all the major
constituents. This is where we believe that HHS, CMS can come into play to
endorse at a broad level a consortium or a summit of the major constituents to
sit down and start talking about the hurdles that each of the groups faces
relative to pulling this off. The reason for the summit, or the collaborative
nature of that, is that when you can get everybody at the table listening to
the other areas’ concerns, then you are in a much better position to propose
solutions that satisfy the whole. I know that when the payers get together and
they talk about it, they can come up with one concept. I’m sure that on the
provider side, they can come up with another concept. But it’s when you bring
the two groups together that we think, holistically, you can actually come up
with alternatives that start getting the entire industry moving in lockstep at
the same time.
Other thoughts related to the transition: This really gets back into the
more local nature. This is one of the things that we have found at Michigan.
From a payer’s perspective, we really don’t understand what the provider pain
points are in ICD-10. Just listening to Mona’s summary of the ten steps, it
gives us a fresh perspective. I can talk to payers and understand our pain
points. I don’t necessarily have the same view on the providers.
But we have also seen that the providers and the facilities have their
perspective and don’t necessarily understand the perspective and the pain
points of a payer.
At Michigan, we have set up partners relative to a small group of medical
practices and facilities that we work with up front to define how we go about
defining our neutrality or the environment. Part of that learning process is
sitting down and just getting to a common definition and nomenclature and an
understanding of what everyone is working on. It’s not something that’s going
to happen fast. If it’s difficult at the micro level, at the regional level,
just imagine, going back to this summit, the opportunity that we would have
nationally to be able to bring those two groups together.
Another thing — and it was mentioned earlier — on the ICD-10 is to come up
with a roadmap that really lists all the initiatives, from regulation and
statutory requirements, not just on the dates that they are going live, but
from a duration standpoint — when does the initiative start the activities for
the most part and when does it end? — literally to line those up, both on the
payer side, as well as the provider/facility side, to see the
interrelationships, so that when we do start talking about any movement of any
date, it’s very, very easy to see how it impacts the other activities. Does it
solve the problems? No. But does it help build line of sight and awareness
overall relative to what it is, in fact, everybody is working on? We think it
would be yes. Again, that sharing of information, having a common baseline,
that collaborative process, we feel is key to being successful long-term.
But the fun one that we want to talk about is testing. Like I said, you
could not have possibly choreographed this better than what occurred today.
First, I want to say that the end-to-end testing concept, or what we call
external testing, in our environment is very, very much tied to our
provider-readiness initiative. Basically, in this case we believe traditional
testing methodologies will not work. We know that the providers in today’s
environment, based on all the good work of 5010 — the 5010 environment is up
and operating. That’s the core foundation for ICD-10. The only thing that
changes in ICD-10 is the data content for procedure and diagnostic codes. The
infrastructure is there.
So our argument would be, then why test — no, excuse me, definitely have to
test, I’m sorry. That’s a Freudian slip.
Why concentrate on sending claims to do the ICD-10 testing?
Basically, we’re taking a different approach at Michigan, and we’re
concentrating on building an environment that is medical scenario-based. If we
can get the complete scenario in front of the providers, the providers would
take that scenario and say, given all this, here are the diagnostic and
procedure codes we would use. They would send just those codes over to us from
a payer’s standpoint. Because it’s a controlled environment, we would have our
claims test environment set up in the background. We would plot those codes in,
actually run claims, kick out the results, and then communicate the output to
We’re not testing the ability to send HIPAA-compliant transactions to and
from. That has already been done. What we are doing in that approach is
basically saying, here’s what you are able to send us. We process it and send
We think there are fourfold benefits to this approach:
• One is that the providers define codes that they would send for
defined medical scenarios, which demonstrates their ability to use and
determine ICD-10 codes.
• Secondly, now payers will understand what actual information
providers will be sending us.
• The third is that when we process the claims and send the information
back, the payers will understand that the results are actually being processed
by the payer.
• The providers understand how the payer is going to actually process
and reimburse the claim.
We just believe it’s a different model, and it’s a model that really
concentrates on the ability to get the content understood and communicated back
and forth, not the technology, because that infrastructure has already been
From our standpoint, this is a radically different approach. We understand
that. However, we believe it also provides a baseline for a different type of
testing that could be used on future health-care reform initiatives, including
the migration to ICD-10, 11, et cetera.
In summary, we believe that the success to ICD-10 is predicated on strong
collaboration between providers and payers, at the national, regional, and
local level. We really believe that we are all in this together. If we can send
that message and create a collaborative environment where we all believe that,
we believe we can come up with solutions that will collectively work in the
totality of everything.
We also feel that testing, to be successful here, really needs to be done
differently. We hope to concentrate on medical scenarios that really provide
the baseline for testing.
Again, we would like to thank you for the opportunity to give Blue Cross
Blue Shield of Michigan’s perspective on ICD-10.
MS. DOO: Thank you.
MR. HEBERT: Thank you. I would like to thank the committee for having me
here to testify on behalf of AHIP. My name is Sid Hebert. I’m the ICD-10
program manager for Humana. My primary responsibilities are implementation of
the revised HIPAA electronic transaction standards, the ICD-10 code sets, and
administrative simplification mandated by the Affordable Care Act.
You can see that my plate is pretty full.
What you are going to hear is sort of a uniting thread. Most of my comments
here, and if you catch me at any other venue, are that we can’t even validate
our intentions without testing. The core of what we have ahead of us is
testing. It is an unprecedented requirement for health care, considering the
broad spectrum of stakeholders. Quite frankly, if we do not get it correct,
we’re probably just not going to produce a very good result.
I work for Humana, but I am representing AHIP. Humana is one of the nation’s
largest publicly traded health and supplemental benefits companies. We offer a
wide array of health and supplemental benefit plans for employer groups,
government programs, and individuals.
The testimony today is based on a number of meetings with AHIP’s HIPAA
Standards Transactions and ICD-10 Task Force. To say that we have labored over
this delayed decision is an understatement. This is important to the
health-care community. It has not only great implications to out-of-pocket
costs for implementation, but it has great implications to our ability to
deliver quality health outcomes for patients.
As we all know, the migration to the upgraded HIPAA electronic transaction
standards, as we heard this morning, and ICD-10 code sets have and will
continue to have major impacts on the business and administrative operations
for health plans and will require significant resources for successful
implementation. At Humana, we began planning and execution for ICD-10 in 2009,
and we have worked consistently and diligently since then. We recognize that
the complexity of this coding system would require careful and systematic
management for successful implementation.
Humana will expend 58 percent of our projected ICD-10 implementation budget
by year-end 2012, so we have a lot of spend ahead of us, and we’re anticipating
a minimum of 11 to 15 percent increased costs for delay just for this first
year. Our anticipation is that our costs would escalate well beyond that for a
On behalf of AHIP, I want to let the subcommittee know that the health
insurance industry is committed to the implementation of ICD-10, which will
allow practitioners to identify and report conditions and condition management
in more specific ways that will lead to more effective measurements of quality
and outcomes. The recent delay puts implementation momentum at serious risk
and, as acknowledged by CMS in the proposed rule, increases implementation
I have spent an entire career on large-scale integration projections, and I
can tell you, delays never produce positive outcomes. They delay the outcome
and they dilute the outcome. Although in this particular case we may be able to
come up with some positive attributes for this delay, because I do not believe
this industry was ready, overall if we can continue this behavior, we’re going
to see dilution in the quality of the outcome.
We have a number of recommendations. I have diluted my verbal comments to
just the recommendations.
The first one: NCVHS should work with HHS to develop a detailed ICD-10
testing and implementation plan. You have heard it echoed from early
this morning. Testing gave us a false sense of security in the 5010
implementation. Effective testing in ICD-10, as we are approaching it now, will
produce the same false sense of security.
Quality has to be built in before testing begins, and testing can only
validate the usability of the product delivered. To believe that testing is
going to give us 100 percent assurance that we are going to be successful I
think is a little shortsighted. What it will do is give us an opportunity to
validate how well our planning and executive work was for building out our
ICD-10 solution, and it will tell us whether or not people who choose to use a
testing methodology — and, by the way, I do very much like what Dennis Winkler
had to say for Michigan about taking a medical approach to it — but it will
only validate our ability to use it. It will not validate the outcome we should
expect in the real world. ICD-10 is all about the content. 5010 was all about
the envelope. If we get bad content, we’re going to get bad results.
Payers will build their systems for sensible, science-based coding of
medical records. If you give us something that’s not one of those, something
that is an aberration, you are not going to get a good result. So not only are
we testing for good, effective outcomes consistent with best medical practice,
but we’re also testing for the aberration that’s going to occur as people try
to learn how to use this new coding system.
I propose that testing that is also the opportunity to calibrate our test
bed, which will include the provider all the way through to the payer, and
everyone in between. We’re really calibrating our ability to produce quality
encoding of true medical conditions in a consistent manner — a much broader
requirement for testing.
The second thing I will tell you about testing is that end-to-end testing,
just the definition of it, is an arduous task. I have worked with a group at
WEDI. Stanley Nachimonson and I are co-chairs. We have just completed quite an
extensive effort just to define what end-to-end testing is in the English
language that a business person can understand at a very high level. It is a
frighteningly scary document, just because of the breadth of everyone who is
So as we approach testing, it has to be multi-stakeholder. It has to be
all-in. If you are not part of the testing process, you’re not part of the
ability to calibrate your own ability to perform your element of the chain of
events, the cycle management. So testing has become a very broad topic, and I
expect that we’ll continue to have avid discussions about it.
But this plan that we’re recommending that NCVHS recommend to the Secretary
would allow for all covered entities to begin testing around October 1 of next
year, 2013. I believe that should be a hard requirement, as opposed to the soft
requirement that we have from 5010, which basically said everyone ready to test
by October 1, 2011. There were a lot of people who were ready to test who
actually weren’t. There were a lot of people who weren’t ready to test until
well into 2011, almost the compliance date. We need hard testing dates, and
everyone should be prepared to begin no later than October 1, 2013.
The program should include milestones and metrics that would be monitored to
better understand the state of the industry. A failing of the 5010 engagement
was that it did not put actionable, usable information about the process.
People were self-attesting that they were ready to test, but there was no
information beyond that.
In tandem, we recommend that the subcommittee consider recommending the use
of other incentives to ensure that all stakeholders can meet the new deadline.
Once again, let’s introduce a carrot. One approach would be to leverage the
momentum towards achieving meaningful use by ensuring that certified EHR
vendors are required to comply with ICD-10, as well as SNOMED CT.
Our second recommendation is that NCVHS should recommend that HHS stand firm
and not move the date again. I can’t reinforce enough that in my entire career
I haven’t seen a benefit to delay. The continued uncertainty regarding the
enforcement deadline for 5010 over the first six months of 2012 have
demonstrated the high costs with delayed enforcement dates that are often
extended at the last minute. The implementation of 5010 was extended when it
became clear at the very last moment that certain entities were not prepared. I
would contend that delaying enforcement to support people who actually do the
heavy work and lifting is probably not an effective strategy, as demonstrated
Further changes to the ICD-10 compliance date or similar enforcement delays
throughout 2013 and 2014 prior to the October 1, 2014 deadline would cause
significant costs for health plans when the industry will be preparing for the
implementation of health insurance exchanges and other ACA-mandated changes.
Health plans naturally evolve over time, and extended delay will require an
extension of testing activities and prolonged maintenance of the testing
We stand ready to ensure that member plans will be able to meet the
deadline, and thus strongly encourage HHS to not make any further changes to
the implementation date.
To achieve this and to avoid last-minute delays, HHS needs a mechanism to
assess the readiness — not a survey, by the way — of the provider community
to hit a certain date. I will acknowledge that I’m saying the payers are going
to be there. So now I’m focusing on the providers. You can also use the same
mechanism for us. If implementation is highly likely, then set that date and do
not change it. Health plans view October 1, 2014 as achievable, but if other
stakeholders will not be ready we are setting ourselves up for some serious
We strongly recommend against any dual implementation periods for ICD-10, as
some have suggested. We have heard recommendations for different implementation
dates for health plans and providers — to which we have to ask, what really is
the point? The point is to get ICD-10 implemented, not to drag it out over a
number of years. Others have also suggested phasing in the implementation of
ICD-10 procedure codes and diagnostic codes. To Dennis Winkler’s earlier point,
we have it planned, our design for that. It would be a major restart if we did.
Among other costly impacts, this option would require a new set of hybrid
DRG definitions and would cause a two-phase approach to changing impacted
hospital contracts. Both approaches would be nearly impossible to implement
from an operational perspective and would cause great challenges both in the
development of health plan and provider contracts and implementation of
quality-improvement strategy reporting.
Our third recommendation: We recommend that a comprehensive review of
upcoming administrative simplification and other regulatory and statutory
deadlines take place. The implementation of administration
simplification reforms included in the Affordable Care Act, along with ICD-10,
requires significant changes to health plan infrastructure and impacts almost
every facet of a health plan’s operations. We believe it is prudent for the
NCVHS to conduct such a review to determine if the forthcoming compliance dates
for operating rules, such as ERA, EFT, and future operating rules related to
enrollment, authorizations, referrals, and claims, can be adjusted.
Our fourth and final recommendation: The Department should provide
allowances in the medical loss ratio final rule to account for impact of ICD-10
delay. HHS has recognized that ICD-10 conversion implementation costs
are quality improvement activities. However, the MLR final rule proposed to
limit the amount of ICD-10 conversion costs to those costs incurred in 2012 and
2013, which are capped at .3 percent of earned premium in a relevant market.
We have asked HHS, one, to adjust the .3 percent cap and, two, to allow
health plans to include 2014 implementation costs because of this proposed
In closing, I do want to reiterate that the health insurance industry fully
supports the implementation of ICD-10, which has numerous benefits, including
greater precision in the identification of diagnoses and procedures, improved
reporting for public health and biosurveillance, and support for
quality-improvement programs. Health plans have expended significant resources
to date in implementation, and it is critical that this momentum be sustained
through October 1, 2014. There is considerable change coming with the
implementation of the Affordable Care Act, which will stress health plan
systems and resources. It is critical that the industry come together to make
I thank you for the opportunity and your attention.
MS. DOO: Thank you.
Now we have Holly Louie, from HBMA
MS. LOUIE: I thank the members of the subcommittee for allowing me to speak
I chair the ICD-10/5010 committee for HBMA.
HBMA does support the proposed delay of a year to allow those portions of
the industry that just plain were not going to be ready to meet that deadline.
However, we believe that there need to be very specific issues effectively
addressed to make this delay mean anything for the health-care industry. We
don’t want to be in the same place again as we move ahead when there are big
portions of the industry saying, we’re not ready, and, as my colleagues have
spoken about, more delays to follow.
The first thing that we think is important — and you guys have probably
heard this ad nauseum today — just as there was no definition of what
5010-ready meant, there is no definition of what ICD-10-ready means either
right now. I think that’s a huge thing.
Several years ago, before the final regs were even published, we had a
vendor with a monstrous sign that said, “We are HIPPA-ready,” spelled
H-I-P-P-A. That’s kind of where we are right now with ICD-10.
As a result, ICD-10 means anything that anybody wants it to mean. I think if
this shortsightedness is not corrected promptly, there will be far-reaching
negative impacts, and it will be much greater than 5010, which really was just
a technical change.
You have our proposed definition of ready for the industry.
As we have talked about, testing does need to be at a claim line
adjudication level — the medical that we have heard talked about — so that we
actually know what happens with that claim when it goes through, what the payer
does with it, and how it comes back. We think one of the oversights truly in
the standards right now is the that diagnosis code is not returned in the 5010
format when it comes back. It’s not on the remit. You don’t know what diagnosis
code the payer used to make a determination. We think that’s a critical
oversight. We think it ought to be part of the standards. We think it ought to
be part of 5010 and incorporated as part of this transition.
We think that’s really important, as we have heard various payers and
entities throughout the industry say they are going to use a wide variety of
mapping or crosswalk programs that can be proprietary. We could potentially be
looking at a different map or crosswalk for every plan out there. We just don’t
know what that is going to be.
Equally important, we think testing must begin and be successfully completed
well before October of whatever the year ends up being. We need time to correct
and remediate problems. That should be mandatory. While we do understand the
need for latitude in testing dates, it cannot be such that testing is so
superficial, the parameters so hidden, and the dates so late that it will be
impossible to address the issues that are certain to arise. We strongly
recommend one full year for testing, including time for remediation.
We believe that CMS and the commercial payers must publish their coverage
policies and LCDs and NCDs far in advance of the implementation. We recommend
at least a year. When the reality of payment policies can be so specific that
shortness of breath is a covered indication for a test, but difficulty
breathing is not a covered indication for a test, we need full disclosure and
full understanding of what implementation of ICD-10 will mean from the payer’s
perspective as they look at these clinical scenarios.
