[This Transcript is Unedited]
National Committee on Vital and Health Statistics
Subcommittee on Standards
November 17, 2011
Holiday Inn Rosslyn at Key Bridge
1900 N Fort Meyer Drive
CASET Associates, Ltd.
Fairfax, Virginia 22030
TABLE OF CONTENTS
- Welcome and Introductions
- November 17-18 Hearings
- Review and discuss letter on ERA/EFT
- Review and discuss letter on HIPAA Report
P R O C E E D I N G S (8:15 a.m.)
DR. WARREN: Judy Warren, Chair of the Subcommittee. I’m from the University
of Kansas school of Nursing and I have no conflicts.
MS. DOO: Lorraine Doo, with the Office of Health Standards and Services and
CMS, Lead Staff to this Sub-committee, and no conflicts.
DR. CHANDERRAJ: Raj Chanderraj, practicing cardiologist, member of the
committee, sub-committee, no conflicts.
DR. FITZMAURICE: Michael Fitzmaurice, Senior Science Advisor for Information
Technology to the Director of the Agency for Health Care Research and Quality,
Staff to the Subcommittee, Liaison to the National Committee.
DR. SCANLON: Bill Scanlon, National Health Policy Forum, Member of the
Committee and the Sub-committee, no conflicts.
DR. SUAREZ: I’m Walter Suarez, with Kaiser Permanente, I’m a member of the
Committee and Co-chair of the Standards Subcommittee, and no conflicts.
(Introductions around room)
DR. SUAREZ: Okay, I think we’re going to start with the agenda, and then we
will go until 9:30, when the full committee starts, so we’ll be adjusting some
of the times of each of these items.
We wanted to first talk about the hearings that are coming up later today,
and all day tomorrow; make sure that everybody has a good understanding of the
content, the purpose of the content and the structure of the hearing, and the
material that I haven’t included for this hearing in the packet.
So the first hearing is going to be on claim attachments. We had session on
claim attachments for the Sub-committee members and invited other committee
members via teleconference at one of our Sub-committee meetings, who sort of
established some level of playing field for everyone in understanding of claim
attachments. We included materials about attachments on your tab three, I think
– actually tab one, right after the agenda. We included a presentation
summarizing the core concept of claim attachments. We’re not going to go over
that today, but hopefully you had a chance to see it and actually, this is the
material that was presented at the teleconference that we had earlier in
October. We also included copies of the questions that were submitted to the
testifiers in a document, actually right after the agenda for this meeting that
we’re having right now, where we describe the purpose of the hearing, the
context and then the questions for the testifiers.
And then of course, the agenda of the hearing is right after the agenda of
this meeting that we’re having right now, under tab one.
So the structure that you can see in the hearing, basically, we’re going to
have a first day session; actually, a series of short presentations about the
historical perspective on claim attachments and the perspective from OMC on
clinical messages and how they relate to claim attachments, and then we have a
first session where we describe what we’re expecting to hear; descriptions and
testimony from various perspectives; providers, payors; clearinghouses,
Medicare, Medicaid, on the current practices with respect to claim attachments,
what other priority areas for attachments are being used, the business
practices and what are some of the mechanisms for submitting a request, and
then a response to the attachment information.
And then the second part of the hearing is going to focus on the standards
and operating rules, so we have a representative from the Standard Development
organizations, HL7, X12, CAQH4, and then we also will hear from WEDI on the
status of the development of standards and operating rules and future
Just to point out, the main purpose of this hearing is really not to define
what will be the standard, but to understand, again, what are the current
business practices in some of the priority areas where claim attachments are
being used, and then to understand where is the standard and operating rules
for claim attachments. That’s our primary goal, and after this we expect to
make some observations about claim attachments; probably will not include
recommendations, but there might be some observations after the hearing on this
The other purpose that we wanted to lay out here was the need for entities
that would want to be designated, or recommended, as authoring entities for
operating rules for claim attachments, to let us know so we can sort of begin
that process and understand the expectations that the industry will have with
respect to the development of those operating rules. So that’s the other
purpose for the hearing.
That’s the hearing on claim attachments; let’s see if there’s any question
from any of the staff committee members.
DR. FITZMAURICE: It’s been I don’t know how many years since we’ve had
claims attachments, since we thought we had them since they were going to move
from flat file or EDI to CDA or to Version 3, et cetera. Do we have a sense of
where we think it should go or do we need to fill our minds with what the
industry is telling us in order to come to that kind of a conclusion? By that,
I mean do we want claims attachment in X years, or do we want the industry to
settle on what will work for most of them and to keep working hard and we’ll be
the cheerleader? Do we have guidance on which we come with recommendations to
the Secretary, or are we to be the cheerleader for the industry? Do we have a
sense of that, or are we going to find out after we listen to the industry?
DR. SUAREZ: Actually we will hear a lot about that during the hearing from
both the providers and the payors; we hear about the business practices and
current needs, and then from the standards development organizations, we’ll
hear what their perspectives are with respect to the standard itself, and we’ll
talk about CDA and we’ll talk about X12 275, and all those elements that are a
part of the standard. As I think we mentioned in the evolution process, there
were proposed rules published in 2005 that described a series of priority areas
and a series of approaches to claim attachments, and then what we have is
basically the set of regulations that need to be published by January 1, 2014,
which will define the standards to be used and define the various approaches
and all those things, but my hope is that we would have basically not a
temporary approach, but this will be ultimately the way to submit claim
attachments, and not necessarily just for a series of priority areas, but truly
for any type of attachment that is needed.
There are certain attachments that are needed consistently and constantly,
and so those would become sort of at the top of the priority list, but at the
end it’s very much the way attachments should be sent.
The other thing I want to mention is the alignment of the standard with, of
course, the standard being defined for clinical messages with our electronic
health records, and I don’t know if Lorraine, you want to –
So that’s the first hearing, and then tomorrow morning we’ll have a second
hearing that we’ll focus on Section 10109 of the Affordable Care Act, which
basically is the provision that identifies a series of areas for the next wave
of standardization, and so they include provider enrollment standards,
applicability of standards to other insurance types, standards for claim edits
and claim payment rules and then some standardization of the audit process, so
we have laid out three different sessions that cover those topics.
