Advance Implementation Strategies · 2002. 7. 20. · Southfield Bank & Trust...

Health Insurance Portability andAccountability Act of 1996 (HIPAA)

Public Law 104-191

Advance Implementation Strategies

Gary BeattyPresidentEC Integritygmb803@earthlink.net507-250-3574

– 9 EDI Transactions– Code Sets– Identifiers– Security / Privacy

Session Topics

• Back to the basics

• Implementation Strategies• Break• Financial EDI

• EDI Acknowledgements• HIPAA IG Change Request Process

Is EDI Important?

“HIPAA sets a precedent in the health care industry byaugmenting the clinical exchange of data between theproviders, payer, and sponsors. While HIPAAincreases efficiency and accuracy of transactions, it isimperative for those organizations that fall under theumbrella of this mandate to be poised for compliance.”

- Gary A. Beatty

Chair, ASC X12 Insurance Subcommittee

PROVIDERS INSURANCE AND PAYERS SPONSORS

Eligibility Verification

Service Billing/Claim Submission

AccountsReceivable

Enrollment

Claim Acceptance

Accounts Payable

Enrollment

Claim Status Inquiries Adjudication

Pretreatment Authorization and Referrals

Precertificationand

Adjudication

Enrollment

Payment Order

Elig. Inquiry

Elig.Response

Health CareServicesDelivery

Claim

Patient Info.

Claim Status Inq.

Patient Info.

Claim Status Rsp

ClaimPayment

Limitations & Concerns• Timing• Accuracy• Handling• Reconciliation• Storage

OPTIONS

ANSI X12EDIFACT

EDI ISComputer to Computer

or Application to Application

or

Company to CompanyorDepartment to Department

Electronic Exchange ofBusiness Documents

Business DataInformation(without human interface)

Using a Public Standard Formats

EDI

A REAL WORLDDEFINITION

EDI is theelectronicexchange offrequentrepetitive “dirty”documents

INDUSTRIES

TransportationFinance

ElectronicsRetail

GovernmentAutomotive

Healthcare

COMPONENTS of EDI² STANDARDS

² COMMUNICATION

² SOFTWARE/HARDWARE

ANSI ASC X12

UN/EDIFACT

CommunicationsSubmitter

Receiver

Value Added NetworksClearinghouses

Direct

CommunicationsValue Added Networks

Provider

Provider

VAN

Provider

Payer

Payer

Payer

VANVAN

VAN

VAN VAN

VAN VAN

Payer

CommunicationsClearinghouses

Provider

Provider

Provider

Provider

Provider

Payer

Payer

Payer

Payer

Payer

Clearinghouse

Clearinghouse

CommunicationsDirect

Submitter

Receiver

DIRECT

§ Physical Media (Tape, diskette, CD-Rom)

§ Bulletin Board Systems

§ Modem to Modem

§ Intranet / Internet

ü Encryption

ü Authentication

ü Non-Repudiation

ü Data Integrity

SOFTWARE / HARDWARE

Mapping

StandardsSecurity

Communications

Quality Control

Enrollment

AccountsReceivable

ManagedCare Claims

Adjudication

AccountsPayable

Purchasing

Tactical – Reduced Direct and Overhead Costs

v Improve Accuracy (5% data entry errors)

vReduced Data Entry Time

vSmaller/Faster Transmissions at Lower Cost

vReduce/Eliminate ReworkvAvoid/Reduced Data Entry FTE

vReduce Operational Costs (office supplies,postal costs, and telephone charges)

vReduce the Accounts Receivable Cycle

BENEFITS OF EDI

Strategic – Improve Process that directlyimpacts healthcare stakeholdersØ Improved patient, provider, and payer supportØ Efficient information delivery

Ø Improved quality

Ø Fosters “Good Will” with patients

Ø Fosters closer working relationship betweenorganizations

BENEFITS OF EDI

BENEFITS OF EDICultural – Creating a Competitive Advantage

q Increase responsiveness between healthcarestakeholders

q Penetration of new marketsq Easier to do business withq Improved relations with other organizations

HIPAA¥ Purpose¥ Who¥ What¥ When

K2

Purposes ofProvisions

Ø Improve efficiency andeffectiveness of health caresystem by standardizing theelectronic exchange ofadministrative and financialdata.