We have pleaded for three years for payers and CMS to fully disclose if they
will continue to reimburse nonspecific codes. Yes, we know they exist in
ICD-10, but that’s an answer that has no meaning. We also know that the vast
majority of current physician documentation can’t be coded to the most specific
There must be time to work with our physicians, educate them, help them
learn and understand how and what they need to document to allow correct coding
and appropriate payment for services that they are providing. Physicians have
to clearly understand how what they document is not currently representative of
the details needed to measure quality, and we believe their coding is typically
not really representative of what they are actually doing in diagnosing and
treating. They just don’t document very well.
If there will be no requirement for specificity with ICD-10, then I have to
say, why are we doing this? Is it all pain and no gain? If we end up with every
code still unspecified, how does that help anybody measure quality as we move
Next, we believe there needs to be a clear understanding of the false
implications of crosswalks, maps, and electronic health records as some type of
magic bullet. We are aware of numerous vendors and others marketing these
products as the conversion-to-ICD-10 solution, and physicians are looking to
these products as a one-stop fix. Even worse, we have already had physicians
asking vendors and clearinghouses to just change the code to the right one so
it will get paid.
The missing piece of critical information is that these are simply tools.
They are not coding, and they can’t replace accurate coding based on
documentation in a medical record. A recent article from a major payer stressed
that attempting to use maps and/or crosswalks as a coding reimbursement
solution will result in catastrophic failure of the system. They are not a
viable solution, and CMS, as well as the other industry educators, must be
explicit in their outreach and education on this issue.
The need for in-depth physician involvement, understanding of documentation
and coding, and that they will need to invest time and effort, is the one area
where we believe CMS has done the physician community a disservice. They have
made it sound really simple and really easy and they don’t have to change
EHRs and automated coding assist products identify keywords that could be
used to assign codes. It doesn’t mean the codes are correct. For example, a
radiology report may state that if the patient smokes or has a history or
smoking, clinical follow-up is recommended. Imagine if that’s you. You have
never smoked, but you are suddenly diagnosed as a smoker. The ramifications for
coverage, insurance costs, preexisting risk, et cetera, are now significant,
but incorrect. That doesn’t mean that EHRs and automated products should not be
chosen and implemented — they are going to become more and more necessary —
merely that they are not a magic answer to accurately coding.
The ability for HIPAA-exempt plans to require the use of codes long outdated
or invalid must stop, in HBMA’s opinion. While we fully understand the unique
needs for documentation and other information required for auto, tort, work
comp, et cetera, utilization of codes from the 1990s or 2005, as California has
asked for this year, is just frankly ludicrous. It greatly compounds the
challenges of ICD-10 implementation to also have to meet requirements for codes
that haven’t been valid for years and aren’t and won’t be maintained. It
increases cost, increases system programming complexity, and adds undue burden
throughout the entire system. There is latitude for reasonable and unique
requirements, but we do not believe that coding should be one of those.
As we all should be aware, there are numerous other requirements on
concurrent timelines with ICD-10, as we have discussed. Unfortunately, these
all require system updates or changes, programming modifications, cost, and
people. More importantly, CMS requirements have a significant impact on claims
for commercial payers that is often not recognized. For many, if not most, in
the industry, this means the same resources have to be allocated to the same
project. We have heard some commercial plans say that they expect that there
will be two to five years of claims disruptions and payment disruptions
post-go-live. I don’t know what to say to that, other than, “Yikes.”
I just don’t think there’s a word.
We have heard the stories about entities stopping their work upon the
Secretary’s announcement. It’s foolhardy, but it is a fact. Our members who
have made substantial gains in preparation for ICD-10 have all stated it was at
the cost of other things they needed to accomplish for successful business.
There are just simply not enough resources. We would recommend a consecutive
versus a concurrent schedule for anything that’s not statutorily required so
that we have time to do ICD-10 right and then build from there on other
Lastly, as I think we have heard from everybody, this is going to require a
lot of collaboration from all of the stakeholders and vested parties. We’re
going to need standard definitions, we’re going to need real testing, and we’re
going to need timely publication of policies and extensive education.
MS. DOO: Thank you.
Denise, did you want to say anything about the regulation from a CMS
MS. BUENNING: Sure. Good afternoon. For the record, I’m Denise Buenning. I’m
the acting deputy director of the Office of E-Health Standards and Services at
I have been listening with great interest to all of the discussion and
discourse today on all of the topics, but especially ICD-10, my very favorite.
No, it truly is.
I just want to give you all an update as to where we are in terms of working
towards an announcement of a revised date for ICD-10. I think you all know that
the Department published a notice of proposed rulemaking on April 17 of this
year proposing a one-year delay in ICD-10, until October 1 of 2014. There was a
30-day public comment period associated with that proposed rule, which closed
on May 17. As a result of that public comment period, we received 565 comments,
and variations thereof, on ICD-10 and on the proposal to delay for a year.
Those of you who were with us all when we did the initial ICD-10 proposed
rule in 2008 will remember that as a result of that comment period, when we
received over 3,000 comments — if there were a dozen people in the room, we
had 13 different opinions. It’s the same on this go-round. The public comments
are literally all over the place. Some ask us to stick to the 2013 date. Others
say they agree with the one-year delay. Others advocate for a two-year,
three-year, five-year delay. Don’t go to ten, but go directly to 11. Split the
implementation. Stay with ICD-9, et cetera, et cetera.
Where we stand on this is that we have actually read each and every one of
the comments. We have categorized it. We have come up — when I say
“we,” I and our staff — with a recommendation that we will be taking
forward to the administrator for her consideration. Since this is an HHS
initiative, it will also go up to the Secretary’s level as well.
We are preparing to do that. Right now, in terms of a final rule, all I can
tell you, because of all the clearances and all the discussion that this topic
has elicited and is going to elicit at the Department, we are going to work to
get out a final rule just as quickly as we possibly can. And I’m also from CMS
and I’m here to help you.
The other thing that I would like to mention as well — that proposed rule
also had two other areas of interest, one of which was a change in the national
provider identifier and also, most notably, the health plan identifier. Believe
it or not, we got some comments on that, too.
So that’s where it stands right now.
MS. DOO: Thank you very much.
We are finished with that. This is now the lunch break. We were supposed to
reconvene at 1:15, but I’m assuming you want a little more time than that.
We’ll reconvene at 1:30.
Thank you very much to our panelists. That was wonderful.
(Recess for lunch)
A F T E R N O O N S E S S I O N (1:42 p.m.)
DR. SUAREZ: All right we are going to go ahead and get started. I know
people in the audience will be probably coming back during the next 10-15
minutes, but we have our panelists here, and we have the members of our
subcommittee here, so we are going to jump in and start. The next panel is
going to focus on dental codes and updates and considerations. I’ll turn to
MS. DOO: Thank you very much, and we do – everybody’s back, right? So
first up we have Dave Preble from the ADA, and you were watching this morning
so you know my color codes, right? Five minutes and one minute.
Agenda Item: ADA
MR. PREBLE: On behalf of the American Dental Association, I want to thank
the sub-committee for the opportunity to testify and bring you up to speed on
what have been some major changes in the code maintenance process for the CDT
First, just to give the ADA’s position on why do we have code, I mean,
obviously you’d know more than anybody why we have codes in general, but the
CDT code is there to provide a mechanism for specifically and accurately
recording dental procedures. That’s the basic idea. Is a very a major use of
the code claims adjudication? Absolutely. But it is also used for other things,
for within – however robust electronic health records are in, dental
maintenance systems in offices, to record the procedural part of that and the
subsequent data collection, which is going to become increasingly important as
we move into more measuring quality. You need a standardized code set to
specify what the procedures are. An electronic health record will need much
more than that, so we do not expect that the code on dental procedures and
nomenclature, or the CDT Code, will grow to populate everything that’s needed
for an electronic health record. That’s not its purpose. It’s specifically the
procedural part of it, not the parts that would be diagnostic or anything else
that the record might need.
The feature of the code maintenance process, as it has developed – we,
this past year, developed a process that at first looked okay, but we received
a lot of comments and concerns from a variety of stakeholders.
Most vehement, I would say, of those concerns were that the body that we had
created, the Advisory Committee, the Code Advisory Committee, was not a voting
body, and the question was, if you’re looking to build consensus and measure
consensus without a vote, how can you really show that you had even a majority,
much less a consensus?
As it played out this year, I don’t think there were any actions on the Code
that were not supported in the discussions of the CAC, but listening to those
stakeholders, we have changed for the future, for the next year, the code
advisory to be a voting body, and part of the reason for the change at all is
– I have with me, by the way, so I can introduce – he wasn’t
introduced earlier. I have Mr. Mike Kendall here, who’s Senior Associate
General Counsel for the ADA, and at some point, I’m going to turn one part of
this over to Mike, because there were some questions in some of the written
testimony that came out yesterday, concerning the settlement agreement, and
he’s better equipped to answer any questions you might have, and give some
information about that.
But that will be a very small part. But just, as the settlement agreement,
which was not a government thing, this was a private settlement agreement,
moved into its next phase, the provisions for the Code Revision Committee were
no longer there, so we tried to devise a better process, a process that
included more stakeholders, had an annual update which, along with the idea of
a process that was more responsive to the evolving needs of the profession,
which came from CMS two years ago in a letter, we also requested to do it on a
yearly basis rather than an every two year basis, so we’ve added it into it as
There is provision for input from all stakeholders, public, private, anyone
either by the website or in the hearings themselves, the way that this
Committee works now or will work next year, is that there will be one day of
meetings where there be open mike for anyone to give comment, as well as for
the Committee to discuss things. It will then move into two days of talking
about the code change requests and actually voting on them. There will be no
requirement for ratification of those votes by any ADA entity. There will be a
final voting process by the Code Advisory Committee. And it’s 21 members; the
same as it was this past year.
We go to the composition of the Committee. There are five ADA members, five
payer members. All the nine recognized dental specialties have a seat at the
table, as well as general dentistry and the world of dental academia, through
ADEA, the American Dental Education Association. All of these stakeholders have
been, over a number of years, clamoring for a voice at the table, because they
felt that they had a distinct voice from either the payers or the ADA, and if
you’re going to create a viable consensus process, we felt that we needed to
have all the stakeholders at the table.
The idea in some of the written testimony, that just because the specialty
organizations are either members of the ADA or practicing dentists, means that
they only would be voting or allied with the ADA’s position, has not been shown
to be true in the past. They’ve had major differences. We have a diverse
population of dentists that are ADA members, they have proven to be independent
thinkers. They wanted a vote at the table, and we’ve given it to them, to
create a process that takes stakeholders into account for a consensus process.
The ADA’s role is just, at this point, administrative. It does mean that we
put time, effort and money into maintaining the code. As any of you know, it
does take money to maintain a code set, and we’re willing to do that, but as
far as any control over the process is concerned, we’ve taken, listened to the
concerns of the stakeholders and taken that out of it. The Code Advisory
Committee will be the voting body that will do those things.
I’m not even going to go into this slide. This is – I don’t even know
if you can see it, but it’s basically just a flow chart of the process. It’s
not as complicated as it looks on here. It’s basically that the code change
requests come in, we’ve tried to address the timing of those requests so that
we get the information out to the Code Advisory Committee in a timely manner,
so they have more time to look at them.
We’ve tried to address, obviously have addressed the voting and the
ratification angle of it. Actually, I think that we’ve developed a process that
completely satisfies and may be better than a lot of other code maintenance
processes, the regulatory requirements for openness that we’re governed by.
We kind of were coming to this hoping that everyone would say wow, you came
a long way and did a good job. I know that there are still some lingering
concerns, because I’ve read the written testimony, but we remain open to
looking at, talking to all stakeholders, although I can say that I think that
right now, we do indeed have a process in place that satisfies any regulatory
or legislative requirements.
I want to turn it over to Mike, since we’ve only got a couple of minutes,
just to briefly give us some clarification about the settlement.
MR. KENDALL: Thank you. I also appreciate and add my thanks to Dr. Preble’s
for the opportunity to talk here.
One of the things I wanted to just cover really quickly that came in David’s
remarks, is the notion of the yearly update, because the yearly update really
was in response to a CMS request, as he said. One of the things that the
testimony said was that this gives increased opportunities for the ADA to make
money. The fact is, the way this process works and the way this will go
forward, the ADA will not make any additional revenue through this yearly
update, even though it is taking on some additional responsibilities and costs
in connection with a more frequent update.
The reason I’m here to talk is just to make a couple points clear. It
appears, from the written testimony, that the settlement agreement between
Delta and the ADA, that is now about eleven years old, has sort of colored, or
is being used to inform, or perhaps it’s better to say inadvertently
misinforming, the conversation that’s going on about the new code maintenance
process that’s been adopted. It’s important to remember that the settlement
agreement between Delta and the ADA was a settlement between two private
parties of a civil action that involved copyright and other matters.
Contrary to what it said in some of the written testimony, the settlement
agreement has not expired. The settlement agreement will continue for another
19 years, with provisions of interest to both parties to that agreement. No
government agency was a party to the original settlement negotiations over a
decade ago, when the Code was already being used universally.
We’ve read the testimony, and from what we’ve been able to find, there is no
support for the contention that the use of the code, as it is being used, was
contingent upon any composition of the code maintenance process.
Rather than look to the settlement agreement for guidance there, one should
look to the statutes and the regulations that set the procedures up for a code
maintenance type body.
In fact, the specific contention was that there was a requirement for parity
between the payer representatives on the CRC and the ADA representatives on the
CRC. While the settlement agreement in general is confidential, the CRC rules
really aren’t. The actual makeup of the original CRC was five representatives
from the ADA, four payer representatives, and then there was supposed to be a
representative from a major buyer of insurance, as the other representatives,
kind of a swing vote, who was going to be appointed, or selected by, nominated,
in effect, by the payer representatives, and then affirmed by the ADA
Early on, the CRC talked about this, the payer representatives said they
couldn’t find a buyer of major insurance that wanted to volunteer for this job,
and so the ADA members agreed that instead, the payer representatives could
nominate a consultant to the insurance industry to take that place. So there
was never any kind of parity requirement for the CRC being the code maintenance
The reason I’m bringing all this up is because I think the settlement
agreement, which is, again, a private agreement; most of its terms are
confidential, between two parties, should just be put aside, and not used as
you discuss and evaluate the pros and cons of the proposal that the ADA has now
made for the code maintenance body that’s going to go forward.
And again, while it is a private agreement, I will just really quickly say
that because some statements have been made about it, I think the ADA is
constrained to say, and I think it’s justified in saying –
Number one, the agreement has not expired, as I said,
Two, because of that, there are provisions affecting both sides, both sides
have things still hanging in this agreement. In other words, one side gets
something in exchange for something else. Not relevant, though, to the general
discussion of how a code maintenance body should move forward.
And finally, the settlement agreement is being carried out in accordance
with its terms, and it simply no longer includes provisions concerning how the
code maintenance body looks. That’s why there’s a new procedure involved.
So thank you for listening to that, and as I said, the reason I’m going into
this detail, which I know can sometimes seem like little bugs buzzing around
peoples’ heads when they’re thinking about so many different things, is simply
to make the point that the settlement agreement should not be part of the
consideration here, concerning what we are proposing. Thank you.
MS. DOO: Thank you. Next we have Tim Brown.
MR. BROWN: Yes, and since we’re after lunch, I think I’m going to give up my
time so we can do the hokey pokey and wake everybody up.
Good afternoon. My name is Tim Brown. I’m the Deputy Executive Director of
the National Association of Dental Plans, or NADP. We’ve all said thanks; I
want to add our thanks also to your excellent staff; you have a great group of
people that we’ve been working with, you really should appreciate and value
The CDT is the core communication tool between the payers and the providers,
which makes NADP a really essential contributor in this whole process. So, a
little bit of our background. For the past 20 years, and I’ve been with NADP
for 14 of those, we’ve been representing the industry in code sets development,
electronic transactions, UDI standards, state and Federal regulations; in fact,
we testified to this body back in 2002 and 2004. We are the largest nonprofit
trade association, focused exclusively on the dental benefits industry, and our
members provide benefits to over 90 percent of the 176 million Americans with
You have our written testimony; I’m certainly not going to read that and go
through that. I do want to talk about – highlight a few issues and talk
about one issue that’s still unresolved.
Again, as we said, we’ve been an active participant in the CDT process. We
were an observer and then a voting member, and it was disbanded rather
summarily in September of 2011, and again, that came from a negotiation of
which we are not a part. After the CRC was dismantled, they came with a new
Code Advisory Committee, or CAC, process, and we agreed to serve on that, but
we still had a lot of issues; pretty numerous issues with the new procedures.
