0. HIPAA 201: EDI
An Introduction to the HIPAA Electronic Data Interchange (EDI) Regulations
For audio dial:

1. Presentation Agenda Administrative Simplification Provisions
Benefits of EDI
EDI Key Business and IT Impacts
Standard Identifiers
Code Sets
Transaction Sets Introduction
Transaction Sets
Next Steps
Internal
External
Communication

2. Presentation Objectives
At the end of this presentation, you should:
Understand why the EDI standards were developed
Understand each of the specific EDI standards and their impact on the organization
Be able to determine your own organizational strategies and next steps for tackling HIPAA EDI requirements

3. Purposes of Administrative Simplification

4. Purposes of Administrative Simplification
To improve the efficiency and effectiveness of the health care system by standardizing the electronic transmission of certain administrative and financial transactions and protect the security and privacy of transmitted information.
Over 400 formats of EDI are used in the US

5. Intent of the Transaction and Code Set Rule
To encourage electronic commerce in health care
To simplify administrative processes
To decrease the administrative costs of health care
To eliminate software adaptation for multiple formats

6. Benefits of EDI Reduction in manual data entry and processing
Elimination of cost and delays of postal service
Improved data comparability
Elimination of disparate forms and codes
Improved cash flow
Improved accuracy of information
Fewer claims rejections

7. Benefits of EDI (cont’d)
Cost savings (including reduced labor costs)
Fewer billing errors
Improved accuracy, reliability and usefulness of shared information
Improved customer service
Prevent inadvertent errors that could lead to allegations of fraud and abuse
Minimized risk of penalties

8. Covered Entities Health plans
Health care clearinghouses – services that translate information between organizations
Health care providers who transmit any health information in electronic form in connection with a covered transaction

9. Non-Covered Entities Workers’ Compensation Programs
Property and Casualty Programs
Disability Insurance Programs
Nursing Home Fixed Indemnity Policies
Prisons

10. Requirements of Health Plans
Must accept and process standard transactions from any person in the same time frame in which they processed transactions prior to the implementation of the HIPAA standard
May not offer an incentive to conduct a transaction as a non-standard transaction
Must be able to process earlier versions of code sets

11. Requirements of Health Plans (cont’d)
Must keep code sets for current billing period and appeals periods still open to processing under terms of the plan’s coverage
MAY use a clearinghouse to translate transactions that are not in standard format

12. Requirements of Clearinghouses
A provider submitting standard transactions through a clearinghouse must not be adversely affected financially by doing so
The cost of submission to a clearinghouse cannot exceed the cost of direct transmission to the health plan

13. Requirements of Providers
Must use standard transactions if conducted electronically
MAY continue to use paper media
MAY use a business associate to conduct a transaction
MAY use a clearinghouse to translate non- standard transactions

14. Key EDI Impacts
All trading partner agreements that stipulate data content format definitions or conditions that do not comply to the ANSI X12 standards are no longer valid agreements and will need to be modified
The standardization of data elements and the values in the data elements will eliminate proprietary codes
The HIPAA standards are not required on paper transactions, but can be used on paper to prevent dual system maintenance

15. Key EDI Impacts (cont’d)
For on-line interactions between a server and a browser, data content must comply with the HIPAA X12 standards, but not the data format
Transmissions within a corporate entity would not be required to comply with the standards unless it is sending electronic data from a provider portion to a health plan portion
Case management is considered a health care service

16. Standard Identifiers HIPAA Proposed Standard Identifiers
Potential Key Impacts – Standard Identifiers

17. Proposed Standard Identifiers
Employer Identification Number (EIN)
Format: (9 digit)
Final Rule expected anytime
National Provider Identifier (NPI)
Format: 10 digit
Note: This number will be randomly assigned and not tied to processing logic

18. Proposed Standard Identifiers (cont’d)
National Plan Identifier (PlanID)
Format: 10 digit
Notice of Proposed Rule Making expected anytime
Individual
Format
On hold due to privacy concerns

19. Potential Key Impacts: Standard Identifiers
Business processes related to issuance of new identification cards will be impacted
Identify field availability, field format and field length of HIPAA identifier fields in existing IT applications
Choose to “crosswalk” old and new identifiers or migrate to new identifiers and use throughout systems

20. Potential Key Impacts: Standard Identifiers (cont’d)
Produce and maintain new business directories tables to include mapping to older identification numbers
Provide education to familiarize providers with new identification numbers and formats for data transmission
Business process related to handling of paper (no standard ID required) and electronic (standard ID required)
Dual processes may be required

21. Code Sets What is a Code Set? HIPAA Code Sets
Key HIPAA Impacts - Code Sets
Key IT and Business Impacts - Code Sets

22. What is a Code Set?
Any set of codes used to encode data elements, such as tables of terms, medical concepts, medical diagnostic codes or medical procedures
Includes codes and descriptors
Includes modifiers
For ICD-9-CM, it includes the Official Guidelines for Coding & Reporting

23. HIPAA Medical Code Sets
ICD-9-CM, Volumes 1 & 2:
ICD-9-CM, Volume 3:
CPT-4:
Coding for diseases, injuries, impairments, causes of injury, other health problems
Coding for prevention, diagnosis, treatment, management of hospital inpatients
Coding for professional services, clinical lab tests, diagnostic procedures, hearing and vision services