So that’s the second hearing, which will be tomorrow morning, and again, we
have perspectives from all the various stakeholders that are going to be
potentially affected by this. This topic, Section 10109 of the Affordable Care
Act, was a topic that asked – the provisions asked for NCVHS, along with
the HIP Policy Committee and the HIP Standards Committee, to provide feedback,
so we have taken the lead in this regard. We invited members of the HIT Policy
and HIT Standards Committee to attend; unfortunately yesterday was the HIT
Standards Committee meeting, and we thought it was going to be good, but today
and tomorrow is the OMC Annual Meeting, and so a number of members are actually
going to be attending that meeting today and tomorrow rather than being
available for this.
But we are scheduling some conference calls with the leadership of the two
committees to try to find ways to work together in providing feedback to the
Secretary. I expect that after this hearing we will be putting together again a
letter with observations and recommendations. We expect that those will be
shared and presented, actually, and we hope that we have the opportunity to
present those to the HIT Policy Committee and HIT Standards Committee in the
next couple months at one of their scheduled meetings, and then see if there is
any additional need or additional hearings on the topic, or if the Policy and
Standards Committee wants to do other work, and then finalize the
recommendations and the letter and submit it to the Secretary.
So that’s a plan for the second hearing tomorrow morning. Any questions from
DR. FITZMAURICE: Just a comment – Yes, I think it’s a shame that they
can’t be here to understand the richness and the depth of detail that the
industry presents to us. It’s a good learning opportunity for them. I’m always
impressed with the work of the HIT Standards Committee. They’re hardworking and
they also get into the implementation. Here we have the people who work with
the implementers, coming to testify. It’s great experience for them. I know
that they’re conflicted. I’m also registered for the OMC conference, but I gave
up my registration so that I could be here. I would hope that if they can’t be
here that they can find some way to just get the richness of this. It’s really
quite something that the industry does.
DR. SUAREZ: So that’s the second hearing, and the third hearing is tomorrow
afternoon, and the third hearing is focusing on the standards and operating
rules maintenance process, which will be our second hearing on the topic, and a
hearing that comes after several meetings and discussions with SDOs and with
the DSMO members and so we will have a chance to listen to and probably begin
to define a pathway for recommendations after this hearing, on specific steps
that can be taken to improve the processes and the coordination of the
maintenance of standards and improve particularly the way industry provides
input to this process, and other considerations, really, related to this
So that’s the third hearing. I don’t know if there’s any questions on that
third hearing; again, we expect to provide, after this letter, with
observations and what we hope would be recommendations on the topic.
Any questions on that? All right. Well it will be a very busy next couple of
days, and I want to take an opportunity to thank, certainly, Lorraine for
helping us coordinate all these hearings and all the staff at CMS and NCHS,
that helped us put together these hearings, and we’ll have a chance to thank
all the testifiers, of course, because of their participation, and I know
several of them have put so much effort in developing those recommendations for
a few months now.
This was really an opportunity that we took to advise, or to announce, early
in the process of these hearings, so that organizations can begin to work on
their testimony, and I know several of them put a lot of emphasis on developing
very thoughtful testimony, so we’ll have a chance to thank them too, but I just
wanted to say thanks to Lorraine, for all the work; putting together one of the
hearings is just a full-time job; putting together three hearings in two days
is not an easy task, so thanks, Lorraine.
I think we’re going to go to our next agenda item. We’re going to review and
discuss the outcomes of the discussions from yesterday on the letter on the ERA
and EFT, and we’ll have some changes to offer and then after that, we’ll talk
about the HIPAA report to Congress, so Judy.
DR. WARREN: On our letter about ERA and EFT, basically, most of the letter
was accepted. There were two things that the group wanted added. One was to
format it and really call out the recommendations in our format. We had done
that with an earlier draft; somehow the draft we sent was not the one that had
the formatting on it, so I’ve redone that. And then there was a question about
the scope of the letter, that we had some concerns from the credit card
industry and others that they thought this was eliminating that, so I have a
proposed sentence to add that will hopefully allay those concerns.
As we scroll down, everything’s the same. I’ve changed nothing until we get
down to recommendation one. So what I’ve done is I’ve left the header of the
section, and then I have bolded the recommendation and labeled it as
recommendation 1.0. And before, in the text of the letter, we had “we
recommend that the Secretary” and I’ve just deleted “we recommend
that”, so it becomes really clear and is more like the formatting that
we’ve done on the other letters. Any questions on that one?
DR. FITZMAURICE: Could you point out where the “we recommend that”
was? Just a cursor or something.
DR. WARREN: “We recommend that” was right there. Here is the
sentence that we’re adding. I went through this letter about three or four
times last night, looking for a place that we could put this without calling
major attention to it – so we’ve had the recommendation, and what was in
here was at the heart of our recommendations is our shared vision to support
the adoption and use of EDI for the benefit of the health care industry, with
the expectation that this will reduce cost and administrative burden, and in
parens at the end of the letter, I’ve added – this does not mandate that
EFT is the only method for payment. Cash, credit, debit cards, et cetera, may
still be used. I think that captures the concern that we received in the
letters from the credit card industry. Anybody think of a different way to put
I couldn’t find any other place to put that that wouldn’t call it out as
being different or odd.
DR. SUAREZ: Part of the issue that has to come out, and again, for those
that weren’t here yesterday, this is an issue that was raised by the credit
card industry, was, I guess a perception, and perhaps a little bit of
confusion, was created by the fact that we are using the term EFT to designate
a specific transaction in the health care industry between the health plan and
the health plan financial institution?
Whereas, in the entire industry, the financial industry, EFT has a much
larger definition and applicability, and so the credit card industry argued
that a credit card transaction and the routing of that transaction is also a
form of EFT, and so when we define the healthcare EFT transaction and
recommended it in the letter that we already submitted to the Secretary, the
definition that we provided for EFT was specific to that exchange between the
health plan and the financial institution, and so what I think we needed to
clarify, perhaps, was that in our previous letter of recommendation to the
Secretary, defining the EFT transaction, we define it to be the exchange
between the health plan and the health plan institution, and that this does not
preclude other forms of financial transactions, perhaps to try to avoid the
perception that that was the only EFT that can exist.