One, that they were developed without a lot of input from the dental
benefits industry and other folks that had been engaged in the process. The
other was it would be an advisory body, and it appeared to be fully controlled
by the Council on Dental Benefit Programs. Dave has answered both of those
issues, that is now a voting body. It also will not have the votes ratified by
the Council. So those two issues have been sort of dealt with.
So out of the five things that we identified in both our letters, where we
contacted CMS in December of 2011, and since the two new sets of changes that
have come out, those two are off the table.
The third one really probably relates to the timeline, and we think that
one’s been resolved as well. Dave didn’t go; he put the flow chart but didn’t
show the timeline. The initial timeline only allowed members of the Committee
thirty days to review those submissions, and because so many of our
representatives on that group are representatives of large national
organizations, there just wasn’t enough time to really get a lot of input from
our membership. They have actually now re-released that. They’ve expanded that
time period, and are also putting the code out about a month earlier, so those
three changes, we think, are absolutely steps in the right direction. I think
part of that came from ADA’s willingness to be open and listen, and make some
changes, that they heard not just from the payers, but from many aspects of the
industry, including the specialty organizations.
I need to mention one thing that we didn’t talk about in our written
testimony a little bit. One of that is the change from a two-year to a one-year
process. It’s my understanding that in the past, again, as Dave mentioned, that
is something that CMS was very interested in seeing it move from a two-year to
a one-year process. We still have to share our concerns that this is a
significant cost; it basically doubles our cost. What we used to do over a
two-year process we now have to do in one. You’re very, very aware that health
care is a much regulated industry.
Every time the code set changes, we have to file new plan documents, we have
to update websites, we have to update disclosure documents, contracts – it
goes on and on. So again, we’re now doing that on an annual basis, so it’s
doubling those costs, and many of those changes may or may not have any impact
on the care that’s given to consumers.
An example of that would be, we made pretty significant changes to the
section on x-rays and radiographs. We still were using the word
“films”. I think we all agree that updating those codes is
beneficial, but again, those costs really won’t impact the care that we give to
consumers. It will just be administrative cost to the plans and to the
providers, as they have to update their systems. So that’s our concern with a
two-year to a one-year system.
So back to our written testimony, the issue where I think we still need
clarification; in the original May memo where the ADA updated the CAC process,
there was a concept of any rejected proposals would just be rolled forward to
the next cycle, and we just think that’s an administrative nightmare. If you
just keep moving what we might call bad ideas forward, you’re just going to
consume more resources. I think we understand that that concept is off the
table, and we’re very pleased with that. We would just like to see the ADA make
a statement to that effect from the memo they sent out in May.
I think the big unresolved issue relates to guidelines for submissions, as
well as for the people on, the representatives on the CAC. Under the old
process, there were some very clear guidelines, and just to kind of name a few,
a new code couldn’t unbundle widely-accepted code groups of procedures, it
couldn’t just be a different technique, a laser versus another technique, you
couldn’t add a level of difficulty so you have a difficult prophy. While the
new revised CAC process includes a few guidelines, about six, we don’t think
that goes far enough.
In their most recent update, the ADA did ask for CAC members to submit
recommendations to be reviewed and decided on by the council, and that’s a
little concerning for us. I think the ADA has moved in the right direction over
the last couple of months, to make this a bit more transparent, more open, and
so what we would like to ask, as opposed to just sending something in and
having the council decide, is ask the ADA to actually hold a full open meeting,
let everyone bring their proposals to the table, everything from scientific to
clinical to administrative kind of guidelines, that would assist the
submitters, as well as the members of the Committee, in making those
deliberations and those decisions.
I think the ADA, in very recent conversation, said they were open to this
and the possibility of having this kind of meeting, and we just would encourage
that moving forward.
So finally, with the requests that we’ve made, or have either been resolved
by the ADA, NADP actually has a request for this Committee. Many of these
revisions to the CAC process were just announced. We have the potential, as I
mentioned, for a meeting in August to review and develop guidelines. The next
meeting of the CAC is scheduled in early February of next year, and I think
that’s before this committee meets again. So what we would ask is that the
subcommittee request of us a progress report in six months from this hearing.
It would give you feedback on how things are moving forward, it would continue
to move forward, and it also makes sure that everyone here stays engaged in
this process and keeps it moving forward.
So again, greatly appreciate your generosity of your time. We appreciate the
ADA’s willingness to listen and respond. One of the things that we have to
remember is while the CDT is the language that we use between providers and
payers, it really is what drives the ability for us to provide excellent care
to consumers. So it is something between us, but it has a much larger role in
I’d be happy to take any questions now or can certainly wait until after the
rest of the panel. Again, thank you for your time.
MS. DOO: Thank you. Next we have Bill Kohn.
MR. KOHN: Hi I am Bill Kohn; I’m Vice President for Dental Science and
Policy for Delta Dental Plans Association, and we do appreciate this
opportunity to present before this sub-committee.
My testimony is in regards to our concerns with the changes to the process
that the ADA recently implemented. We believe these recent changes were made
without an appropriate open process, as required under HIPAA regulations.
We’re going to ask the Committee to recommend to the Secretary that these
changes to the Code Revision Process and the changes proposed to the code set
itself, since these new processes were implemented, not be allowed. We would
also ask for a recommendation that the ADA be required to hold a true open
process that includes key stakeholders, and is sensitive to the business needs
of the industry for changes that will be made to a new code revision process.
That said, let me just tell you a little bit about DDPA. Of those 176
million people that Tim mentioned are covered by dental benefits in the US, we
cover 59 million of those lives. There are approximately 142 thousand dentists
in the Delta Dental Provider Networks and we process over 90 million claims per
year. So the CDC code set is our principal means of communications between
dentists and dental benefit payers. It’s central to our core business and it’s
of great importance to our member companies, employer groups, enrollees and
dental providers. Mr. Kendall talked about the settlement agreement between
DDPA and ADA, and for the past ten years, DDPA and other major dental benefit
payers, including CMS, and a national dental benefit purchase rep, or industry
rep, have been equal voting members on the ADA.
The purpose for putting us in there was not to confuse or suggest anything
other than the portion of that settlement agreement that dealt with the code
revision committee is no longer in place.
The part that goes on, as he mentioned, for another 19 years, has nothing to
do with the code revision process at all. So our point being – the point
to be made here is that as soon as they were freed of a requirement under an
agreement to have this equal voting in place, they dissolved it and made major
revisions, then, to the whole process. Equal voting has been in place not just
in the last ten years; it was prior to that, with another agreement, I believe
with AHIM. So at the time the ADA was given this code set, they remained the
standard maintenance organization for this, equal voting was in place, and
that’s been the case.
So now there’s these drastic changes were basically made to the process,
without literally any consultation at all, with what we consider ourselves, to
be a key stakeholder in this entire process.
So the ADA continues to modify the initial process that they, we think,
hurried into place, but still there has been no meaningful consultation with
the payer community on these changes. This highlights some of the very concerns
that payers had back in 2000, when they awarded code sets to these proprietary
code sets, such as CDT.
Just to give you an example, the first meeting in CAC, the new body, the
Code Advisory Committee, was held in February of 2012. This was the third
meeting of a two-year cycle, the final decision-making meeting of this cycle.
There is now no voting, and the ADA really seized upon this opportunity to
revisit codes that had already been voted down in the first two meetings of
They introduced a number of new submissions that sought to eliminate many of
the existing code descriptors, with really no rationale or explanation given.
For many of the existing CDT codes, the descriptor language had been previously
crafted from really hours of deliberation between the payers and the ADA, and
now, with no voting in place, they were being summarily asked to be dismissed.
In addition, the ADA determined kind of unilaterally, that the code would
now be updated annually rather than on a more manageable and cost-effective
two-year cycle. This change, we believe, imposes undue cost and burden on
payers, providers, practice management communities and ultimately the consumer
in the form of higher costs with little benefit.
The need for DDPA and other dental benefit payers to address NCVHS over a
problem with the ADA’s management of this important process isn’t new. We were
here in February of 2002 and again in January of 2004, to seek redress with
NCVHS over actions of the ADA in regards to management of this process. On both
occasions, subsequent changes were made to the process and yet, discouragingly,
here we are again and some of the same issues still exist.
One major problem we see is a lack of rigorous scientific and other
objective criteria for the evaluation and acceptance of new code submissions.
Indeed, in connection with prior code revisions, this lack of objective
criteria has been the source of most of the disagreement between the ADA and
payers. DDPA, and I’m certain many other payers, attempt to base their dental
benefit plan coverage, including covered procedures and frequency, on the best
available science, and employers and consumers are increasingly requesting,
often demanding, to know the scientific evidence base utilized to determine
health care, including dental benefits.
Since the implementation of the ADA, the new CAC, the ADA has stated the
previously CRC was not an optimal process to promote dialogue. A deadlock was
created over minor differences. We disagree with that statement. I was on the
code revision committee, I am on the code revision committee, we had some very
healthy discussion, and agreement on most code submissions. Where we disagreed,
it usually was on new codes representing unbundling of existing procedures
where there was lack of scientific criteria, how was a code performed at some
significant level of frequency around the country? Was there FDA clearance for
whatever was being put forward technology-wise, but most importantly, whether
the procedure had a sufficient established scientific criteria.
These are areas where if we had consistent application of rigorous objective
criteria for the submission and evaluation of these revisions, there wouldn’t
be much disagreement, or any non-collegial dialogue at these meetings.
Full representation and input from appropriate payer organizations in the
decisions to adapt or reject proposed revisions to the code is crucial to
proper code updating and maintenance. In defining an open process, we believe
the Secretary must look beyond merely a permitted presence and input at the
meeting. Because these code sets are core to our business, an open process must
in practice take into account the concerns of the payers on more or less an
equal basis. For this to occur, they must have a greater role in the
development of the decision-making process, not just this granted permission to
participate in the process, as only five votes out of twenty-one, it nominally
represents our interests.
In other payer organizations, having played an integral role in the
development and maintenance of the CDT for the past 10 years, we believe that
even in the absence of these rigorous criteria, that this equal voting process
has helped maintain – limiting unnecessary codes from being implemented,
and assuring that clear descriptors were written to help providers properly
file claims. Until objective scientific criteria are adopted, it’s even more
crucial that we have an equal role in this process.
We believe there’s a basic philosophical difference in how the use of the
code is interpreted. We believe the primary role is to promote the accurate and
efficient submission and adjudication of claims, a more or less complete
listing of what dentists do, but in a scientifically rational format. HIPAA
regulations largely support this view. Given this, we also believe more
emphasis should be given to the payer perspective and needs, and the ADA has
stated belief, and you heard briefly Dr. Preble give that, but they believe the
primary role is to include all procedures that a dentist currently performs, in
order that they may prepare a comprehensive, accurate and detailed patient
He also states it’s important for electronic health records, and it’s been
stated for medical and legal reasons.
Procedural codes without corresponding diagnostic codes, however, add little
or no value to an electronic dental health record. They simply record a service
without documenting a corresponding purpose or outcome. In addition, procedure
codes should not be, and never were intended, as a replacement for a narrative
description in a medical or a dental chart. So we see no evidence that quality
of care, access to care, medical or legal process is harmed or impeded by the
payer’s efforts to limit unnecessary codes or by our insistence by clear
We can provide you numerous instances, however, where consumer and health
system costs are negatively impacted by inappropriate codes or unclear and
Updates and improvements to the process are definitely needed. In addition
to the rigorous criteria for code submission and evaluation, a code set needs
different types of codes that better reflect current practice and health care
system realities. We need emerging technology codes, codes that measure
performance and quality, those that reflect diagnosis, similar to what you
already see on the medical side.
The best interest of the consumer is ignored by including codes that do not
have scientific validity behind them or by excluding these other kinds of codes
that measure performance or quality. The Affordable Care Act calls for NCVHS to
assist in the achievement of administrative simplification in order to reduce
the burden on patients, providers and health plans.
As per the HIPAA regulations, we believe that also, the Secretary’s
responsibility, through her delegated representatives, to continue to review
the process of code modification to ensure the code sets continue to meet the
business needs of the industry, and that specific shortcomings are brought to
the attention of the code set maintainers. We don’t believe the ADA’s
reconstituted CRC meets requisite standards.
We respectfully request that the NCVHS advise the ADA to take several
actions, including develop a new code revision process, with rigorous
submission and evaluation criteria, in close open collaboration with key
stakeholders, particularly the payer community. This process should meet the
standard of an open updating process.
We also ask that changes made to the CDT code set after this new CAC process
was instituted be set aside or denied until such time as the Secretary or
representatives can evaluate the propriety of the recent changes made to the
updating process. Code set changes scheduled to be implemented for the
2013-2014 CDT, the two-year cycle that we just ended, be limited to those
approved by all parties prior to the dissolution of the CRC by the ADA.
We recommend, and also would appreciate, any oversight by the NCVHS to this
process, and finally, if the ADA cannot, and we hope this wouldn’t occur, but
if they cannot in a timely manner resolve their differences with payers
regarding primary use of the HIPAA-designated code set, that the NCVHS advise
the Secretary to create a committee to explore the establishment of an
alternative HIPAA-designated code set for the purpose of electronic claims
My previously submitted written comments contain more information and
background, and I will be pleased to provide any more, but I thank you for this
opportunity to present in person.
MS. DOO: Thank you. Lynn Mouden, please, from CMS.
MR. MOUDEN: Good afternoon. I am Lynn Mouden. I am the new Chief Dental
Officer at CMS and the Center for Medicaid and CHIP Services. Obviously I want
to add my thanks to the Committee for the opportunity to address these issues.
Medicaid and CHIP programs in the states rely on accurate and complete data
for payment of claims, and obviously, in turn, to assure accurate reporting of
those services to CMS. As the new Chief Dental Officer and yes, I’m coming up
on about four months anniversary, I don’t have the long history of working with
the CDT revision process that some others may have. On the other hand, I’ve
been an enthusiastic member of the ADA for almost 38 years, and as a private
practicing dentist for 16 of those years. I obviously have a strong connection
both to the Association and the use of the code in the private practice of
dentistry. So I’m going to limit my comments to the process in place for code
revisions and how that process has changed.
For ten years, the CRC considered changes to the Code. The process was
collegial and provided opportunity for open and frank discussion of requested
changes. As has been alluded to, sometimes a decision was thought to be
deadlocked because of unequal voting process. That’s not necessarily a bad
thing. In fact, if learned colleagues on both sides of the discussion can’t
come to an agreement and a compromise, maybe having a code revision laying on
the table is an advantage to the process and the outcome.
When I was in practice in the 70s and 80s, I used the code exclusively for
billing insurance companies and Medicaid. I thought I was a pretty typical
dentist in a small town practice. My concern was insuring that what I
considered to be the best treatment for my patients would be appropriately
reimbursed by whichever payer was involved. A claim that was not paid or a
claim that was denied because the specific code procedure was not covered was a
problem for me as the dentist, a problem for the patient, who now may bear
unexpected responsibility for payment and also for the doctor/patient
relationship that’s so important in maintaining that patient’s health.
Codes are vitally important in that setting to ensure that the patient
receives not only the appropriate dental treatment but also that they receive
the benefits to which they are entitled, through whichever insurer is involved.
Concerns about the lack of a scientific basis for a code change, I believe are
indeed valid. Without a true scientific basis for adding a code, the CDT itself
becomes a reflection of someone’s wanting to bill for a service whether or not
the service itself is evidence-based. This, again, can lead to problems for the
patient now having to bear the cost because the service is not covered.
At least equally important, if not more important, is that the service might
not be covered because there is insufficient clinical evidence to support that
practice, so the patients are not only stuck with a bill, but they’ve had a
procedure with possibly irreversible changes when the clinical efficacy of the
procedure may not yet be proven.
While the ADA’s position is that these procedures are not illegal, frankly,
being legal is not sufficient quality. In addition, the patient has no way of
knowing what science is behind the procedure, as they determine whether or not
to undergo the treatment and to pay for it. The ADA’s Clinical Evidence Review
Board is not conducting objective scientific review, and may frankly have a
conflict of interest. Changes to the code are problematic for state Medicaid
and CHIP programs that must process claims. Any change, addition or
modification of a billing code requires a change in computer programming that
processes claims. While this might seem like a small thing to somebody
practicing dentistry, it in fact could mean huge investments in computer
changes needed to address that change at the payer level.
However, it is the position of CMS, as addressed in the letter from Cindy
Mann, Director of the Center for Medicaid and CHIP Services, Deputy
Administrator of CMS, to the ADA, that we did in fact stand behind the annual
possibility for changes to the Code that would help us address issues such as
new mid-level providers that are allowed in some state practice acts, that
would allow for these changes to be incorporated in a timely fashion.
Following the agreement with the ADA that expired in 2011, the ADA
unilaterally instituted the new process for code revision under what you now
know as the Code Advisory Committee. As it functioned starting in early 2012,
the CAC was truly only an advisory body, with final decisions and changes left
to the ADA’s counsel.
