DR. MOORE: Thanks, Bob, Mike. The next team to be presenting would be the team that is working with the five transactions that are claims and claims related. The chair of that team is Barbara Redding and Jane Harman -- they are co-chairs -- from the National Center. Barbara is from the Health Care Financing Administration. Barbara, do you and Jane want to come up?
Barbara has had a great deal of experience in working with the Medicare program and the quasi-de facto standards that we have there, that are not generally used by the entire industry, but are used by a large segment of that industry, so she is quite knowledgeable about the effort and the amount of resources and time required to implement something.
Barbara, you want to take over?
DR. HARMAN: I'm Jane Harman from the National Center for Health Statistics, part of the Centers for Disease Control and Prevention, and I am going to be presenting the first part of our segment, and Barbara Redding will conclude, and we'll have plenty of time for questions at the end.
Our team was responsible for reviewing electronic transactions that would be candidates for becoming the national standards for health care claims and encounters, coordination of benefits, for insurance remittance advice and for claims status inquiry.
Our charge was to assure that regardless of which standard was chosen for each of these transactions, that standard would be identically implemented by all users. This requires the provision of an easy to follow implementation guide and a complete data dictionary.
We solicited advice from the health community, both formally and informally. We received formal advice from the National Uniform Billing Committee, an organization comprised of payers and providers who are concerned with health care billing standards by institutions and facilities, from the National Uniform Claims Committee, a similar organization concerned with health billing standards for physician and supplier claims. We also received formal advice from the work group for electronic data entry exchange, an industry group concerned with electronic transactions, and from the American Dental Association. Although not on this slide, we carefully considered the testimony presented before the National Committee on Vital and Health Statistics, Dr. Detmer's group from whom you just heard.
We believe that these four principles are of utmost importance to the standardization process. I will address each of these principles separately.
Timely data content management is imperative. By law, the standards may not be revised more than once a year. However, when revisions occur, data content updates should approve all requests approved during the past year.
The structure and format of the adopted standard, that is, how the data is arranged for electronic transaction, should remain stable for the duration of the implementation period. Annual data content updates could occur during that time. Data segments, data fields and code sets could be added, but the basic structure and architecture of the transaction would not change during the implementation period, except under extremely exceptional circumstances.
Testing of the standard transaction at the work group level is essential to evaluate the functioning of the data structures, to ascertain that the implementation guide works and to assure a smooth and relatively efficient translation for all users. Test conditions and results of this testing should be made public.
The documentation must be so complete and so unambiguous that in the famous words of my distinguished co-chair, even a woman from Mars could easily write a correct claims transaction. I don't know if that implies that HCFA has received some claims that look like they were written on Mars. They may have perhaps generated a few remittance advices that looked like they came from Mars as well.
At a minimum, that means there must be a complete unambiguous implementation guide, a universal data dictionary applicable to all of the new standard transactions, and clearly written rules explaining under which conditions particular data items must be present.
We have also worked from the principle that each of these three transactions, the claim, the encounter and coordination of benefits, would be transparent to one another. In other words, the same transaction format would serve to transmit any of these three types of transactions.
I'll turn over the rest to Barbara.
DR. REDDING: These are the committee's recommendations for standards to be adopted. Except for the retail drug claim, which would be in the National Council for Prescription Drug Programs, all of the remaining formats will be X12 formats, according to our current thinking.
There are a number of things that we need to say about data content. We are working with established data sets. The NCVHS core data set is one. Other data sets we are working with are those that have been maintained over any years by the National Uniform Claims Committee, the National Council for Prescription Drug Programs, the National Uniform Billing Committee and the American Dental Association.
We would like to see these committees continue to work as they have in the past, although with HIPAA, they may have more to do. We are also looking for a way to include public health organizations in the data content deliberations of the industry. We are also thinking in terms of a super set concept. We are aiming on defining a maximum data set that meets all health care community needs. For example, it would carry all the information the payer would have to have in order to honor a claim. It would also have to carry the information that a physician or a hospital would have to have in order to post their internal systems from an electronic remittance device.
The data content must be millennium ready. Any standard that would be adopted would have to be millennium ready. I believe that this means that all dates must be eight digits. I know that we can look at the date and say, well, somebody might not want to compute that particular date. But there is such a wide variety of systems involved in this, that I cannot imagine how we would be able to do that accurately.
Data content and review will be extremely important to all of us. When the proposed rule is published, it will include an inventory of data elements for each of the transactions. It will reference websites where further detail can be obtained. I would beg anyone involved in this business to read that with a critical eye and in great detail, and to send us comments if you see anything that you need that isn't there, or if you see anything that you don't need that is there, because once the final rule is in place, the data content will be set for one year or longer. The law will require all the users to accept the data sets for that time.
