Health Insurance Reform: Standards for Electronic Transactions. a. Transaction Standard for Health Care Claims or Equivalent Encounter Information

10/16/2000

We proposed in subpart K that:

For pharmacy claims, the NCPDP Telecommunications Standard Format Version 3.2 and equivalent Standard Claims Billing Tape Format batch implementation, version 2.0, would be the standard.

For dental claims, the ASC X12N 837 - Health Care Claim: Dental, Version 4010, Washington Publishing Company, 004010X097, would be the standard.

For professional claims, the ASC X12N 837 - Health Care Claim: Professional, Version 4010, Washington Publishing Company, 004010X098, would be the standard.

For institutional claims, the ASC X12N 837 - Health Care Claim: Institutional, Version 4010, Washington Publishing Company, 004010X096, would be the standard.

Comments and Responses on the Transaction Standard for Health Care Claims and Equivalent Encounter Information: Pharmacy

i. Comment: One commenter suggested that the final rule contain the correct version of the NCPDP Batch Standard Version. The correct version is 1.0, not version 2.0 as originally proposed.

Response: We agree to make the recommended change. The correct name of the standard may be found in §162.1102.

ii. Comment: Several commenters recommended that we reword this section to state “version 3.2 or higher.” This change would allow any approved version of the standard to be used. Currently, there are health plans and health care providers who have implemented a higher version of the standard.

Response: This final rule adopts NCPDP Telecommunications Standard Format, Version 5.1 in place of version 3.2. We do not believe that the term “or higher” is appropriate in that it will allow for variations in the standard used for pharmacy transactions. This is the most recently approved version of the NCPDP standard. This version contains revisions that address comments made to the proposed rule. There are numerous other benefits and advantages to naming Version 5.1. Some of these benefits and advantages are the following:

  • Expanded dollar fields.
  • HIPAA supported fields including Employer ID, Plan ID, and Prescriber (Provider) ID.
  • New clinical fields including expanded Diagnosis Code, Patient Height, and Patient Body Surface Area.
  • Service transactions for expanded professional pharmacy service support.
  • Expanded coordination of benefits (COB) support.
  • Support of intermediary processing.
  • Coupon fields.
  • Expanded response messaging including preferred product support and approved message codes.
  • Flexibility with qualifiers that allows for addition of qualifier type codes instead of adding new fields.
  • Pricing uniformity.
  • Controlled Substance reporting support including Alternate ID and Scheduled Rx ID.
  • Consistency within the NCPDP telecommunication standard.
  • Correction of issues from previous versions.
  • Variable length transactions that allow for trading partners to transmit only the data required for doing business (i.e. A v5.1 claim can be very small when necessary. Refer to the v5.1 implementation specifications for examples).
  • Supports partial fill indicators.
  • Additional code values for Drug Utilization Review (DUR).

iii. Comment: One commenter recommended that the word “retail” be removed when mentioning the NCPDP standard since the NCPDP Telecommunications Standard Format Version 3.2 and equivalent NCPDP Batch Standards Version 1.0 may be used to bill professional pharmacy services as well as retail pharmacy services.

Response: We are adopting the NCPDP standard for retail pharmacy only. We are adopting the ASC X12N 837 for professional pharmacy claims. Professional pharmacy claims use both the National Drug Code (NDC) and HCPCS j-codes to identify the pharmacy procedure or service. The NCPDP standard is designed to accommodate the NDC only and does not allow for billing of professional pharmacy claims using HCPCS. The NCPDP standard would require major modifications in order to accommodate the HCPCS codes.