24. HIPAA Medical Code Sets (cont’d)
HCPCS:
NDC:
CDT-3:
Coding for medical equipment and supplies as well as injectable drugs
Coding for drugs and biologics (replaces “J” codes)*
Coding for dental services (replaces “D” codes)
These Code Sets do away with all local codes.
* An Notice of Proposed Rule Making will be released to remove NDC Code requirements

25. HIPAA Non-Medical Code Sets
Codes valid at the time the transaction is initiated
Claim Status Reason Codes
Claim Adjustment Reason Codes
Codes used in the Implementation Guides, such as:
UB92 Revenue Codes
Value Codes
Condition Codes
Place of Service Codes
Type of Service Codes
Provider Taxonomy Codes

26. Key HIPAA Impacts: Code Sets
Will capture data elements not currently captured
Adjustment reason codes and claim status codes will change
Work to eliminate all proprietary codes – may mean requesting new standard codes
Future claim submissions may require code plus modifier for services
Number of diagnosis codes allowed on a submission will increase from 4 to 8 with 4 pointers per diagnosis for each service line on the claim

27. Key IT and Business Impacts: Code Sets
Identification of all proprietary codes to determine their applicability
Require mapping of proprietary codes to HIPAA code sets
Develop plan on how to handle elimination of proprietary codes
Require providers to insure vendors plan to include all HIPAA modifiers and applicable codes in new software releases
Require an update to policies and procedures

28. Transaction Sets Introduction
Implementation Guides
Transaction Sets
Pharmacy Claims

29. Implementation Guides
Implementation Guides include:
Data elements required or conditionally required
Definition of each data element
Technical transaction formats for the transmission of the data
Code sets or values that can appear in selected data elements

30. Downloading Implementation Guides
Where to download Implementation Guides:
Implementation Guides are in PDF format
X12N Implementation Guide downloads are free
NCPDP Implementation Guides require a fee

31. Pharmacy Claims National Council for Prescription Drug Programs
The final standards for electronic health care transactions, and for code sets, adopt the NCPDP Telecommunication Standard Format, Version 5.1 and the NCPDP Batch Standard, Version 1 Release 0 for pharmacy claims
Health plans, health care clearinghouses and health care providers who utilize electronic transactions will be required to use these standards beginning October 2002
Application for an extension until October 2003 available from the DHHS website (due Oct 2002)

32. Standard Transaction Types
Purpose
270/271
Eligibility inquiry/response
278
Authorization/referral
837
Claim submission, 3 types: Institutional, Professional, and Dental
276/277
Claim status inquiry/response
835
Claim payment remittance
834
Enrollment
820
Premium payment

33. Transaction between Providers and Health Plans
Transaction Sets
Accounts Receivable
Accounts Payable
Claim Status Inquiries
Adjudication
Service Billing / Claim Submission
Claim Acceptance
Pretreatment, Authorization, and Referrals
Pre-certification / Adjudication
Eligibility Verification
Enrollment
270/271
278
837
276/277
835

34. 270/271:Eligibility Transaction
270 Eligibility Inquiry - A request sent by a provider for determination of eligibility
271 Eligibility Response - An information source that responds to the request with either an acknowledgement that the patient has active or inactive coverage, or that the patient was not found within their system

35. Business Considerations: 270/271 Transaction
Requires a revision in eligibility policies and procedures
Requires a change in how eligibility information is received, stored, and transmitted
Requires a change in how eligibility information is interpreted
Will result in fewer telephone calls
Includes both batch and real-time bi-directional EDI transactions

36. 278: Health Care Services Review Transaction
278 – Pre-certification/Authorization/Referrals
The 278 is the only transaction that has both request and response within the same Implementation Guide
The 278 is used to request that a utilization management organization review a proposed or actual procedure or admission and provide approval or authorization of that service
Although not mandated within the transaction, the 278 should be used for one patient for one service

37. Business Considerations: 278 Health Care Services Review
Transaction will effect Medicare and Medicaid work flow
Requires a change to operating procedures and policies relating to timeliness of referral and response
Medicare and Medicaid will establish and direct operating protocols

38. 837: Institutional, Professional, Dental Claims
Used to submit health care claim billing information, encounter information, or both from providers of health care services to payers, either directly or via intermediary billing agencies and clearinghouses
It can also be used to transmit health care claims and billing information between payers with different payment responsibilities where coordination of benefits is required or between payers and regulatory agencies to monitor the provision, billing and payment for health care services

39. 837: Institutional, Professional, Dental Claims (cont’d)
Implementation Guides have no recommended limit to the number of claims transaction submissions within one ISA-IEA (outer envelope) transmission
For translation processing, it is recommended to limit the number of claims per transmission
When a provider submits the complete data set of claims information, the health plan cannot request the data at a later date

40. IT and Business Considerations: 837 Transaction
Requires education on new electronic claims format
Requires a change to policies and procedures
Eliminates all proprietary codes not contained within the transaction
Involves mapping of existing claims transaction formats such as NSF, UB92, and HCFA 1500 to the 837 X12N Implementation Guides

