Statement of the National Uniform Claim Committee

To the
National Committee on Vital and Health Statistics
Subcommittee on Standards and Security

Presented by Jean P. Narcisi

July 13, 2000

My name is Jean Narcisi. I am the Director of Electronic Medical Systems at the American Medical Association (AMA) and Chair of the National Uniform Claim Committee (NUCC). It is my pleasure to appear today on behalf of the NUCC before the Subcommittee on Standards and Security of the National Committee on Vital and Health Statistics (NCVHS). I would like to thank you for the opportunity to testify.

My brief statement summarizes the NUCC’s views regarding the issue of “local codes”. As you may know, a letter was sent last March to Dr. John Lumpkin, NCVHS chair, expressing some concerns regarding the use of local codes and requesting that the subject be explored by the NCVHS. The NUCC believes it is important to gain an appreciation of the magnitude of the problem and to discuss implications, such as industry facilitation or approaches for efficient elimination of local codes. A more thorough understanding of the problems and issues with local code usage by all parties will better enable a sound Administrative Simplification solution. Therefore, I am pleased to share with you the NUCC’s perspective.

The subject of the use of local codes and the difficulty of converting Medicaid local codes to national procedure codes was raised at our February 16-17, 2000 meeting by Ms. Linda Connelly, member of the NUCC representing the National Association of State Medicaid Directors (NASMD). In addition to Medicaid coding problems, several other NUCC members stated that the issue of local codes is not limited to Medicaid, but also affects private payers and providers.

The NUCC believes that the development and use of local codes is in direct conflict with the intent of the standards addressed by the Administrative Simplification portion of the Health Insurance Portability and Accountability Act (HIPAA) of 1996. However, we realize that a reliable process must be established in order to effectively convert local codes into a national system.

The NUCC represents many constituencies, and our discussions have been unable to identify the existence of any national process for recognition, establishment, or maintenance of local or regional codes. In addition to the information gathered from these hearings, the NCVHS and the Department of Health and Human Services may want to formally survey payer and provider groups, regarding the current uses of local codes.

NPRM Comments:

The NUCC made several comments regarding coding issues in response to the HIPAA Notices of Proposed Rulemaking (NPRM) that I would like to highlight for you:

• The NUCC believes that if local codes are adopted as part of a standard national code set, the modifiers that apply should also be included.
• In addition, if temporary codes are established for certain code sets (e.g., local codes), there should be a mechanism developed to move these temporary codes into a national code set and the temporary codes should sunset after a specified period of time (e.g., next regular update for a specific code set). Furthermore, the NUCC believes that code sets should be technologically independent of computer platforms and transmission protocols. Therefore, any proposed coding modifications to the national code set should be handled through the respective committees currently maintaining the code sets and the review process should include the appropriate affected parties.
• The “J” codes are part of the alphanumeric Health Care Financing Administration Common Procedural Codes (HCPCS) and are assigned on an annual basis. Many of the local codes that have been created were developed because of the lack of a “J” code for a new drug. Therefore, HHS proposed in one of the NPRMs that National Drug Codes (NDC) become the national standard code set for drugs. The NUCC believes that this could create extensive system changes for providers and payers without sufficient benefits. Furthermore, the NUCC believes that the issue of the “J” codes versus the NDC codes needs much more evaluation. Therefore, the NUCC supports the following recommendation: NDC codes should only be used for prescription drug programs, retail pharmacy claims and durable medical equipment (DME) that do not have “J” codes until the sufficient benefits and overhead costs of implementing the NDC codes exclusively can be further researched.
• One of the HIPAA NPRMs specified that those who receive electronic transactions covered by the transaction standards must be able to receive and process all standard codes, without regard to local policies regarding reimbursement for certain conditions or procedures, coverage policies, or need for certain types of information that are not part of a standard transaction. The NUCC supports this position in order to standardize the implementations. However, the NUCC believes that the language in the Final Rule should be expanded to include reference to applicable code sets including the numeric or alphanumeric codes and modifiers and associated narrative descriptions as well as the notes and guidelines published by the code set developer that instruct the user how to apply the codes and modifiers of the code sets. In addition, the Final Rule should declare that the version of the code set applicable to a calendar year is the version specified by the developer as applicable for that year. This would promote uniform implementation.

Other Code Sets:

In addition to the “local codes” as they pertain to procedure and diagnostic code sets, the NUCC believes there are several other code sets used in electronic transactions that need to have an effective national maintenance process established because there have been a number of problems with adding or modifying the codes. These code sets include the following:

• Place of Service (POS) codes – The POS codes identify the location where services were performed. POS codes are reported on professional paper claims as well as electronic claims. The Health Care Financing Administration (HCFA) maintains the POS codes, however, the process for maintenance is not at all consistent. For example:

The NUCC was copied on a request to HCFA regarding the possible implementation of two new POS codes in March of 1999. The Administrative Uniformity Committee of Minnesota requested the addition of codes to be added for urgent care-office and urgent care-hospital. The NUCC reviewed the request and determined that the NUCC should recommend to HCFA that the NUCC take on the role as the reviewer of POS code requests. At that time, the HCFA representative to the NUCC brought up a concern regarding the review cycle for Place of Service codes. The HCFA representative stated that although HCFA staff maintains POS codes and the comments regarding changes or additions to the POS codes, there was no established cycle of review. Apparently, Y2K concerns had temporarily halted implementation of any new POS changes. The representative further stated that they believed the Administrative Uniformity committee at HCFA would likely welcome the support of a national committee such as the NUCC potentially taking on the responsibility of maintaining the system.

