[This Transcript is Unedited]
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DR. WARREN: Judy Warren, Chair of the Subcommittee. I'm from the University of Kansas school of Nursing and I have no conflicts.
MS. DOO: Lorraine Doo, with the Office of Health Standards and Services and CMS, Lead Staff to this Sub-committee, and no conflicts.
DR. CHANDERRAJ: Raj Chanderraj, practicing cardiologist, member of the committee, sub-committee, no conflicts.
DR. FITZMAURICE: Michael Fitzmaurice, Senior Science Advisor for Information Technology to the Director of the Agency for Health Care Research and Quality, Staff to the Subcommittee, Liaison to the National Committee.
DR. SCANLON: Bill Scanlon, National Health Policy Forum, Member of the Committee and the Sub-committee, no conflicts.
DR. SUAREZ: I'm Walter Suarez, with Kaiser Permanente, I'm a member of the Committee and Co-chair of the Standards Subcommittee, and no conflicts.
(Introductions around room)
Agenda Item: November 17-18 Hearings
DR. SUAREZ: Okay, I think we're going to start with the agenda, and then we will go until 9:30, when the full committee starts, so we'll be adjusting some of the times of each of these items.
We wanted to first talk about the hearings that are coming up later today, and all day tomorrow; make sure that everybody has a good understanding of the content, the purpose of the content and the structure of the hearing, and the material that I haven't included for this hearing in the packet.
So the first hearing is going to be on claim attachments. We had session on claim attachments for the Sub-committee members and invited other committee members via teleconference at one of our Sub-committee meetings, who sort of established some level of playing field for everyone in understanding of claim attachments. We included materials about attachments on your tab three, I think – actually tab one, right after the agenda. We included a presentation summarizing the core concept of claim attachments. We're not going to go over that today, but hopefully you had a chance to see it and actually, this is the material that was presented at the teleconference that we had earlier in October. We also included copies of the questions that were submitted to the testifiers in a document, actually right after the agenda for this meeting that we're having right now, where we describe the purpose of the hearing, the context and then the questions for the testifiers.
And then of course, the agenda of the hearing is right after the agenda of this meeting that we're having right now, under tab one.
So the structure that you can see in the hearing, basically, we're going to have a first day session; actually, a series of short presentations about the historical perspective on claim attachments and the perspective from OMC on clinical messages and how they relate to claim attachments, and then we have a first session where we describe what we're expecting to hear; descriptions and testimony from various perspectives; providers, payors; clearinghouses, Medicare, Medicaid, on the current practices with respect to claim attachments, what other priority areas for attachments are being used, the business practices and what are some of the mechanisms for submitting a request, and then a response to the attachment information.
And then the second part of the hearing is going to focus on the standards and operating rules, so we have a representative from the Standard Development organizations, HL7, X12, CAQH4, and then we also will hear from WEDI on the status of the development of standards and operating rules and future directions.
Just to point out, the main purpose of this hearing is really not to define what will be the standard, but to understand, again, what are the current business practices in some of the priority areas where claim attachments are being used, and then to understand where is the standard and operating rules for claim attachments. That's our primary goal, and after this we expect to make some observations about claim attachments; probably will not include recommendations, but there might be some observations after the hearing on this topic.
The other purpose that we wanted to lay out here was the need for entities that would want to be designated, or recommended, as authoring entities for operating rules for claim attachments, to let us know so we can sort of begin that process and understand the expectations that the industry will have with respect to the development of those operating rules. So that's the other purpose for the hearing.
That's the hearing on claim attachments; let's see if there's any question from any of the staff committee members.
DR. FITZMAURICE: It's been I don't know how many years since we've had claims attachments, since we thought we had them since they were going to move from flat file or EDI to CDA or to Version 3, et cetera. Do we have a sense of where we think it should go or do we need to fill our minds with what the industry is telling us in order to come to that kind of a conclusion? By that, I mean do we want claims attachment in X years, or do we want the industry to settle on what will work for most of them and to keep working hard and we'll be the cheerleader? Do we have guidance on which we come with recommendations to the Secretary, or are we to be the cheerleader for the industry? Do we have a sense of that, or are we going to find out after we listen to the industry?
DR. SUAREZ: Actually we will hear a lot about that during the hearing from both the providers and the payors; we hear about the business practices and current needs, and then from the standards development organizations, we'll hear what their perspectives are with respect to the standard itself, and we'll talk about CDA and we'll talk about X12 275, and all those elements that are a part of the standard. As I think we mentioned in the evolution process, there were proposed rules published in 2005 that described a series of priority areas and a series of approaches to claim attachments, and then what we have is basically the set of regulations that need to be published by January 1, 2014, which will define the standards to be used and define the various approaches and all those things, but my hope is that we would have basically not a temporary approach, but this will be ultimately the way to submit claim attachments, and not necessarily just for a series of priority areas, but truly for any type of attachment that is needed.
There are certain attachments that are needed consistently and constantly, and so those would become sort of at the top of the priority list, but at the end it's very much the way attachments should be sent.
The other thing I want to mention is the alignment of the standard with, of course, the standard being defined for clinical messages with our electronic health records, and I don't know if Lorraine, you want to –
So that's the first hearing, and then tomorrow morning we'll have a second hearing that we'll focus on Section 10109 of the Affordable Care Act, which basically is the provision that identifies a series of areas for the next wave of standardization, and so they include provider enrollment standards, applicability of standards to other insurance types, standards for claim edits and claim payment rules and then some standardization of the audit process, so we have laid out three different sessions that cover those topics.
So that's the second hearing, which will be tomorrow morning, and again, we have perspectives from all the various stakeholders that are going to be potentially affected by this. This topic, Section 10109 of the Affordable Care Act, was a topic that asked – the provisions asked for NCVHS, along with the HIP Policy Committee and the HIP Standards Committee, to provide feedback, so we have taken the lead in this regard. We invited members of the HIT Policy and HIT Standards Committee to attend; unfortunately yesterday was the HIT Standards Committee meeting, and we thought it was going to be good, but today and tomorrow is the OMC Annual Meeting, and so a number of members are actually going to be attending that meeting today and tomorrow rather than being available for this.