There have been some issues. There have been divided opinions on architecture. We have received a great deal of advice for flat files, as well as advice for X12 files.
We also received advice for dual standards, so perhaps you begin with a flat file and an X12 file and then on a date certain you would retire the flat file.
Almost all of the people that advise us did however want to see an X12 architecture in the end. The team concluded that the best way to deal with that would be to find a way to allow more migration time within the meaning of the law, so that people have time to adjust to what for some people will be a fairly significant amount of change. We would want a migration design that is equitable to all players. We are hoping that you will have some suggestions for us on what that might be.
Last but not least, the team really believes that somehow we must provide for experimentation with future technologies without subverting the standards, and we would appreciate suggestions for that regard. We all know that I care a great deal about stability, but forever is just too long for anything.
With that, questions, comments, preferences?
DR. TRACY: I am wondering, your slide did not describe the issue of claims attachments associated with the claim. I may have misread X12 837, but I believe it is silent on claims attachments. My presumption is that they are often needed to adjudicate the claim. My question is, was it merely not covered in the slide and is covered in the recommendations, or is some other action being taken regarding this important matter?
DR. REDDING: I have been asked to repeat every question, so make sure I get this right. But I think the question is, are claims attachments being addressed in the planned notice of proposed rulemaking. The answer is no. The legislation calls for standardized attachments one year later. And staff will have something ready in a year on that.
DR. EMERY; I'd like to raise a question about -- I believe you said that you were thinking about a maximum data set. I am very much concerned about the impact and the cost that that would incur to those people collecting the data, what the need is for that, the justification for that, more information about that.
We hear a lot about minimum data sets, but maximum data sets frankly scares us.
DR. REDDING: I think the question was, Jack Emery of the American Medical Association is concerned about the impact and cost of a maximum data set.
We gave that a great deal of thought. The difficulty with a minimum data set is, it means that everyone writing a claim is going to have to revise the content, depending on who the payer will be.
The team thought that since claims go from hand to hand, from payer to payer, since many people have more than one insurance policy, that a maximum data set would be simpler to manage than a minimum data set. But we are open to suggestion. If you have a plan, we would love to hear it.
DR. EMERY: I do hope you will take into consideration that there is a cost in collecting that information. To the extent that reimbursement rates then to provide that information, to provide the documentation for that little lady on Mars, adds up. It becomes cumulative. It is a very strong concern we would have about how much information then you are going to be asking.
I can appreciate your interest in trying to perhaps minimize by maximizing, but there is a cost associated with that, and we would be very concerned about that.
DR. REDDING: One of the things that we are working with the National Uniform Claims Committee now is on data conditions. That should mitigate the impact of a maximum data set, because it would carefully spell out under which conditions which pieces of data need to be present.
DR. ZUBELDIA: Your slide showed version 3070 of the standards. I understand that the DME requirements are not met by version 3070 in the claim. Are you thinking about adopting a modified standard or going to a later version of the claim that will incorporate the DME requirements?
DR. REDDING: We are hoping the next 12 will have a millennium ready solution on a website in a relatively short time. Is anyone here from X12 that could address that issue?
The question was that the version 3070 implementation guides are not all currently millennium ready, and how would we propose to deal with that.
PARTICIPANT: I'm simply wanting to request you to back the slides up about three or four to the 837, 835 transaction sets with the versions listed.
DR. OWENS: Bob Owens from the X12. What we are doing is in fact laying a process in place, so regardless of the final version of the standards selected, we will have implementation guides ready for that particular version.
What we have right now is 3070 totally done, pretty much ready to go for the ten transactions. As far as updating it to a later version, with the exception of the claim, that is pretty much just changing the 3070 to a later version.
Now, in the claim there is already work underway to make the modifications to the guide for the DME. So depending on what your final selection is, we can go either way. If you want DME in there, then we will have that and ready for an implementation guide in the later version. Our only recommendation is, if you move it to the later version for the claims standards, that you would also consider moving it to a larger version for all the others.
DR. REDDING: Well, bear in mind that we need to be able to refer to a website with implementation guides for the readers of the notice of proposed rulemaking.
DR. OWENS: That is the same one that you will have for this one, which is the Washington Publishing website.
DR. ROBINSON: You mentioned that the flat file wa not going to be adopted as the 837 for the claims.
DR. REDDING: Yes.
