Optimizing Reimbursement with HIPAA 5010 and ICD-10

Optimizing Reimbursement with HIPAA 5010 and ICD-10 IDAHO HFMA Linda Corley, BS, MBA, CPC Senior Leader – Compliance and Associate Development

HIPAA 5010 Agenda • HIPAA Electronic Administrative Transaction Standards Overview • Regulation requirements for the transactions • Why change? – benefits of the new standards • Not just a “software” change! • All revenue cycle departments – electronic transactions affected! • Getting Started • Scope of change and HIPAA 5010 enhancements • Why and how reimbursement “can” improve under HIPAA 5010 • Implementation considerations • Planning Your Next Steps • HIPAA 5010 • ICD-10 • Utilizing HIPAA 5010 for organizational change

HIPAA 5010 – Electronic Administrative Transaction Standards Overview • January 15, 2009, the U.S. Department of Health and Human Services (HHS) released two final rules supporting the continued transformation of the U.S. healthcare system toward a comprehensive electronic data exchange environment. • HIPAA 5010 • ICD-10 • Represent the transaction code set components of the Health Insurance Portability and Accountability Act (HIPAA) of 1996. • HIPAA 5010 – Mandatory compliance on January 1, 2012 – all covered entities • Internal Medicare testing began January 1, 2010 • External testing began January 1, 2011 • No entity may require another entity to use the new version of the standard without agreement between the two parties for testing and implementation.

HIPAA 5010 Final Rule Overview • Current 4010 standard is widely recognized as outdated and lacking in the functionality currently needed by the health care industry. • Electronic Data Interchange (EDI) specialists from both government and industry worked together to achieve • Correction of 4010 problems with “compatibility” of data across trading partners • Address low compliance ratesby enhancing administrative data exchanges • Reduction in the number of necessary communications between trading partners attempting to resolve issues related to HIPAA data • All HIPAA Covered Entities • Providers Health Plans • Clearinghouses Billing / Service Agents • Business Associates of Covered Entities that use the affected transactions

HIPAA 5010 Final Rule Overview • BCBS of Chicago estimates over 850 individual data “element” changes • Front matter(educational and informational) reformatted for consistency across all guides • Content clarified and improved to correct 4010A1 ambiguities in utilization • Cosmetic– presentation format changes for clarity of data • Technical and Structural– Consistent data representation across all transactions • A patient is defined the same in the claim, eligibility request, referral, etc. • Reporting rules are the same throughout the suite which improves “guides” • The most positively reviewed change is that “discrete” data is defined / required instead of multi-functional data segments • Business Usage– Added new, modified existing, and removed business functions to improve efficiency and promote understanding

Key HIPAA 5010 Changes for Implementation Consideration

HIPAA 5010 Adoption Rules • Version 5010 of the X12 standards suite of administrative transactions • EDI X12 = data format based on ASC (the Accredited Standards Committee) X12 standards for the exchange of specific data (text) between two or more trading partners (i.e. organization, entity, or group of organizations) • New version of EDI X12 = New version numbers like 4010, 4020, 4030 • These are “minor” standards changes • 5010 = New version “initial” number which is a “major” revision release • “Standards” cover a number of requirements for reporting structure of data to be transmitted electronically • Separators, control numbers, specific segments, delimiters • Big trading partners may include requirements NOT mandatory in 5010! • Version D.0 of the NCPDP suite for retail pharmacy • Version 3.0 of the NCPDP suite for Medicaid pharmacy subrogation • Version D.0 or Version 5010 for retail pharmacy supplies and services, based on trading partner agreements

What must be changed? The formats currently used must be upgraded from X12 Version 4010A1 to 5010 and from NCPDP 5.1 to D.0 Systems that submit claims, receive remittances, exchange claim status or eligibility inquiry and responsesmust be analyzed to identify software and business process changes The new versions have different data element requirements Medicare has performed a comparison of the current and new formats for the transactions used and they can be found at http://www.cms.hhs.gov/ElectronicBillingEDITrans/18_5010D0.asp Key Changes in Transmission Standards