Comments and Responses on the Transaction Standard for Health Care Claims or Equivalent Encounter Information: Dental

The majority of commenters expressed support of the selected standard.

i. Of those comments we referred to ASC X12N, the work groups determined that 246 comments identified areas where the implementation specification could be improved, and the appropriate changes were made.

ii. One individual comment identified a business need that ASC X12N judged could already be met within the current standard implementation specification. Detailed information on how the current implementation specifications can be used to meet these business needs has been provided by ASC X12N at the Internet site in §162.920.

iii. Thirty-one individual comments alleged technical or editorial errors in the standard implementation specification. A technical review of these issues was conducted by work groups within ASC X12N. The work groups determined that the 31 comments identified areas where the implementation specifications were in fact correct and that no changes were needed. Changes to the implementation specification were not required.

iv. There were another 4 individual comments which identified business needs that ASC X12N judged could not be met directly within the current standard implementation specification. The implementation specifications could not be changed prior to the issuance of the final regulation because the X12 standards development process for modifying standards could not be completed in time. However, a review of the issues by the ASC X12N work groups has identified a means of meeting the business needs within the existing implementation specification as an interim measure. Organizations and individuals who submitted such comments are encouraged to work with the DSMOs to submit a request to modify the national standard.

Comments and Responses on the Transaction Standard for Health Care Claims or Equivalent Encounter Information: Professional

i. Of those comments we referred to ASC X12N, the work groups determined that 356 comments identified areas where the implementation specification could be improved, and the appropriate changes were made.

ii. Thirty-five comments identified business needs that ASC X12N judged could already be met within the current standard implementation specification. Detailed information on how the current implementation specifications can be used to meet these business needs has been provided by ASC X12N at the Internet site in §162.920.

iii. 267 comments alleged technical or editorial errors in the standard implementation specification. A technical review of these issues was conducted by work groups within ASC X12N. The work groups determined that the 276 comments identified areas where the implementation specifications were in fact correct and that no changes were needed. Changes to the implementation specification were not required.

iv. There were another 9 comments which identified business needs that ASC X12N judged could not be met directly within the current standard implementation specification. The implementation specifications could not be changed prior to the issuance of the final regulation because the X12 standards development process for modifying standards could not be completed in time. However, a review of the issues by the ASC X12N work groups has identified a means of meeting the business needs within the existing implementation specification as an interim measure. Organizations and individuals who submitted such comments are encouraged to work with the DSMOs to submit a request to modify the national standard.

v. Comment: The majority of commenters expressed support for the selected standard. However, there was concern that the X12N 837 neither meets Medicaid’s needs nor supports behavioral health services. One commenter stated that representatives of the alcoholism and substance abuse treatment fields were not adequately represented in the development of the standards.

Response: The X12N standards are developed and maintained in an open atmosphere. We strongly encourage all industry stakeholders to assist in this process to ensure that their business needs are met. If Medicaid Agencies or other entities believe their business needs will not be met through the selected standard, we encourage them to submit any new data requests to the DSMOs. We will be monitoring the DSMOs’ process for the revision of standards to ensure that they are revised appropriately.

vi. Comment: Several commenters stated that the adoption of the claim standard without the attachment standard will create processing problems. They stated there is a potential that certain claims that require an attachment will need to be adjudicated manually.

Response: The health care claims or equivalent encounter information standard currently contains many justification requirements for certain services, including oxygen, chiropractic, ambulance, and durable medical equipment services. Therefore, these claims will not have to be adjudicated manually. Once the attachment standard is adopted, we expect that the justification requirements for the services listed above will be met by the attachment standards and, therefore, will be removed from the health care claims or equivalent encounter information standard. All other attachments that are not in this transaction or are not met by the attachment standard will need to be adjudicated manually.

Comments and Responses on the Transaction Standard for Health Care Claims or Equivalent Encounter Information: Institutional

i. Of those comments we referred to ASC X12N, the work groups determined that 169 comments identified areas where the implementation specification could be improved, and the appropriate changes were made.

ii. Three comments identified business needs that ASC X12N judged could already be met within the current standard implementation specification. Detailed information on how the current implementation specifications can be used to meet these business needs has been provided by ASC X12N at the Internet site in §162.920.

iii. 54 comments alleged technical or editorial errors in the standard implementation specification. A technical review of these issues was conducted by work groups within ASC X12N. The work groups determined that the 54 comments identified areas where the implementation specifications were in fact correct and that no changes were needed. Changes to the implementation specification were not required.

iv. There were another 6 comments which identified business needs that ASC X12N judged could not be met directly within the current standard implementation specification. The implementation specifications could not be changed prior to the issuance of the final regulation because the X12 standards development process for modifying standards could not be completed in time. However, a review of the issues by the ASC X12N work groups has identified a means of meeting the business needs within the existing implementation specification as an interim measure. Organizations and individuals who submitted such comments are encouraged to work with the DSMOs to submit a request to modify the national standard.

v. Comment: The majority of commenters expressed support of the selected standard.