DR. ROBINSON: I know that the NSF 3.0 just came out. Is HCFA still going to maintain that? Because the systems are going to need a flat file to be able to process through their systems. Are you expecting the systems to be able to maintain the mapping of that, so it can process all the way through the system? Or is HCFA still going to maintain a national standard format?
DR. REDDING: HCFA will cease maintaining the national standard format at the end of any migration period that is devised, or at the end of the implementation period. We are now and will continue to provide national standard crosswalks between the national standard format and X12 formats.
DR. ROBINSON: So any updates to the 837 that need to be updated on NSF on that crosswalk, that is where you will address it, but you won't be updating the format itself?
DR. REDDING: I'm not sure I understand the question.
DR. ROBINSON: You said you will be providing crosswalks to a format, to a national format.
DR. REDDING: We currently always in our specifications include a map that shows which NSF data element is mapped to which position in an X12 guide. We would continue to do that.
DR. ROBINSON: But if you don't have a standard format, a flat file, then how are you going to crosswalk it?
DR. REDDING: Well, we will the lat year.
DR. ROBINSON: But after that?
DR. REDDING: But after that, we don't --
DR. ROBINSON: Is it going to be up to the standard maintainers then to maintain the flat file?
DR. REDDING: There will be no more flat files.
DR. ROBINSON: Well, there has to be one to be able to process it through the system all the way through. You can't take ANSE data and process it through.
DR. REDDING: With the X12 scheme, you will have to have a translator that will build you a flat file that you can use with your internal system.
DR. ROBINSON: Okay. Thanks.
DR. OWENS: Actually, I have two more questions, as long as I was up here. One is going back to the maximum data set. Is your intention to create a maximum data set for like business process, like institutional claims, physician claims, dental claims? Or is it one overriding maximum data set?
That is question one, then question two would simply be --
DR. REDDING: How about one at a time?
DR. OWENS: Okay. These are easy.
DR. REDDING: The first question was, is the maximum data set going to apply separately to institutional, dental and physician supplier claims or would it be an over set. The answer is, it will be for each individual classification of claim.
DR. OWENS: Then the second question is, has the group made a decision as to what code sets it is going to recommend for each of the business types as well? Like CPT, CDT, ICD-9.
DR. REDDING: There will be a presentation on medical coding this afternoon.
DR. ROBINSON: Barbie, you said the data content will be set for one year, after the final rule? Then it is going to be implemented over two years. Does that mean that that set is frozen for three years?
DR. REDDING: No. The question was, will the maximum data set be frozen for three years, basically, is that --
DR. ROBINSON: No, the 837 that you adopt, the 3070 or 3073 or whatever, is that going to be frozen?
DR. REDDING: Will the version be frozen?
DR. ROBINSON: For the three years specified in the legislation.
DR. REDDING: We're not recommending that necessarily the version be frozen, but we are recommending that the structure be frozen for those three years. So we would not anticipate any major rewrites, although we would anticipate that possibly as often as once a year, data might be added or subtracted.
DR. ROBINSON: So that is the same procedure you see going forward beyond the three-year implementation, too, then, would be very three years you would have a data structure change.
DR. REDDING: The question was, would that also then apply going forward after the three years. The answer is, hopefully. There could conceivably be some new requirements that would make a rewrite seem like a good idea. But we would really like to keep it stable. It would be awful to have people -- in my opinion, it would be very difficult to have people -- the early implementers are on this version, and somebody comes along a month later and it is a different version. I just think it would be awfully hard for people to follow.
DR. ROBINSON: Then on the migration time frame, you talked about the migration time frame being possible to have the 837 implemented at a later time because of the complexity and the fact that a lot of people are using other formats currently.
DR. REDDING: Yes.
DR. ROBINSON: The problem with that is, if all of the other transactions are adopted within two years, because of the fact that they interact with the 837, if you have all the other ones up in two years and not the 837, you are going to have a bigger problem than if you had insisted on having them all in the same time frame and all of them come up within the two year time frame.
DR. REDDING: The question was, as far as I can tell, and correct me if I haven't got it right, but the question was, if for example all of the X12 standards except the 837 were implemented, wouldn't it be a smoother migration if there was no allowance for continuation of an old file. Is that basically what you're saying?
I don't know. The advice that we have received to date would imply that people need more time to migrate from flat file standards that are widely used. If that is not true, people have to let us know, because most of the advice that we have now basically says I have so many customers on this, that or the other flat file, I need migration time.
DR. RIZZI: Barbara, there has been some discussion, and I haven't heard if there has been any decisions made about whether or not the HIPAA law and these standards will apply to payers and providers using an intra-net. Have you had any update on that, or any decisions made?