Software must be modified to produce and exchange the new formats Business processes may need to be changed to capture additional data elements now required or to report data elements in varying submissions Transition to the new formats must be coordinated: Continue to use the current formats for some Trading Partners’ (payors) exchanges Start to use the new formats with other Trading Partners Identify vendor time table(s) for testing How will testing be conducted? Separate test connection Based on test indicator in transaction Self-test site Key Changes in Transmission Standards

Strategies For Improving Reimbursement

Review, Evaluation and Education • Step One – Review, evaluation and education to appropriate staff members • ASC X12 is not just for IS, IT, or “techies”! • Benefits will be a change in business processes to facilitate (optimize) payment– if HIPAA 5010 is implemented in an appropriate manner . . . • Review revenue cycle uses of patient / payor information • Patient access / registration PAS • Service authorization Case Management • Billing and collections PFS • Assess clinical data reporting needs for “automated” transactions and processes • Incorporate new electronic regulatory processes that may have required manual intervention under HIPAA 4010

Review, Evaluation and Education • Identify deficiencies in the current HIPAA 4010 revenue cycle processes that can be improved under HIPAA 5010 for facility-specific trading partners (payors) • New formats address healthcare industry needs and clarify intent • Improved instructions – alias names removed • Ambiguity eliminated from language and rules for establishing situational data. Can now clearly understand when a situation exists that requires data to be used or populated in a transaction • Attention given to privacy issues around “minimum necessary” • Worked to eliminate unnecessary or redundant data qualifiers or codes to ensure more consistent use of information • Aim for standardization of all payor requirements! • Pay particular attention to distinct payor requirements that had to be manually processed under 4010 that may be electronic under 5010

Review, Evaluation and Education Step Two – Understand “which” changes affect your payors HIPAA 5010 utilizes the same subpart NPI in billing provider for same claim to all payors Need to include / involve provider enrollment staff at the beginning of implementation Review current NPI subpart enumeration to find cases where a specific NPI may only be used with one payor Either work with payor to find a way to STOP using this NPI – or inform other payors of this specific NPI and its associated address Physical address must be utilized (sent) for billing provider A post office box address cannot be utilized for the billing provider. PO box addresses should be utilized for the “pay-to” address, if necessary The NPI for service location should be utilized only when it is external to the billing organization Only one (1) NDC number per service line for Medicaid billing (rebate)

Review, Evaluation and Education Investigate use of additional electronic transactions that you may not already have implemented such as: Claim status Authorizations Referrals Use of new claim fields that can reduce the utilization of attachments such as: Situational service line description data element (SV101-7) for non-specific procedure codes. Most importantly – Review and correct any previous workarounds implemented “just to get the job done” with HIPAA 4010 Ensure prior customizations are applicable to the new standards and/or necessary for HIPAA 5010

What Transmission Formats Will Optimize Reimbursement?

Enhancements Included with HIPAA 5010 Enhancements are focused on functional areas requiring 5010 changes and are limited to: Improving claims receipt, control, and balancing procedures Increasing consistency of claims editing and error handling Provides common edit definitions to be used by all systems and jurisdictions Returning claims needing correction earlier in the process Adds edits for common mistakes to the front-end MAC systems, rather than waiting to do these edits in the adjudication systems Assigning claim numbers closer to the time of receipt The front end systems will assign the base claim number (in the format expected by the adjudication system), and have the adjudication system add any suffix necessary for split or adjustment claims OptimizingReimbursement

Specifically for Patient Access: Identify deficiencies in the current HIPAA 4010 registration process that can be improved under HIPAA 5010 for facility-specific trading partners (payors) Evaluate your ability to reduce administrative cost by fully adopting the 270 Eligibility Inquiry and 271 Eligibility Response Understand how the new 271 standard transaction will respond to Eligibility inquiries with expanded subscriber and coverage information Work with your trading partners to reduce reliance on individual companion guides for required demographic data Determine who needs to be trained and what content the training should include for Patient Access staff members Optimizing Reimbursement – PAS