But we are scheduling some conference calls with the leadership of the two committees to try to find ways to work together in providing feedback to the Secretary. I expect that after this hearing we will be putting together again a letter with observations and recommendations. We expect that those will be shared and presented, actually, and we hope that we have the opportunity to present those to the HIT Policy Committee and HIT Standards Committee in the next couple months at one of their scheduled meetings, and then see if there is any additional need or additional hearings on the topic, or if the Policy and Standards Committee wants to do other work, and then finalize the recommendations and the letter and submit it to the Secretary.
So that's a plan for the second hearing tomorrow morning. Any questions from Committee members?
DR. FITZMAURICE: Just a comment – Yes, I think it's a shame that they can't be here to understand the richness and the depth of detail that the industry presents to us. It's a good learning opportunity for them. I'm always impressed with the work of the HIT Standards Committee. They're hardworking and they also get into the implementation. Here we have the people who work with the implementers, coming to testify. It's great experience for them. I know that they're conflicted. I'm also registered for the OMC conference, but I gave up my registration so that I could be here. I would hope that if they can't be here that they can find some way to just get the richness of this. It's really quite something that the industry does.
DR. SUAREZ: So that's the second hearing, and the third hearing is tomorrow afternoon, and the third hearing is focusing on the standards and operating rules maintenance process, which will be our second hearing on the topic, and a hearing that comes after several meetings and discussions with SDOs and with the DSMO members and so we will have a chance to listen to and probably begin to define a pathway for recommendations after this hearing, on specific steps that can be taken to improve the processes and the coordination of the maintenance of standards and improve particularly the way industry provides input to this process, and other considerations, really, related to this maintenance process.
So that's the third hearing. I don't know if there's any questions on that third hearing; again, we expect to provide, after this letter, with observations and what we hope would be recommendations on the topic.
Any questions on that? All right. Well it will be a very busy next couple of days, and I want to take an opportunity to thank, certainly, Lorraine for helping us coordinate all these hearings and all the staff at CMS and NCHS, that helped us put together these hearings, and we'll have a chance to thank all the testifiers, of course, because of their participation, and I know several of them have put so much effort in developing those recommendations for a few months now.
This was really an opportunity that we took to advise, or to announce, early in the process of these hearings, so that organizations can begin to work on their testimony, and I know several of them put a lot of emphasis on developing very thoughtful testimony, so we'll have a chance to thank them too, but I just wanted to say thanks to Lorraine, for all the work; putting together one of the hearings is just a full-time job; putting together three hearings in two days is not an easy task, so thanks, Lorraine.
I think we're going to go to our next agenda item. We're going to review and discuss the outcomes of the discussions from yesterday on the letter on the ERA and EFT, and we'll have some changes to offer and then after that, we'll talk about the HIPAA report to Congress, so Judy.
Agenda Item: Review and discuss letter on ERA/EFT
DR. WARREN: On our letter about ERA and EFT, basically, most of the letter was accepted. There were two things that the group wanted added. One was to format it and really call out the recommendations in our format. We had done that with an earlier draft; somehow the draft we sent was not the one that had the formatting on it, so I've redone that. And then there was a question about the scope of the letter, that we had some concerns from the credit card industry and others that they thought this was eliminating that, so I have a proposed sentence to add that will hopefully allay those concerns.
As we scroll down, everything's the same. I've changed nothing until we get down to recommendation one. So what I've done is I've left the header of the section, and then I have bolded the recommendation and labeled it as recommendation 1.0. And before, in the text of the letter, we had "we recommend that the Secretary" and I've just deleted "we recommend that", so it becomes really clear and is more like the formatting that we've done on the other letters. Any questions on that one?
DR. FITZMAURICE: Could you point out where the "we recommend that" was? Just a cursor or something.
DR. WARREN: "We recommend that" was right there. Here is the sentence that we're adding. I went through this letter about three or four times last night, looking for a place that we could put this without calling major attention to it – so we've had the recommendation, and what was in here was at the heart of our recommendations is our shared vision to support the adoption and use of EDI for the benefit of the health care industry, with the expectation that this will reduce cost and administrative burden, and in parens at the end of the letter, I've added – this does not mandate that EFT is the only method for payment. Cash, credit, debit cards, et cetera, may still be used. I think that captures the concern that we received in the letters from the credit card industry. Anybody think of a different way to put that?
I couldn't find any other place to put that that wouldn't call it out as being different or odd.
DR. SUAREZ: Part of the issue that has to come out, and again, for those that weren't here yesterday, this is an issue that was raised by the credit card industry, was, I guess a perception, and perhaps a little bit of confusion, was created by the fact that we are using the term EFT to designate a specific transaction in the health care industry between the health plan and the health plan financial institution?
Whereas, in the entire industry, the financial industry, EFT has a much larger definition and applicability, and so the credit card industry argued that a credit card transaction and the routing of that transaction is also a form of EFT, and so when we define the healthcare EFT transaction and recommended it in the letter that we already submitted to the Secretary, the definition that we provided for EFT was specific to that exchange between the health plan and the financial institution, and so what I think we needed to clarify, perhaps, was that in our previous letter of recommendation to the Secretary, defining the EFT transaction, we define it to be the exchange between the health plan and the health plan institution, and that this does not preclude other forms of financial transactions, perhaps to try to avoid the perception that that was the only EFT that can exist.