DR. REDDING: The question is, will these HIPAA regulations apply to people using intra-net. My question is, could you tell me more about this context for his intra-net? It could be used a variety of ways.
DR. RIZZI: The way I understand it will be used is like a proprietary communication process, where trading partners, providers who have payers in their network are going to communicate for eligibility and claims type transactions, as well as provider information on what -- I'm not an expert on this, but what I understand, a closed internet is just like a private mechanism set up using public telephone communications to communicate back and forth. Will they have to use the standards that are being mandated here, or can they continue to use proprietary flat files or whatever standards they set up?
DR. REDDING: If I have this right, you are basically saying it would be providers and payers, and instead of being on some other kind of wire, they would be on an intra-net?
I think that the intent of this law is to simplify workload for both payers and providers. So therefore, I think regardless of the transportation mode, a provider has a right to insist that a standard be accepted by a payer.
DR. MOORE: And also, the payer has a right to insist that the provider give them the standard, and they not have to go to a different format just for the provider's convenience, because they worked out a trading agreement with some other partner to do that.
So what we are thinking today is that proprietary agreements not be allowed between trading partners that have existed. If the information is flowing, what you do beyond the front door of your operation with your internal partners is your business. What HCFA does beyond the front door of a carrier intermediary is our business.
Outside of that door, -- and we can make that any format we want it. Before, the question was, I'll have to convert that to a flat file in order to process it. So will everyone who works with that data. We will make that information look in the format that we need to make it look to do efficient operations within our files, interfacing with beneficiary files, interfacing with provider files, things of that nature, has to be done in order to do the processing.
That is our decision; we set it up to be most efficient for us. But we will have to accept at the front door that standard transaction that is coming from some other trading partner. To allow different partners to have different agreements out there tends to make it more onerous and convoluted, and it is back to where we are today. For that reason, we would say no, unless we get better advice from someone else.
PARTICIPANT: Bob, I'd like to follow up with that question. That is, can trading partners that agree to not use the standard agree to do that?
DR. MOORE: No. This is a law that is mandating that a provider and a payer use the standard from their back door to their front door and vice versa. A provider may have dozens of trading partners. A payer is going to have hundreds of trading partners. How do you make that arrangement work?
In my way of thinking, as it has in the past, he who has the goal sets the rules, and the payer has been setting the rules and the providers have been dancing to those rules for many decades. We are trying to level that playing field, to make more providers come into the fold and begin doing electronic commerce. The only way we can do this is to create some standards and start getting people to do it in a uniform, consistent manner.
PARTICIPANT: I understand the department's concern about the health insurance industry strong-arming providers.
DR. MOORE: That is not the department's concern. I thought that was the provider's concern.
PARTICIPANT: Well, the provider's concern. I think the department has a concern as well. But I think about -- I work for the Blue Cross/Blue Shield Association, and we have a unique relationship between and among our plans. We have talked about this issue before.
DR. MOORE: If there is private information moving between the plans, that is between the plans. If there are services between providers and plans, that should be in the standard format.
PARTICIPANT: So then we would be allowed to use a different standard internal to --
DR. MOORE: If you are dealing with coordination of benefits between a Blue plan, I would think you would need to do it within the standard, because you are going to be dealing -- or are you saying that the Blues are all willing to deal with each other with their private proprietary standard, and then with the rest of the world where the public standard is going to be graded by these standards? Is that what you are telling me?
PARTICIPANT: I can't say exactly what it is.
DR. MOORE: If that is what you're telling me, I might agree to that, because then only the Blues are paying a price for their own internal proprietary standard. But if that is the proposal you make to me, then perhaps we on the government side will say, that is an acceptable idea, as long as you are willing -- and the Blues pay that price and you absorb it for yourselves because that is what you want.
But when you deal with the rest of the world on all these other standards, you're going to have to use the mandated standard. If that is coordination of benefits, then a health plan or any other secondary player, you will have to use the standard in order to communicate with them.
PARTICIPANT: Thank you.
DR. ZUBELDIA: Following up on that, Bob -- don't go away yet -- I have seen some language that during the transition period willing trading partners will be allowed to continue with existing standards. Has that been changed recently? Because I understand that after the standard is adopted, there will be a transition period during which willing trading partners will be allowed to continue with flat files or whatever standards they want to use for the transition period only. Has that changed?
DR. REDDING: The question is, will there be a transition period where proprietary standards would be usable. That is kind of what we were talking about when we were talking about a migration plan, and what would be an intelligent and equitable migration plan that would allow people time to adjust.