Ø Protect security and privacyof transmitted information.

Requirements for Adoption of Standards• Applicability

– Health plans

– Health care clearinghouses

– Health care providers who transmit anyinformation in an electronic form.

• Standards must be developed by anAccredited Standards Committee ofthe American National StandardsInstitute.

X12HL7 NCPDP

PROVIDERS INSURANCE AND PAYERS SPONSORS

Eligibility Verification

Service Billing/Claim Submission

AccountsReceivable

Enrollment

Claim Acceptance

Accounts Payable

Enrollment

Claim Status Inquiries Adjudication

Pretreatment Authorization and Referrals

Precertificationand

Adjudication

834

820

270

271

278

837

275

276

275

277

835

ANSI ASC X12 STANDARDS

v Enrollment and disenrollment in a health plan.4 Benefit Enrollment and Maintenance (834)

v Health Plan premium payments.4 Payment Order/Remittance Advice (820)

Enrollment Enrollment

834

820

INSURANCE AND PAYERS SPONSORS

ANSI ASC X12 STANDARDS

v Eligibility for a health plan.4 Health Care Eligibility / Benefit Inquiry (270)4 Health Care Eligibility / Benefit Information (271)

v Referral, certification and authorization.4 Health Care Service Review Information (278)

PROVIDERS INSURANCE AND PAYERS

Eligibility Verification

Enrollment

Pretreatment Authorization and Referrals

Precertificationand

Adjudication

270

271

278

ANSI ASC X12 STANDARDS

v Health claims or equivalent encounter information.4 Health Care Claim (837)

v Health claim attachments.4 Patient Information (275)

v Health claim status.4 Health Care Claim Status Request (276)4 Health Care Claim Status Notification (277)

v Health care payment and remittance advice.4 Health Care Claim Payment/Advice (835)

Service Billing/Claim Submission

AccountsReceivable

Claim Acceptance

Accounts Payable

Claim Status Inquiries Adjudication

837275276275277

835

PROVIDERS INSURANCE AND PAYERS

Standards Implementation Guide

Mandatory

Optional

Required

Situational

Not Used

STANDARDS VERSUSIMPLEMENTATION GUIDES

Washington PublishingCompany800-972-4334http://www.wpc-edi.com

Establish standards for code sets– Developed by private and public

entities.• CPT4• ICD-9-CM• HCPCS• CDT• NDC (11 digits)

– Internal Codes• X12• NCPDP• HL7

CODE SETS

Level 1 – CPT4

Level 2 – Alpha Codes

Level 3 – Local Codes

Dental Codes (D)

J Codes

UNIQUE HEALTH IDENTIFIERS• Employers

– Federal Tax Identifier - IRS

• Health Plans – HCFA?– Plan ID (3 Levels)

• Payers & Administrators

• ERISA Group Health Plans, Taft-Hartley Trusts, METs

• PPOs & Similar Organizations

• Health Care Providers– National Provider Identifier

• Organizational NPI• Individual NPI

• Individuals - Unknown!

Security / Privacy• Privacy

– Administrative Procedures– Physical Safeguards– Technical Security Services– Data Transmission Security– Electronic Signature

• Security– Encryption– Authentication– Non-Repudiation– Data Integrity Verification

Implementation Alternatives

Standard

Standard

HTMLJAVAXML

Proprietary

WEB

Server

Proprietary

Client

Standard

Standard

Clearinghouse

representing

Provider/Sponsor

Proprietary or Standard

SameClearinghouseRepresenting Both Parties

ProprietaryProprietary

Clearinghouserepresenting

Payer

Proprietary or Standard

Provider Payer

Provider Payer

EDISoftware

FROM(FF) TO(X12)

V TP

VAN1

AccountsReceivable Accounts

Payable

FROM(X12) TO(FF)

VAN2

997

LOG---

EDISoftware

PENALTY FOR NON-COMPLIANCE

• $100.00 For each violation

• Maximum of $25,000.00 penalty per year

– Identical requirement

– Prohibition

• Each offense– Fined not more than $50,000– Imprisoned not more than 1 yr.