Following concerns by several of the members of the CAC, including CMS, the
ADA again modified the process so the council could only accept or reject
recommendations from the CAC. Further modification announced in just the past
few weeks eliminated the council approval as part of the protocol. We see these
modifications as positive steps in the code revision. However, the makeup of
the Code Advisory Committee is still problematic. Instead of the longstanding
committee composition of equal numbers of dentists and payer representatives,
the current CAC, as designed by the ADA, has five members representing payers
and the 16 members representing the practice of dentistry.
Having been in the dental community for 38 years, I don’t expect any group
of dentists to all vote the same way, it just doesn’t happen that way. I would
certainly not expect the members of this committee to vote in lockstep, either.
But we also understand that most committee members, even if they’re nominally
representing a dental specialty organization, are in fact members of the
organization that represents practicing dentists. It’s important to note that
the ADA was given authority to maintain the CDT codes only when, and only
because, it did agree to give insurers not just a vote, but an equal number of
votes. Whether that decision might have been different had there not been that
agreement in place, frankly I have no way of knowing.
We ask that the Committee do several things.
We ask the NCVHS to consider exactly who gains and who loses when the ADA
unilaterally refuses to consider clinical evidence for unproven procedures. We
ask that the committee recommend to the Secretary of Health and Human Services
to further consider the code revision group’s membership, to address how it is
constituted, and how revisions to the code are approved for inclusion. We ask
the Committee to immediately put a process in place whereby the code set
maintenance authority cannot be changed for any of the six HIPAA adopted
standard national code sets without review by the Secretary or by NCVHS.
Finally, we ask the NCVHS to consider requesting that the Secretary
temporarily place revisions of the CDT on hold and any change to the Code
Committee or process and to restore the Coode Revision Committee membership and
process until such time as the NCVHS has completed its review.
I certainly thank you for your time and for your efforts as we all are
working to provide optimum oral health for all our Americans. Thank you.
MS. DOO: Thank you very much. Now I’ll turn it over to Ob and Walter for
DR. SUAREZ: Yes, thank you indeed. I think as a little bit of background, I
guess the Committee started to hear about some of these challenges a couple
months ago, relatively, — so this is a very helpful, more detailed description
and explanation of this series of issues that exist with the maintenance of the
dental code set, and the process itself. I think I’m going to open it to the
Committee members for any questions they might have, and I know there is
certainly going to be questions about what is ultimately the role and the
responsibilities of NCVHS with respect to code set activity. I know we have
done, and certainly as part of our overall HIPAA responsibility, we certainly
look at the code sets, but I don’t know that we have engaged ourselves in the
process of actually reviewing and approving code changes of code sets like ICD
or CPT or others.
So anyway, I’ll just open it for questions – Bill, do you have –
DR. SCANLON: This actually could be for the panel as well as maybe other
committee members – you understand some of this more than I do. What I was
thinking as you were talking is sort the issue is, what’s the parallel with the
CPT, sort of process, because it seems to me that there were more criteria
decisions that were embedded in what you were talking about than what I’m
familiar with for CPT. CPT, as I understand it, a procedure code is created for
something that’s done, but then CMS, and particularly Medicare, can decide is
this appropriate for us to cover and not all CPT codes end up sort of being
covered for various reasons. We also have, besides CMS, we used to have the
carriers, and now I guess the Medicare administrative contractors still may
play a role in local coverage policies, and those are based upon their reviews
of evidence, and so here it seemed like multiple decisions were being wrapped
up into this one process of producing a code, which was very, very different,
and it doesn’t seem that that’s necessarily inevitable that it needs to be that
way, because I would think the payers could play the same role as CMS does and
Medicare does, is that after a code is created, we decide whether or not it’s
appropriate for coverage.
There is always that issue and this applies to physicians as well as
dentists, that yes, things can be legal, but whose job is it to stop things
that are legal but not necessarily beneficial? I was just having trouble kind
of following the parallels.
DR. SUAREZ: Any comments or reactions?
MR. KOHN: There are some major differences between CPT, or the medical side,
and CDT. CDT is purely procedure codes. We’re talking about hundreds of codes
versus thousands of codes, and because Medicare has no impact on dental coding
or dental payment because dentistry is not included in Medicare, that whole
role was eliminated, that very important role that comes into play for CPT
codes. So it’s really a rather simplistic process, and I think this whole idea,
though, of having rational criteria, and particularly good science, it’s just
– it’s a basic professional standard, I would think, that needs to be in
place if you’re going to have a code for the consumer or something that should
So that’s – it’s definitely not the same as CPT, but there are some
basic principles that are –
DR. SCANLON: I didn’t want to have us sidetracked by the issue of Medicare.
I brought up Medicare because I was familiar with sort of what CMS does. But it
seems to me that there is the issue that a Blue Cross plan and Humana United
can also make the same kinds of decisions that Medicare does, saying that this
is what our coverage policy is going to be with respect to that procedure code.
So it’s the issue of what seemingly are independent decisions about here’s a
code, here’s our coverage policy, versus what you seem to be talking about, is
we’re not going to have a code unless it meets certain criteria of sort of
benefit, and that would imply something about coverage.
MR. KENDALL: That articulates very well the ADAs position. We don’t think
these things should be wrapped up together. The adoption of a code does not
determine payment because that’s a determination made by the individual payers,
and the adoption of a code does not represent an endorsement necessarily of a
particular procedure. It’s a code to describe what dental procedures are being
used, and as David said in his remarks, will be extremely important in helping
us collect data to determine efficacy of procedures in the future.
MR. KOHN: We hear that all the time, that you can deny payments on whatever
code is in place, and that’s true, and we do. There is a large number of codes
that aren’t paid. But we don’t think it’s appropriate for the consumer to then
have to pay for things that aren’t found – we’re talking about a small
number of codes. Most codes we all agree on. But in a small number where
there’s not adequate scientific basis for it, where it’s performed with such
little frequency and it’s not really accepted yet as an accepted clinical
procedure other than it may be used in a small number of dental schools, or
where a technology has not been cleared by the FDA.
We don’t think it’s appropriate that consumers should then have to pay for
those things, either, even though we can deny them, it’s really not a problem
for us. We think this is a very consumer unfriendly and nonprofessional thing
DR. SUAREZ: You have another comment on this question?
MR. PREBLE: A couple of things. I don’t think any code set is looked at as
an arbiter of what any profession does or does not do. That’s putting too much
on a code set to do. The code set is there just to reflect what is being done.
Even if there is no code for a particular procedure, there are block codes that
unspecified procedure by report, that could be used to do that, so you can’t
put something on a code set that it’s not its purpose to do. If just really
briefly, if I may, and get indulgence, there were two issues for NADP that they
said were unresolved.
I just want to let the committee know that they really are resolved, that
the issue of rolling over codes that were denied automatically is not part of
the process, and we’re happy to send that out as a written communication so all
the stakeholders know that. So that one, we did actually resolve.
The guidelines part, since we did see that in the written testimony before I
came; I even asked for permission to be able – can I get a decision on
We are going to have a meeting in August to address guidelines. We are going
to invite the stakeholders to that meeting. It will not be just a meeting of
the ADA taking in the testimony, which we had already said we would do –
we’re actually going to invite the stakeholders to that.
So I think except for the final result of those guidelines, we’ve addressed
all of the five issues that NADP put forward, and as far as the makeup of the
Committee, as far as the makeup of the Committee, as far as the numbers of
I think if you look at the other code maintenance processes, which is where,
as was discussed, NCVHS’s role is to assess the process, not necessarily in the
complete weeds of it, from an open standpoint, as a process that is geared
towards developing consensus of all the stakeholders.
I think it looks like on its face, that it would satisfy that.
DR. WARREN: So my question is, there was a comment made that there are
different categories in CPT. Some of the new cutting edge procedures will have
those codes, they may not necessarily have the science all established yet. And
there’s certainly a lot of examples with CPT codes, of cutting procedure codes
that are out there that don’t have – they’re in the process of building
the science, and building the expectation that at some point in future, they
will be reimbursed But they don’t guide reimbursement. And so I think that’s
one thing that you might want to think of, is maybe there’s a separate category
of codes that fall into that area.
The other thing, what I’m hearing, is this whole issue of communication,
communication, communication, and oh by the way, transparency. So I’m hearing
some dialogues; I’ve been on the SNOMED editorial board when it was owned by
CAP and made the transition to IHDSDO and sit now on their quality assurance
committee. We had a lot of changes to go from a code set that was owned by a
professional organization to an international standards development
organization that now has, I think the last count, we had 20-some odd
international countries that belonged.
One of the things that we’ve struggled with is what do we have to have in
place to accept a new concept and add a code to it? And so I think maybe if you
work on some of that, that might help some of this. When you look at what our
role might be, I agree with Walter; our role, if you go back and look at the
HIPAA legislation, is to make sure that there is a legitimate process in place
that is transparent, that is meeting the expectations of that group, and if
there’s a group that comes in that isn’t’ transparent, that doesn’t allow for
input and stuff, then we have the opportunity to say well, this code set
doesn’t meet these criteria of openness and everything that was laid out in
HIPAA, but this new one coming up does. And I don’t want to see dentistry get
into that kind of battle; you’ve got a good code set going with what you’re
doing, so I think maybe if you take a look at what do you need to do to be more
transparent and more in line, might be helpful here. It would certainly make
our job a lot easier in trying to figure out how we work with you in order to
keep the code set designations that we’re responsible for ensuring.
MR. KOHN: You will see in my written comments, I talk about CPT emerging
technology codes, CPT 3 codes, and I can tell you as a member of the CRC, I
brought this up and there was discussion on it; two meetings at least, and
there was no response from the ADA on establishing those type of codes. We
believe that that is a good thing for emerging technology to be tracked and
followed and develop before you get FDA clearance, more information, also
performance and quality measures. We have a very simple code set right now. We
think it could be improved with some very small changes like emerging
DR. WARREN: So I guess my response to that is code sets do not enforce
practice. Nor do they enforce what’s paid for. If we did that, we would ratchet
down immediately what happens in our health care system, and there would only
be a few chosen few that could practice and bill through that practice, and so
we wouldn’t have new models emerging; we wouldn’t have new innovation. So I
would hate to see code sets viewed in that light.
What they are is support for helping us harness all the other infrastructure
that we currently have, and that’s evolving, and some of the infrastructure
will disappear, some will evolve into new kinds of things. As new technology
comes out, we’re going to have new ways of doing or of delivering health care
in this country, and so I’d like to see it open, that we don’t use code sets to
shut down. Because I’ve heard the comments before, well if we allow those codes
to come out, all we’re going to do is increase health care costs, so we need
not to share billing and money with people. We’ll keep it down with code sets.
And I don’t want us to go back to that kind of dialogue. I think we’re in a
better place now. But that’s my opinion, so –
DR. CARR: I was sort of following on what Judy said, because I think today,
there are codes that may be covered for a pediatric or Medicare population, but
not another population, and similarly, benefit design may exclude codes. So I
think when trying to take it to add further value judgments, for one thing,
because the knowledge evolves, I think it becomes a difficult task, and then on
top of that, a payer can choose to pay for some things and not others. I think
the point about the patients, I mean, this happens all the time on the medical
side, whether it’s medications that may or may not be covered or procedures,
and I think it speaks more to the transparency of informing the individual, who
may decide they still want the procedure, or maybe they don’t. But that’s the
model I think they’re accustomed to in medicine.
MR. PREBLE: Speaking to the idea of openness and willingness to listen to
comments, not just words, but I think in the actions of the ADA over the past
six months, I think that we’ve shown to be extremely willing to listen to
stakeholder comments and actually act on them. We’ve completely changed from
what many members from my council thought was not a good idea at first, moving
to a completely independent voting situation, but they came to the conclusion
that even though you have these specialty groups in the academic world, and the
ADD and the payers, all at the table voting, the basic idea is with that level
of diversity of stakeholders, if a compelling argument comes to the table for
or against a particular code, whether it’s based on science or any other thing,
then you’re going to get the right decision from that diverse stakeholder
group, and so they said okay, we’re going to give up control of this and let
those stakeholders make the decisions, because the compelling arguments will
rise to the top.
DR. SUAREZ: Thank you so much again for the testimony.
MS. DOO: Thank you so much, everybody.
DR. SUAREZ: We are going to be moving on to the next panel, which is
focusing on unique device identifiers, and we will try to focus on the
relationship to the administrative transactions. So we invite our testifiers to
join us here today. I think we’re going to go ahead and get started with this
next panel. We appreciate, again, your taking the time to come and participate
in this discussion about the unique device identifiers. As you know, there’s
been a lot of work over the last several years in defining and establishing a
national device identifier, with many, many perspectives, and implications for
many areas, from patient safety to administrative issues, so we wanted to bring
this panel together to try to focus on that administrative transaction side,
and see how the development of this unique device identifier relates to and
fits into the standards that are being used for transactions in the industry.
So I’ll turn you to Lorraine.
MS. DOO: Thank you. And you all have been here for part of the day, I think
I’ve recognized your faces. Wonderful. Welcome. And thank you all for coming.
It’s really great. So we’re starting with Terrie.
MS. REED: I am Terrie Reed, Associate Director of Informatics at the Food
and Drug Administration Center for Devices and Radiological Health. I run a
team that focuses on data management within the Center, and as part of that
foundational to that is this unique device identification system and
development of a unique device identification database.
So I was asked to come here today to give you an overview of what unique
device identification means to us, the FDA; what work we’ve accomplished so far
in a broad brush, because it has been many years of work, some of the benefits
that we see, what our current status is, and time lengths, as we can get them
So we’ll start with what we see as the qualities – I’m going to start
out broad overview and then get a little bit deeper as we go along. The main
qualities that we have been charged with developing in the UDI system is to
develop one that identifies devices in a consistent, unambiguous, standardized
way, that provides an identifier that’s unique at all levels of packaging
– very important that it’s harmonized internationally, and I will talk
about that a little bit, and that it facilitates the storage, exchange and
integration of data and systems.
We see what are called post-market, so after a device gets on the market
there are a lot of challenges for us to identify the safety of those devices
and how they’re performing in the marketplace. One of the challenges is because
we don’t have an identifier right now as compared to the National Drug Code
that’s for our drug counterparts.
So we are in a place where submitters send us text. They literally write
text for what the device is, who the manufacturer is of the device, and we have
to sort through that in our databases, so the UDI will help with that.
We also have a similar situation in the supply chain, because there is no
unique identifier; at all levels along the supply chain, the supplier to the
hospital distributer; they all add a different number. I have a slide that
shows for one catheter, made by Becton, Dickinson, there were 32 different
identifiers for that particular device. And so trying to track that down once
it got into a hospital, and we send out a recall or the manufacturer sends out
a recall, identifying that device without a unique identifier is a real problem
for all along the supply chain.
Similarly, registries that are trying to perform outcomes research or
compare device effectiveness are hampered by the fact that people are still
using text or their own numbering systems. There’s no unique identification
that can be used to exchange data from those registries or to build
comprehensive registries about a particular type of device.
Electronic health records do not have a place for unique identification, and
we are working – I’ll talk a little bit about some other efforts that we
have to have UDI represented in electronic health records. We even have some
demonstration projects in that regard, where we’re trying to test that out.
The benefits – we will have a better way to document product
performance. As I said, understanding adverse event reports, developing that
risk profile on devices to allow – another aspect of this is because we
don’t have that identifier, it can’t be on claims data, we can’t put it in
insurance claims, we can’t mine the data. If you’ve heard of the sentinel
system for our Center for Drugs, they’re able to look at claims data, mine data
for device effectiveness, for drug effectiveness. We can’t do that. So this
will allow FDA to quickly address those concerns, and one of the big aspects of
our post-market side is, of course, to feed better decision-making for approval
of devices as they are changed, updated and approved.
So we see UDI as an enabler, literally, to unlock these data sets that are
already out there, these databases.
Claims data, of course, as your focus is – registry data, EHRs and
meaningful use. We’re working in all of those areas to try to integrate UDI
throughout the health care system. It will facilitate linking across these
various data sources and amplify the usefulness of each one of them.
So those are the methods. I thought I would start out with that and then
just give you how we got here. This is the paragraph, in 2007, that was put in
the FDA Amendments Act, and it says that the Secretary should promulgate
regulations to require placement of a unique identifier to the point of use.
I’m not going to read the whole thing. But it was a paragraph, and since then
we have worked on a proposed rule, which I’ll tell you a little bit about.
One of the important aspects I mentioned earlier was this international
harmonization. The National Drug Code is administered by FDA, and so when a
drug crosses borders, just like our catheter example, that drug can get another
unique identifier for whatever country it was made in, and so it’s difficult
for track. So we didn’t want to repeat that.