In the financial industry, EFT has a much larger applicability, so it was
probably more trying to say something like that, somehow to do that, in our
previous letter we recommended that EFT, the health care electronic fund
transfer transactions be defined as a transaction between a health plan and
financial institution –
MS. DOO: And also just a thought for the Committee, and now I’m just
looking at the word; since NCVHS is giving us recommendations, we wouldn’t
necessarily in this letter say, this does not mandate that EFT, but really
you’re saying, we are not suggesting that the Secretary mandates EFT as the
only method, right, because NCVHS doesn’t mandate. You recommend. And we
mandate, so that you’re advising us to take that into consideration in our
policy, which is what we’ve responded to, the letter is saying, is that when
the rule comes out they will be invited to comment on our policy.
So it’s that first part, so after burden, it says this does not mandate, is
that we are not proposing that the Secretary mandate EFT as the only method of
DR. SUAREZ: It might be worth introducing the topic a little bit more before
the “we are not proposing” part. So that it helps understand the
context, or at least – I don’t know if something like –
MS. DOO: I know Margaret wants to say something. It’s a little awkward to be
responding to a letter that hasn’t gone out yet, to letters that have come in,
to which we cannot be responsive because it’s pre-decisional.
DR. SUAREZ: But this letter, we already sent, right? The EFT standards
letter we already sent.
MS. DOO: That’s true. This is operating rules.
DR. SUAREZ: That is why it’s important to introduce the previous letter;
it’s important to know that in a previous letter we recommended the adoption of
a standard for EFT transactions – of a standard for health care electronic
fund transfer, I think that’s the way we defined –
MS. DOO: Right. Am I capturing it right?
DR. SUAREZ: I’m just looking, actually, at the letter –
DR. CHANDERRAJ: Do you want to add “payment by credit card and other
DR. SUAREZ: We said in the letter – I’m looking at the letter that we
submitted; define health care EFT transaction as the electronic methods used by
a health plan to order, instruct, or authorize a depositor or financial
institution to electronically transfer funds.
So that’s how we define it in that letter, and that’s what has created the
perception in the credit card industry that that’s the only EFT that could
DR. WARREN: So we ought to bring that definition in here?
DR. SCANLON: To me that definition is actually more helpful than talking
about credit cards and cash, because I think it’s hard to envision a plan
paying with a credit card, or a plan paying with cash. And that’s defining
this. I think maybe the issue would be clarified more if we would put the word
“when”, when a plan electronically pays – in that sentence that
you just read, Walter.
DR. WARREN: When a plan does what, Bill?
DR. SUAREZ: When a plan is submitting an electronic message to order,
instruct or authorize its financial institution to electronically transfer
funds. We’ll add the definition there. And then that’s where we want to
probably then say, we want to take this opportunity to clarify that this
recommendation does not preclude other methods of payment, including –
credit cards, payments done by debit/credit cards, cash or others.
DR. WARREN: I’ll add in the rest of that definition.
DR. SCANLON: But I think a key thing is to make sure that we’re talking
about the plan’s financial institution arrangement, because I can pay a co-pay
with an electronic funds transfer; I can get a bill from a physician and send
in a co-pay using my bank with an electronic funds transfer, and we’re not
talking about that transaction –
DR. SUAREZ: That’s true, it does not preclude the health plan to use other
methods of payment, this does not preclude the health plan to use other methods
of payment. This is really the health plan conducting or doing the payment
– one way is to order an electronic funds transfer from its bank but
another one is conducting a transaction via –
DR. WARREN: So maybe I’m confused about where this is. To me, I thought EFT
was when the plan authorizes a bank to pay a provider, and then it goes in the
provider’s checking account, or bank account.
DR. SUAREZ: The EFT is the message that a health plan sends to the bank.
DR. WARREN: So do health plans ever send credit card messages to do that? I
don’t think so. So where are we getting –
DR. SUAREZ: The argument that the banking industry is making is that a
health plan can certainly pay through other means; a credit card, some health
plans might authorize the payment of a provider via a credit card; basically
it’s saying the health plan owes Doctor Smith $1,200; instead of sending an EFT
to their bank to transfer the funds, they can issue a credit card to that;
that’s the argument that the credit card industry is raising, is that this
gives the impression that the only way a health plan can pay a provider is by
submitting an EFT electronically, is by submitting an EFT to their financial
And so that’s why we need to clarify that other methods of payment by the
health plan to the provider, including credit card payments. Margaret, do you
want to –
MS. WEIKER: This is Margaret Weiker. I was going to suggest that when we
talk about EFT, we’re talking about a specific recommendation in regard to the
format of that EFT, which is the CCD plus format, and even though EFT is bigger
than just one format, one method, I think we need to clarify too, that it’s not
just EFT, where I think there may be some confusion when we say EFT and it’s
this broad spectrum. We’re focusing just on the payment of a provider by a
health plan using the CCD Plus format.
DR. SUAREZ: Yes. That would be helpful too, which is part of our
recommendation. I think part of the confusion might have been created by the
fact that we separately defined, because that’s what all the transactions are
– in every one of the HIPAA transactions, one of the first things –
the first thing that is done is to find the transaction; what is a health care
claim? What is a health care claim payment? And then define the standard that
applies to that. So that’s what we were trying to do in the original
recommendation of the letter.
MR. LAZARUS: I’m Steve Lazarus, and I work with CORE, and I’m not speaking
directly for CORE because I’m not authorized to, but the operating rules that
you just recommended to go forward to CMS include provision for reconciling
either a check number or an EFT transaction number, between the remittance
advice and the payment, whether it be by check or EFT. There is no provision to
reconcile a credit card transaction, or any other type of transaction, against
that remittance advice, and it’s a lot more complicated than just responding to
what you’re talking about here.
DR. SCANLON: That was actually worrying me, which is the issue of do we need
to take up the credit card sort of transaction? I think in some respects, it’s
probably a very small universe, because why would a provider want to pay a
credit card fee to accept a credit card from their insurer? It’s one thing to
get it from the patients because it improves collection, but it’s another thing
to do it from a plan.
But it does open up a door, because what we’re talking about here is we’re
talking about among the EFT types of transactions in the big universe, we’re
talking about picking out some and specifying some standards for this slice,
and then the question becomes okay, if it’s a credit card transaction, do we
need to make some specifications about that, so that there’s a parallel? But
again, I think it’s something that’s relatively small, if it exists.