• False pretenses– Fined not more than $100,000– Imprisoned not more than 5 yr.

• Intent to sell, transfer, or use– Fined not more than $250,000– Imprisoned not more than 10 yr.

Wrongful Disclosure

Implementation ProcessFace the Facts

•Will HIPAA Happen?

•What will the final requirements be?•Delays – Delays - Delays

Senate Bill 836

House Rule 1975

Other Legal Challenges

Getting Organizational Buy In

•Requires Top Down Management Support

•ROI is Real

•Cost is Real ⇒⇒ Investment

•Opportunity for Re-engineering

•Overcome Internal Politics

•HIPAA will impact all aspects of Health Care

Aligning HIPAA Strategies

Corporate Strategy

IT / Web Strategy

HIPAA Strategy

HIPAA Compliance

HIPAA

REQUIREMENTS

Transactions Identifiers Codes Privacy

HIPAA RequirementsNot all black and white

HIPAA Assessments – Identify/Leverage Options

Participate – X12N, WEDI, AFEHCT, Others….

Your HIPAA TeamWho needs to be involved

• Business / Administrative Staff– Management Support– Line(s) of Business Staff– Quality Control / Audit– Legal– Human Resources

• Technical Staff– EDI Analyst/Programmers– Network Support– Security– System Operations

EDI Resources / Education• Skil l Set Requirements

– Health Care Knowledge

– EDI Knowledge

• Resources with Both are very Scarce

– Find people with healthcare knowledge

– Training

• EDI Basic

• EDI Tools

Responding toConsumerism in Healthcare

• Our product is HIPAACompliant!

• Mergers / Acquisitions/ Consolidation

• Business Partners

BREAK

Introduction toFinancial EDI

Objectives

ó EDI versus EFT versus FEDIó Paper-based transactionsó Basics of f inancial EDI and EFT mechanismsó Handling examplesó Financial EDI issues

DEFINITIONS

~Application to Application~Business Data~Structured Format

EDI

Electronic ExchangePayment DataValue Transfer

DEFINITIONS

EFT

¹ Timing of Transferó Direction of Transfer$ Cost of Transfer

ü Confirmation

O Verification

Issues to Consider

� Application to Application� Financial Data - Value� Structure Format

DEFINITIONS

FEDI

PAPER-BASED TRANSACTIONS

PAYER/BUYER

PROVIDER/SELLER

CHECKWITHREMITTANCEADVICE

CLAIM/INVOICE

PAPER vs. EFTin VALUE TRANSFER

PAYER’SBANK

PAYMENTINFORMATIONREMITTANCE

PAYROLL

PAYERBuyerPayer

Employer

PAYEESeller

ProviderEmployee

PAYEE’SBANK

VALUE

FED WIREEFT Mechanisms

~ Same-day Availability~ Confirmation~ Limited Data~ Clearing thru Fed~ High Cost

ACHEFT Mechanisms

� Usually Batch Mode� 1-2 Days Delay� Additional Data Format Dependent� Clearing thru Fed� Low Cost

COMMONACH FORMATS

94 Character Records

CCD No Ancillary RecordsCCD+ One Ancillary RecordCTX 820/835 ANSI X12 Syntax

TABLE

#1

#2

820 835

ABC Insurance123 South Main St.Minneapolis MN 55402

67452October 16, 2002

Pay to__Joe’s Office Products________________$_472.48Four Hundred Seventy Two and 72/100__________Dollars

Southfield Bank & Trust

F r e d H S m i t h67452123456789123456789I :: I :: 12312341231234II.

Invoice 18726 July 29, 2001 $230.40Prepay Discount $(23.04)Invoice 19746 August 1, 2001 $265.12Total $472.48

ABC Insurance123 South Main St.Minneapolis MN 55402

67451October 16, 2002

Pay to__Front Street Clinic ________________$_60.00Sixty and 00/100 __________Dollars

Southfield Bank & Trust

F r e d H S m i t h67451123456789123456789I :: I :: 12312341231234II .