We’ve worked very hard with what used to be a global immunization task force
for devices, that has been renamed now to be the International Medical Device –
actually it’s Regulators’ Forum. And so the attributes that we are using, we’re
actually harmonized internationally and I have the link to those and the link
to the new UDI roadmap on their website.
The benefits of that are that the device manufacturers can use that single
UDI across a wide array of regulators and countries. It provides the foundation
for eventually global security supply chain, global disability, automated
import review; it supports the Department of Defense and WHO efforts requiring
global device identification.
So this has been our road. We developed internally to FDA Center for
Devices, the regulatory tests, the language, based on that small paragraph.
That is complete, and also it contains a preamble, and an economic impact
analysis, that was all approved by CDRH, FDA, NHHS, and was sent to the Office
of Management and Budget in July of 2011, and we are waiting. One of the things
we say at every presentation is that we expect it to be out in two weeks, and
some day that will be true. So that’s our speculation – and then once that
is approved by the Office of Management and Budget, there will be publication
of proposed rules and the final rule. We are working now but then the fun will
We’ll have a 90-day comment period, public meetings, analysis of the
comments – you know all this drill – response and final publication
of the rule.
So going a little deeper, we had four distinct steps and many stakeholders
that we are trying to work with to achieve development of this system. The
first one is to develop a standardized way to identify and issue those
identifiers. We are working to place that UDI in a human readable or auto ID on
a device. As I said, I’m in charge of the staff that’s creating that UDI
database, and working on data management, so that data is very high quality.
And then, probably one of our hardest efforts, because we can’t control it
as much, is this adoption and implementation by those that we don’t regulate.
We can regulate the manufacturers to submit the unique device identifier and
the attributes associates, but we don’t have control over whether hospitals or
the health care systems will adopt.
UDI characteristics. This UDI code will be according to ISO 15459, which
allows it to have anyone who meets that standard to be what’s called an
“issuing agency”; currently GS1 and HIBCC, but that doesn’t limit it
to those two entities. Anyone who would meet the requirements for an issuing
agency would develop UDIs.
The UDI itself would be created and maintained by the manufacturer. What it
actually contains is something called the device identifier piece and
production identifier. So the device identifier is made by the manufacturer in
make and model, and the production identifier has those things like serial
number, expiration data. I’ll show you an example of this, what it means for
device identifier, production identifier, in a later slide.
So the UDI would be applied at all levels of packaging, and have a human
readable and encoded auto-ID format. We are not going to specify the technology
to be used, and they’re not going to specify the standards to be used. That’s
not FDA’s job. And the direct part marking for some devices, where that would
We’re going to use a risk-based approach, so we are not going to require
someone who doesn’t have a serial number now to apply a serial number, or who
doesn’t have expiration dates on their product’s labels now to do that. It’s
based on really what’s on the label now. The granularity that would be used for
marking that is also based on this. Not all devices would require production,
and we’d take into account the realities; the retail environment, UPC codes
that already exist on products, and we are going to have a lot of robust
alternative placement and guidance for industry on how to do this effectively.
So here is an example.
The numbering on the UDI, so that bar code right there, would be the auto-ID
portion of the UDI, and then the numbers, sorry, they’re so small, underneath
would be the production identifiers.
This is a Medtronic product; they already had this on their labels. This is
an ENDOPATH product, also has it on the label of the device. In this case, the
bar code is in two segments, so we’re not requiring it to be in one
concatenated or not. If you see the 01, the numbers that follow after that 01
are what I had called the device identifier, and then 17, and this is a GS1
standard in this particular case, the numbers following the 17 are the
expiration date, and the numbers following the 10 are the lot number, so
parsers would be able to detect that and use that in databases.
Yet another example – in this case is the HIBCC code system with the
bar, and that’s also on the label of the device.
The development of the UDI database, as I said, is based on the attributes
that were internationally harmonized. Because that is a public document and
those attributes are available publicly, we can display them on the slide. If
they weren’t, and if we hadn’t internationally harmonized and they were in that
proposed rule, of course, we could not. This allows us to have folks have some
understanding of where we’re headed. It’s not exactly the same, but it’s very,
Implementation will be based on premarket risk, so our plan right now is for
the highest risk, which is our Class III, to have the labeling requirements
twelve months after the final rule. Class II would then be 36 months after the
final rule, Class I five years final rule. So it would be a phased-in approach,
where we would expect to learn iteratively lessons learned as we go along and
as we get further on into the process.
And during that, we would intend to phase out some numbering systems that
are used on some devices now, so that all devices would have UDIs. Currently
some have indices, which is confusing to people. And like I said, robust
I just wanted to list a couple of the efforts on this slide of what we’re
doing with other groups. We have a project, a large public private partnership,
with some universities, to look at white papers on implementation of UDI and
electronic health records, claims, registries, those things that I talked about
earlier, where the gaps are, how we can integrate into those systems. We have
some UDI-based surveillance activity in a multihospital system. We’re working
on a pilot in Mercy Health System, it’s the St. Louis area, to integrate UDI
into a particular device type and have that go as a pilot and see how that
works out. We also have, as part of that, to integrate that with our adverse
event reporting system. So we’re really testing out some of these benefits that
we expect to get from UDI. That’s what ASTER-D is, to incorporate UDI into
electronic adverse event reporting.
I don’t have on here – a very important role. A couple of us are on a
technical evaluation panel, a national quality forum, which is also looking at
what are the current gaps and how could UDI fit into the health information
This is a timeline. There is one error – I put 2012 right here, this
should have been July 2011, when that preamble economics and approval was done
and sent to OMB. Otherwise, there’s a lot of TBDs but we have the timeline
ready. Then I had listed, on the right side, some of those activities that I
talked about, where we’re more in the claims world and more in pilots and
integration. These things. We have to rely on other groups like yourselves to
help us implement, because we have no regulatory authority in these areas.
And this is our website.
MS. DOO: Thank you. Margaret, you’re up next.
MS. WEIKER: I am Margaret Weiker, I’m an Offering Manager with Hewlett
Packard, and today I’m representing ASC X12. I am the Chair of the Insurance
Subcommittee. I was asked to speak on the EBI panel and talk about its
relationship to the administrative transactions. So I’m going to focus on the
X12 administrative transactions, and then once I complete, I’ll put a plug in
for NCPDP. I also am a standardization co-Chair at NCPDP, so I’m very actively
involved in standards development in that area as well. That’s just the typical
From a background point of view, and when you look at a lot of the
standards, you will see that we reference it as a UPN, and many will even say
“Oh, the UPN” or “the UPC”. Well it may not be a UPN or a
UPC. It could be a GTN. It could be an NHRIC number. So generically, a lot of
the standards organizations generically say UPN or UPC, but we support multiple
different numbers for multiple different entities. So as you can see,
manufacturers typically use multiple different groups to enumerate these
products, so there are just four of those that are listed and these are what
are typically listed in the actual standards per se.
As Terrie mentioned, there was the FDA 2007 Act that actually established
the UDI, or the development of a UDI. Also in 2007, the Department of Defense
initiated a pilot task with the GPN and the GS1 global trade network, and of
course, after I finish, the California Medicaid Pilot has also done some work
in this area.
So from a standards transaction point of view, the X12 4010 Version, which
hopefully everyone is off of right now or will be by the end of this month,
does support it in the 837 Professional Claim. It accommodates it as a line
level situation build reported item supply. So it’s a situational data element,
it’s at the line level, and it can be used for billing or reporting, so that’s
– out of all of that, that’s what – to get out of there. Because it’s
a situational data element, its only allowed use at this point in time is for
the Medicare or Medicaid program, and the numbers that are actually supported
are the HIBCC and the UPC numbers.
As we move to 5010, it’s important to note that this was added as part of
the errata. Initially we thought the pilot was complete, and had removed it
because when discussing it with some people from California Medicaid, they’re
like oh, we don’t think we’ll go for it, blah, blah. Then after additional
discussions, it was determined that they might want to continue to do that, so
as part of the errata process, we put it back in and we worked with Medi-Cal
and had other payers, et cetera, involved in developing the actual situational
rule, because it is a situational data element, and it’s used to report the
item, so no longer is it used for billing per se, it’s just to be used for
So the only allowed situations are for an HHS-approved pilot project, if
it’s government regulated, for medical and surgical supplies and then supports
a plethora of identifiers. As you can see, hopefully, it supports a custom
order number, the HIBCC number, the UCC-12 number, the EAN/UCC-8 number, the
EAN/UCC-13 number, the GTIN number, so as I go through that, you can see why we
need one number in the industry to do this.
So it was added back into the errata, so again, we support this.
Then in December of 2009, the DSMO received a change request, change request
number 1093, that requested that the existing code qualifiers in both the X12
and the NCPDP standards be brought forward in the next version. Whatever the
next version was, it was to bring the qualifiers that currently existed, hence
my previous slide, into the next version, and then to add any other product
qualifiers to support the UDI that was currently being developed and regulated
by the FDA.
The DSMO disapproved of the change request. Basically we thought it was
premature. We assumed that there would be a code set, the UDI code set would
become the national code set for identifiers, and at the time that code set was
brought forward to be mandated for use under HIPAA, then the transactions would
be updated at the same time so they could kind of go in lockstep, in other
words. I’m going to mandate the code set, I’m going to make the changes to the
standard at the same time; they all go together.
So we thought, the DSMO thought, it was premature to go ahead and accept the
recommendation, because one; the UDI database was not completed, there wasn’t
abstracts, et cetera, available for it. So the DSMO disapproved it.
So, going forward, as we have a UDI database, one database, one of the
things that both SDOs, even HO7, so all of us, would need to know is, where do
I get this code set? I have a code set, UDI, where do I get it? So we call that
an external code source addition, or a reference, so where’s the source, how do
I get it, and then an abstract, which is basically a paragraph of exactly what
it is. So first we need to know where to get the code set.
Then we need to know, what are the impacted standards that are involved? In
4010 and in 5010, we just had it in the 837 Professional, and the NCPDP claims
transactions supported it as well. So what are the standards that it’s going to
be needed in? Could there be a need to do a prior authorization on a particular
device? If so, that would need to be added to the appropriate transactions, and
supported as such. So as we think about moving this forward and actually
rolling it out for payer use in reporting, what transactions do we need to have
it in? What are the usage rules? Is this only something to be used to report
versus I’m going to bill for a service but the service was to insert a
catheter, so I then am going to report the UDI. And then is it reporting, is it
used for billing? Because if it’s used for billing, that’s a different location
in a transaction versus if it’s just being used for reporting purposes.
So what’s – how’s the usage of the code going to be used, which of
course then will precipitate, how the situational rule would be written. So we
would need to add qualifiers to the appropriate standards going forward.
Now most of the standards organizations, in their process, have built into
the standards the fact that there may be a need for a qualifier that is not
currently in the base existing standard. So in the X12 standard, there is
something called a ZZ qualifier, and basically what that does is it allows the
SDOX12 to say, in this data element, in this location, for this situation, you
use a ZZ qualifier, and that represents the UDI. So initially we would probably
use, depending on time frame and where we were in the development cycle, use a
ZZ qualifier to say this would be used for the UDI, and at the same time, we
would be adding a specific qualifier for UDI into the base underlying standard.
Then, as the next version rolled out, ZZ would no longer be used for the UDI;
you would use the actual qualifier that said, “This is for UDI”.
So both X12 and NCPDP, they use a code of 99 for other, have built this into
their standards that allows this flexibility for modifications that can be
incorporated while the base underlying standard is going through the process
and being modified.
And again, new qualifier code source, those types of things.
Also, some other items to consider are editing of Med data. What’s the
structure of the number? Am I going to edit to say, does it start with 01, does
it start with 10, does it start with 7, are there dates, so I need to look at
dates? So those type of things need to be thought out as well, and that’s more
from a system point of view versus a standard point of view. And as I mentioned
before, NCPDP does have a qualifier, the 99; X12 uses 77, and they do support
the UPC, the HRI, the HIBCC, the GTN and the UPN today.
So it would be a matter of adding another code to our qualifier into an
external code list and then any situational rules, et cetera, around that from
an NCPDP point of view.
So, as Stanley would say, Ta da! I’m done. Thank you.
MS. DOO: Wow, thanks very much, Margaret. All right, and now we have –
so is it who all actually ended up coming, because I know you came a long way.
So it is Pansy, Sara and Marchel. Great.
MS. BURGESS: I’m just going to give a brief introduction of who we are, and
who’s going to do what. My name is Marchel Burgess, and I’m currently a
consultant with the Department of Health Care Services in the Office of HIPAA
Compliance. While I have worked on several initiatives, including 5010, a
little bit of don’t shoot me for 5010, it’s not my fault – ICD 10 a little
bit and some other medical code set transitions, I was not actually involved in
the pilot process and the project for UPN UDI, but I’m going to be involved
going forward because Sara is moving on to more challenging, by far –
somewhat challenging activities within the Department, and I will be involved
working with Pansy, moving forward with California’s ongoing use of the UDI,
and very hopefully, its adoption as a HIPAA coding standard at some point in
With me today is Sara Rivera, who was the project manager for the UDI pilot
project. Sara has worked for many years with the department to bring this
project to where it is today. On the phone we have Pansy Watson, who is the
Chief of California’s Medi-Cal Medical Supply and Enteral Nutrition Branch.
This branch oversees the policies and processes for hundreds of millions of
dollars in reimbursements to health care providers for medical supply
Pansy also worked on this project for multiple years and brings extensive
knowledge about how California is currently using the UDI to support the
payment, tracking and reporting of medical supplies, and with that little
introduction, I will turn it over to Sara and Pansy. Thank you.
MS. RIVERA: Thank you Marchel, and thank you Walter and NCVHS Standards
Committee, for allowing us to speak about the California experience. We think
this is a very important initiative, and we look forward to sharing our
experiences and lessons learned.
I also want to thank Terrie Reid and Margaret – Terrie’s been very
supportive of our pilot over the years, and Margaret, you helped us with the
X12 standard. So we’ll spend the next few minutes of this presentation –
Pansy and I, we’re going to go back and forth talking, giving you a little bit
of background on how we got here, a brief overview of the UDI pilot, our main
findings and experiences, lessons learned and our recommendation to the
Secretary on how to move forward.
So briefly, on our background – the background of this project; I’m
sure everybody knows that the HIPAA standard, currently the HIPAA standard for
reporting medical supplies and devices and equipment is HCPCS. HCPCS is a five
digit alpha numeric coding system which is designed to aggregate products based
on common characteristics, into a single code, that HCPCS is not intended to
uniquely identify medical products.
From a reporting and a claims processing perspective, essentially
information is lost when you’re using just the HCPCS for paying claims, and for
establishing quality and utilization controls, so for California and other
health plans to overcome this gap, this reporting gap, many times payers will
require providers to submit a claim attachment with the claim, and this is a
very inefficient way to process a claim. Much of the information on a claim
attachment isn’t codified, and so you essentially lose what it is that you’re
paying for. We’re kind of getting, in my mind, to that point where many of
these health plans need to know what they’re paying for and to be able to track
those products in a codified process.
This occurred really back in probably about 2002, but California passed a
law to mandate that the Medi-Cal program, which is the name for California’s
Medicaid program, to contract with medical supply manufacturers for the purpose
of establishing rebates and other cost-saving mechanisms. But early on,
California determined that HCPCS would not support its laws to comply with this
law, because the claim itself, we needed some mechanism to uniquely track the
product, to identify the product that was contracted within the Department.
So the UDI, which formerly, I think people might be more familiar with the
term “Universal Product Number”, this is the term that was used even
way before I got onto the project, that was considered as a viable option for
placing on the claim what is it that California is actually paying for and
tracking as part of this contracting process?
So California pursued a request to test the standards, the UPN standards,
which at the time were kind of defined as – it’s not in statute anyway,
but the universal Product Number was defined as either the GS1/G10 standards or
HCPCS, so California pursued an exception to the standards through the 162.940
to test the UDI as a standard. And that was approved back around the 2004 time
So it took a couple of years to get the pilot up and running, but eventually
we did, and we presented a report to the Secretary and we are here now.
Just quickly, Terrie talked about what the UDI is, so I’m not going to go
back and explain it, but from a very simplistic purpose view, a lot of people
will think of the UDI as the bar code itself, but it’s really more than that.
The bar code and the numbers you see on the bar code are much broader. Where
you see on the bar code are much broader. Where you see, on the bar code, on
the slide, where it says “UDI”, that really is the device – It
should say “DI”, Device Identifier. So within the UDI coding scheme
itself, you actually have a number that uniquely identifies the product itself.
So from a claims processing perspective, that’s the data that we want to
use; not necessarily the serial code and the expiration dates and all that.
And as Terry mentioned, the two primary coding councils are HIBCC and GS1.
But the overall concept is to allow providers, pharmacies, to be able to take
the UDI that’s currently on the package, scan it, place it on its electronic
health records and then promulgate it through the claims processing system.