Specifically for Patient Access: Identify deficiencies in the current HIPAA 4010 patient registration process that can be improved under HIPAA 5010 for facility-specific trading partners Focus on top five payors to ensure a majority of patient demographic data can be captured accurately and timely Study payor companion guides to ensure specific requirements can be met Registration systems must be able to collect the necessary data upfront Review system sub-parts to correlate trading partner requirements for claims processing Identify data elements required for a “clean” claim to process Patient Access work-flow should be adjusted to ensure value from the information gained Pre-admissions, insurance verification, scheduling, registration! Optimizing Reimbursement – PAS

Optimizing Reimbursement – PAS • Work to identify areas that can be improved utilizing HIPAA 5010 – • Goal should be to go beyond just an upgrade to current electronic transactions and associated processes! • Decide what works well now vs. how you want Patient Access to perform! • Investigate – • More use of EDI Form 270 / 271 Eligibility Inquiry and Responsebecause of new expanded search options and response data • Improvements in data accuracy and timeliness • “Real-time” response • Do your best to convert older EDI registration and patient scheduling processes to take advantage of new 5010 software features • Establish improved financial counseling ability due to increased clarification of patient responsibility

Optimized Reimbursement – PAS One example of Version 5010 benefits is decreased staff time required for activities such as manual look up of patient coverage information and phone calls to insurance companies to verify eligibility Standardized 270 / 271 provides overall improvement in the ability to request information and the value of the information returned “Real time” requests and responses directly from payor’s system Provides more detailed patient information and More information that will be required by the payor on the claim Improves and clarifies definition of “patient” that currently present registration difficulty More detailed “subscriber / patient” hierarchy changes When a patient has a unique member ID (such as a HMO assigned ID number), they are considered a subscriber so specific patient responsibility information can be returned (i.e., dependents) Expect increased use of the transaction standard by payors and providers once covered entities migrate to 5010

Optimizing Reimbursement – PAS Eligibility Inquiry / Response 270 / 271 -- Benefits Payor must allow and respond to alternate search options to reduce “member” not found responses Added support for 45 additional Patient Service types on the 270 Eligibility Request Nine (9) categories of benefit information must be reported on the 271 Eligibility Response Payor reporting will include co-insurance, co-payment and deductible, must also include patient responsibility Supports transition to ICD-10 reporting Medical necessity (diagnosis) information added Clarifies NPI Instructions Always report NPI at the lowest level of specificity Allows for “Present on Admission” indicator for 837I (institutional claims) Significant changes will remove implementation obstacles

Optimizing Reimbursement – PAS Registration Process Improvement • The matching of the patient’s date of birth (DOB) during the eligibility checking process will allow providers to store the matching information upfront in the process. • Currently, lack of this information leads to phone calls, denied claims and appeals. • Because this information may now be available in the initial communication with the payor, additional search options including member identification can be leveraged. • The improved ability to match a patient to a payor should reduce the number of claims denied because of syntax problems with the name.

Optimizing Reimbursement – PAS • Patient Access Re-engineering • Version 5010, particularly when combined with CORE, offers the provider the opportunity to re-engineer significant components of the revenue cycle. • Transactions that once seemed too challenging to implement should be reconsidered—especially due to their potential return on investment. • This particularly is the case with the real-time 270 / 271 eligibility transaction • CORE – Administrative efficiency is the primary goal of the CORE initiative, and in a sense, CORE picks up where 5010 leaves off. (Committee on Operating Rules and Efficiency, http://www.caqh.org) • Through voluntary rules for payors, clearinghouses and providers around the exchange of eligibility information, CORE vastly improves the usefulness of the 270 / 271 eligibility transaction between payor and provider. • Integrating this real-time transaction with providers practice management / hospital information system has proved to be a significant cost saver for providers.

Optimizing Reimbursement – PAS • Determine who needs to be trainedand what content the training should include for Patient Access staff members • Identify a 270 / 271 "super user" (i.e., subject matter expert) to champion recommended new processes and/or data entry requirements • Identify staff to be trained on system changes after work-flows are established and procedures are set • Work with IS to identify appropriate data capture process changes and with Training to develop materials that define procedures in writing to promote improvements • Complete the PAS staff training • Incorporate training into new employee orientation.