DR. WARREN: So Bill, are you suggesting that we handle the credit card issue
separately? Because I’m confused now –
DR. SCANLON: But it’s a question of whether we’re being forced into a
corner, because if it is a real exception that matters, then we need to think
about it. If it’s something where we’re going to solve most of the problem by
saying here, for EFTs between plans and providers, or providers’ financial
institutions, here are the standards, and that’s going to solve most of the
issues, then maybe we can go on to other things with higher priority, because I
think again, this is small, and the fact that – we’re not promulgating anything
about the credit card transaction. They’re going to go on as they have in the
past. Just as we’re not forcing people to do electronic payments, either.
DR. SUAREZ: Exactly. We’re not forcing electronic payment, we’re not forcing
EFT to be only the EFT done through an ACH, and we’re not precluding other
methods of payment; those are the three elements. And a fourth one is really
the point that you make, which is in these recommendations, we’re not
addressing the other methods of payment, including credit card.
MS. WEIKER: Keep in mind, when we’re doing this reconciliation, and the
whole purpose of this is – and Steve alluded to it a little bit earlier,
is the 835 transaction, communicates to the provider what was paid, what was
denied, what was reduced because of co-pay or whatever. In that transaction
there is a segment that’s associated with the payment – that segment
doesn’t support credit card payments. So when you look at the reconciliation of
the 835 to the banking transaction, the CCD Plus format, which carries the
segment from the 835, it doesn’t support this credit card payment.
So when you start looking at the reconciliation of the remit to the payment,
and if it comes in, if the plan pays by credit card, that transaction, that
number, that authorization number from the credit card transaction, is not in
that TRN segment in the 835, so you’re going to have a disconnect and you’re
going to have a reconciliation issue, that what we’re trying to do with both
the 835 and with the adoption of the CAQH CORE operating rules, is to get that
reconciliation “on track”, so we need to be very careful with how
this is being worded, because otherwise you’ve got no reconciliation happening
and we haven’t solved anything, we’ve just created more of a mess.
DR. SCANLON: I agree with you, but the question is, are credit card
transactions important enough that we need to reopen this and say we have to
find a way to make the credit card transaction be reconcilable?
MS. WEIKER: I think when we’re talking about the payment from a health plan
to a provider, to be honest, I don’t know of one health plan that pays a
provider via credit card. It’s a check or it’s an EFT. I guess they could send
cash, but nobody uses cash anymore. So it’s a check or it’s an EFT. I don’t
know of any entity, any health plan, and Bill, you’ll hear from the Blues, that
pay a provider via credit card.
DR. SCANLON: I guess what I am trying to think is that we have these three
methods of payment; cash, credit cards and EFTs, and what we’re trying to say
is, when it’s EFTs, which are going to become more predominant because
basically, there’s efficiencies for everybody to use them, that we want these
standards to apply.
The other – we may worry about the credit cards because there’s a kind
of a gap there, but it’s so small – we’ve got a lot bigger agenda here
about standards in general – it’s such a small issue that we’re not going
to take it on as an explicit, how do we sort of build in the reconciliation?
That’s kind of where I’m at today, as opposed to reopening this and saying we
have to stop this train because we need to make sure that we deal with credit
cards as well.
I think what we’re trying to say here now is, we weren’t commenting on the
credit cards. Any of that business, if there is any plan in America that pays
by credit card they can continue to do so, and maybe at some future point we
address this if it ever becomes a prevalent practice.
MS. WEIKER: Right. And they need to come into the appropriate organizations
to have that business function ensured that the transaction that supports the
payment with the remit works together. So if this becomes prevalent, let’s
start at the beginning and work through the flow, so to speak.
DR. CHANDERRAJ: So that last sentence, we want to take this opportunity to
clarify that this recommendation – should be gone then? We should make a
clarification of that statement, saying that forms of payment by the financial
institution to the provider does not include in this recommendation.
DR. SUAREZ: We can take out the part of that sentence “including credit
card payments”, and just stop “by the plan to the provider”,
because there’s other methods of payment, we don’t want to – the other
part we want to, as Margaret pointed out, we want to encourage certainly the
use of electronic mechanisms to do the payment, we want to ensure that that
electronic mechanism allows the provider to do the reconciliation, and we don’t
want to give the – in the letter that we received from the credit card
industry, they don’t distinguish credit card payment and EFT. They see a credit
card payment is a form of EFT and that’s the argument they’re making.
DR. WARREN: So what they are saying, because I just went back and looked at
their wording, when they hear EFT, they’re thinking of the entire EFT standard,
which does incorporate them.
So when we talk about EFT, what I’m wondering is that the key word here is a
standard for health care, EFT, because we did say we were only doing one small
segment of that, and I think if we put our definition back in, and I’ll pull
the one from the letter to put in here, that should handle it, with the
statement of we want to take this opportunity – does not preclude other methods
DR. SCANLON: I would change the word “preclude” to
“apply”, because I think “preclude” maybe suggests that we
were thinking that we could force everybody to do electronic –.
DR. SUAREZ: That’s it, that’s great.
DR. CHANDERRAJ: But there are only two forms of format of payment by EFTs,
that will get a receipt, or the acknowledgment of payment. But we did not
include other forms of payment in that receipt, as Margaret was mentioning
earlier. There are only – either a check number or something that’s going
to be there. This is only applying the EFT payment to the institution or
wherever the provider is banking with. So this kind of statement doesn’t apply
at all; we are not encouraging other forms of payment.
DR. SUAREZ: This does not apply to the provider at all. This only applies to
the exchange between the plan and the bank.
DR. CHANDERRAJ: But in these standards we proposed, there are only two ways
of transferring this EFT. What the financial institution does to the provider
is different. We’re not even involved in that.
DR. SUAREZ: But this is not applying to that.
DR. CHANDERRAJ: But the statement reads that the EFT can be handled by other
forms, but we don’t have that leeway in our EFT.
MS. DOO: I think what she is saying is that your recommendation does not
apply to how the provider is paid, because you’re only addressing the
communication between the plan and its bank, you’re not addressing how the
provider gets its money.
DR. SUAREZ: This is actually good, because it emphasizes the point that it
only applies to that exchange between the health plan and the health plan’s
bank institution, and does not apply to other methods of payment.