Claim 18726 July 29, 2001 $100.00Patient Deductible $(20.00)Office Visit Co-Pay $(10.00)Office Visit Co-Pay $(10.00)

820835

ü Remittance adviceü Payment orderü Combination remittance advice & payment orderü Payment instructions to financial institution

EDICTX

820835

820835

Examples of FinancialPaths

»Value & Data Together»Value & Data Separate»Value & Data Separate thru Bank

Network

VAN1

ANSI820835

EXAMPLE #1: VALUE & DATA TOGETHER

BUYER/PAYER

SELLER/PROVIDER

ANSI820835

VAN1

BUYER/PAYER BANK

SELLER/PROVIDER BANK

REMITTANCE ADVICE

ACH $$CTX$$820/835

$$CTX$$820/835

Advantages

q Automated cash applicationq Timely credit analysisq Predictable cash flowq Automated discrepancy recognitionq No reconciliation of payment and remittance

ANSI820835

VAN2

BALANCEREPORTING

BUYER/PAYER

SELLER/PROVIDER

ANSI820835CCD

VAN1

BUYER/PAYER BANK

SELLER/PROVIDER BANK

Example # 2: Value & Data Separate

$$CCD$$ ACH $$CCD$$

Rewards and Tasks

Early warning of discrepancies·Automated cash application·Predictable cash flow·Timely credit analysis·Must reconcile on value date·

ANSI820835

VAN2 BALANCE

REPORTING820/835

BUYER/PAYER

SELLER/PROVIDER

ANSI820835

VAN1

BUYER/PAYER BANK

SELLER/PROVIDER BANK

Example # 3: Value & Data Separate thru Bank Network

$$CCD$$CTX/820/835

ACH $$CCD$$CTX/820/835

Advantages to Sender

Send when you want·Use bank's warehousing·Control of delivery dates·Use receiver's timing·Internal simplicity / outsourcing·

FINANCIAL EDI ISSUES

! Often Last Implemented

! U.S. Bank Diversity

! Investment in Software

! Confusion Over Formats

! Lengthy Implementations

Often Last Implemented

7 Treasury not aware of other active EDI efforts

7 Conservatism

7 Concern about float loss

7 Concern about controls

FINANCIAL EDI ISSUES

U. S. Bank DiversityFINANCIAL EDI ISSUES

% 9,000 commercial banks% All are ACH capable.% Less than 10% are EDI capable.% Role of NACHA Banker's Council

Investment in SoftwareFINANCIAL EDI ISSUES

TYPICALEDI

TRANSLATORBANKING

EDI SOFTWARE

Confusion Over FormatsFINANCIAL EDI ISSUES

ACHBAI

ANSI X12 (820)

EDIFACT

ANSI X12 (835)NACHAHCPCS?????

PAYERS/PROVIDERSHIPAA

Long ImplementationsFINANCIAL EDI ISSUES

? EDI vs EFT vs FEDI? Financial standards developed? Need support from financial institutions? Understanding the path is critical? Implementation issues can be overcome

Summary

EDI Acknowledgements

• FunctionalAcknowledgements

• InterchangeAcknowledgements

• Application Advices

The primary purpose of aFunctional Acknowledgmentis to acknowledge the receipt

of

ONEFunctional Group.

FA ACKNOWLEDGES

Functional Group·

Transaction·

Error Detail·

Action at all levels·

FUNCTIONAL GROUP RESPONSE

Group control number·

Level of acceptance·

Transaction set counts·

Group level syntax errors·

TRANSACTION SET RESPONSE

Transaction set control number·

Level of acceptance·

Error codes·

TRANS. SET

___________ ______

__________

ERROR DETAILSegment and loop information·

Segment error codes·

Element information·

Element error codes·

Copy of bad data· ERRORSERRORS

SAMPLEFUNCTIONAL GROUP

GS*HC*PBS-DED*XYZ-RD*20001015*1630*700000001*X*004010X098~(1) ST*837*000000001~(2) BHT*0019*00*0123*20001015*1630*CH~(3) REF*87*004010X098~(4) NM1*41*2*PREMIER BILLINGSERVICE*****46*TGJ23~ :(40) SE*40*000000001~GE*1*700000001~