DR. MOORE: The decision on a migration plan hasn't been finalized. What we are trying to do here is role out to everyone where we are today, what we are thinking about. We have come to some agreement in our world on what the standards should be. The next step as you heard Mike and Bob roll out, there are a lot of other decisions on these issues: the migration, implementation, how we work through those, what are the problems.
We haven't heard from all of the community yet, but we want to put the standard up. The goal is still in the law that says the year 2000. How we get there -- if we get enough feedback that says we need to address the issues and give more time for what appears to be good and reasonable rationale for doing this, then we will address it and we will go that way. But I need to see it.
What have we heard today? We have had, I would say, hearsay, I believe this, I believe that. I'd like to see it in writing. We have to get the law changed, and before we do that, I think Congress is going to ask us to put the information on the table.
DR. EVANS: This question is along the lines of hearsay. As a payer, will the payers be required to generate outbound 837s, potentially joined with an 835 when they are primary and another payer is secondary? I think I have seen this as it relates to receiving claims electronically from Medicare, and to continue that, we would need to do that.
DR. MOORE: One of the big intents of the legislation was to provide that routing of claims, so that the provider would not be under the rules of today, of having a claim paid by the first payer, get back a remittance device, put it on paper, attach the paper to another paper claim, and submit that claim and it takes six months before that whole cycle is processed, when the payer had all the information that the second payer needed to begin with.
I think that was part of the comment that was made before, can you use a proprietary system. If you are moving data within your agreed network, whether it is the Blues which look at themselves as one large plan, that is possible, if it is proprietary information. Once you start to move information that is going to be moved to other entities that are required in order for them to do their business with that provider, then we begin to get over onto the other standard.
DR. EVANS: So that is the intent? So by February 2000, we should have that capability?
DR. MOORE: We should.
DR. EVANS: Thank you.
DR. RENSHAW: Barbara, I understand that your intent is that woman from Mars can come in and take the implementation guides and build a transaction. Do you see any provision for payer-specific limits or restrictions at all on the maximum data set and things in the implementation guide, such as claims, number of claims per transaction, number of lines per claim, any kind of boning down of what is in the implementation guide to tie into specific restrictions of a specific payer? In other words, a payer put out supplemental guidelines?
DR. REDDING: I think the question is, will there be room for payers to put out supplemental guidelines, particularly with respect to issues that are not addressed in the implementation guide, such as the number of lines in a claim. Do I have that right?
DR. RENSHAW: Basically. Those things are addressed in the transaction, but they are very large.
DR. REDDING: I hadn't really thought about that at all. I thought about a case where the woman from Mars would have the implementation guide and she would have the data dictionary. She would have the conditions that tell her what data needs to be present under what circumstances, because a line of data doesn't need to be there all the time.
But I didn't honestly think that she would think, I'll write five lines for this payer and seven for that payer. So possibly, one solution would be to adjust the numbers so that everybody can live with them.
DR. MOORE: I think one of the issues here is that when we worked in the paper world, we were limited to the 8 x 11 piece of paper. When we are moving into this world, I don't think we should let those limitations govern the way we do business. I think we need to start thinking in broader terms. If a physician claim can only handle seven line items in the past because that is all that was on the piece of paper, and now the physician wants to submit something with 10 line items, I agree that there has to be some limit, but I think that limit is something that we have to think about. But I think we ought to raise at the bar, as Mike said before, and not keep it at the same level it was with the paper in the past.
DR. RENSHAW: Would you raise the bar or lower the bar to a common point, and there would not be specific points payer by payer?
DR. MOORE: Right, because some payers have different limits within their processing capability, that their system couldn't handle until some time, 15 line items, where another system could handle up to 100 line items. So we need to be really sensitive about those conditions.
But we need to think about how we can make that happen, and bring those others who are limited to three up to a reasonable level.
DR. REDDING: And we might also want to think about adjusting the implementation guide to reflect reality, if it does not currently do that. Who is next?
DR. ANDIDORA: Hello. Thank you for soliciting comments. I would just like to make a comment.
I am representing EXACT, which is a Medicare Part B carrier. We are the largest carrier in the country. To give you an idea, we are processing about five million claims per month. So this is going to impact us very greatly. We have over 20,000 customers to deal with also.
I just want to go on record as saying we are behind the standards. We think it is a great idea. All of the customers that we have talked to agree that it would be wonderful to have one standard to deal with all health insurance claims. We believe it is doable in the time frame allotted. So one thumbs up from somebody, anyway.