DR. CHANDERRAJ: Maybe I am objecting to other methods of payment by the
plan, rather than payments by the financial institution, or the clearinghouse.
DR. SUAREZ: No, it is by the plan, because the plan can send cash in an
envelope to the provider; this does not apply. The plan can send a check; this
does not apply to a check sent to the provider. Those are the other methods of
payment from the plan to the provider.
DR. SCANLON: Even though technically we’re talking about a message between
the plan and the financial institution, the reality is that they’re sending
that message because the provider has an account in that financial institution.
The reality is, they’re sending that message because the provider has an
account in that financial institution, so it’s effectively a message to the
provider. This is going to be a deposit in your account.
MS. DOO: The provider may have an account at another financial institution,
DR. SCANLON: That’s possible too, but I think the issue is that there’s not
this relationship between the financial institution and the plan that’s
independent of the provider. They don’t just send random checks to bank, or
random EFTs to banks, if the provider doesn’t have an account there. De facto,
it’s the provider we’re communicating with, or about, at least.
MS. DOO: Right, about the provider. Maybe to another bank; Margaret is
frowning because she’s saying, but it could be another bank, which is right, so
the plan’s bank will communicate to the provider’s bank, and we’re not
affecting that exchange.
MS. WEIKER: Right.
DR. SUAREZ: There are three steps, actually four steps; the health plan
sends the transaction to the health plan bank; that’s the only one that is
applied. The health plan’s bank sends a transfer order, the fund transfer, to
the provider bank; that’s a true EFT. In the financial word that is the EFT
itself. And then the provider bank sends a message to the provider, saying I
received a check; it’s not an EFT, it’s a bank statement.
DR. SCANLON: Okay, but if we have two banks involved in this process, how do
we get the information to the provider to deal with the reconciliation? That
information – when you say we’re not talking about the transfer between
the two banks, we are talking about the transfer between the two banks. It’s
got to contain the same information that came from the plan to the first bank,
it has to be sent on to the second bank so it can go on to the provider.
DR. SUAREZ: It does, but not as part of a requirement, because banks are not
covered entities subject to HIPAA.
DR. WARREN: So they comply with EFT because banks do.
DR. SCANLON: So what we’re relying on is voluntary compliance. What would
happen in the world if the banks decided in transfers between themselves, that
they were going to use a different standard? It seems to me then we’re back to
square one here.
DR. SUAREZ: Yes, but realistically that’s not going to happen, because –
DR. SCANLON: I understand legally we’re not influencing that transaction,
but again, de facto, we are.
DR. CHANDERRAJ: My point is that the EFT is only between the plan and the
financial institution – this only applies directly –
DR. WARREN: Wait a minute, the health EFT is only there. EFT is a banking
standard, and it applies to all of these different loops. It’s done by NACHA.
We’re just influencing one piece of the EFT, which we’ve pulled out and said
it’s the health care portion of EFT, or we need to find some other
distinguishing label, and I think that’s what got people confused, is they’re
thinking of the entire EFT process. Am I off track, or is that accurate?
DR. SUAREZ: No, that is precisely –
DR. WARREN: Okay. Since it’s only when the health plan sends a message to a
banking institution, that’s the segment that we’re calling health care EFT that
this letter’s about.
DR. CHANDERRAJ: But payment of the plan to the financial institution of the
provider will make –
DR. WARREN: I see what you mean, yes.
DR. CHANDERRAJ: That’s the only part –
DR. WARREN: I just didn’t take this off. Sorry.
DR. CHANDERRAJ: No, that doesn’t clarify. Does not apply – other
methods of payment by the financial institution to the provider, not the –
DR. SUAREZ: No, other method of payment by the health plan.
DR. CHANDERRAJ: This – recommendation only applies of the payment of a
plan to the financial institution of the provider. That’s the only part we are
addressing by the standards. How the financial institution pays the provider is
not being addressed here.
DR. SUAREZ: This applies to the health plan sending a message to the health
plan financial institution.
DR. CHANDERRAJ: Exactly; that’s the only thing.
We have to clarify that.
DR. SUAREZ: It doesn’t apply to other methods of payment.
DR. CHANDERRAJ: By the financial institution to the provider.
DR. SUAREZ: No, the financial institution of whom? Of the –
DR. CHANDERRAJ: Of the provider.
DR. SUAREZ: That’s a separate route.
DR. CHANDERRAJ: We don’t want to go there.
DR. SUAREZ: Exactly.
DR. CHANDERRAJ: We just want to make the payment by the plan to the
financial institution of the provider.
DR. WARREN: No; it goes to their financial institution; that institution
sends it to the institution of the provider. So there’s at least two banks
DR. SUAREZ: There are two banks; the health plan bank and the provider bank.
DR. CHANDERRAJ: Financial institution of the plan, out to the financial
institution of the provider.
DR. SUAREZ: No, the health plan and the financial institution of the
provider never connect.
DR. CHANDERRAJ: That’s what I’m saying.
DR. SUAREZ: The health plan – connects to the financial institution of the
health plan. That’s what this applies only to. The rest of the route is not
subject to this. That’s what we’re trying to say, that this does not apply.
DR. SCANLON: But our goal in the administrative simplification is to get
better communication between the plan and the provider, and what we’ve got here
is I’ve got a standard of talking about communication between the plan and the
plan’s financial institution, and then there’s going to be a handoff, and to
the extent that the handoff is the same information that the plan gave to the
financial institution, then that ends up in the provider’s hands, everything is
But we’re operating on trust here, and we’re operating on the hope that it’s
in the interest of the two financial institutions not to mess with that
information that’s coming to them, to just simply pass it on. And we’re in that
bind because they’re not covered entities.
DR. SUAREZ: I believe there are operating rules in the financial industry
that take care of that, specific operating rules.
MS. DOO: Right. And in the remittance advice standard, I think Margaret was
going to explain that this whole issue of the trace number, which you all
addressed, that has to go through, is how it makes that connection to the
payment and what the provider sees – so along the path of the banks,
ultimately with the providers, how that reconciliation is done.