Optimizing Reimbursement – PFS Specifically for Patient Financial Services: • Identify a proactive path for strategic implementation of HIPAA 5010 within Patient Financial Services (PFS) • Identify deficiencies in the current HIPAA 4010 billing and collections process that can be improved under HIPAA 5010 for facility-specific trading partners (payors) • Evaluate your ability to reduce administrative and processing costs by fully adopting the following HIPAA 5010 standardized formats: • 276 / 277 - Claim Status Inquiry and Response • Medical Claims for Institutional (Form 837-I), Professional (Form 837-P), and Dental (Form 837-D) Services • Medical 835 – Remittance Advice • Understand how the new standard transactions listed above can be utilized to streamline work flow through automation instead of current manual processes

Optimizing Reimbursement – PFS • Evaluate your ability to reduce administrative and processing costs by fully adopting the following HIPAA 5010 standardized formats: 276 / 277 - Claim Status Inquiry and Response • Subscriber and dependent data made more consistent • Subscriber info needed only when patient cannot be uniquely identified • Added Pharmacy related data segments and the use of NCPDP Rejection Codes • Improved inquiry tracking mechanisms and identifiers reported for transaction entities • Added Patient Control number • Increased Claim Status segment repeat to >1 for more detailed status information • Allows payors to report more status codes and greater detail regarding the claim status • Added more examples to clarify instructions

Optimizing Reimbursement – PFS • Evaluate your ability to reduce administrative and processing costs by fully adopting the following HIPAA 5010 standardized formats: • Medical Claims for Institutional (Form 837-I), Professional (Form 837-P), and Dental (Form 837-D) Services • Payor-specific provider ID’s which associate the provider with specific payors. • Helps to improve claim adjudication efficiency. • Billing provider – clearly articulates the billing provider definition, and reduces the errors in payor-to-payor coordination of benefits • Standardizes the creation of an 837 COB claim when the primary payor’s remittance information returned to the payor is not in 835 format (i.e., provides crosswalk for paper remit) • Allows balancing a COB claim based on primary payor’s information • Rules defined for calculating the primary payor’s allowed and approved amount. This results in the elimination of several amount segments • Will improve the claims auto adjudication rate.

Optimizing Reimbursement – PFS • Medical Claims for Institutional (Form 837-I), Professional (Form 837-P), and Dental (Form 837-D) Services • Standardizes the provider “type” definition for inpatient and outpatient visits based on the NUBC standards • Provides for “pay-to” provider name and address which helps in electronic processing of Medicaid subrogation of payors • Will enable payor to clearly identify provider type on the 837 claim and thus perform better contract management in the benefit adjudication process and systems. • Provides for present-on-admission indicator related to each diagnosis code • Removed all data requirements which industry leaders expressed were obsolete. Example: date of similar illness. • Requires anesthesia services to be reported in minutes instead of units • Provides for increased number of diagnosis codes on claim (12)

Optimizing Reimbursement – Case Mgt. 278 - Referral Certification and Authorization (also referred to as “Health Services Review Request and Reply”) Adds segments for reporting key patient conditions that were missing under HIPAA 4010 Adds / expands support for various business needs Expands usage for authorizations beyond “yes” and/or “no” response Involve Patient Care Management in investigation of how 278 can be utilized to reduce telephone calls, FAXing, and denials!

Optimizing Reimbursement – PFS • Evaluate your ability to reduce administrative and processing costs by fully adopting the following HIPAA 5010 standardized formats: • Medical 835 – Remittance Advice • In addition to previously mentioned, payment improvements: • New healthcare medical policy segment added to the 835: • Reduces inquiries to payors • Assists providers in locating published and encoded medical policies used in benefit determination • Coordination of benefits – clarification of when to use primary, secondary and tertiary claim status indicators • Medicaid subrogation • New data elements will provide ability for payors to allow direct billing by a Medicaid agency to other health plans • For the payor: May result in reduced administrative cost by introducing COB for Medicaid programs. Claim processing of Medicaid supporting products would become easy. • For the provider: Faster claim payment on Medicaid claims.