In the financial industry, EFT has a much larger applicability, so it was probably more trying to say something like that, somehow to do that, in our previous letter we recommended that EFT, the health care electronic fund transfer transactions be defined as a transaction between a health plan and financial institution –
MS. DOO: And also just a thought for the Committee, and now I'm just looking at the word; since NCVHS is giving us recommendations, we wouldn't necessarily in this letter say, this does not mandate that EFT, but really you're saying, we are not suggesting that the Secretary mandates EFT as the only method, right, because NCVHS doesn't mandate. You recommend. And we mandate, so that you're advising us to take that into consideration in our policy, which is what we've responded to, the letter is saying, is that when the rule comes out they will be invited to comment on our policy.
So it's that first part, so after burden, it says this does not mandate, is that we are not proposing that the Secretary mandate EFT as the only method of payment.
DR. SUAREZ: It might be worth introducing the topic a little bit more before the "we are not proposing" part. So that it helps understand the context, or at least – I don't know if something like –
MS. DOO: I know Margaret wants to say something. It's a little awkward to be responding to a letter that hasn't gone out yet, to letters that have come in, to which we cannot be responsive because it's pre-decisional.
DR. SUAREZ: But this letter, we already sent, right? The EFT standards letter we already sent.
MS. DOO: That's true. This is operating rules.
DR. SUAREZ: That is why it's important to introduce the previous letter; it's important to know that in a previous letter we recommended the adoption of a standard for EFT transactions – of a standard for health care electronic fund transfer, I think that's the way we defined –
MS. DOO: Right. Am I capturing it right?
DR. SUAREZ: I'm just looking, actually, at the letter -
DR. CHANDERRAJ: Do you want to add "payment by credit card and other avenues"?
DR. SUAREZ: We said in the letter – I'm looking at the letter that we submitted; define health care EFT transaction as the electronic methods used by a health plan to order, instruct, or authorize a depositor or financial institution to electronically transfer funds.
So that's how we define it in that letter, and that's what has created the perception in the credit card industry that that's the only EFT that could exist.
DR. WARREN: So we ought to bring that definition in here?
DR. SCANLON: To me that definition is actually more helpful than talking about credit cards and cash, because I think it's hard to envision a plan paying with a credit card, or a plan paying with cash. And that's defining this. I think maybe the issue would be clarified more if we would put the word "when", when a plan electronically pays – in that sentence that you just read, Walter.
DR. WARREN: When a plan does what, Bill?
DR. SUAREZ: When a plan is submitting an electronic message to order, instruct or authorize its financial institution to electronically transfer funds. We'll add the definition there. And then that's where we want to probably then say, we want to take this opportunity to clarify that this recommendation does not preclude other methods of payment, including – credit cards, payments done by debit/credit cards, cash or others.
DR. WARREN: I'll add in the rest of that definition.
DR. SCANLON: But I think a key thing is to make sure that we're talking about the plan's financial institution arrangement, because I can pay a co-pay with an electronic funds transfer; I can get a bill from a physician and send in a co-pay using my bank with an electronic funds transfer, and we're not talking about that transaction -
DR. SUAREZ: That's true, it does not preclude the health plan to use other methods of payment, this does not preclude the health plan to use other methods of payment. This is really the health plan conducting or doing the payment – one way is to order an electronic funds transfer from its bank but another one is conducting a transaction via -
DR. WARREN: So maybe I'm confused about where this is. To me, I thought EFT was when the plan authorizes a bank to pay a provider, and then it goes in the provider's checking account, or bank account.
DR. SUAREZ: The EFT is the message that a health plan sends to the bank. That's EFT.
DR. WARREN: So do health plans ever send credit card messages to do that? I don't think so. So where are we getting -
DR. SUAREZ: The argument that the banking industry is making is that a health plan can certainly pay through other means; a credit card, some health plans might authorize the payment of a provider via a credit card; basically it's saying the health plan owes Doctor Smith $1,200; instead of sending an EFT to their bank to transfer the funds, they can issue a credit card to that; that's the argument that the credit card industry is raising, is that this gives the impression that the only way a health plan can pay a provider is by submitting an EFT electronically, is by submitting an EFT to their financial institution.
And so that's why we need to clarify that other methods of payment by the health plan to the provider, including credit card payments. Margaret, do you want to -
MS. WEIKER: This is Margaret Weiker. I was going to suggest that when we talk about EFT, we're talking about a specific recommendation in regard to the format of that EFT, which is the CCD plus format, and even though EFT is bigger than just one format, one method, I think we need to clarify too, that it's not just EFT, where I think there may be some confusion when we say EFT and it's this broad spectrum. We're focusing just on the payment of a provider by a health plan using the CCD Plus format.
DR. SUAREZ: Yes. That would be helpful too, which is part of our recommendation. I think part of the confusion might have been created by the fact that we separately defined, because that's what all the transactions are – in every one of the HIPAA transactions, one of the first things – the first thing that is done is to find the transaction; what is a health care claim? What is a health care claim payment? And then define the standard that applies to that. So that's what we were trying to do in the original recommendation of the letter.
MR. LAZARUS: I'm Steve Lazarus, and I work with CORE, and I'm not speaking directly for CORE because I'm not authorized to, but the operating rules that you just recommended to go forward to CMS include provision for reconciling either a check number or an EFT transaction number, between the remittance advice and the payment, whether it be by check or EFT. There is no provision to reconcile a credit card transaction, or any other type of transaction, against that remittance advice, and it's a lot more complicated than just responding to what you're talking about here.
DR. SCANLON: That was actually worrying me, which is the issue of do we need to take up the credit card sort of transaction? I think in some respects, it's probably a very small universe, because why would a provider want to pay a credit card fee to accept a credit card from their insurer? It's one thing to get it from the patients because it improves collection, but it's another thing to do it from a plan.
But it does open up a door, because what we're talking about here is we're talking about among the EFT types of transactions in the big universe, we're talking about picking out some and specifying some standards for this slice, and then the question becomes okay, if it's a credit card transaction, do we need to make some specifications about that, so that there's a parallel? But again, I think it's something that's relatively small, if it exists.