DR. REDDING: That comment was from EXACT Medicare. They process five million claims a month. They are all for this.
DR. FYFFE: Kathleen Fyffe with the Health Insurance Association of America. We represent about 300 commercial health insurance companies.
I have a question and a comment. I'm not clear in my mind what the response was about the proprietary networks in some of the current Blue plans or within other organizations, because of the following scenario.
Let's say that I am a physician provider in a group practice, and I have a significant percentage of claims that I submit to the local Blue plan. Am I assuming correctly that there is a proprietary format that I am currently using with that Blue plan? Yes? It is possible. My concern is that if I don't have to follow a standard format, national format for that Blue plan, then I would be discouraged from moving toward a national format that the commercial insurance companies want to use. My saving grace might be that if Medicare requires the national format, that the volumes in my office would be such that I would have so many Medicare transactions and so many commercial insurance transactions, that I would prefer to use a national standard instead of a proprietary standard.
DR. REDDING: I think basically you are saying that you believe it would discourage standardization if a physician was required to use a proprietary format with one payer and a standard with the other. I think you misunderstood what Bob was trying to say.
DR. MOORE: Let me repeat it.
DR. REDDING: The difference is whether or not the customer is external. The question was about an intra-net. I asked about who was on the intra-net, and it was physicians who deal with a particular payer.
So we would envision those people as being subject to the standard, because it deals with an external customer. However, if the payer had an internal system that communicated with another internal system, we would see that as not being a candidate for standardization, but rather for native mode, no external customer.
DR. FYFFE: No external customer, and they would not have to follow these standard transactions.
DR. REDDING: Internally, with their customers. The physician with the payer would have to follow it.
DR. MOORE: If the Blue plan is dealing with information to another Blue plan, then -- one of the issues that came up is that if I am in Michigan and I have a person that I am insuring in Michigan, they go to Florida, they receive something. They have a number of transferable benefits between the plans, so the person goes into the Florida Jacksonville Blue Cross. Then transferring that information on eligibility back to the Michigan Blue Cross plan to get it, would they have to be -- and to get the allowances and whatever else that goes with it --
DR. FYFFE: That is internal to the Blue plans.
DR. MOORE: That is internal to the Blue plans.
DR. FYFFE: All right, thank you for clarifying that.
DR. DAVIS: Bob Davis of New York State. My question is, how do you envision the standard being able to keep up with legislative mandates from the states? Every year, we have legislative requirements that happen. They usually happen late in New York State, and we are asked for that next January to have something in place to deal with some legislative mandate. Will the standard be able to accommodate those state legislative needs?
DR. REDDING: The question is, will the standard be able to accommodate and keep up with state level legislative mandates. In response, I have a question for you. Will they give us a year?
DR. DAVIS: I'll tell you, the thing that happened in New York State the last year, the law passed in June and it was implemented in January. So in the case of what we had last year, coming down the pike to us, the answer to that was no.
DR. REDDING: But in this scenario, it would have made February, and they probably would have settled for that.
What the law provides is that the updates can't be more frequent than once a year. Within that constraint, I think a lot can be done.
DR. DAVIS: So a lot has to be done to educate the state legislatures in terms of, once we have a national standard, they need a year of implementation, because you need to go to ANSE to get the element added to the data set, and then from that you need a year to implement.
DR. REDDING: Yes, or you might go to one of the content committees.
DR. DAVIS: The education of that I think is vital.
DR. MAYS: These are national standards, so a state cannot change the standard, because the change would have to apply to every state in the union.
DR. REDDING: He is not trying to change the standard, Bob. He is just trying to get it to keep up with his legislature.
DR. MAYS: What I'm saying is that this pre-empts state legislation, so the legislatures in the state can't change what a claim is.
DR. DAVIS: Let me give you the example that we have in New York State. New York State changed the reimbursement law last year. Part of the New York State reimbursement law is to say they will take and spread out the bad debt and charity, the indigent care across all payers. That law changed in January 1. Part of that law says we will now have these pool amounts, this surcharge that has to be on.
So what you're saying is, because that is not in the federal legislation, we can't do that?
DR. MAYS: No, all I'm saying is -- is that changing a claim format?
DR. DAVIS: There is claim information certainly for commercial payers who have elected to be part of the game or not elected to be part of the game. That commercial payer may or may not have things that have to be on the claim. The answer to that is, absolutely yes. So we have a state law that is trying to do something, and we think it is trying to do something good.
DR. MAYS: Well, the state law simply says that you have to supply the information. The issue is, would that information have to be supplied within the national standard claim format, or would people in your state have to develop another attachment or something like that to carry that forward.