Optimizing Reimbursement – PFS • Understand how the new standard transactions listed above can be utilized to streamline work flow through automation instead of current manual processes • Strategic planning of the upgrade to HIPAA 5010 is a challenge! • May want to consider the “Four A’s for Reaching 5010 Compliance:” • Appreciate – the new standardized formats offer many PFS benefits! • Analyze – Must investigate and understand YOUR systems and processes • Adopt – You choose your organizational level of adoption: • Interface – Complies with mandate but fails to captureall significant business value • Function Centric – Adds the advantages of providing strategic business solutions to the core application system • Total Adoption – All encompassing, revamping both core system and interfaces to a granular utilization! Re-engineering! • Apply – Dependent upon your adoption methodology

Optimizing Reimbursement – PFS • Work with your trading partners (payors) to reduce reliance on individual companion guides for required claims processing requirements • More discrete provision of data than variability of 4010. • Know YOUR system capabilities – speak authoritatively with payors regarding what they request for claims submission and what you supply! • Goal is consistency of required data elements for ALL payors. • Remember – in addition to system changes, most efficiencies and cost savings will be through business process improvement!

Optimizing Reimbursement – PFS • Determine who needs to be trained and what content the training should include for Patient Financial Services (PFS) staff members • After you have determined changing data element requirements for the 837 claim, ensure both billing and collection staff members understand the added, deleted and/or changed form locators. • Identify a 276 / 277, 837 and 835 "super user" (i.e., subject matter expert) to champion recommended new processes and/or data entry requirements • Identify staff to be trained on system changes after work-flows are established and revised procedures are set • Work with IS to identify appropriate data capture process changes and with Training to develop materials that define procedures in writing to promote improvements • Complete the PFS staff training • Incorporate training into new employee orientation.

Optimizing Reimbursement – PFS Version 5010 is here and must be implemented as the first step on the road to ICD-10 implementation. It is a critical component to true standardization and interoperability. Many of the flaws of the current 4010 version will be a thing of the past with the implementation of Version 5010. The promise of administrative simplification and subsequent savings with HIPAA can be achieved if providers, vendor, payors and clearinghouses all work to take advantage of this standard and integrate it into systems and workflow rather than simply comply. As a provider, it is critical that Version 5010 be part of the strategic information systems and technology plan. Leaders should seize the opportunity to guide their organization through a successful implementation of the standardized formats for 2012 and beyond. The most successful provider organizations will be those that effectively orchestrate and leverage this combination of changes into a strategichealthcare information exchange plan.

Planning Your Next Steps For HIPAA 5010

The HIPAA 5010 project is a pre-requisite for the ICD-10 project What 5010 DOES: Increases the field size for ICD codes from 5 bytes to 7 bytes Adds a one-digit version indicator to the ICD code to indicate version 9 vs.10 Increases the number of diagnosis codes allowed on a claim Includes some of the other data modifications in the standards adopted by Medicare FFS Optimizing Reimbursement

The HIPAA 5010 project is a pre-requisite for the ICD-10 project What 5010 DOES NOT do: Does not add processing needed to use ICD-10 codes Does not add a crosswalk of ICD-9 to ICD-10 codes Does not require the use of ICD-10 codes The 5010 format allows ICD-9 and/or ICD-10 CM & PCS code set values in the transaction standard. The business rules for using ICD-10 code set values will be defined with the ICD-10 project. Optimizing Reimbursement

Critical Success Factors for Implementation Ensure the following takes place: • Knowledge transfer / education provided to key leadership teams – this is not simply an IT project • Enterprise-wide gap and impact analysis of 5010 “required” changes • Your trading partners may require varying data element changes! • Fully integrated hospital or facility IT and other systems – interfaces • Comprehensive internal and external communication plans • Detailed contracts with other providers, payors and vendors with clear identification of timing, integration and conversion / translation applications • Comprehensive modeling and integrated functional testing plan across the continuum of care specific to each facility