DR. WARREN: So Bill, are you suggesting that we handle the credit card issue separately? Because I'm confused now -
DR. SCANLON: But it's a question of whether we're being forced into a corner, because if it is a real exception that matters, then we need to think about it. If it's something where we're going to solve most of the problem by saying here, for EFTs between plans and providers, or providers' financial institutions, here are the standards, and that's going to solve most of the issues, then maybe we can go on to other things with higher priority, because I think again, this is small, and the fact that - we're not promulgating anything about the credit card transaction. They're going to go on as they have in the past. Just as we're not forcing people to do electronic payments, either.
DR. SUAREZ: Exactly. We're not forcing electronic payment, we're not forcing EFT to be only the EFT done through an ACH, and we're not precluding other methods of payment; those are the three elements. And a fourth one is really the point that you make, which is in these recommendations, we're not addressing the other methods of payment, including credit card.
MS. WEIKER: Keep in mind, when we're doing this reconciliation, and the whole purpose of this is – and Steve alluded to it a little bit earlier, is the 835 transaction, communicates to the provider what was paid, what was denied, what was reduced because of co-pay or whatever. In that transaction there is a segment that's associated with the payment – that segment doesn't support credit card payments. So when you look at the reconciliation of the 835 to the banking transaction, the CCD Plus format, which carries the segment from the 835, it doesn't support this credit card payment.
So when you start looking at the reconciliation of the remit to the payment, and if it comes in, if the plan pays by credit card, that transaction, that number, that authorization number from the credit card transaction, is not in that TRN segment in the 835, so you're going to have a disconnect and you're going to have a reconciliation issue, that what we're trying to do with both the 835 and with the adoption of the CAQH CORE operating rules, is to get that reconciliation "on track", so we need to be very careful with how this is being worded, because otherwise you've got no reconciliation happening and we haven't solved anything, we've just created more of a mess.
DR. SCANLON: I agree with you, but the question is, are credit card transactions important enough that we need to reopen this and say we have to find a way to make the credit card transaction be reconcilable?
MS. WEIKER: I think when we're talking about the payment from a health plan to a provider, to be honest, I don't know of one health plan that pays a provider via credit card. It's a check or it's an EFT. I guess they could send cash, but nobody uses cash anymore. So it's a check or it's an EFT. I don't know of any entity, any health plan, and Bill, you'll hear from the Blues, that pay a provider via credit card.
DR. SCANLON: I guess what I am trying to think is that we have these three methods of payment; cash, credit cards and EFTs, and what we're trying to say is, when it's EFTs, which are going to become more predominant because basically, there's efficiencies for everybody to use them, that we want these standards to apply.
The other – we may worry about the credit cards because there's a kind of a gap there, but it's so small – we've got a lot bigger agenda here about standards in general – it's such a small issue that we're not going to take it on as an explicit, how do we sort of build in the reconciliation? That's kind of where I'm at today, as opposed to reopening this and saying we have to stop this train because we need to make sure that we deal with credit cards as well.
I think what we're trying to say here now is, we weren't commenting on the credit cards. Any of that business, if there is any plan in America that pays by credit card they can continue to do so, and maybe at some future point we address this if it ever becomes a prevalent practice.
MS. WEIKER: Right. And they need to come into the appropriate organizations to have that business function ensured that the transaction that supports the payment with the remit works together. So if this becomes prevalent, let's start at the beginning and work through the flow, so to speak.
DR. CHANDERRAJ: So that last sentence, we want to take this opportunity to clarify that this recommendation – should be gone then? We should make a clarification of that statement, saying that forms of payment by the financial institution to the provider does not include in this recommendation.
DR. SUAREZ: We can take out the part of that sentence "including credit card payments", and just stop "by the plan to the provider", because there's other methods of payment, we don't want to – the other part we want to, as Margaret pointed out, we want to encourage certainly the use of electronic mechanisms to do the payment, we want to ensure that that electronic mechanism allows the provider to do the reconciliation, and we don't want to give the – in the letter that we received from the credit card industry, they don't distinguish credit card payment and EFT. They see a credit card payment is a form of EFT and that's the argument they're making.
DR. WARREN: So what they are saying, because I just went back and looked at their wording, when they hear EFT, they're thinking of the entire EFT standard, which does incorporate them.
So when we talk about EFT, what I'm wondering is that the key word here is a standard for health care, EFT, because we did say we were only doing one small segment of that, and I think if we put our definition back in, and I'll pull the one from the letter to put in here, that should handle it, with the statement of we want to take this opportunity - does not preclude other methods of payment.
DR. SCANLON: I would change the word "preclude" to "apply", because I think "preclude" maybe suggests that we were thinking that we could force everybody to do electronic --.
DR. SUAREZ: That's it, that's great.
DR. CHANDERRAJ: But there are only two forms of format of payment by EFTs, that will get a receipt, or the acknowledgment of payment. But we did not include other forms of payment in that receipt, as Margaret was mentioning earlier. There are only – either a check number or something that's going to be there. This is only applying the EFT payment to the institution or wherever the provider is banking with. So this kind of statement doesn't apply at all; we are not encouraging other forms of payment.
DR. SUAREZ: This does not apply to the provider at all. This only applies to the exchange between the plan and the bank.
DR. CHANDERRAJ: But in these standards we proposed, there are only two ways of transferring this EFT. What the financial institution does to the provider is different. We're not even involved in that.
DR. SUAREZ: But this is not applying to that.
DR. CHANDERRAJ: But the statement reads that the EFT can be handled by other forms, but we don't have that leeway in our EFT.
MS. DOO: I think what she is saying is that your recommendation does not apply to how the provider is paid, because you're only addressing the communication between the plan and its bank, you're not addressing how the provider gets its money.
DR. SUAREZ: This is actually good, because it emphasizes the point that it only applies to that exchange between the health plan and the health plan's bank institution, and does not apply to other methods of payment.
DR. CHANDERRAJ: Maybe I am objecting to other methods of payment by the plan, rather than payments by the financial institution, or the clearinghouse.