As a result of those discussions the NUCC made a formal recommendation to HCFA that the NUCC become the maintainer of all POS codes. To date, a formal response has not been received from HCFA regarding the NUCC recommendation to be the maintainer. In addition, the Administrative Uniformity Committee of Minnesota has not received a response from HCFA regarding the request for the urgent care codes. Therefore, a “local code” for urgent care is now used in Minnesota for electronically reporting services performed at urgent care facilities.

• Claims Adjustment Reason codes – These codes communicate an adjustment from a third-party payer to a provider and give a reason why a claim or service line was paid differently than it was billed. The code set is maintained externally from the HIPAA transactions and Implementation Guides. The committee has no formal governing protocol and is made up of interested individuals from the X12N community. However, the number of third-party payers greatly outnumbers the providers (e.g., 11 payers, 4 providers, and 2 vendor/clearinghouse representatives). Therefore, if a provider member requests a suggested change in nomenclature to a code, it is very difficult to succeed in getting the change approved because there is not a provider/payer balance on the committee. Primary distribution of this code set is the responsibility of Washington Publishing Company.
• Claims Status codes - Claim status codes communicate information about the status of a claim, i.e., whether it's been received, pended, or paid. This code set is maintained by the same committee that maintains the claims adjustment reason codes. Primary distribution is of this code set is the responsibility of Washington Publishing Company.
• Remittance Advice Remark codes - Remark codes are used to relay service-specific informational messages that cannot be expressed with a reason code. Remark codes are maintained by HCFA but may be used by any health care payer when they apply. Code requests are submitted to one individual at HCFA that manages all of the maintenance of the code set. Primary distribution of this code set is the responsibility of Washington Publishing Company.
• Provider Taxonomy codes – This is an external code set whose original purpose was to codify provider type and area of specialization for all medical related providers. However, the Provider Taxonomy Code list is inconsistent. It appears to have been developed based upon a combination of services, specialties, fields of scientific study, as well as age of the patient. The Blue Cross and Blue Shield Association acts as the administrator of the Provider Taxonomy Code list, therefore, the code structure is classified as external to X12. Ongoing maintenance is solely the responsibility of Workgroup 15 (Provider Information) within ANSI ASC X12N, and the members of the committee consists of interested individuals from the X12N community. As with the claims adjustment reason code committee, there is no formal governing protocol. Primary distribution of this code set is the responsibility of Washington Publishing Company. Similar to the code sets that I mentioned previously, the process for maintenance is not at all consistent. For example:

I have personally attended several Provider Taxonomy meetings over the past two years because the code list was not consistent with the AMA Physician Masterfile Database. The Masterfile Database includes over 160 specialties that are primary source reported from the American Board of Medical Specialties. There were approximately 34 specialties that are part of the AMA Masterfile that are not included in the Provider Taxonomy Code list. Therefore, I attended the meetings and participated in several conference calls in an attempt to get the missing specialties included. However, to date our suggested changes have not been added to this code set.

The NUCC believes that the above mentioned code sets are considered data content and, therefore, should be maintained by the key parties who are affected by health care electronic transactions (e.g., those at either end of a health care transaction such as payers and providers). In addition, a reliable process must be established in order to effectively manage a national system. Furthermore, the utility of these code sets may go beyond HIPAA transactions. For example, the potential for use of these code sets in the public health community is very conceivable if they are broadened to include codes for community health issues such as maternal and child health, prenatal care, etc. As you may know, the public health community does not fall under HIPAA, however, there is a desire to standardize the transactions and code sets for public health reporting. It would be much more efficient and cost effective if the same code sets were used for both HIPAA and public health transactions.

Recommendation:

The NUCC would be the appropriate committee to oversee the maintenance of the five code sets that I previously discussed. The NUCC includes representatives of standards development organizations, regulatory agencies, public health, and the National Uniform Billing Committee. Criteria for membership includes a national scope and representation of a unique constituency affected by health care electronic commerce with an emphasis on maintaining a provider/payer balance. In addition, the NUCC would collaborate and coordinate with the other data content committees and standard development organizations named in the Memorandum of Understanding (MOU) for managing the change requests to the transactions.

On behalf of the National Uniform Claim Committee, I want to thank you again for this opportunity to comment before the NCVHS. I want to express my appreciation for the several opportunities that have been provided to-date to assist the NCVHS and the Department in fulfilling the responsibilities associated with Subtitle F of the Health Insurance Portability and Accountability Act of 1996.

As one of the consulting organizations specified in HIPAA, the NUCC is highly supportive of the development and use of national standards for electronic transactions. We look forward to working closely with the NCVHS and the other members of the MOU to maintain the standards that will provide our nation with an administratively simplified health care system.