RESULTINGFUNCTIONALACKNOWLEDGMENT

ST*997*AK0000001~AK1*HC*700000001~AK9*A*1*1*1~SE*4*AK0000001~

SAMPLE WITH ERRORSGS*HC*PBS-DED*XYZ-RD*20001015*1630*700000002*X*004010X098~(1) ST*837*000000002~(2) BHT*0019*00*0123*20001015*1630*CH~(3) REF*87*004010X098~(4) NM1**2*PREMIER BILLING SERVICE*****46*TGJ23~ :(40) SE*40*000000002~GE*2*700000002~ Mandatory

ElementMissing

IncorrectTransactionCount

ST*997*AK0000002~AK1*HC*700000002~AK2*837*000000002~AK3*NM1*4~AK4*1*98*1~AK5*E~AK9*E*2*1*1*5~SE*8*AK0000002~

RESULTINGFUNCTIONAL ACKNOWLEDGMENT

INTERCHANGE ACKNOWLEDGMENT

Interchange control number·

Date and time·

Accept or reject·

Error code·

Sent within interchange envelope·

Not in GS - GE·

TA1 - Segment used to report status of processing for an interchange

TA3 - Segment used to provide a notice from the service request handler for delivery and to report services performed

INTERCHANGE ACKNOWLEDGMENT AND

NOTIFICATION

MailMail

SAMPLE INTERCHANGE

ISA*00*1234567890*01*EZMONEY * 30*22-1231234^^^^^* 30*33-5435433^^^^^* 000230*1262*U*00401

*900000003*1*P*:~GSGEIEA*1*900000003~

Bad date & time

SAMPLE INTERCHANGEACKNOWLEDGMENT

ISA*00*1234567890*01*BIG-BILL * 30*33-5435433^^^^^* 30*22-1231234^^^^^* 000301*0800*U*00401

*900000400*1*P*:~TA1*900000003*000230*1262*E*014~TA1*900000003*000230*1262*E*015~IEA*2*900000400~

824 - Application Advices

• Implementation Guide Compliance– Not X12 syntax errors identified by 997 FA

– X12N beginning to develop IG for 824

http://www.wpc-edi.com/spwg1

PROCESSINGEDI management software should handle acknowledgment issues.

Trading partners must decide on the level of error detail to support.

AGREE ON

What to send·Conditions to detail·Expected reply time·Response to non-receipt·Error condition procedures·

HIPAA Implementation Guides• Implementation Guides cannot change

more frequently than once each year.• Changes due to:

– Healthcare Industry Recommendations

– Federal Mandates

• National Committee on Vital and HealthStatistics– Formal Recommendations to Secretary HHS.

Change Request Coordination ?• 3 ANSI Standards Organizations

Memorandum of Understanding

X12

HL7

NCPDP

NUCC

NUBC

DCCDHHSNCVHS

• 3 Data Content Committees• DHHS / NCVHS

Implementation Guide / Data Content Change Request

X12 HL7 NCPDP NUBC NUCC DeCC

10 Business Days to Express Interest

WebRequest Form

WebRequest Form

Work Request Tracking System

http://www.hipaa-dsmo.org (FAQ)

X12 HL7 NCPDP NUBC NUCC DeCC

90 Days to develop organizational Recommendation (45 Day Extension If Needed)

X12 HL7 NCPDP

ApprovedChanges

ApprovedChanges

ApprovedChanges

MOU Guiding Principals

• Public Access – Single Point of Entry

• Timely Review of Change Requests• Cooperation and Communications• Consider All Viewpoints

• Evaluate Impact of Change Requests• Maintain a National Perspective• Conform to Legislation

Next Steps…

• Annually, MOU Steering Committee will provideNCVHS with a change summary & Recommendations.

• NCVHS Reviews & Provides Recommendations toHHS

• HHS– Initiate the HIPAA rule modifications accordingly– Federal Rulemaking process if required

• NPRM• 60 Day Public Comment Period• Response to Comments• Publish Final Rule

– Include a compliance date for changes to standards– Cannot be less than 180 days

Thank You!

gmb803@earthlink.net