DR. SUAREZ: Okay – So we have it – in a previous letter we
recommended adoption of a standard for health care EFT and then we’ll put the
definition. We want to take the opportunity to clarify that this recommendation
only applies to EFT messages between the health plan and their financial
DR. CHANDERRAJ: Who is their financial institution?
DR. SUAREZ: The health plan’s financial institution. This only applies to
the health plan message being sent to the health plan’s financial institution,
that’s the only standard.
DR. CHANDERRAJ: You’re not sending it to the provider’s financial
MS. DOO: Not here. Change “their” to “its”.
DR. SUAREZ: Applies to EFT messages between the health plan and its
Thank you. I think we got it.
The other part, of course, is that once – this is a recommendation to
the Secretary; the Secretary’s going to write regulations. Once those
regulations come out, there will be plenty of opportunities to add to or
Okay, thank you very much.
DR. WARREN: Let me just show you the other – so again, I removed the
“we recommend that the Secretary should”, put in “recommendation
2.0” and then “the Secretary”; everything else is the same. So
it’s just a formatting issue. I left them in exactly the same places; here’s
our recommendation three, so the only thing I did was take recommendation 3.0
and replace it where we had “we recommend that”.
DR. SUAREZ: Let me ask you this, Judy, because those recommendation two and
recommendation three, were the conditional elements of recommendation one, so
we don’t want to miss that. They’re not independent. So in the recommendation
number one, there should be –
DR. WARREN: So this should be 1.1, right?
DR. SUAREZ: Right, it might be better to just call it 1.1, and then let’s
make sure that in the recommendation number one, we still say conditional 2. So
DR. WARREN: The wording did not change. The only wording I took out was
“we recommend that”, and replaced it with the recommendation number.
And then the last one, I did have to do a little wordsmithing on. This
sentence was after the recommendation, and so it looked a little odd to have it
there, so I just moved it up into this paragraph. That was the only editing
that I did. And I read through it several times; it looked like it still looked
good there, but we just need – the location didn’t change anything.
The reason that I moved it up is that after that, we have our concluding
paragraph and the end. So it looked really strange to have two one-sentence
paragraphs at the bottom, and I couldn’t think of anything else to put in
there, and I wanted to keep it as crisp as possible.
DR. SUAREZ: That looks great. Any other comments on the letter?
DR. WARREN: Oh yes, your two edits are in the –
DR. FITZMAURICE: I have another one. Where you have it in yellow –
DR. CHANDERRAJ: Are we going to make one single page of recommendations
only, with the objectives and recommendations? Observations? Only one page of
simple ones; we wanted to consolidate –
DR. SUAREZ: I think that’s what we’re doing.
DR. FITZMAURICE: 153, it says that this recommendation only applies to EFT,
but applies only to, it’s like you’re modifying the verb as opposed to
modifying what it applies to.
DR. SUAREZ: Maybe applies only to the EFT message.
MS. DOO: Yes, add “the” in front of EFT.
DR. SUAREZ: That’s great; we’ll present this to the Full Committee later
this morning. We should then move on to the HIPAA Report.
DR. SUAREZ: So for the HIPAA report, I think our task was to incorporate in
the front matter, in the introduction, some framing statements and then do a
little bit of –
(Discussion with Dr. Suarez and Dr. Carr about how to set up file on
DR. CARR: This was a joint effort of Bill, Walter and myself, so the opening
paragraph is the same. The second paragraph is the same except that it has a
heading and there’s an introductory sentence. So the introductory sentence
that’s new is “The Health Insurance Portable and Accountability Act was
expected to play a major role in controlling administrative costs.” Then
it goes on to a description. Is that okay to have that as the major – to
say that’s – because our first paragraph is “we spend 2.5 trillion in
administrative costs” and then we say, “this was expected to control
DR. WARREN: I would put 1996, the HIPAA And Accountability Act of 1996, so
that people remember how long ago it was?”
DR. SUAREZ: I think the header of the entire page –
DR. FITZMAURICE: I would suggest that it’s the administrative simplification
portion of HIPAA that did that.
DR. SUAREZ: The Administrative simplification provision of the Health
DR. WARREN: Otherwise people are going to get all securing thing and privacy
(Short discussion among participants about grammar).
DR. CARR: Okay, so HIPAA was created to achieve several goals, including
make it possible for people to keep health insurance, protecting
confidentiality and security of health care information, and finally helping
the health care industry control administrative costs. A main component of
HIPAA focuses on administrative simplification, which requires the adoption of
standards for electronically receiving –
DR. FITZMAURICE: Given that, I would go back and take out all the changes
that I just recommended in the first sentence, because now it’s introducing the
administrative simplification portion.
DR. CARR: So we go on to say that – this is the same as what we had;
HIPAA electronic data requirements for standardized formats and content were
intended to move the health care industry from a manual to an electronic system
to improve security and lower costs and lower the error rates. So that’s pretty
much the same except for that opening statement.
Next sentence – let me just preview it a little bit – “status of
the implementation” and then “challenges to the implementation”
and then “necessary next steps”. So that comprises the full thing.
So now let me bring you back to Status of the Implementation.
So over the past decade, the administrative simplification provisions of
HIPAA have contributed to the transformation and modernization of the health
care industry in three important ways – one, laying the groundwork to move
the industry from paper to electronic formats in administrative and clinical
systems; two, moving the industry to a common set of standards from a
multiplicity of standards and formats, and 3, establishing a privacy and
security framework to ensure protection of health information.
Today there is much greater awareness of the need to protect the privacy of
personal health information and enhance efforts to do so, however the
completeness of these efforts is not known, as the Department has not
systematically tracked implementation.
Moreover, the speed of adoption across the industry has been disappointing,
though in part understandable. I didn’t get that, Bill, you left something out
of that sentence. And then the lack of full implementation of all HIPAA
components now threatens the nation’s progress toward reforming health care.
So I’ve got a sort of mixture of peoples’ comments here. Walter had written
this first thing, and then Bill, you had put this in. It culls out – it
makes it sound like there’s a lack of awareness of the elements to protect
privacy. Is that what we really want to say?
Actually, what Walter has said is, we’ve established a privacy and security
framework to ensure protection of health information. So would it be reasonable
to just then take out this sentence and then say, however the completeness of
these efforts is not known to the Department, as the Department has not
systematically tracked –
DR. SCANLON: I think either take it out or put it in the prior paragraph; it
was a point that was raised yesterday, that we really have to move forward on
privacy. I’m not strongly wedded to it, but it came up in the discussion
DR. SUAREZ: That sentence is really part of the previous paragraph.