So I’m going to turn over the next few slides, starting on slide six, to
Pansy to talk about the pilot itself, and the lessons learned. Pansy?
MS. WATSON: Thank you Sara, and thank you Marchel, and greetings to
everyone. Thank you on behalf of the California Medi-Cal program for this
opportunity to present the California UDI pilot project findings. Hopefully you
can hear me okay?
I’ll mention it as the UDI, but we refer to it as the UPN pilot project, was
authorized by the HHS Secretary to test the cost effectiveness and the
feasibility of UDI as a HIPAA coding standard. The pilot objectives were to
lower costs, provide better reporting data, reduce fraud and abuse and improve
patient safety. These were actually many of the benefits of the Medi-Cal
contracting program. The pilot testing was authorized for a three-year period,
with over five thousand Medical providers participating. The scope of the
project included over sixty seven hundred products in the diabetic testing
supplies, enteral nutrition, incontinence, ostomy, tracheostomy, urologicals
and wound care product categories. Most of the manufacturers participating used
the GS1 and the HIBCC standards for product identification.
Slide eight – Over the three year test period, California Medicaid
Management Information System processed over seven million claims with UDIs
that resulted in over six hundred million dollars in provider reimbursement.
The UDIs were allowed on the ASC X12 837 Professional claims that Margaret
talked about. They were reported in the 2400 product identifications –
Sara has a presentation on that as well. But the diabetic supplies and the
enteral nutrition products were only allowed on the NCPDP pharmacy claims
transactions, reported in the product identification segment.
On slide nine, we talk about the lower program costs. For the success of our
Medical contracting program, a mechanism which requires to identify and
validate that the product dispensed and billed by the provider match the
Medical contracted product. Allowing the product UDI on the claims provided
specific product identification and eliminated the need to request additional
product information on claims attachments. This resulted in lowering
operational cost and much faster and more accurate claim adjudicating.
Slide ten. The UDI improved our quality of reporting data by allowing
Medi-Cal to identify the specific products reimbursed. This product specificity
allowed better control when establishing rates and policy. It also enhanced
fiscal reporting and monitoring of health care outcomes. The product
specificity reporting is not possible using only the HCPCS on claims. The next
slide demonstrates that.
Slide eleven. This is an example of HCPCS description versus a product
specificity using the UDI. The products in the list all meet the description
and are coding on the HCPCS 87520; I use this as an example because under the
HCPCS codes there were hundreds of different products with cost variants, as
you see, from 20 bucks to over 200 dollars.
All of these products meet the HCPCS, but the specific product list using
the UDI allows for pricing specific to the product type, size and materials,
and all these are within one HCPCS code.
Slide twelve. Sara, do you have anything to add to that one? It shows the
difference between the HCPCS and using the specific UDI.
MS. RIVERA: And this was just one example. We had many HCPCS where there
just represented multiple different types of classifications, assumptions and
price ranges, where even trying to set – a lot of people will think okay,
we’ll just set an average price – well this is a classic example, if you
set an average price between 20 and nearly 300 dollars, it means nothing, and
that’s where you need that supplemental information. SO using the UDI really
MS. WATSON: The UDI also helped in the reduction of the fraud and abuse,
because the product dispensed must match the product billed on the claim using
UDI. This also added a level of provider accountability and improved fraud
investigators’ ability to identify and analyze claims.
Slide thirteen. Medi-Cal contracted programs performed quality reviews of
contracted products to ensure how products meet industry standards. The
providers use the UDI to ensure they are purchasing and dispensing only
products that meet Medi-Cal’s quality standards. The UDI also helps us identify
specific product recalls as well, so the UDI helped Medi-Cal in improving our
Slide fourteen. This kind of ends the portion of my presentation, and Terrie
– thank you Terrie – addressed a lot of these challenges that we had
with using the UDI, and they included the lack of that central repository which
the FDA is working on. One of the things that we found is that our medical
supply contracting team used sample packaging to help validate some of the
UDIs, but the complex packaging labeling formats made it very difficult to
visually identify and decipher the UDI. So we felt that it would really be
helpful if we had a very exact and neat number on there that clearly identifies
And lastly, a lack of a mandate for all manufacturers of labels to use a
specific coding standard such as GS1 or HIBCC, for their products, we found
that a very few, not many, manufacturers, are still using their proprietary
coding and it made it a little difficult to validate and identify a product
So thank you again. This concludes my portion of the presentation, and Sara
will continue with the next slide.
MS. RIVERA: So what this next slide shows is within the HIPAA exception
evaluation criteria for evaluating HIPAA standard, there were ten conditions,
and as we went through the pilot and we were trying to objectively analyze is
this a useful coding standard or not, we felt pretty confident that eight out
of the ten areas of evaluation, that we could say yes, UDI is a good thing, it
can help improve the efficiency and the effectiveness of the health care
system, it meets the needs of the health data standards user committee, both
the GS1 and the HIBCC standards are ANSI accredited. They have timely updating
procedures, they’re technologically independent, and ultimately they’ll result
in minimum data collection and paperwork burdens on users, and they adapt
– HCPCS are a little less flexible in terms of adapting to changes. We
believe that once the UDI standards are up and running, they’ll adapt to
advances and technological changes much faster than HCPCS.
The two areas that we scored partially matched were number three, be uniform
and consistent with other HIPAA standards. We compared UDI, obviously, to the
National Drug Code standard, which ultimately we envision the UDI becoming kind
of like the NDC, the National Drug Code standard, where it’s maintained by the
FDA, there’s a place where you can actually go and view the UDI codes, there’s
a process for updating them, but we’re just not there yet. Originally, when
this pilot started, we thought that there already was a national database out
there with UDIs and we realized that there really wasn’t.
Number eight, be precise, unambiguous and as simple as possible. Once we
worked really close with the manufacturers and we identified what the UDI code
was on their package, it was relatively simple, but getting to that point,
asking them give us your UDI, just that process of what is the UDI, where is it
on the claim or on the package – that was a challenging process, but as I
said, once our database was billed and we saw them, it’s a usable process, but
it takes a while to get to that point.
This slide just kind of reiterates what I said, of the two areas that we
identified as “partially” met, I won’t repeat those.
Lessons learned. Alright, so we talked about all the great benefits that
California observed using the UDI, so we do believe that the benefits that
California achieved as a Medicaid program could be realized by other health
plans; Medicare, commercial payers, once the system is up and running. We do
believe that the benefits of using the UDI on claim and general health care
transactions will outweigh the costs to implement once we get to that point.
The FDA, what Terrie is working on to actually promulgate regulations to
name the UDI as a standard and to actually have a definition for the UDI and
have a database to store UDIs, will play a critical role, and as I mentioned,
we do kind of envision this leading to a system similar to the National Drug
The FDA regulations, when implemented, will help overcome the challenges
that we already identified as problems with the current system.
So in our report, as part of the testing a new HIPAA standard, we had to
write a report and submit it to the HHS Secretary, which we did, and we had a
recommendation, and our recommendation was to align the naming of the UDI as a
HIPAA coding standard, using the same timelines that the FDA promulgates their
regulations; at that same time, name the UDI as a HIPAA coding standard. We
didn’t mandate it as a HIPAA coding standard, but just name it as a HIPAA
coding standard. And this would be similar to how the NDC, the National Drug
Code, was allowed for physician-administered drug products, where right now
they can use it, or they can use HCPCS. We think it’s too early to mandate it,
but once the FDA UDI regulations are out, we don’t see any reason why it
couldn’t be named as a standard, where a payer could use it as an alternative.
Bullet number two – obviously, modify the applicable HIPAA transaction
standards, which include the NCPDP and X12, to allow UDI reporting as a
situational data element. So again, there would be language in there to say
okay, if it meets the reporting needs of the health plan and the provider,
allow for the reporting of this coding system.
And the final bullet is really to allow that process for HIPAA-covered
entities to start using it to meet their business needs. Again, we think it’s
premature to mandate the standard, but California had a very specific business
need to start using it, or to use something other than a claim attachment. We
think that other payers, Medicare, will also, at some point, would see this
database up and ready, and the UDI regulations are promulgated, they’ll start
saying well wow, this is a great alternative to what we’re currently doing. So
allow that process.
Other components of our recommendation were to collaborate with the FDA.
When we say collaborate, the FDA is doing their work to make sure manufacturers
use it, but we think that Medicare’s, Medicaid’s, commercial health payers,
should work very close together to make sure that this rolls out in a way that
makes sense, a very clear, concise transition plan to go from HCPCS to the UDI
standards, and that could be a multi-year process.
But also to ensure that the UDIs are clearly identified on the packaging
label, that the manufacturer is clearly labeling, because even if you recall
the slides that Terrie showed, UDI on a bar code is complex. On a claim
transaction, you don’t really need all those numbers; you just need one
component of it, so we want to make sure that’s very easy to read. So one of
our recommendations is on the package, actually have the manufacturers say UDI,
and then colon and then the number, so that anyone looking at it truly knows
what the number is to put on the claim.
And then establish a committee, which I kind of mentioned, to start
developing a transaction plan, and that committee should include
representatives from the FDA, X12, NCPDP, GS1, HCPCS and the medical community.
On this slide, it’s just an example of how we envision, on the X12 standard,
the placement of the UDI. The X12 standards themselves have a loop, and it’s
actually called Product Identification, but when the implementation guides are
created for HIPAA, that loop is named “Drug Identification”. But we
believe that same loop should be used for identifying UDIs and drugs. It’s just
a matter of adding the appropriate qualifiers to differentiate between an NDC
versus a UDI, and that’s where Margaret and her team will be very helpful in
terms of developing those qualifiers. And again, it should be a situational
So UDI should be on the institutional and professional claim. Dental we’re
not really too sure; we weren’t sure if that was a need, that that would
probably come out of the industry. And of course the NCPDP, which there’s
already a data element for it, the de-identification of the co-payers.
And Margaret had mentioned other X12 transactions and NCPDP transactions
that might be impacted. This is the list from our perspective of all the
different HIPAA-covered transactions that would be impacted, so obviously, get
claims, but it would be the claims status, response requests, the eligibility
benefit inquiry, the claim payment, the 837, service authorizations,
coordination of benefit and Medicaid pharmacy subrogation. So it would be more
than just the claim transaction itself.
And the final slide is just kind of a picture of how the UDI can kind of
bring all the HIPAA-covered entities together; manufacturers, health plans and
And we do believe that UDI ultimately can improve patient safety, reduce
fraud and abuse, enhance the quality of reporting data and promote cost savings
and efficiencies. And that is it.
DR. SUAREZ: Thank you very much for this, this is very, very informative. I
think we’re going to open it to the committee for questions?
DR. SCANLON: Actually I have a question and comment. I think this is an
incredibly important thing for all you have done, and hopefully, that your
optimism about its adoption will become a reality, because actually, I was at
JO about 13-14 years ago, we were focused on the same topic. We were looking at
sort of Medicare and HCPCS codes. Our example were catheters; at that point the
range in price was $1 to $17; Medicare was paying $11 for every one of them and
had no idea what kind they were getting, so at that point we were saying we
don’t care if you change the price, just know what you bought. And I think
that’s what we need to do. We really need to move forward on this, because it’s
unacceptable to be using something as crude as the HCPCS code for this.
MS. KLOSS: Assuming it gets adopted, what thought have you given to how it
will be maintained? Because I can imagine that this is very dynamic, with a lot
of change in devices. Would that become an ongoing function of FDA?
MS. REED: The development of the UDI database, just like any other database
that FDA regulates, that our product codes or anything, our adverse event
reporting, we have business rules, we’ll have, as part of the regulations that
I can’t share with you – it does. How to exactly do this, when to update –
MS. KLOSS: But that process has been all laid out as well –
DR. SUAREZ: I have a question about the regulations – it’s hard to
imagine why or what is holding the regulations for a year; is there any sense
of that you can refer to or mention? I don’t know if you have any –
MS. REED: I really can’t comment – we continue to have conversations
with the Office of Management and Budget. We supply them with information, they
DR. SUAREZ: So it is, on OMB, and OMB has – normally they have 90 days,
that’s how I understand it, to clear this – okay. A quick other question I
have is about the timing. So this was also interesting that this is an MPIN,
it’s a proposed rule, so if one were to project how soon this can be done if
they were, let’s say, released some time later this year, what’s the time line
from that point on with all the comments and all the processing comments and
then the final action – are we looking at two years from now before the
MS. REED: So it’s a phased approach; I had shown it’s risk-based, Class III,
so we’re anticipating a 90-day comment period, respond to those comments. We
are going forward with that UDI database as if – we are having user acceptance
testing that we’re planning in July, so we are moving forward, as if that’s
going to all go through.
Our plan is to have it available for final – for submissions to be
coming in Spring 2013.
DR. SUAREZ: Spring of 2013? Okay.
MS. REED: So the database to be up and running.
DR. SUAREZ: Thank you. Judy.
DR. WARREN: So if the FDA is going to build and maintain the database, I
assume that’s also the generation of any more codes that are needed. How does
that relate to the work that you talked about at the beginning, that’s
international, where Australia owns the Secretariat –
MS. REED: So we’re not going to assign – we will not be assigning the
codes. Those are through those – they’re called issuing agencies, as part
of that ISO standard that I referred to, and they have to meet certain criteria
to be an issuing agency and how they assign those codes. So GS1 and HIBCC has
been mentioned here already in that business, and they’re already working
internationally, GS1 to B10.
So rather than an FDA taking on that, we wanted to play the marketplace and
be part of the environment landscape instead of proposing some kind of FDA. And
also get the benefit of having it be global, working internationally, as
opposed to one country, since right now, as I said, in the NDC world, each
country has their own national drug code, not international. So we wouldn’t
assign the codes, but we would require the submission of the codes to us and
along with that UDI, I didn’t spend a whole lot of time on this, but there
would be a specified set of attributes that have also been harmonized
internationally; things like brand, model, which really trip us up now, because
people are typing in, you know, in those adverse event reports, the brand name,
which we have an example of Medtronic being spelled hundreds of ways in our
databases because we don’t have those assigned to a standard.
DR. SUAREZ: Any other questions? All right, well thank you so much again,
thank you for taking the time to come and present. I think we’re going to take
a break now and if we can take maybe a ten-minute break and come back at 5
minutes before the top of the hour so we can get the final panel.
DR. SUAREZ: So this last panel is going to focus on a very, very important
topic, and that is Affordable Care Act provision related to compliance
certification. As you’ll know, the Secretary is going to be issuing regulations
related to the establishment of a compliance certification process in
accordance with the provisions of the Affordable Care Act, and there was
certainly an interest in receiving feedback from the national committee, and so
that’s why we convened this panel, to listen to the perspective of the industry
regarding this compliance certification process, and so we’re very excited to
have the various representatives that are going to testify today, so thank you
again for joining us, and I’ll turn it to Lorraine.
MS. DOO: Thanks everybody, and we will start the afternoon with Jim Daley,
MR. DALEY: Good afternoon. Again, I would like to thank you for the
opportunity to testify today. I’m Jim Daley, from Blue Cross/Blue Shield South
Carolina. I’m also the Chair-Elect of WEDI; I’m here today to testify on behalf
I’m not going to go over what WEDI does; you’ve heard that a couple of times
today already. In a nutshell, we’re trying to take manual paper-based processes
and try and do them electronically, encouraging the industry to move that way.
What I do want to say on this slide, though, is in anticipation of the
certification requirements, we did hold a forum back in February of this year,
well-attended. It was not an official PAG; we didn’t take votes on any
particular topics, or recommendations, but we just threw out a bunch of aspects
of certification and got feedback from the attendees as to what they thought,
some of their concerns, some of their considerations. Based on the notes taken
during that session, that’s what you’ll see today in this presentation.
First concern was what are you trying to do with certification? What is the
real goal of this? There needs to be some definition; are we trying to say is
the industry ready? Everybody ready? Just one segment ready? Or are we trying
to say not only do people appear to be ready, but they’ve resolved all the
interpretation issues? Are we trying to say that in addition to getting the
transactions flowing, we’ve actually resolved the internal processing and we
agree that actual usage of the data on the transactions is appropriate, and of
course there’s another question of those are just trading partner issues, it
has nothing to do with being ready or not ready, it’s one specific relationship
of one submitter to one receiver not working quite right.
Various aspects that have to be done to make the whole thing flow properly,
so what is a certification going to accomplish? What’s it trying to do? And
that will have bearing on how best to do it.
Certainly it’s got to provide some ROI. You don’t want to go through an
effort if there’s no real return on what you’re doing. It should look at the
critical root issues; look at what real pain points we went through, not just
the year but 4010, 5010 and maybe other implementations, and saying what are
those real pain points and how do we work on those, not work on the trivial
issues, the big ones.