DR. SUAREZ: No, it is by the plan, because the plan can send cash in an envelope to the provider; this does not apply. The plan can send a check; this does not apply to a check sent to the provider. Those are the other methods of payment from the plan to the provider.
DR. SCANLON: Even though technically we're talking about a message between the plan and the financial institution, the reality is that they're sending that message because the provider has an account in that financial institution. The reality is, they're sending that message because the provider has an account in that financial institution, so it's effectively a message to the provider. This is going to be a deposit in your account.
MS. DOO: The provider may have an account at another financial institution, actually.
DR. SCANLON: That's possible too, but I think the issue is that there's not this relationship between the financial institution and the plan that's independent of the provider. They don't just send random checks to bank, or random EFTs to banks, if the provider doesn't have an account there. De facto, it's the provider we're communicating with, or about, at least.
MS. DOO: Right, about the provider. Maybe to another bank; Margaret is frowning because she's saying, but it could be another bank, which is right, so the plan's bank will communicate to the provider's bank, and we're not affecting that exchange.
MS. WEIKER: Right.
DR. SUAREZ: There are three steps, actually four steps; the health plan sends the transaction to the health plan bank; that's the only one that is applied. The health plan's bank sends a transfer order, the fund transfer, to the provider bank; that's a true EFT. In the financial word that is the EFT itself. And then the provider bank sends a message to the provider, saying I received a check; it's not an EFT, it's a bank statement.
DR. SCANLON: Okay, but if we have two banks involved in this process, how do we get the information to the provider to deal with the reconciliation? That information – when you say we're not talking about the transfer between the two banks, we are talking about the transfer between the two banks. It's got to contain the same information that came from the plan to the first bank, it has to be sent on to the second bank so it can go on to the provider.
DR. SUAREZ: It does, but not as part of a requirement, because banks are not covered entities subject to HIPAA.
DR. WARREN: So they comply with EFT because banks do.
DR. SCANLON: So what we're relying on is voluntary compliance. What would happen in the world if the banks decided in transfers between themselves, that they were going to use a different standard? It seems to me then we're back to square one here.
DR. SUAREZ: Yes, but realistically that's not going to happen, because -
DR. SCANLON: I understand legally we're not influencing that transaction, but again, de facto, we are.
DR. CHANDERRAJ: My point is that the EFT is only between the plan and the financial institution – this only applies directly -
DR. WARREN: Wait a minute, the health EFT is only there. EFT is a banking standard, and it applies to all of these different loops. It's done by NACHA. We're just influencing one piece of the EFT, which we've pulled out and said it's the health care portion of EFT, or we need to find some other distinguishing label, and I think that's what got people confused, is they're thinking of the entire EFT process. Am I off track, or is that accurate?
DR. SUAREZ: No, that is precisely -
DR. WARREN: Okay. Since it's only when the health plan sends a message to a banking institution, that's the segment that we're calling health care EFT that this letter's about.
DR. CHANDERRAJ: But payment of the plan to the financial institution of the provider will make –
DR. WARREN: I see what you mean, yes.
DR. CHANDERRAJ: That's the only part –
DR. WARREN: I just didn't take this off. Sorry.
DR. CHANDERRAJ: No, that doesn't clarify. Does not apply – other methods of payment by the financial institution to the provider, not the -
DR. SUAREZ: No, other method of payment by the health plan.
DR. CHANDERRAJ: This – recommendation only applies of the payment of a plan to the financial institution of the provider. That's the only part we are addressing by the standards. How the financial institution pays the provider is not being addressed here.
DR. SUAREZ: This applies to the health plan sending a message to the health plan financial institution.
DR. CHANDERRAJ: Exactly; that's the only thing.
We have to clarify that.
DR. SUAREZ: It doesn't apply to other methods of payment.
DR. CHANDERRAJ: By the financial institution to the provider.
DR. SUAREZ: No, the financial institution of whom? Of the –
DR. CHANDERRAJ: Of the provider.
DR. SUAREZ: That's a separate route.
DR. CHANDERRAJ: We don't want to go there.
DR. SUAREZ: Exactly.
DR. CHANDERRAJ: We just want to make the payment by the plan to the financial institution of the provider.
DR. WARREN: No; it goes to their financial institution; that institution sends it to the institution of the provider. So there's at least two banks involved.
DR. SUAREZ: There are two banks; the health plan bank and the provider bank.
DR. CHANDERRAJ: Financial institution of the plan, out to the financial institution of the provider.
DR. SUAREZ: No, the health plan and the financial institution of the provider never connect.
DR. CHANDERRAJ: That's what I'm saying.
DR. SUAREZ: The health plan - connects to the financial institution of the health plan. That's what this applies only to. The rest of the route is not subject to this. That's what we're trying to say, that this does not apply.
DR. SCANLON: But our goal in the administrative simplification is to get better communication between the plan and the provider, and what we've got here is I've got a standard of talking about communication between the plan and the plan's financial institution, and then there's going to be a handoff, and to the extent that the handoff is the same information that the plan gave to the financial institution, then that ends up in the provider's hands, everything is fine.
But we're operating on trust here, and we're operating on the hope that it's in the interest of the two financial institutions not to mess with that information that's coming to them, to just simply pass it on. And we're in that bind because they're not covered entities.
DR. SUAREZ: I believe there are operating rules in the financial industry that take care of that, specific operating rules.
MS. DOO: Right. And in the remittance advice standard, I think Margaret was going to explain that this whole issue of the trace number, which you all addressed, that has to go through, is how it makes that connection to the payment and what the provider sees – so along the path of the banks, ultimately with the providers, how that reconciliation is done.
DR. SUAREZ: Okay – So we have it – in a previous letter we recommended adoption of a standard for health care EFT and then we'll put the definition. We want to take the opportunity to clarify that this recommendation only applies to EFT messages between the health plan and their financial institution.