DR. CARR: Okay, maybe that is what we will do. Then this is a new paragraph
then; however, the completeness of these efforts is not known to the
Department. Moreover, what did you mean by this – speed of adoption across
the industry has been disappointing, though in part understandable?
DR. SCANLON: Given the starting point for implementation.
DR. CARR: Okay. Given the starting point for implementation, lack of full
implementation of all HIPAA components now threatens the nation’s progress
towards reforming the health care system and providing access to quality health
care in a timely manner. Is that what we want to say?
So let’s remember that; we may want to come back to that. Let me just show
you what we went on to say, and then let’s come back and decide if that makes
Challenges to implementation. Achievement of the vision of seamless
electronic flow of information in a confidential and secure manner has been
slow, with resultant unnecessary waste of resources. I put that in, is that
okay? I think it’s good.
DR. WARREN: I think it is good.
DR. CARR: Continued and more rapid progress in achieving the full benefits
of administrative simplification and strong privacy protection will be hampered
by the following issues, which have also impeded past progress. So Bill, that
was your language.
And then you said, I just took the bullets that we had, but you had a note
here – bullets about how varied administrative processes were at the
DR. SCANLON: I think this is the point you were raising yesterday, Walter,
about the starting point, that we shouldn’t view where we are as so negative,
if we consider where we are as so negative, if we consider where we were.
DR. SUAREZ: As I was beginning to think about this yesterday again, and then
realized that the real start wasn’t 15 years ago, wasn’t 10 years ago, really
was 8 years ago, 2003, really late 2003, so we’re only 7 years, ultimately,
into this, and so I’m concerned that we’re painting a picture of this –
DR. CARR: Disparaging.
DR. SUAREZ: It’s sort of more negative than what it should be.
DR. CARR: We need to just fix this, but let’s decide if these are the points
we want to make, and then we need balance, I agree.
So the law failed to mandate adoption by all parties. The law only requires
adoption for health plans, all health care, clearinghouses, and health care
providers that chose to conduct transactions electronically.
Is that correct?
DR. SUAREZ: That choose to conduct transactions electronically, not chose.
DR. CARR: We’ve got to do a tense check on this, but the concepts.
DR. SCANLON: When I was trying to change this, I ended up with only four
bullets, future impediments, and some of these bullets are kind of, were in the
past. There’s some of the explanation as to why we haven’t made as much
progress as we have.
DR. CARR: I put all these together and we can parse them, but the first four
Okay second, strong incentives for adoption, such as Medicare’s requirement
for electronic claims submission, are absent for many participants. Agree?
Three, compelling evidence about the potential benefits of full scale and
more rapid adoptions lack, and given the department has not measured the impact
of the law.
Four, the original standards were compromised by the lack of full industry
participation, and the levels of optionality and variability allowed in the
implementation of the standard.
So those were the four that Bill had; is that right, Bill?
DR. SCANLON: Right, and those are the ones that I would characterize as both
impediments of the past and ongoing impediments.
DR. CARR: So then this was just a restatement of this.
DR. SCANLON: Now, sort of as a theme in some of the things we’re doing,
talking about optionality being a problem. The issue of incentive for people to
comply is also a problem.
DR. CARR: Did you want to include the patient identifier in yours?
DR. SUAREZ: That’s the next bullet.
DR. SCANLON: Then the ones after that are things that were true and may have
impeded progress, but the issue is how much do they impede future progress, and
it doesn’t seem like that was clear.
DR. SUAREZ: One point on the bullet of the original standards were
compromised, I don’t know that they were compromised by the lack of industry
participation, it was more the levels of optionality and variability. I think
the original standards, and I remember –
DR. SCANLON: I think that point is – maybe it’s not the standards, it’s
the point that was raised, I think, in our phone call about the fact that
people are still submitting paper claims, which is kind of opting out, and it’s
not that you’re not complying with the standards, you’re opting out of having
to deal with the standards, right? When you file paper claims?
DR. SUAREZ: Yes, but that’s not the original standards.
DR. SCANLON: I am saying that; there is this issue of we haven’t achieved as
much administrative efficiency because we haven’t gone all fully electronic.
DR. CARR: So what was compromised? If the original standard isn’t right,
what would be the right word?
DR. SUAREZ: Well the levels of optionality and variability. So you can draw
by the lack of full industry participation.
DR. CARR: Something was compromised by lack of full industry participation –
DR. SUAREZ: The original standards were compromised because of the level of
optionality and variability.
DR. CARR: So this lack of full industry participation is actually more
related to the –
DR. SUAREZ: I think that’s way too strong. I think that gives the impression
that nobody was in these meetings. I was.
DR. CARR: Does it belong up here? This is the law failed to mandate
adoption, but this is what is the lack of full industry participation by the
fact that – so have we said this satisfactorily? Or do we need to add the
DR. SCANLON: I think we can drop lack of full industry participation.
DR. FITZMAURICE: Could I suggest “requires adoption only for”?
DR. WARREN: Health plans and clearinghouses were required; it’s health care
providers that are the only.
DR. SUAREZ: The law requires adoption for all health plans – You have to
drop the “only” after the word “law” in that line, drop
that one, and then go and add “only” after the word “and health
care providers”, and only health care providers that chose to conduct
DR. CARR: Right. Okay, that chose to conduct transactions electronically.
I’ll get that. So these are the first five bullets; are these – this is,
as Bill put it, past and present?
DR. SUAREZ: No, the second bullet, strong standards for adoption, such as
Medicare’s requirement for health care providers to submit electronic claims.
It’s a requirement on health care providers.
DR. FITZMAURICE: We’ll go up to the higher bullet and say, to providers that
choose, not chose, because we’re in present tense.
DR. CARR: The tenses are all over the place, I just want to make sure these
things are right.
So there’s those five bullets, comments about those additional bullets?
So if we go down here, I just did a compendium of other bullets, that I
think these are kind of just restatement of what we already said; education of
consumers about the law has not been robust, the law required baseline privacy
and security standards – Bill, this was you – in the health industry.