5010 Implementation Plan Example

Phase 1: Organize the Implementation Effort • Become familiar throughout the organization with the requirement to upgrade to the 5010 transaction standards • Identify project manager • Identify current version of EDI software being used to complete HIPAA transactions • Identify and list current application systems used to complete and/or utilize data relative to HIPAA transactions • Determine need for new hardware to support 5010 transactions (e.g., faster internet connection, more server storage, or greater memory) • Identify key personnel to be involved in project plan • Develop project meeting schedule • Establish time tracking project codes

Phase 1: Organize the Implementation Effort • Complete and submit initial ROM for project • Determine and obtain agreement as to what IS documentation is required for this type of project • Plan for office communication on project; establish mailing lists for project team and user community • Begin preliminary budget (e.g., software upgrades, hardware upgrades, training)

Phase 2: Analyze Impact • Identify data changes in 5010 transactions vs. 4010 transactions • Discuss with vendors and application owners about data reporting changes in the 5010 transactions that apply • Most changes are technical • Some may require the reporting of data differently • Identify possible work flow changes needed to be made as a result of 5010 changes • Determine if additional resources are needed to assist with implementing the 5010 transactions (e.g., identify needs for data reporting, identify workflow changes, implement additional transactions)

Phase 3: Vendor Collaboration • Ask vendors if they will be upgrading system's version of software for the 5010 transactions • Ask vendors if system and/or software will be able to generate both 4010 and 5010 transactions during the transition period with trading partners • If system will not be able to generate and receive both 4010 and 5010 transactions, talk to vendors about the timing of upgrading to the 5010 transactions • Ask vendors if the system and/or software upgrades will also support ICD-10, which is mandatory October 1, 2013 • Ask vendors if there will be any charges for upgrading our system and/or software for the 5010 transactions

Phase 3: Vendor Collaboration • If vendors will not be upgrading system at this time for ICD-10, ask if there will be charges for the upgrade when they complete it later • Ask vendors for an estimated timeframe of when they will install upgrades • Ask vendors for an estimated timeframe of when they will have the upgrades completed • Confirm with vendors what is required to get in their queue to have the upgrades installed • Contact system owners, identify changes required for 5010 implementation • Determine if additional resources are needed to assist with vendor activities (e.g., sequencing installations, identifying software and hardware needs)

Phase 4: Develop Budget • Prepare budget for implementation costs, including expenses for: • Systems changes • Software changes • New hardware • Staff training • Resource materials • Consulting services • Decreased productivity • Other considerations

Phase 5: System and Software Upgrades • Installation of software upgrades by vendor (Remember, vendors will be coordinating implementations with all of their customers.) • Update legacy systems as required to support 5010 transaction changes • Remediation of 4010 maps to 5010 in EDI systems

Phase 6: Training • Identify staff to be trained on system changes • Identify a 5010 "super user" (i.e., subject matter expert) for Level 2 questions • Work with training department to identify 5010 changes that require staff training • Complete the training • Incorporate training into new employee orientation

Phase 7: Internal Testing • Conduct internal testing with vendors to ensure 5010 transactions can be generated within the system (This will serve as a "dry run" within internal walls to ensure systems are capable of creating the transactions.) • Obtain certification of 5010 compliance from vendors

Phase 8: Trading Partner Contact • Survey Trading Partners • Clearinghouses • Direct connect • Ask trading partners when they will be ready to send and receive test 5010 transactions • Determine when trading partners will be ready to send and receive "live" 5010 transactions • Convert to the 5010 transactions prior to January 1, 2012 with trading partners that are willing to convert

Phase 9: External Testing • Conduct external testing with trading partners to ensure the 5010 transactions are sent and received properly • Review results from trading partners on testing • If applicable, work with vendors and system owners to correct any problems with creating 5010 transactions or 5010 data content

Optimizing Reimbursement with HIPAA 5010 and ICD-10