DR. CHANDERRAJ: Who is their financial institution?
DR. SUAREZ: The health plan's financial institution. This only applies to the health plan message being sent to the health plan's financial institution, that's the only standard.
DR. CHANDERRAJ: You're not sending it to the provider's financial institution?
MS. DOO: Not here. Change "their" to "its".
DR. SUAREZ: Applies to EFT messages between the health plan and its financial institution.
Thank you. I think we got it.
The other part, of course, is that once – this is a recommendation to the Secretary; the Secretary's going to write regulations. Once those regulations come out, there will be plenty of opportunities to add to or comment on.
Okay, thank you very much.
DR. WARREN: Let me just show you the other – so again, I removed the "we recommend that the Secretary should", put in "recommendation 2.0" and then "the Secretary"; everything else is the same. So it's just a formatting issue. I left them in exactly the same places; here's our recommendation three, so the only thing I did was take recommendation 3.0 and replace it where we had "we recommend that".
DR. SUAREZ: Let me ask you this, Judy, because those recommendation two and recommendation three, were the conditional elements of recommendation one, so we don't want to miss that. They're not independent. So in the recommendation number one, there should be -
DR. WARREN: So this should be 1.1, right?
DR. SUAREZ: Right, it might be better to just call it 1.1, and then let's make sure that in the recommendation number one, we still say conditional 2. So 1.0.
DR. WARREN: The wording did not change. The only wording I took out was "we recommend that", and replaced it with the recommendation number.
And then the last one, I did have to do a little wordsmithing on. This sentence was after the recommendation, and so it looked a little odd to have it there, so I just moved it up into this paragraph. That was the only editing that I did. And I read through it several times; it looked like it still looked good there, but we just need - the location didn't change anything.
The reason that I moved it up is that after that, we have our concluding paragraph and the end. So it looked really strange to have two one-sentence paragraphs at the bottom, and I couldn't think of anything else to put in there, and I wanted to keep it as crisp as possible.
DR. SUAREZ: That looks great. Any other comments on the letter?
DR. WARREN: Oh yes, your two edits are in the -
DR. FITZMAURICE: I have another one. Where you have it in yellow -
DR. CHANDERRAJ: Are we going to make one single page of recommendations only, with the objectives and recommendations? Observations? Only one page of simple ones; we wanted to consolidate –
DR. SUAREZ: I think that's what we're doing.
DR. FITZMAURICE: 153, it says that this recommendation only applies to EFT, but applies only to, it's like you're modifying the verb as opposed to modifying what it applies to.
DR. SUAREZ: Maybe applies only to the EFT message.
MS. DOO: Yes, add "the" in front of EFT.
DR. SUAREZ: That's great; we'll present this to the Full Committee later this morning. We should then move on to the HIPAA Report.
Agenda Item: Review and Discuss HIPAA Report
DR. SUAREZ: So for the HIPAA report, I think our task was to incorporate in the front matter, in the introduction, some framing statements and then do a little bit of –
(Discussion with Dr. Suarez and Dr. Carr about how to set up file on computer.)
DR. CARR: This was a joint effort of Bill, Walter and myself, so the opening paragraph is the same. The second paragraph is the same except that it has a heading and there's an introductory sentence. So the introductory sentence that's new is "The Health Insurance Portable and Accountability Act was expected to play a major role in controlling administrative costs." Then it goes on to a description. Is that okay to have that as the major – to say that's – because our first paragraph is "we spend 2.5 trillion in administrative costs" and then we say, "this was expected to control costs".
DR. WARREN: I would put 1996, the HIPAA And Accountability Act of 1996, so that people remember how long ago it was?"
DR. SUAREZ: I think the header of the entire page -
DR. FITZMAURICE: I would suggest that it's the administrative simplification portion of HIPAA that did that.
DR. SUAREZ: The Administrative simplification provision of the Health provision.
DR. WARREN: Otherwise people are going to get all securing thing and privacy thing –
(Short discussion among participants about grammar).
DR. CARR: Okay, so HIPAA was created to achieve several goals, including make it possible for people to keep health insurance, protecting confidentiality and security of health care information, and finally helping the health care industry control administrative costs. A main component of HIPAA focuses on administrative simplification, which requires the adoption of standards for electronically receiving -
DR. FITZMAURICE: Given that, I would go back and take out all the changes that I just recommended in the first sentence, because now it's introducing the administrative simplification portion.
DR. CARR: So we go on to say that – this is the same as what we had; HIPAA electronic data requirements for standardized formats and content were intended to move the health care industry from a manual to an electronic system to improve security and lower costs and lower the error rates. So that's pretty much the same except for that opening statement.
Next sentence – let me just preview it a little bit - "status of the implementation" and then "challenges to the implementation" and then "necessary next steps". So that comprises the full thing.
So now let me bring you back to Status of the Implementation.
So over the past decade, the administrative simplification provisions of HIPAA have contributed to the transformation and modernization of the health care industry in three important ways – one, laying the groundwork to move the industry from paper to electronic formats in administrative and clinical systems; two, moving the industry to a common set of standards from a multiplicity of standards and formats, and 3, establishing a privacy and security framework to ensure protection of health information.
Today there is much greater awareness of the need to protect the privacy of personal health information and enhance efforts to do so, however the completeness of these efforts is not known, as the Department has not systematically tracked implementation.
Moreover, the speed of adoption across the industry has been disappointing, though in part understandable. I didn't get that, Bill, you left something out of that sentence. And then the lack of full implementation of all HIPAA components now threatens the nation's progress toward reforming health care.
So I've got a sort of mixture of peoples' comments here. Walter had written this first thing, and then Bill, you had put this in. It culls out – it makes it sound like there's a lack of awareness of the elements to protect privacy. Is that what we really want to say?