DR. DAVIS: But I thought we were trying to do an administrative simplification.
DR. MAYS: Well, that is why it pre-empts state law.
DR. DAVIS: So you are saying, do an attachment. So now for all the claims in New York State where you need this, you now need to put a piece of paper on with that? That doesn't make sense to me.
DR. MOORE: Is it a different data element that you are adding to this? I haven't heard you say that.
DR. DAVIS: Yes.
DR. MOORE: Then you would have to bring your case to the standards organization and say, I want to make the change, and you do that.
DR. DAVIS: We understand that, but the question is, that is about a year process, at best it is a year process. Now, obviously when we need education of our state legislature.
DR. MOORE: And we need education on our side, because we do the same thing in the Medicare world.
DR. DAVIS: Yes, because last year our state legislature did not give us that year process.
DR. MOORE: You can't get the benefits of what we are trying to do and at the same time respond to all the legislative demands of 50 different states and a national government.
So you're right, we need to educate our people. One of the things that we have been doing all along is adding to the claim. Every time we want something in Medicare, we add it back to the claim. The claim has grown and grown and grown, until it no longer looks like a claim. It looks like a hodgepodge of a lot of information that we wanted to know about someone.
We have talked with X12 and others about how to find a way to have that information added, and do it. The claims attachment is another piece. It isn't going to be a piece of paper. It is going to be another electronic transaction that is going to carry information that isn't part of a claim.
But let's go back to another point. Medicare wants to have a DME certificate of medical necessity. Why should the entire community pay for something that Medicare wants to add to the claim? The same thing for New York. If New York has a special requirement, then we ought to find a way for New York to pay that price to process it, and for all the providers in New York to have to absorb that cost. Why transfer it to 50 other -- to all the other states and all the other payers in the country?
DR. DAVIS: I guess that brings up the bigger question, because the bigger question clearly is education, because legislatures have to be educated in terms of, this is the impact when they do make legislation like that, and the process that it will go through is whatever the process is. I think that is a very important part of this process.
DR. ST. GEORGE: Can I just add a comment to this issue?
DR. REDDING: Sure.
DR. ST. GEORGE: Actually, depending on the nature of the change in the requirement, it can probably be addressed in the existing standard, because many of the codes in the claims and on the payment remittance advices are externally maintained code tables, which allow for a much faster change.
So for instance, if you had an add-on payment or a penalty or an adjustment that actually could be handled with a claims adjustment reason code, and you wouldn't have to worry about whether you could comply with the state legislation code.
So the answer is, depending on the nature of -- if it is not a huge new element no one ever heard of, in most cases and X12 transactions would allow you to accommodate those changes.
DR. REDDING: Thank you.
DR. DONATH: There are many claims payers in the multi-employer sector that currently do not have the technology nor the monies to expend on enhancing their systems to comply with any standards that will be adopted.
It is my understanding they will then have to use clearinghouses. Now, a survey that was recently conducted by a third party administration association indicated that the cost of processing a claim would go from 25 to 40 cents a claim to 60 cents a claim if you are using a clearinghouse. Could you address that issue? Have you taken that into consideration for those plans who really do not have the monies to --
DR. REDDING: Let me repeat the question for the record. I think what you are saying is that there are many payers that don't have the money to adopt standards. They are operating electronically, though?
DR. DONATH: No. Yes, they have a computer system to process claims, but not electronically. They are entering them manually.
DR. REDDING: The Health Insurance Portability and Accountability Act of 1996 only applies to electronic operations. If you are mailing a paper claim, it is outside the purview of that legislation.
DR. DONATH: But if they are getting claims from physicians that are sending electronically, or hospitals, and they don't have the capability, won't they have to go through a clearinghouse? What is the purpose of the clearinghouse?
DR. REDDING: If you choose to do business electronically, you will have to abide by the standard and the time frames in the final rule. If that means using a clearinghouse, that is what it means. We are trying to develop a migration plan that will allow people to spread out the cost over a little bit of time.
DR. DONATH: So you're saying that if they want to continue processing claims manually, they can.
DR. REDDING: Yes. The question was, if they want to continue processing claims manually, they can. Yes, they can.
DR. MOORE: No.
DR. REDDING: No, they are paper claims, Bob.
DR. MOORE: No, no. She is a plan. All plans and all payers have to develop the capability to receive electronic transactions, period. Providers have an option. They may or may not do it electronically. If they choose to do it electronically, -- and that was one of my earlier slides -- they must use the standard. They may not take another standard. Or they can go on paper.
