The HIPAA now! guide to transactions and code sets standards
The HIPAA now! guide to transactions and code sets standards
By Carol Slone, RNC, BSN, MSMIS
Director, Phoenix Health Systems
Montgomery Village, MD
The Department of Health and Human Services (HHS) was expected to unveil its first final regulation of the Healthcare Insurance Portability and Accountability Act (HIPAA) of 1996, Transactions and Code Sets Standards, in late June.
HHS and standards organizations such as the Workgroup for Electronic Data Interchange (WEDI) in Reston, VA, and Date Interchange Standards Association (DISA) in Alexandria, VA, are urging us to begin implementation immediately. But first, we need to answer these questions: What is this reg? Why implement it now when the law provides 26 months for compliance? How do we implement this regulation? And what will implementation do to, and for, health care?
From many standards to one
Today, many health care providers and plans use EDI (Electronic Data Interchange) or the digital exchange of standard business documents and data. HHS estimates that 400 formats are used in the United States for health care claims processing. This apparent lack of standardization makes it difficult for vendors to develop software, inhibits potential efficiencies, and increases costs for health care providers and health plans. The increased administrative costs of health care ultimately impact the patients.
To perform EDI using a common interchange and data structure, the widely adopted use of standards is required. As part of HIPAA, HHS was directed to issue standards for electronic data transactions used in the administration of health care data and claims.
The use of industrywide standards is expected to eliminate the need for software adaptation for multiple formats required to meet the demand of proprietary variations, now in use by providers and plans. Operational efficiencies with long-term savings is the result. The final rule for electronic transactions standards, to support HIPAA, was expected June 30, 2000. Compliance will be required by August 2002.
The HIPAA standard EDI format requires standardization of the data content by specifying uniform definitions of the data elements that will be exchanged in each type of electronic transaction and identification of the specific codes or values that are valid for each data element. Payers are required by law to have the capability to send and receive all HIPAA transactions.
Improving care quality and reducing costs
While it is easy to imagine the work involved with converting a system to become standardized, let’s remember the outcome potential:
• reduction in handling and process time;
• elimination of the risk of lost paper documents;
• elimination of the inefficiencies of handling paper documents;
• improvement of overall data quality;
• decreased administrative costs.
The implementation of the regulations within human resources and employee benefit management sectors of business is likely to improve the quality of service to the patient.
The Transactions and Code Sets Standards applies to ". . . any health plan, any health care clearinghouse, and any health care provider that transmits any health information in electronic form in connection with . . ." the defined transactions. The scope of the transaction standard includes:
• electronic transmissions using all media, even when the transmission is physically moved from one location to another using magnetic tape, disk, or CD media;
• transmissions over the Internet (public network), extranet (private network using Internet technology to link a business collaborating parties), leased lines, dial-up lines, and private networks — all included;
• telephone voice response and fax-back systems not included.
HIPAA defines EDI health care transactions as:
• health claims or similar encounter information;
• health care payment and remittance advice;
• coordination of benefits;
• health claim status;
• enrollment and disenrollment in a health plan;
• eligibility for a health plan;
• health plan premium payments;
• referral certification and authorization;
• first report of injury (not included in June 2000 Final Rule);
• health claims attachments (not included in June 2000 Final Rule).
By now you may be wondering, "What do I have to do to be compliant?" Detailed implementation guides are available from the Washington Publishing Co. in Rockville, MD, for Web download of electronic documents or purchase of hard-bound copy. (Web site: http://www.wpc-edi. com/hipaa/.)
The details of the HIPAA transaction standards are explicitly defined in each guide, including data elements required or conditionally required, definitions of each data element, technical transaction formats for the transmission of the data, and code sets or values that can appear in selected data elements.
Critical to any standardized transaction is agreement of the definition for the data elements. HIPAA transaction standards via the implementation guides define a master data dictionary for EDI, which provides common data definitions across the standards, is readily available to the public, and includes data element names, definitions, and appropriate references to the transactions where they are used.