Actually, what Walter has said is, we've established a privacy and security framework to ensure protection of health information. So would it be reasonable to just then take out this sentence and then say, however the completeness of these efforts is not known to the Department, as the Department has not systematically tracked –
DR. SCANLON: I think either take it out or put it in the prior paragraph; it was a point that was raised yesterday, that we really have to move forward on privacy. I'm not strongly wedded to it, but it came up in the discussion yesterday.
DR. SUAREZ: That sentence is really part of the previous paragraph.
DR. CARR: Okay, maybe that is what we will do. Then this is a new paragraph then; however, the completeness of these efforts is not known to the Department. Moreover, what did you mean by this – speed of adoption across the industry has been disappointing, though in part understandable?
DR. SCANLON: Given the starting point for implementation.
DR. CARR: Okay. Given the starting point for implementation, lack of full implementation of all HIPAA components now threatens the nation's progress towards reforming the health care system and providing access to quality health care in a timely manner. Is that what we want to say?
So let's remember that; we may want to come back to that. Let me just show you what we went on to say, and then let's come back and decide if that makes sense.
Challenges to implementation. Achievement of the vision of seamless electronic flow of information in a confidential and secure manner has been slow, with resultant unnecessary waste of resources. I put that in, is that okay? I think it's good.
DR. WARREN: I think it is good.
DR. CARR: Continued and more rapid progress in achieving the full benefits of administrative simplification and strong privacy protection will be hampered by the following issues, which have also impeded past progress. So Bill, that was your language.
And then you said, I just took the bullets that we had, but you had a note here – bullets about how varied administrative processes were at the outset?
DR. SCANLON: I think this is the point you were raising yesterday, Walter, about the starting point, that we shouldn't view where we are as so negative, if we consider where we are as so negative, if we consider where we were.
DR. SUAREZ: As I was beginning to think about this yesterday again, and then realized that the real start wasn't 15 years ago, wasn't 10 years ago, really was 8 years ago, 2003, really late 2003, so we're only 7 years, ultimately, into this, and so I'm concerned that we're painting a picture of this -
DR. CARR: Disparaging.
DR. SUAREZ: It's sort of more negative than what it should be.
DR. CARR: We need to just fix this, but let's decide if these are the points we want to make, and then we need balance, I agree.
So the law failed to mandate adoption by all parties. The law only requires adoption for health plans, all health care, clearinghouses, and health care providers that chose to conduct transactions electronically.
Is that correct?
DR. SUAREZ: That choose to conduct transactions electronically, not chose.
DR. CARR: We've got to do a tense check on this, but the concepts.
DR. SCANLON: When I was trying to change this, I ended up with only four bullets, future impediments, and some of these bullets are kind of, were in the past. There's some of the explanation as to why we haven't made as much progress as we have.
DR. CARR: I put all these together and we can parse them, but the first four are yours.
Okay second, strong incentives for adoption, such as Medicare's requirement for electronic claims submission, are absent for many participants. Agree?
Three, compelling evidence about the potential benefits of full scale and more rapid adoptions lack, and given the department has not measured the impact of the law.
Four, the original standards were compromised by the lack of full industry participation, and the levels of optionality and variability allowed in the implementation of the standard.
So those were the four that Bill had; is that right, Bill?
DR. SCANLON: Right, and those are the ones that I would characterize as both impediments of the past and ongoing impediments.
DR. CARR: So then this was just a restatement of this.
DR. SCANLON: Now, sort of as a theme in some of the things we're doing, talking about optionality being a problem. The issue of incentive for people to comply is also a problem.
DR. CARR: Did you want to include the patient identifier in yours?
DR. SUAREZ: That's the next bullet.
DR. SCANLON: Then the ones after that are things that were true and may have impeded progress, but the issue is how much do they impede future progress, and it doesn't seem like that was clear.
DR. SUAREZ: One point on the bullet of the original standards were compromised, I don't know that they were compromised by the lack of industry participation, it was more the levels of optionality and variability. I think the original standards, and I remember -
DR. SCANLON: I think that point is – maybe it's not the standards, it's the point that was raised, I think, in our phone call about the fact that people are still submitting paper claims, which is kind of opting out, and it's not that you're not complying with the standards, you're opting out of having to deal with the standards, right? When you file paper claims?
DR. SUAREZ: Yes, but that's not the original standards.
DR. SCANLON: I am saying that; there is this issue of we haven't achieved as much administrative efficiency because we haven't gone all fully electronic.
DR. CARR: So what was compromised? If the original standard isn't right, what would be the right word?
DR. SUAREZ: Well the levels of optionality and variability. So you can draw by the lack of full industry participation.
DR. CARR: Something was compromised by lack of full industry participation -
DR. SUAREZ: The original standards were compromised because of the level of optionality and variability.
DR. CARR: So this lack of full industry participation is actually more related to the -
DR. SUAREZ: I think that's way too strong. I think that gives the impression that nobody was in these meetings. I was.
DR. CARR: Does it belong up here? This is the law failed to mandate adoption, but this is what is the lack of full industry participation by the fact that – so have we said this satisfactorily? Or do we need to add the lack?
DR. SCANLON: I think we can drop lack of full industry participation.
DR. FITZMAURICE: Could I suggest "requires adoption only for"?
DR. WARREN: Health plans and clearinghouses were required; it's health care providers that are the only.
DR. SUAREZ: The law requires adoption for all health plans - You have to drop the "only" after the word "law" in that line, drop that one, and then go and add "only" after the word "and health care providers", and only health care providers that chose to conduct transactions electronically.
DR. CARR: Right. Okay, that chose to conduct transactions electronically. I'll get that. So these are the first five bullets; are these – this is, as Bill put it, past and present?
DR. SUAREZ: No, the second bullet, strong standards for adoption, such as Medicare's requirement for health care providers to submit electronic claims. It's a requirement on health care providers.
DR. FITZMAURICE: We'll go up to the higher bullet and say, to providers that choose, not chose, because we're in present tense.
DR. CARR: The tenses are all over the place, I just want to make sure these things are right.
So there's those five bullets, comments about those additional bullets?