And certainly avoid retesting; we’ve just gone through a tremendous amount
of testing and implementation, the things are up and running, admitted
operating rules are not there yet. But the 5010 is in place. We want to try and
retest that to certify we’ve retested, so we need to try and avoid duplication
of effort as well.
Another consideration is the health plan identifier, and it would be nice if
we actually had that rule in front of us right now to look at, but based on
some of the things in the proposal, what is a health plan? There’s a HIPAA
definition, certainly we know what that is, but we recognize in health plans,
the HIPAA definition is not always everything you need. There are other
entities involved in moving transactions back and forth – the OEID and the
proposed rule; how does that enter into it? There are health plans, as defined
by HIPAA, that don’t do any of this. They just say here’s my premium, just
cover me, you handle all the transactions. Should they be involved in
certification or should the people who are handling the transactions be
involved in that process? So we really need to look at the interplay of what
ACA said in terms of health plans should do certain things, or HIPAA says is a
health plan and what’s the HPID regulation going to do, and try and reconcile
Enumeration – things such as sub-plans were proposed, so does a health
plan say I’m okay – for example CMS – Medicare is a health plan, but
it’s really administered through the MAC, so who certifies? How do we do that?
Fully insured plans, as I mentioned, they may not do anything in terms of
transacting. They are technically a health plan, as defined by HIPAA, but
they’re not doing any of the transactions, somebody else is doing it on their
behalf. So certainly, HIPD is an interesting thing to play into.
In terms of depth and format, health plans are supposed to provide evidence
that they’ve done this kind of testing, et cetera, so the effort of doing that
depends on what this really means; what documentation is going to be required.
The simplest form is attestation – we did it, and there’s a document
certifying that they’ve done the transaction testing, they’re in compliance.
Very straightforward. There’s another level you could go to –let’s take a
look at some EDI reports, see if they look like compliant transactions in
there, look at number of rejections, things of that nature. You could use a
validation tool. Back in the 4010 implementation, there were several agencies,
or several vendors, that provided tools that said, your transactions are
compliant, look good, or here’s some compliant ones, see if you can process
them. That’s another way of going at it. And of course then there’s the
full-blown let’s run things back and forth right through your systems and start
to finish right through and all the way back out, and look at those results.
There are a lot of different levels that could go about in terms of what the
attestation really implies.
Certainly the sheer number of providers means you can’t test – a payer
cannot test with every single provider, and they don’t transact with every
single provider directly. They go through clearinghouses mostly. If you look at
the hundreds of thousands of providers out there, the numbers are staggering.
And on the flip side, of course, if a payer tests with some submitter or a
provider, that means a provider is also testing back with all the payers. So we
need to look at both the aspects of that equation.
So here is a reiteration of some of that. You can look at end to end
testing, and the rule was a little bit unclear in that, or the law, rather, was
a little unclear. It said from end to end, such as from the providers – is
it from the provider source to the health plan; in other words, out from the
door of the provider to the door of the health plan, including all stops
between? Is it from the time a health plan receives a transaction, to the time
it sends some kind of an output back? But that’s a claims status result, the
eligibility response, remittance, what is that end to end? Or is it actually a
testing of the full round trip from maybe somewhere within the provider
organization to finally out the door there, through all the hops, through the
payer, process through the payer, all the way back out through all the hops,
back to the provider. What is this testing attestation that we have tested with
these providers, and it works.
Synchronization – if you do try and do an actual full testing effort in
here, the data synchronization is going to be something to be reckoned with.
This is a simple picture, extremely simple picture, of what’s involved in
typical transaction flows. I guess I can’t really point to my screen, but
you’ll see on the left side you’ve got providers, and I just put a couple of
sample functions that occur within those organizations. On the right hand side,
in the green, there’s three simple functions that occur with the payers, and
the provider could go directly to a payer, many do, and then the payer would
respond directly to the provider.
However, a provider may also go through a clearinghouse, or billing service,
to get their transactions out. A payer may also use some kind of a business
partner, a clearinghouse, to receive the transactions. In between those
clearinghouses/EDI gateway/billing services, there could be many more hops, so
in terms of certification that this testing has occurred, all those different
scenarios need to be looked at to determine what are we trying to do here, how
do we do that, and if the health plan certifies they’ve tested, how do they
know the testing went all the way back to the source, through those other hops?
Some of the challenges – I touched on this a little earlier. Federal
health plans – does Medicare certify or does each MAC certify? For
Tricare, for several Tricare contractors, does the Department of Defense
certify I am good to go, or does each contractor do that, or would they
actually partner with someone else who actually processes part of this? Does
the partner certify that they’re compliant? A lot of questions to be asked
there. There’s certainly a major part in handling these transactions. So should
they be required to certify back to the other entity identifier and the HPID
rules for what enters into certification?
Resources/dollars including trading partner and provider impacts. If a payer
has to test with the providers, that means a provider has to test with the
payer. If there’s resource requirements, dollars, et cetera, on the other end;
it doesn’t happen just on one end. And also have to look at what happens within
HHS. Somebody’s going to have to review these attestations to say they make
sense, I agree, you’re good to go. If no one looks at them, then I’m not sure
what the purpose would be. We have to look at the administrative overhead on
the Federal side as well as amongst providers, payers, clearinghouses, or
whoever needs to be involved in this process.
Control over who agrees to test. If health plans have to test with someone
or other, how do they guarantee that other partner is willing to test with the
health plan? So that’s going to be another issue, and if you need to certify
you’ve tested with everybody, what happens if only 90 percent say we’ll test
with you? Another consideration.
Multiple lines of business. Health plans are not just – most of them
aren’t one little entity that only does one kind of insurance. They do many
things. Does each one of those lines of business have to certify, or as soon as
one does, we consider that they’re all certified?
Testing is not production. They may certify it works in testing – when
the rubber hits the road you move to production. That doesn’t guarantee it’s
going to work perfectly. Hopefully it does if you’ve tested well enough. No
guarantee. And it’s point in time only. Our systems aren’t static. Even as
we’re implementing 5010, health plans are making changes nightly, weekly,
monthly, whatever it is, for new initiatives to solve production problems,
whatever they may be. It’s a constantly changing environment so certification
may look good, but it looks good at that point in time.
Some of the issues with health plan only certification – applying the
requirement only to health plans – they look good to go, but to really
make sure the industry is functioning as it should, there’s all those players
involved that also need to be functioning properly. That picture I just showed
a couple of slides ago, if they’re not all working, there’s one weak link in
the chain – then the health plan saying we’re ready doesn’t really make it
work. So you could exclude critical parties by doing that.
The complication of attestation – once again, if the health plan says
we’ve certified that we tested with everybody, how do they really certify that?
That all those other parties have participated and they are also working well?
I don’t have the answer, I wish I did, but that’s something we need to
Another thing that could happen – this happened back in the 4010, I’m
sure 5010 as well. I won’t mention the legal groups, but there are many that
say if we have to put our name on a paper to say this is it and we are
absolutely perfectly in compliance, somebody’s going to say well, you better be
really strict about this and start rejecting items; none of this soft
compliance. And we faced that in the past and I know we try to do our best to
keep it flowing, but if we get to a very strict interpretation, that could
cause some ripples.
And I should mention, there may be dependent entities outside of the health
ROI – The certification process itself is an extra cost. So it needs to
be offset by a benefit somewhere along the line. Hopefully everyone benefits by
this, by having a smoother working environment and not a lot of issues to deal
with, but we need to consider the impact to not just health plans, but all the
trading partners, providers and HHS, as I indicated earlier. The documentation
to say this proves that we’ve done this testing and we’re in compliance, it’s
got to be minimal volume and maximum readability.
What is that minimum we can show that really proves this works? Must avoid
replication – if you’ve already done this, do you have to redo it just to
get the results in a form that can be sent somewhere else. Again, if that’s a
dump of transactions in hex format or binary format, I’m not sure how many
people could read that and say it looks compliant to me, so it’s got to be
something really easy to read, easy to consume, easy to know and say this
works. And it should focus, again, on the most critical issues. Let’s not look
at the little nits, one trading partner issue here and there – the global
things of yes, this entity is ready to process, it seems like it’s working,
maybe you have trouble with one person, one group out there, but they’re
essentially ready when they should be.
Other considerations – certification is one tool, but pilot testing
would certainly help. If we look at some of the recent issues with 5010, and we
had the WEDI CMS collaboration statement, these are some of the other common
issues across the industry; interpretation issues or just not understanding
what was required out there. If we tested, some of these internal consumption
issues may be resolved ahead of time so people know what those other impacts
are; it’s not just a sending from point A to point B, it’s how you use the data
once it’s in there. How do we resolve those up front so we’re not faced with an
“Oh my goodness” once we start actually using these things.
Acknowledgements would help. A lot of the issues that we faced were –
well it’s not working – well the reason it’s not working is because your
transaction never got to the health plan – so how do we resolve that?
Acknowledgments will help – not just that they got there, but in fact,
these are the issues we saw with them.
There’s the use of the 999 or whatever transaction was used for
acknowledgments back there, and can the submitter then look at that and say a
ha, I see what’s wrong and I agree, I can fix it or that’s not wrong, you have
an interpretation issue. So the acknowledgments will help, not just in
production but in the testing process as well.
And of course, market pressures are going to force compliance. We can say we
need to get people moving along – sooner or later, if you want to stay in
business, you’re going to fix it. Once you’re in production, if something goes
wrong that night with somebody or other, people will be hopping all over trying
to fix that, and I know many times, I’ve heard across the industry well they’re
the only ones that are having this problem, everybody else it works fine. That
pressure is put to bear on that particular organization, saying why does yours
not work and everybody else does? So there’s a lot of other ways to get that
And of course, web is – not required to create the web, so compliance
should not really be a web aspect in there.
One more thing on the audits, that was also mentioned in the rule. Audits,
they’re an extra expense. In my life at Blue Cross, I was head of a unit which
dealt with many, many, many audits; every single week, pretty much, and just
dedicated staff, just to support the audits. So the question is, what is the
overhead involved? Should that audit process be an on-site process? Couldn’t
evidence just be sent to a third party to review and say it looks like you are
compliant? Certainly any audits that are involved should not introduce new
requirements above and beyond operating rules and the standard itself. And it
should focus on remediation; it shouldn’t be out there to penalize; it should
be there to say let’s get us working smoothly together and focus on a positive
way of resolving the issues.
And in conclusion, WEDI supports the need to assure timely and effective
implementation of the standards and operating rules. We feel we need to clarify
the objective; what we’re trying to do here, consider the costs versus the
benefit, the process must add value, be easy to understand, not just understand
but easy to follow as well. We need to consider the impact to all parties, not
just the health plan but others that would be involved in that process, and
look at the future. This is not the first time, the only time we’ll be
implementing something else and making sure that we’re doing it right. We’re
going to have new operating rules, new versions of standards, and other
requirements as well.
Which fits into the topic of how on earth does the industry actually test
itself and make sure it’s functioning? Something to consider not today, but
down the road; we really need to look at that process.
So with that in mind, I’d like to thank the committee for the opportunity to
testify, and turn the mike over to Lee Barrett.
MS. DOO: Thank you very much. Yes, Lee?
MR. BARRETT: Good afternoon. Thank you again to the committee for inviting
EINAC, the Electronic Healthcare Network Accreditation Commission, to testify
before the committee.
What I want to try to do is to go through, really provide an overview of,
who EINAC is. We’re going to talk about the process. This is, I think, our
overall presentation, which I didn’t want to do. I had another one. That’s got
too many slides; we sent another one.
MR. BARRETT: Okay, in any event, I’m going to talk about who is EHNAC, I’m
going to talk about our accreditation process. I want to talk about, as well,
and how the EHNAC model, which has been in existence since 1995, how that
really applies for the Affordable Care Act, and as Jim was talking about some
of what WEDI is recommending here, I think it’s going to hopefully become
clear; we’ve got a model that has been working and is in existence, and gets
national recognition out there.
So who is EHNAC? We were founded in 1995, and we are an independent 501(c)6
organization, not for profit. When started in 1995, we had over 30
organizations that participated in developing these industry standards, or what
we call criteria. Criteria is the same word; basically it’s synonymous with
standards, although at least what we’re doing is we’re using it as criteria,
and we looked at it, those people who were part of the initial set of criteria
were developed, looked at it in relation to data transmission, data security,
advertising and resources, so we’ll go through that in a little more detail in
a few minutes.
So the governance process of EHNAC really is; we’re voluntary, we’re
Federally recognized as a standards development organization, we have nine
commissioners that are broad-based and represent both public and private sector
organizations across the health care industry, and it’s guided by a peer
evaluation which really focuses on quality, the innovation, cooperation as well
as open competition amongst industry participants.
If you look at the purpose of EINAC and we even are in existence, really is
we look to develop these various sets of criteria, and what you’re going to
find, hopefully, in a couple of minutes, hopefully people will be pleasingly
surprised. We’re more than just a clearinghouse accreditation. Initially that
was our initial focus, but I think people get pleasingly surprised when they
see that we’re much more than that, and when I go through this.
We primarily are focused on health care data exchange, and if you look at
health care data exchange today, it’s far more than just what the
clearinghouses or electronic health care networks are doing. We’ve got the
health information exchanges, we have accountable care organizations, we have
all the various stakeholders that are, in fact, exchanging both clinical and
administrative data. So we’re looking at this very holistically across all
Therefore, our accreditation programs are focusing on the following areas.
We’re looking at electronic health networks, we look at financial services
organizations; many of the banks, as many of you are aware, are into health
care as well, big exchanges as well regarding electronic funds transfer and
E-prescribing networks; medical billers, health information exchanges,
managed in-service organizations. Jim talked about TPAs; payers, as well as
other health care industry organizations and I’ll talk about a couple of other
areas that we’re also focusing on this year, but it’s a very broad-based set of
stakeholders that we have focused on in developing accreditation programs for.
So what we are really focused on as far as an overall philosophy is really,
as a voluntary accreditation organization for the industry, we’ve incorporated,
and we have committees, that spend time looking at regulatory compliance, not
only HIPAA, Hitech, ARRA, Affordable Health Care Act, all of the various
regulatory legislation at the Federal, as well as we incorporate some state
specific regs as well, into our criteria. So it’s very broad-based.
We focus as well on really improving the efficiency and the quality of
health care delivery, and that’s an overall set of philosophy that we’ve been
focused on as far as our accreditation programs.
So what’s the value proposition that EINAC brings to the table here? Well
there are four major pieces that we focus on. One is, on the framework side of
the metric here, we’re looking at providing usable policies and procedures;
we’re looking at promotion of best practices, in relation to electronic data
exchange, we’re looking at improving overall business practices, as well as
providing a discipline for organization and planning.
On the metrics side, we want to raise the bar, and so on the metrics side,
we’re looking at enhancing overall performance through a whole set of
requirements for quality metrics, as well as customer satisfaction, we think,
is extremely important as part of some of the criteria that we’re evaluating.
On the quality side, we’re looking at quality improvements in the products and
services that organizations, vendors and others offer, we’re looking at
training, we’re looking at, as well, cost reductions and efficiencies, as well
as providing really an overall comprehensive evaluation and objective
evaluation of all this criteria that organizations need to provide.
On the compliance side, as I mentioned, at the Federal level, we’re looking
at Federal regulation as well as we’re looking at some state regulation as
well. All of those are factored into the criteria that we go through, and I’ll
spend a couple of minutes to go through what our criteria and development
process looks like.
On the development side, we have four areas that EINAC really focuses on.
One is privacy, confidentiality and security. We’re also looking at technical
performance, best practices, as well as the resources that an organization has;
they say that they have, to support and provide services to the industry.
We are also looking at several other accreditation programs this year. We’re
focusing on operating rules; we’ve already started a program and a committee in
which what we’re doing is this year we will be incorporating all of the
operating rules into our existing criteria for all of our programs. So by end
of year we will have all these operating rules incorporated.
Second, we’re looking at development of an accreditation program for the
health care information service providers, the HISPs. We’re coordinating with a
number of organizations in the industry that are focusing here on direct
project, to develop an accreditation program here, and we’re also looking at
telemedicine. We have, for example, in Maryland, Maryland has a specific
initiative, just passed legislation, in which they are looking at focusing on
an accreditation for telemedicine vendors in the state of Maryland, and EHNAC
is very involved with the advisory committee that they’ve put together to look
at development of criteria for telemedicine accreditation as well.
So these are some of the additional initiatives that we’re focused on as far
Our development process is fairly rigid; again, we try to follow that of
standards development organizations by having, through our Criteria Committee,
developing of all of the various criteria and for each of the programs that we
have, about 70 percent of the programs use what I would call core criteria that
we have across all the programs. About 30 percent are therefore specific to
So we go through, then, a 45-day process of public review as well. It then
goes to our executive committee and gets approved on an annual basis.