Code sets to be used in documentation
Explicitly defined data elements need to be filled with standardized data from HIPAA prescribed code sets. Industry de facto standards have been adopted for the coding of medical data elements such as diagnoses, procedures, and drugs. These code sets have been developed by public and private organizations and are currently mandated for use in Medicare and Medicaid documentation.
Because of the widespread use of these standards, they have been added to the ASC X12N (standards for electronic versions of health care administration transactions) and adopted by the National Council for Prescription Drug Programs in Phoenix, as well as recommended for inclusion in the HIPAA standards. Familiarity with these standards can be comforting in a time of sweeping changes in the health care industry. Most of the players in the health care industry will easily recognize these required code sets:
• ICD-9-CM (volumes 1 and 2): diseases, injuries, impairments, other health-related problems, their manifestations, and causes of injury, disease, impairment, or other health-related problems;
• Current procedural terminology, current dental terminology, or ICD-9-CM (volume 3): procedures or other actions taken to prevent, diagnose, treat, or manage diseases, injuries and impairments;
• National drug codes;
• Health Care Financing Administration common procedure coding system: Other health-related services, other substances, equipment, supplies, or other items used in health care services;
Characterized as smaller code sets by the HIPAA transaction standard are sets of codes for data elements such as type of facility, type of units, and specified state within address fields. Familiar to us in this category are the U.S. Postal Service two-character state abbreviations and zip codes.
Other proprietary code sets will be eliminated if not explicitly mentioned in the implementation guides. The standards clarify that newly developed code sets may appear in response to the needs of future transaction standards.
Implementing within your organization
How you will implement the Transactions and Code Sets Standard will depend upon what kind of health care related organization you are — a provider, plan, or clearinghouse. Listed here are issues and factors providers should consider:
• Providers can achieve HIPAA compliance in their internal systems, which, no doubt, will require partnership with their software vendors. Providers could choose to continue/discontinue their relationships with clearinghouses or establish new relationships. Using the traditional, although inefficient, paper method also remains an option.
HIPAA explicitly prohibits health plans from refusing to process or from delaying the processing of a transaction that is presented in HIPAA specified standard format. So health plans must be ready to do EDI in the upcoming HIPAA world. In effect, clearinghouses may continue in both traditional roles and as translators of the HIPAA EDI transaction standards.
• Because of the interchange of data, planning for HIPAA transaction processing will require coordination between all parties: providers, plans, and clearinghouses. The compliance date is two years from the date of the regulation’s Final Rule effective date, except for small health plans, which have an additional 12 months.
If you are an early implementer, you may need to continue to use old methods until the receivers are ready to implement the HIPAA transaction formats by the deadline prescribed by law. HHS has recommended that a health plan give its health care providers a notice of at least six months before requiring them to use a given standard. In spite of the volume of work that standardized transactions may require, remember this is a one-time system conversion with long-term benefits.
Action steps for provider organizations
• Identify transactions and codes sets currently in use.
— Determine HIPAA compliance of current transactions.
• Identify information systems and feeder systems.
— Determine HIPAA compliance of current systems.
• Identify clearinghouse partners.
— Determine future relationships.
— Determine clearinghouse to plan HIPAA compliance time frame.
• Talk with your vendors.
— Determine if system modifications (upgrades) will be offered.
— Determine if new products will be offered.
• Talk with your business partners.
— Determine their HIPAA compliance plans.
— Determine methodology to secure business partner relationship.
— Involve legal counsel for all contract revisions.
• Take these actions as an organization:
— Discuss long-term strategic benefits to using additional EDI for your organization.
— Analyze cost benefits of potential strategic business changes.
• Conduct a full HIPAA impact analysis in order to make educated and strategic decisions.
— Each system may require more than one change.
— One change may impact other systems.
— There may be economies of scale with vendors.
Perhaps five years from now, this one-time conversion will be a fleeting, not altogether unpleasant memory. Nevertheless, we are all likely to reap significant rewards — as industry members and as patients — while enjoying greater efficiency in the electronic interchange of health care data and reduced costs in providing care.
(Phoenix Health Systems is the publisher of the HIPAAlert e-mail newsletter. For more information, visit the Web site: http://www.phoenixhealth.com.)
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