So if we go down here, I just did a compendium of other bullets, that I think these are kind of just restatement of what we already said; education of consumers about the law has not been robust, the law required baseline privacy and security standards – Bill, this was you – in the health industry. For the first time, covered entities and their attorneys were understandably very conservative about sharing records, until they were more familiar with the enforcement regime. Do we want to say that? Have we said that in the reports?
DR. SUAREZ: I don't know about that will point to, because that was just a transitional process in the adoption of the privacy law -
DR. SCANLON: That was why – I think these things do not belong after we've made the points about what's our continuing problem. They either belong before, saying here's how we explain slow progress, or you just don't mention them and we focus only on the future.
DR. SUAREZ: What's the heading in this section? Because I'm confused -
DR. CARR: Challenges – I call this challenges to implementation.
DR. SUAREZ: We've got to be careful of creating an executive summary of an executive summary, because we're going down now to summarizing in this first page -
DR. SCANLON: But that's what we already had. If you look at the executive summary we had, the first page and a half is essentially a summary statement.
DR. CARR: This is just a restatement of what we had.
DR. SCANLON: Somebody could read that and be done and then they'd go on to more detail in the rest of the executive summary. So what we were trying to do, I think as a result of yesterday's round table, was to say, okay, what are the highlights that belong in that page and a half?
DR. SUAREZ: As I recall, there were three things that were done, were already mentioned up there, HIPAA Health Transformation and Modernization of Health Care in the three ways, and there were five things that we said were challenges. Those were the only things. If we go more than three and five, then it becomes like a page and a half -
DR. SCANLON: I agree; I think these either get dropped or they get – I think the three needs to be ahead of the five bullets, because the five bullets are what are the continuing challenges.
DR. CARR: What about timelines were initially long, further extended, resulting in slower pace of adoption, as well as downstream delays of sequenced initiatives?
DR. SUAREZ: I don't think – the terms were initially long; they weren't really.
DR. CARR: Okay, so they weren't initially – timelines were extended?
DR. SUAREZ: They were only extended for one year. So if we're arguing that for one year we're here, I don't think that's probably correct. I mean, the time line was only delayed for one year, the original one.
MS. DOO: Well, it was the first extension in 2003, and then there was the NPI, which was in 2007 or 08 –
DR. SUAREZ: Extended? Delayed?
MS. DOO: NPI. It was how they framed the –
DR. CARR: Delayed the year. ?Various time lines were extended", how about that?
DR. CHANDERRAJ: I think Bill's point of the old challenges should be removed and we only should address the current challenges.
DR. CARR: So this is history, and then the top five are where we are today. Do we want to say education of the consumers about the law has not been robust? CMS would like to speak.
MS. DOO: I'm putting on a slightly different hat, and I'm assuming that we have some either evidence or justification for saying this, because I would suggest that OCR feels that it has done a yeoman's job, given the volume of complaints.
DR. SCANLON: Actually, I've suggested dropping that bullet because I wanted to know, even if it hadn't been robust, what was the consequence?
DR. CARR: Next, line 61. The law required baseline privacy and security standards in the health industry for the first time; covered entities and attorneys were understandably conservative.
Do we speak to that in the report, because we can't have it in the executive summary if it's not in the report.
We'll check that. So let me just take you through the rest of this; we can tidy this up a little bit of it.
Necessary next steps: So this is what I took Walter's thing and gave it this heading; HIPAA's goals remain highly relevant, with an ever-growing need to converge financial, administrative, clinical and quality data to promote greater quality and efficiency in the health sector, while ensuring the privacy and security of such data.
Their achievement is contingent on a strong commitment by the department and stakeholders to develop as rapidly as possible a comprehensive set of standards that achieve genuine administrative simplification and privacy protection involving the integration of data from a multiplicity of sources in ways never envisioned when the law was passed.
While the time frame of achieving these goals should be ambitious, recognition of other challenges impacting health care entities such as implementation of EHRs, meaningful use, adoption of ICD-10, et cetera, is critical, so that a realistic time frame can be established.
To realize the vision of HIPAA and adequately address the pressing health needs of an aging America, we need to move boldly and vigorously to complete the standardization needed to effectively and efficiently deliver quality care. Among the most important steps moving forward, we need to:
And then this tenth report to Congress, as required by HIPAA, chronicles key milestones in underlying progress and the ongoing work to fully implement all provisions.
DR. SUAREZ: If you go up, I think the introductory paragraph of this has a statement that I'm not sure, where it says that their achievement is contingent on a strong commitment by the Department and the stakeholders to develop as rapidly as possible comprehensive standards. I don't know what that means.
DR. CARR: I thought you wrote that.
DR. SUAREZ: I didn't Write that; no, not at all. The issue is not developing the standard, the issue is adoption and compliance.
DR. SCANLON: I think it is an issue of both the development of the standards, which that is part of the commitment, but then the issue of comprehensiveness is that – I think it's reasonable for people to say I'm not going to participate, or I'm going to find ways to opt out, when the standards don't deal with all the needs that exist. And that's where the comprehensiveness comes in.
DR. CARR: So would it be better to say -
DR. SUAREZ: When you look at the administrative processes in health care, these ten transactions that we're dealing with cover 90 percent of those processes, so it's as comprehensive as we –
DR. SCANLON: No, the issue is, if I'm submitting a claim and we talk about sort of attachments, the question is, do we need attachments, do we need sort of optionality? And if I'm one of the participants in this process and I start to argue I need this option because you haven't dealt with this situation, we have to be able to address that. That's where the issue –
DR. SUAREZ: That's what we're going to do with the –
DR. SCANLON: I know, and that's what I'm saying; we can't just say, you have to use our standards unless we can assure people that these standards meet their needs. And that's what I'm trying to get at.
DR. CARR: Okay. So we need to start the Full Committee meeting. This needs a little more work.
(Whereupon, the subcommittee adjourned.)