For the first time, covered entities and their attorneys were understandably
very conservative about sharing records, until they were more familiar with the
enforcement regime. Do we want to say that? Have we said that in the reports?
DR. SUAREZ: I don’t know about that will point to, because that was just a
transitional process in the adoption of the privacy law –
DR. SCANLON: That was why – I think these things do not belong after
we’ve made the points about what’s our continuing problem. They either belong
before, saying here’s how we explain slow progress, or you just don’t mention
them and we focus only on the future.
DR. SUAREZ: What’s the heading in this section? Because I’m confused –
DR. CARR: Challenges – I call this challenges to implementation.
DR. SUAREZ: We’ve got to be careful of creating an executive summary of an
executive summary, because we’re going down now to summarizing in this first
DR. SCANLON: But that’s what we already had. If you look at the executive
summary we had, the first page and a half is essentially a summary statement.
DR. CARR: This is just a restatement of what we had.
DR. SCANLON: Somebody could read that and be done and then they’d go on to
more detail in the rest of the executive summary. So what we were trying to do,
I think as a result of yesterday’s round table, was to say, okay, what are the
highlights that belong in that page and a half?
DR. SUAREZ: As I recall, there were three things that were done, were
already mentioned up there, HIPAA Health Transformation and Modernization of
Health Care in the three ways, and there were five things that we said were
challenges. Those were the only things. If we go more than three and five, then
it becomes like a page and a half –
DR. SCANLON: I agree; I think these either get dropped or they get – I
think the three needs to be ahead of the five bullets, because the five bullets
are what are the continuing challenges.
DR. CARR: What about timelines were initially long, further extended,
resulting in slower pace of adoption, as well as downstream delays of sequenced
DR. SUAREZ: I don’t think – the terms were initially long; they weren’t
DR. CARR: Okay, so they weren’t initially – timelines were extended?
DR. SUAREZ: They were only extended for one year. So if we’re arguing that
for one year we’re here, I don’t think that’s probably correct. I mean, the
time line was only delayed for one year, the original one.
MS. DOO: Well, it was the first extension in 2003, and then there was the
NPI, which was in 2007 or 08 –
DR. SUAREZ: Extended? Delayed?
MS. DOO: NPI. It was how they framed the –
DR. CARR: Delayed the year. ?Various time lines were extended”, how
DR. CHANDERRAJ: I think Bill’s point of the old challenges should be removed
and we only should address the current challenges.
DR. CARR: So this is history, and then the top five are where we are today.
Do we want to say education of the consumers about the law has not been robust?
CMS would like to speak.
MS. DOO: I’m putting on a slightly different hat, and I’m assuming that we
have some either evidence or justification for saying this, because I would
suggest that OCR feels that it has done a yeoman’s job, given the volume of
DR. SCANLON: Actually, I’ve suggested dropping that bullet because I wanted
to know, even if it hadn’t been robust, what was the consequence?
DR. CARR: Next, line 61. The law required baseline privacy and security
standards in the health industry for the first time; covered entities and
attorneys were understandably conservative.
Do we speak to that in the report, because we can’t have it in the executive
summary if it’s not in the report.
We’ll check that. So let me just take you through the rest of this; we can
tidy this up a little bit of it.
Necessary next steps: So this is what I took Walter’s thing and gave it this
heading; HIPAA’s goals remain highly relevant, with an ever-growing need to
converge financial, administrative, clinical and quality data to promote
greater quality and efficiency in the health sector, while ensuring the privacy
and security of such data.
Their achievement is contingent on a strong commitment by the department and
stakeholders to develop as rapidly as possible a comprehensive set of standards
that achieve genuine administrative simplification and privacy protection
involving the integration of data from a multiplicity of sources in ways never
envisioned when the law was passed.
While the time frame of achieving these goals should be ambitious,
recognition of other challenges impacting health care entities such as
implementation of EHRs, meaningful use, adoption of ICD-10, et cetera, is
critical, so that a realistic time frame can be established.
To realize the vision of HIPAA and adequately address the pressing health
needs of an aging America, we need to move boldly and vigorously to complete
the standardization needed to effectively and efficiently deliver quality care.
Among the most important steps moving forward, we need to:
- Develop meaningful metrics to measure progress.
- Align appropriate incentives to ensure full adoption.
- Ensure adoption and implementation of all standards by all entities subject
- Accelerate the pace to adopt and implement new standards.
- Implement more aggressive enforcement.
- Synchronize timelines in adoption and implementation of standards; and
- Evaluate unintended consequences, such as the effect of new standards on
And then this tenth report to Congress, as required by HIPAA, chronicles key
milestones in underlying progress and the ongoing work to fully implement all
DR. SUAREZ: If you go up, I think the introductory paragraph of this has a
statement that I’m not sure, where it says that their achievement is contingent
on a strong commitment by the Department and the stakeholders to develop as
rapidly as possible comprehensive standards. I don’t know what that means.
DR. CARR: I thought you wrote that.
DR. SUAREZ: I didn’t Write that; no, not at all. The issue is not developing
the standard, the issue is adoption and compliance.
DR. SCANLON: I think it is an issue of both the development of the
standards, which that is part of the commitment, but then the issue of
comprehensiveness is that – I think it’s reasonable for people to say I’m
not going to participate, or I’m going to find ways to opt out, when the
standards don’t deal with all the needs that exist. And that’s where the
comprehensiveness comes in.
DR. CARR: So would it be better to say –
DR. SUAREZ: When you look at the administrative processes in health care,
these ten transactions that we’re dealing with cover 90 percent of those
processes, so it’s as comprehensive as we –
DR. SCANLON: No, the issue is, if I’m submitting a claim and we talk about
sort of attachments, the question is, do we need attachments, do we need sort
of optionality? And if I’m one of the participants in this process and I start
to argue I need this option because you haven’t dealt with this situation, we
have to be able to address that. That’s where the issue –
DR. SUAREZ: That’s what we’re going to do with the –
DR. SCANLON: I know, and that’s what I’m saying; we can’t just say, you have
to use our standards unless we can assure people that these standards meet
their needs. And that’s what I’m trying to get at.
DR. CARR: Okay. So we need to start the Full Committee meeting. This needs a
little more work.
(Whereupon, the subcommittee adjourned.)