41. IT and Business Considerations: 837 Transaction (cont’d)
Requires a change in how claim information is entered and processed
Requires a change to reason codes used today
Contains additional required data fields that current claims transactions do not include
A uni-directional, batch EDI transaction set

42. 835: Remittance Transaction
Remittance information is provided as justification for the payment received by the 837 transaction, as well as input to the provider’s accounts receivable system
Remittance information consists of two separate levels
Level 1 - consists of claim and service information packaged with detail information
Level 2 - consists of remittance information that is not specific to claims and services contained in Level 1; this information relates to the Provider Adjustment Segment which provides for reporting increases and decreases in the amount remitted

43. 835: Remittance Transaction (cont’d)
The transmission of any of the following from a health plan to a health care provider’s financial institution:
Payment
Information about the transfer of funds
Payment processing information
The transmission of either of the following from a health plan to a health care provider:
Explanation of benefits
Remittance advice

44. IT and Business Considerations: 835 Transaction
Requires a change in policies regarding financial transaction processing
Requires review of electronic funds transfer (EFT) procedures as the 835 allows direct EFT
Review of workflow process to ensure that all processes are documented
Contains additional required data fields that current claims transactions do not include
A uni-directional batch EDI transaction set

45. 276/277: Claim Status Transaction
The 276 Claim Status Request is the inquiry from the provider to the health plan regarding the status of a specified claim(s)
Status information can be requested at the claim or line level
The 277 Claim Status Response is the reply from the health plan to the provider on the status of the claim(s) within the adjudication process

46. Business Considerations: 276/277 Transaction
Change business structure in how requests for claims information are processed
Develop data file to capture and retain claims information for specified periods of time
Upgrade claims data to capture requirements in 276/277 to provide comprehensive information
Both batch EDI and real-time, bi-directional transactions

47. 834: Enrollment / Disenrollment Transaction
One of two transactions not processed by the provider; NOT required since employers/ sponsors are not covered entities
The 834 transaction was developed for transfer of enrollment information from a sponsor of insurance coverage, benefits, or policy to a payer
The 834 deals with three types of transactions:
Initial enrollment
Changes to enrollment benefit information
Reconciliation to ensure accuracy of data

48. Business Considerations: 834 Transaction
Enrollment process must be reviewed to ensure all transaction data is available
Requires a change in policies and procedures
Status inquiries must be enhanced to handle an automated process
EDI agreements must be reviewed

49. 820: Premium Payment Transaction
The 820 transaction is not required since employer/sponsor is not a covered entity; is sent from employer/sponsor to payer
Used to initiate an electronic payment that includes the remittance detail needed by the receiver to properly apply the payment
Payment can be initiated without the remittance detail, and send the remittance detail separately to the plan
Payment can be made electronically or by paper

50. Covered Transactions: Standards Not Yet Determined
First report of injury – Workers’ Compensation
Health claims attachments – following electronic claims with paper attachments does not make sense

51. Planning for Implementation
Strategic approach
Enhance EDI capabilities to realize savings
Recognize data and information as an asset
Identify HIPAA as an opportunity
Map HIPAA compliance to the organization’s strategic plan

52. Next Steps

53. Next Steps Educate your staff
Define an organizational EDI strategy and determine which transactions you want to process electronically using the standard formats
Conduct a comprehensive analysis
Evaluate transactions and code sets currently in use
Identify information systems and feeder systems
Identify and begin discussions with trading partners and vendors
Review contracts
Identify process changes necessary

54. Next Steps (cont’d)
Select implementation recommendations based on alternatives identified during the analysis
Develop transition and conversion plans
Establish a training plan
Establish monitoring and reporting mechanisms

55. Industry Collaboration
WEDI - Workgroup for Electronic Data Interchange:
SNIP - Strategic National Implementation Process:
SNIP is a collaborative health care industry-wide process resulting in the implementation of standards and furthering the development and implementation of future standards
Many white papers available, written by industry collaborative effort:
Direct Data Entry (DDE)
Coordination of Benefits (COB)
Testing and certification

56. Requesting Changes to Standards
Requesting Changes to the HIPAA X12N or NCPDP Implementation Guides:
HHS named consortium consisting of X12N, NCPDP, HL7, NUBC, NUCC, ADA
Consortium is the Designated Standards Maintenance Organizations (DSMO)
December 2000 – current: approximately 300 changes requested
Go to to request changes

57. Questions and Discussion
Press 1 on your touch tone phone for questions.

58. Resources American Health Information Management Association (AHIMA):
Benchmark information and case studies
Interim Steps for Getting Started
Computer-Based Patient Record Institute (CPRI):
CPRI Security Toolkit
Department of Health and Human Services HIPAA Administrative Simplification:
Latest News on Regulations
Current proposed and final rules
For the Record: Protecting Electronic Health Information (National Academy Press, 1997)
Full Report
HIPAA Transaction Implementation Guides from the Washington Publishing Company
Links to federal HIPAA sites
Subscribe to release of HIPAA documents (such as notice of proposed rule making)