But she is a plan. Therefore, she has to develop the capability or contract out to a clearinghouse or some third party the capability to receive that information, and convert it to whatever she needs, paper or whatever.
DR. DONATH: So then I do go back to the question, has that been taken into consideration, because it will add cost based on this study.
DR. MOORE: We have not taken that into consideration. The law says that all plans must do it, and it says all payers. Small plans are given an additional year, and small plans are those with 50 or less participants. So it would be -- the requirement is there for you to do it. The only way for us to back out of that requirement is to say we have to change the law. For that, we have to go to Congress and we have to have the documentation.
DR. DONATH: I just have one other question. Sometimes managed care organizations, claims are sent to managed care organizations or PPOs for precertification and repricing. Are you considering the standards or are you establishing the standards for multiple routings of a claim that is sent electronically? Because it would be more than one organization handling the same claim.
DR. REDDING: I believe the guides provide for multiple routing, but beyond that, no. What is on the website is what you'll get, in terms of the implementation guide and how the envelopes work.
DR. ROBINSON: The way we envisioned it is, the HMO receives the claim from the provider and reprices it or what have you, and then forwards the 837 as modified to you for payment. So you would still be getting an 837 transaction.
DR. FYFFE: I'd like some clarification on whether or not it is a black and white issue as to whether this federal law supersedes state law, because there is an out. According to the language, and I am not an attorney, it says that there is -- except as provided in paragraph two, and paragraph two has lots of exceptions, this standard shall supersede any contrary provision of state law, except if the Secretary determines it is necessary to prevent fraud and abuse, to insure appropriate state regulation of insurance and health plans for state reporting on health care delivery costs, or for other purposes.
DR. REDDING: I'm no attorney, either.
DR. FYFFE: Yes. So what I'm saying is, for the purpose of the audience here, I think that this is something that counsel or other attorneys have to take a look at, because I don't think it is a clear-cut, black and white answer. Just a comment.
DR. OWENS: Barbie, I would just like to clarify a couple of things relative to the X12 standard from comments earlier. The HIPAA law requires no more than once per year change. The X12 standard itself allows for three iterations of the standard each year.
Also, as John St. George mentioned earlier, in addition to code sets there are provisions for specific mark-up percentages. So the example you gave, sir, is already definitely addressed in the standard. So the idea is that you would have a common implementation with a minimum data set. That is what we are trying to advocate here. That is what the law requires. If it is specific, I need to charge $1.10 instead of $1.00 for a particular service, that certainly is a variant. The transactions do not mandate how much you charge for a particular service.
So I just wanted to make that clarification.
DR. MOORE: One last question, and then we're going to break for lunch, and we'll be back at 12:30. It is 12:00.
DR. TRACY: I thought about the response that I got from Barbara to my last question, so I have a new one. I hope she will act with some forbearance.
You indicated that there is an extra year before the claim attachment material is addressed. My concern is in the first year of mandatory implementation, there is going to be a void, where you haven't said anything about claims attachments. Can you describe for me how you would expect people to comply to the first year of required submissions, when only the primary claim and not the attachments have been addressed?
DR. MOORE: We hope to expedite the claims attachment, and we are already starting working with that. There was a work group that was established. I know you said you weren't aware of anything that had been accomplished yet with HL7 and X12.
The issue here is that the claims attachments for most information going to the payer is clinical in nature to make the adjudication of that claim. The claim is inappropriate, and we have bastardized the claim over years by adding that kind of information to it, rather than sticking with where we were. So now we are going to have to address that problem.
We started a joint work group to look at one, and we have at least nine different entities that are participating with that, payer and provider groups, so that we can address what are the maximum possible attachments that payers want, what are the things that they are asking for, so that we can identify them and codify them, then work that out.
We have started already with that, and we will be working through those. It is a team that is led by one of Bobby's staff, doing that. We hope to have that answer next summer at this time. August of next year, that standard is to be submitted to the Secretary, and adoption is to be done by February of '99. We hope to beat that time frame, because we are taking advantage of what we are learning here, the issues that are there, and we hope to have that particular standard ready when the others are, even though we are given more time. The time is mainly because of the complexity and the lack of use of it today.
But I can't give you a definite answer that it is going to be there on the year 2000. But we are going to try to make it there by then.
Have a nice lunch. There are a lot of places available. There is a snack bar upstairs, I understand. I'll see you back here at 1:30. We have three more groups to cover.
(The meeting adjourned for lunch at 12:02 p.m., to reconvene at 1:30 p.m.)