The programs that we have range all the way from E-prescribing, as I
mentioned before, to outsourced programs, and you can see here on the next
slide, for all the outsource or outsource accreditation programs, we have
everything from that of data centers, as well as call centers, disaster
recovery sites, we go through all of that, and then under our health care
network accreditation program, it runs everything from TPAs to medical billers,
electronic health care networks. So it’s a very broad-based suite of
accreditation programs across all the stakeholders.
The process is very electronic. We use the Web for everything from an
organization goes through, applies for accreditation, the application and it
goes all the way through from self-assessment is submitted; it goes back to the
self-attestation aspect that Jim talked about. In the accreditation process we
also have site reviews, so in every single one, we have auditors that actually
go out and review each of these sites as well. And then an award of
accreditation at the end of that process.
So an organization must go through – this is not just a one-shot deal,
organizations have to re-accredit every two years. So if we’re looking at this
thing on how do we leverage the EINAC model that’s already been in place since
1995 for ACA certification, we’ve got the framework; we’ve had that framework
in place, and we have a payer accreditation program already in place.
We also have an accreditation program for TPAs that Jim was talking about. A
lot of payers already mandate EHNAC as part of their RFI and RFP processes, as
they’re going out to look for electronic health care networks, clearinghouses
and others. So it’s already – we’re also well known to a lot of the payers
and a lot of the industry already.
And I would say if we needed to enhance or incorporate any enhancements, we
certainly can do that through our criteria process, and our methodology, as I
indicated, is already fairly well entrenched in the industry.
We would want to convene an industry action group, as far as recommendation
of various stakeholders to look and see what would be needed for the criteria.
We would identify some betas, as Jim was also talking about – we think
that’s extremely important, and others have talked about, to get that feedback
and enhance the program, hold webinars and other feedback mechanisms to gain
basically more support throughout the industry, and put together an overall
accreditation model of criteria, basically as a release one, going through and
leveraging our criteria, standards development organization process.
So those would be recommendations that we would make from an EHNAC
perspective to leverage our existing framework that’s already there.
Thank you to the committee, again, for the opportunity to present.
MS. DOO: Thank you. Next we have Jeanette Thornton, from AHIP.
MS. THORNTON: I know the day is getting short, so let’s get right into it. I
think you all are more than familiar with what the Affordable Care Act did in
terms of this whole new category of operating rules. You all have been working
on this for the past two years. So we have new categories of rules that apply
to health plans, that apply to clearinghouses, and apply to providers. What’s
really interesting about the structure that was created in the Affordable Care
Act was it created this whole new process whereby one of those entities, health
plans, has to complete certification, and ACA includes very detailed
requirements about what that certification has to include in terms of what a
health plan actually has to demonstrate to the Secretary. That includes things
like actually being compliant with standards and operating rules, which makes a
lot of sense, also has completed end to end testing, and then a third thing
which hasn’t been mentioned, but really ensured that entities that health plans
work with, their service partners, have insured that they are all compliant
with these operating rules.
So we like to call this building half a bridge; these transactions are
requests and responses between entities in the health care system, and we need
to have someone to be sure to receive it at the other end of the request, so it
really is an iterative process. We don’t want to build half a bridge, so my
recommendations are going to be focused on today, how do we develop a
certification process that works for health plans but also ensures that this
bridge goes somewhere? We don’t have a bridge to nowhere, which many of you,
I’m sure, are familiar with.
So looking at the Affordable Care Act and things that the Secretary has done
using her authority in the past, we really believe that the Secretary has the
broad-based authority to set up a certification process that can really define
a certification process that’s workable for the industry. So a couple of
In terms of actually demonstrating compliance with the standards and
operating rules, we really feel that at this point it needs to be primarily an
attestation-based process, and I think we heard this morning, a lot of the
challenges with some of the different testing and standards implementation that
we’ve all been going through over the past couple of years, more recently with
Next, the key thing in the Affordable Care Act is a requirement that health
plans provide a documentation that they have completed end-to-end testing with
partners; it says in the law; e.g., such as hospitals and physicians. Partners
really needs to be narrowly defined as trading patterns, so those entities that
we’re actually conducting those transactions with, so in many cases this may be
a practice management system or vendor, that’s being used by the physician.
We also think that it would be important for the NCVHS to recommend that
there is a high level testing schedule, that’s put in place, and that health
plans would work with their trading partners to implement this testing
Given all the challenges that were discussed this morning with 5010, I
really feel that it’s important for health plans to have this flexibility to
define their own approach, to end-to-end testing. There are several different
methods to be used to achieve that. Jim mentioned a couple in his testimony,
which I thought were great – testing with a sample of providers, the use
of testing modules, et cetera.
And also, under the Affordable Care Act, the Secretary does have the
authority to designate an independent body to also do certification, and we
recommend that entities that are already certified by CAQH CORE should be able
to leverage that existing certification in meeting these requirements.
Regarding the requirement about service partners and then health plans
having to ensure that they’re in compliance with these transactions, you know,
service partners is a very broad term; it could mean those that take out the
garbage at a company. We really want to make sure that this is really narrowly
focused on those covered entities that are actually conducting business
transactions with health plans.
We also think that CMS could really promote that use of outside
certification entities like CAQH CORE in helping health plans meet the service
provider requirement so that all health plans, a lot of us use the same
vendors, the same IT companies, so if those IT companies are certified, that
would help us demonstrate that we are in compliance.
A key note, and I think this was mentioned earlier, this morning, health
plans are in the process of setting up their testing plans for the first set of
eligibility and claims status operating rules that are implemented as of
January 1, 2013, but the requirement to certify doesn’t come until the end of
the year, December 31, 2013. So we’re very concerned that any rules regarding
certification may disrupt testing that’s already underway right now in terms of
getting ready for January 1.
So I mentioned my half a bridge, and let me go back to that point, with a
couple of ideas that we’ve been noodling on, to think about how do we insure
providers and most important, the vendors or practice management systems, are
also brought on board and are in compliance with the standards and operating
One of the things that we thought about is the role of the HHS OIG. In the
past, CMS has used the OIG to help them demonstrate that through their
compliance guidance, how to get these other entities on board. They have
recognized, in some past reports, the missing link in terms of practice
management system vendors and putting in place mechanisms to ensure that those
vendors are in compliance. So one of the things the OIG could come out with as
a recommendation that says “We recommend that provider work only with
practice managers and vendors that are certified as being in compliance, as a
way to ensure that that gap is filled.”
Another option is always through the 800 pound gorilla in the room, and
that’s Medicare. We’ve been thinking a lot about this. I don’t know if many of
you are familiar with, there’s something called the Administrative
Simplification Compliance Act in 2003. We’ve come a long way, maybe, maybe not,
but this was the requirement that first, as part of participation in Medicare,
a provider actually had to submit an electronic claim for the first time in
2003, and this subsequent Act was used again in the Affordable Care Act, which
requires, by January 1, 2014, providers that are participating in Medicare to
actually, I think the exact language here – Medicare payments would be
prohibited in a method other than the EFT or ERA.
Well, if under Medicare, provider are being required to comply with the EFT
and ERA, wouldn’t the corresponding operating rules go along with that, and so
we think that’s one idea to leverage.
A second idea that we’ve put forth in our comments is regarding the
meaningful use, and I know that this was discounted as part of Stage Two, but I
want to beat that dead horse again. We think that the meaningful use has to
include some basic administrative transactions as part of meaningful use. At
least the eligibility transaction and the claims status transaction, the ones
that we have the most experience with over the – we think it’s a missed
opportunity to actually complete that bridge.
So those are some of the ideas that we had regarding certification, and I
appreciate your time today.
MS. DOO: Now we have Marri-Lee Stine, with Aetna.
MS. STINE: I am Marri-Lee Stine. I’m a manager for provisory solutions at
Aetna, and I’d like to thank the committee for having me today.
I know there are some advantages and disadvantages to being the last person
to testify. One of them is I could just sit here and say yes, what they said.
But we won’t do that. We are firmly committed to the successful implementation
of the Affordable Care Act, and we do support all of the efforts to simplify
the electronic processes between the providers and the plans, and as Jeanette
was speaking about the half a bridge concept, we’re at one end of the bridge
and we really would like to connect that bridge together. We think that a key
element to the successful implementation and completion of het bridge, I like
that analogy, is the careful adoption and implementation of the requirements
that were set forth, especially regarding this trading partner testing and
compliance concept. I added trading partner in there.
It’s my opinion that the concept of limiting that requirement to only health
plans really doesn’t ensure the consistency and compliance across an industry
that historically has seen a wide variance in the adoption of these
transactions, depending on the type of implementer.
We heard this morning in some of the 5010 Lessons Learned about the wide
variations depending on which step in the process you look at. We heard about
practice management systems that had not implemented some of those changes, and
some of the difficulties that cause for providers and some of the other
missteps along the way.
The fact is, it’s my opinion, that we’re only going to get to true
administrative simplification if we really do seek consistent implementation.
What I would like to talk about today is some of our testing experiences,
and this is testing experiences specific to transaction testing. As a large
national payer, and we are, we’ve had a lot of experience with testing
transactions with multiple types of individual partners; that individual
testing that Jim talked about in his presentation, and we have partners that
are both directly connected and that come to us through different types of
clearinghouses. That individual testing is resource-draining, it is very
closely, and because of just the nature of individual testing, it results in
inconsistent results of testing. There’s different data set up at different
times, that each of those different partners have different scenarios they
would like to see, a different times, so the testing efforts wind up being just
inconsistent across the board.
The individual testing, the steps that you will take involve determining how
you’re going to connect, what environment will be available, drafting
appropriate test scenarios, finding the test data. If the test data is not
available you have to create it, refresh it, make sure that nobody’s touched it
in the meantime, Once you have it in place, than you get to schedule it.
Sometimes you need to schedule it during off hours because you’re using the
same resources, either be they system or people resources, as you need for
production. So once the tests begin to be performed, the results must be
reviewed, checked, double checked, questions regarding results go back and
forth between the payer and the partner.
After all that is satisfied, you might be able to get to sign off. That has
to happen for each individual trading partner that you’re working with, be it a
directly connected provider or clearinghouse or whoever, that can be hundreds
and hundreds. It’s a lot of work.
Now that’s one way to test. We also have experience with the CORE process;
we certified for both CORE Phase I and Phase II. We did them incrementally. We
did CORE Phase I as an early adopter. We did CORE Phase II once those rules
were available and ready.
The testing scenarios outlined by CORE were developed by a multistate team.
They’re consistently applied across different types of i8mplementers and there
are different test scenarios that are consistent across stakeholders, but there
are sets of scenarios for each stakeholder type.
The process begins, that process. It is a different process. It begins with
a pledge. You agree to abide by the operating rules. That’s signed by a senior
company executive. As anyone knows, this is a challenge. But once you get that
signature, you can get started.
Each scenario requires a specific set of test data to be set up in our test
environment, but we’re all working with the same setoff test data. Still a lot
of work, but at least we’re all looking at the same setoff test data.
The test data did allow for some flexibility. We found that to be a benefit.
We could use our own format for member IDs. We could use our own format for
plan information, things like that, but the scenarios were consistent.
Once everything was set up, we were able to begin the testing. Some rules
were tested in different ways. Some things required upload of a document,
transactions themselves were actually initiated through a third party website.
The third party website evaluated the transaction response for compliance and
provided a determination of whether or not we were compliant with those
During the testing process and during the data set-up process, we did find
that we had questions. We heard during the operating rules section this
morning, there was feedback where people did find that they had questions on
When we had questions on the rules, some of it was the rules, some of it was
the testing process itself. We did raise the questions; the questions were
answered. We didn’t find that to be a barrier too much. We were an early
adopter, so some of that took a little bit longer than it probably would today.
But we didn’t find it to be too much of a barrier to the testing process.
One of the things that we did in addition to our own testing was we
implemented a requirement for our directly connected submitters that they also
accomplish CORE certification to be a direct connected submitter to us.
We announced that in February 2008, so if you’re going to submit to us you
have to be CORE certified. That was something that we found to be quite
To summarize, we believe that testing and compliance is key to the
successful adoption and implementation of the standards and Affordable Care Act
operating rules. We believe that the prior experiences of stakeholders must be
a consideration when developing the rules around the testing and demonstration
There is value to including all stakeholders. We heard that earlier. It
doesn’t make sense to only test with one stakeholder. Right now we’re talking
health plans. We’re at the end of the road in many of these transactions, or at
the beginning of the process. We strongly encourage testing of the entire
We believe in reuse of existing processes, be it the CORE process or
whatever we have in place today, that may mitigate some of the costs involved
in this effort. It is a costly effort, both in time and money.
And experience tells us that any effort requiring attestation of a senior
executive must be clear in its requirements. It was mentioned earlier that if
you’re going to have somebody sign their name, we’d better be clear about what
we’re asking them to sign and why.
And that is what I have, and I’d like to thank you again for having me
MS. DOO: Thank you. We did, on this topic, we did receive a very
comprehensive written testimony from Edifecs that could also be found from a
link on the Agendas, and Edifecs does provide free software and certification
testing for the transactions themselves, as well as for the operating rules,
and there’s a very nicely documented explanation of how that certification is
done for the transactions, so I think the committee will certainly look at it,
but those that are listening on the phone and other members of the group may
wish to look at it as well.
DR. SUAREZ: Thank you very much for this last panel, and I think the very
last testimony is a great way to summarize one of the most important themes of
the day, which is testing, so I thank you very much for that. I really
appreciate it. Let’s see if there are any questions from the committee? Any
questions on the certification, compliance certification process?
Okay, well, I think the concept here of this particular panel was to really
begin to frame and understand what are some of the options and certainly, we
heard, I think Jim did a nice job laying out some of the various options of
compliance certification from simple attestation to external certification
processes, and vendor offer type of certification.
Certainly these are some of the issues that we would need to look into and
evaluate as we frame some of the observations that we had out of this hearing
and this panel, and discuss any recommendations.
Just to conclude, I think, I’ll just say a few words; but first let me
mention the process, as with all our hearings that we have had, we are going to
be putting together some letters, or a letter, depending on how we approach it,
with a summary of the observations from the various subjects that we covered
today, and any possible recommendations that the committee feels would be
I think the intent, at least, is to process this in time for – and
again, it depends on the discussions that we will have as a subcommittee, at
least a report back to the full committee in September at the next meeting, at
which point we might have something concrete about one or more of these topics,
and we would be able to present those then.
I think we had some time allocated for some discussion, but I think it’s
getting close to our end of the day, and we want to give certainly a few
minutes to the public input, so I just want to conclude by thanking all our
testifiers; we had 34 testifiers today, and we really want to express our
utmost appreciation for the time that you took in preparing this testimony and
answering the questions that we provided for you to address, so thank you so
much for taking the time for that.
I also wanted to thank our very, very able staff support – Lorraine,
who did another amazing job in pulling together this one-day hearing, so thank
you, Lorraine, for the time, for all the work contacting everybody and
discussing all this with everyone, so thank you. Thank you to the committee
members for joining us today and to the public as well, for participating and
Before we open it for public input, Ob, do you want to –
MR. SOONTHORNSIMA: Very briefly, again, I don’t want to echo everything that
you said, and our appreciation for the testifiers. One of the things I observed
today is how nicely all these topics kind of came together; very nicely; it was
grueling and we apologize for the tightness of time, especially that we are
trying to listen on very, very important topics, but one of the observations I
have is there’s a lot of common themes going across all panels, around
collaboration, around complexity and reliance on key stakeholders, and
obviously, lots of obstacles.
Another running theme also is there’s so many different ways of doing this,
and take away from me is there’s no panacea, it’s not a silver bullet, but lots
and lots of good ideas, and I think that an answer is somewhere in that, and
it’s going to require for us to spend lots and lots of time deliberating on all
these different options and ideas, but most important thing, I think, it’s the
collaboration that is required, and all of you have stated that. SO thank you
DR. SUAREZ: Any comment from the committee members before we turn it for
MS. KLOSS: I would just add to what your summary has been and just a sense
of some urgency in bringing together that cohesive picture. I think the issue
of a roadmap or a playbook or something like that was also one of the recurring
DR. SUAREZ: We are going to open it up for any public input, any person here
in the room, if you would like to make any public statement before we close,
you’re invited to do so now, if anyone cares to do that.
So we don’t have anyone here in the room, so I wonder if anyone on the phone
that has joined us through the WebEx is interested in making any public
Do we need to provide instructions on how to do that, is there a way to
– it’s not possible, so those that are joining us via the web, they’re not
able to provide us with input? Okay.
If anybody on the phone has any comments, they can send it to us via e-mail,
that certainly is something that we would appreciate and take into account. So
Our emails are on the NCVHS website.
Again, thank you so much for joining us, and look forward to continuing to
work with everyone and we’ll declare the meeting adjourned. Thank you.
(Whereupon, the meeting adjourned at 4:52 p.m.)