Several commenters stated that they wanted the UB92 to be selected as the institutional claim standard since it is widely used. Several commenters disagreed that the X12N 837 met all of the guiding principles. The guiding principles are:

(1) Improve the efficiency and effectiveness of the health care system by leading to cost reductions for, or improvements in benefits from, electronic health care transactions.

(2) Meet the needs of the health data standards user community, particularly health care providers, health plans, and health care clearinghouses.

(3) Be consistent and uniform with the other standards required under this part--their data element names, definitions, and codes and the privacy and security requirements--and with other private and public sector health data standards, to the extent possible.

(4) Have low additional development and implementation costs relative to the benefits of using the standard.

(5) Be supported by an ANSI-accredited standard setting organization or other private or public organization that will ensure continuity and efficient updating of the standard over time.

(6) Have timely development, testing, implementation, and updating procedures to achieve administrative simplification benefits faster.

(7) Be technologically independent of the computer platforms and transmission protocols used in electronic health transactions, except when they are explicitly part of the standard.

(8) Be precise and unambiguous, but as simple as possible.

(9) Keep data collection and paperwork burdens on users as low as is feasible.

(10) Incorporate flexibility to adapt more easily to changes in the health care infrastructure (such as new services, organizations, and provider types) and information technology.

The principles in question were 1, 4, 6, 8, 9 and 10.

There was also concern that the X12N 837 does not meet the needs of many State Medicaid agencies. Different agencies require codes and data elements that are not in the transaction standard.

Response: While the UB92 is supported by many institutions, it is not used in a standard manner. To undergo a national UB92 standardization effort is not practical since the X12N 837 meets institutional needs and the majority of commenters support the selection of all X12N transactions.

We believe the X12N 837 meets all of the guiding principles in question. Implementation of the X12N 837 using the specifications defined in the implementation specification for version 4010 will lead to administrative simplification and cost savings for both health plans and health care providers. One nationally accepted standard will exist, rather than a variety of national and local formats (#1). We believe that the long-term savings that will accrue from the adoption of the standard will offset the short-term implementation costs (#4) (see section VI. Final Impact Analysis). The DSMOs have a process for the development and maintenance of transactions and implementation specifications that include many quality and technical assurance checkpoints prior to the approval of X12 standards and X12N industry implementation specifications (#6). Uniform implementation of the standards is critical. The implementation specifications provide for standard as well as unambiguous data content requirements for all users of each transaction (#8). Exchange of the X12N 837 standard transaction does not require increased data collection or paperwork burden (#9). The X12N 837 standard and syntax allow for the easy addition of new business functions. For example, instead of listing all CPT codes, the implementation specification refers to the code source. The standard uses qualifiers to aggregate general data content into unambiguous business transactions (#10). If an external code set is updated, the standard transaction would not have to be updated since the codes are external to the implementation specification. Qualifiers allow for the precise definition of generic fields, such as dates.

As part of the proposed rule comment process, commenters were encouraged to review the implementation specifications. Many commenters submitted requests for data needs or changes to the implementation specifications and, thus, we believe there has been ample time to review and submit these requests. If Medicaid agencies or other entities did not identify all of their business needs, they will need to submit new data requests to the DSMOs.

We note that health plans and covered health care providers that do business with Medicaid agencies will be required to use the standards within the 24 month implementation period (36 months for small health plans). We believe it would be inconsistent with the statutory intent to require these entities to support non-standard requirements solely for individual State Medicaid agencies, especially where those health plans and health care providers operate in more than one State. HCFA and the DSMOs stand ready to assist the State agencies with their transitions to the standards.