August 2004 Newsletter

The Next HIPAA?

by , Vice President of EDI Services, Partner

At a recent meeting, a client asked, "What's the next HIPAA coming down the pike?"

The question was difficult to answer, because this HIPAA is not yet done.

Confusion is still prevalent, and it is important to note that the only thing that can be stated with certainty is that payers must accept claims in the HIPAA-mandated format.

Many providers feel that becoming compliant requires them to produce claims in the ANSI X12N 837 format. This is not necessarily required if a clearinghouse is inserted between the provider and the payer, as is the case with any Quadax client.

Quadax has diligently worked for more than two years to achieve compliancy. We're almost there, but not completely, because a few payers have not yet implemented their 837 processes. This does not mean claims cannot be sent, it simply means these payers are relying on CMS's contingency plan, and are continuing with business as usual, processing claims from a legacy format.

Compounding the challenge of achieving compliancy is that a number of payers have also opted to insert a clearinghouse (or gateway) as their front-end processor; Ohio Medicaid, Pennsylvania Medicaid, WV Medicaid to name a few, have taken this approach. Their use of HTP, EDS, and UNISYS respectively has added a certain level of complexity to the process, but progress has been and continues to be made.

A common misperception associated with this law, is that a conclusion to this process is up ahead. That is far from reality, because the act of achieving compliance does not absolve entities from the task of staying compliant. As shortcomings are identified, formats are certain to change. We've already seen that, because the ANSI 4010 format was quickly amended to a 4010A1 format after payers uncovered that data required for their adjudication systems to be able to process and pay claims was absent from the initial format. As is usual and customary in this industry, this too shall pass. Before the 4010 formats were completely documented, actions to develop a 4050 format were underway, while a movement to introduce a 4010A2 format in the interim is garnering attention.

The reality of this situation is that the cost of doing business in the healthcare arena will continue to remain fluid. For providers who rely on their billing system vendor to supply their EDI needs, there are certain to be application, support, and enhancement fees each time a new version is released, not to mention personnel costs associated with operating and managing these jobs. However, users of clearinghouse services will benefit economically because, by the very nature of the business, the clearinghouse is required to be responsive to the changes, without assessing additional development fees, since for most, the revenue model is to charge for transactions delivered.

Aside from the ability to budget, since actual expenses can be calculated and forecast, the use of a clearinghouse provides significant additional value. The task of sending claims and retrieving remittance requires the establishment of an audit routine to ensure accuracy of the submission process. Intrinsic to the ANSI process is the two-way exchange of files: receivers of data (payers) are obliged to return a functional acknowledgement (997) each time a new claim file (837) is received. Following the 997, which indicates if the file is acceptable, the payer should also supply a detailed listing of the claims received, in the form of either an 824, 864, 277, or 277U. And, since there is no established standard for the response, the organization must be able to adapt to the variety of methods and formats that are returned by the payers.

For Xpeditor customers, the act of ensuring accuracy takes the form of "tracking records" and "web reports." The tracking record details the life cycle of a claim, from the point at which it was entered into Xpeditor, through the conversion, editing, and correction process to the release, submission, and eventual acceptance of the claim by the payer. Additionally, the portion of the 837 that makes up an individual provider's claims, as well as any and all response files supplied by the payer, are accessible to the client through our secure portal via the Internet. The openness of this audit trail exposes Quadax to all manner of scrutiny, but also allows for a high-degree of confidence in the thoroughness of our processes and our client's satisfaction that their claims are complete, compliant, and can be adjudicated.

The solid foundation and coordinated framework of the system Quadax has put together, coupled with the support network and development staff assembled, assures our clients that we are prepared to implement future transaction rule changes in a seamless and non-disruptive manner.

Additionally, this infrastructure supports an integral protection from a potential government audit, since every time a claim is changed, a record of how, when, and by whom is tacked onto the permanent record.

Summing all of this together, Quadax Xpeditor clients enjoy an automated and improved process that provides new levels of business analysis, on a platform that has the built-in capacity to include new capabilities while reducing the risk of possible penalties and fines.