Members of the Committee, Ladies and Gentlemen;
Thank you for this opportunity to testify to you on UHIN’s experience with the adoption of transaction standards. I am Bart Killian, the COO of UHIN. I have been with the company since it’s inception and have been deeply involved in the efforts to implement transaction standards in the state of Utah.
UHIN formally opened its doors for business in 1995. The concept for UHIN began earlier as a coalition of providers, payers, and state government formed to begin a venture to simplify the process of claim submission and payment using electronic data interchange. From the very inception, UHIN’s founders decided that all users of the network would utilize a single transaction standard for all the various transactions carried on the network.
I have to admit that, at the beginning, we were unsure if this idea would work. However, 6 years later, I can unequivocally say that UHIN has been a success. We now serve approximately 90+ percent of the medical and institutional providers in the state of Utah, and we have all the payers domiciled in the state (with the exception of Cigna) in addition to a growing number of other nationally-based payers. UHIN uses only X12N transaction standards.
At the beginning, we were unsure of what it would take to make this idea work. Now, in hindsight there is a definite sense of the factors needed to bring about the adoption of standards.
First, there must be a defined group of partners. Because there are so many meetings involved in the process, it is best if the partners are co-located so that members can meet each other and begin to know and trust the persons involved. In addition, this group must have an organization at the center who is neutral and trusted by all the partners. It is our belief that, given the competitive nature of the health care industry in America today, this neutral, trusted third party is essential to the success formula.
Second. It is necessary to bring immediate value to the participants. In UHIN’s case, we immediately modified and began using an existing piece of software developed for HCFA as an all-payer method of submitting institutional claims. In addition, we very quickly took other software for professional billing and modified it so that it could also be used as an all-payer system. While both pieces of software were far from perfect, both worked sufficiently well that payers were able to immediately begin to receive electronic claims.
Third. If anything characterizes this effort it is the ongoing nature of problem solving. Effective problems solving is key to the success of this type of effort. When we first began we did not have an effective way to identify and resolve issues. For example, it took us nearly 2 years to release our first standard on billing anesthesiology. Now, we accomplish similar standards frequently in less than 4 months.
Fourth. There is a synergy that begins to be felt once the process has begun. For example, if a provider is sending electronic claims to Medicare, under UHIN there is no reason that they cannot send electronic claims to 9 other payers with a minimum of effort of their part. Thus, convincing one provider to submit electronic claims should impact all the UHIN payers equally. The efforts of one member impact many members. Thus, the effect of doing electronic commerce as a group gives benefits that far outstrip what would happen if each payer or each provider was attempting to do this individually.
As I mentioned above, it is important to immediately bring value to the partners. Specifically, the creation of UHIN immediately created a level playing field. All partners had a voice in identifying and resolving the issues that were addressed. Electronic commerce has the effect of making geography less important, particularly for outlying providers. Utah is a large, highly rural state and one of the immediate values was that payers were immediately able to receive claims from rural providers in the same fashion that they received them from closer, urban providers.
All partners in the coalition were required to initially buy a seat on the UHIN Board of Directors for $25,000. This initial investment was used as start up funds until the company began billing for the network services. After UHIN went into production, our partners estimated that it took them less than 6 months to recoup this investment.
One of UHIN’s core missions is to reduce the cost of health care to end users. To this end, we are a not-for-profit company who charges far less than our for-profit competitors. In addition, many of our decisions have resulted in a reduced cost to our end users. For providers, the first value that they received was that they were able to reduce the cost of submitting claims. In our first year of operation, for a one-provider office, UHIN charged them $50 for the software, and a $100 per year membership fee. For this, they could submit all the claims that one provider could generate. For larger providers the cost was correspondingly higher, but we were committed to lowering costs for provider from the onset.
At the beginning of our second year of operation, UHIN staff joined the X12 organization and Dr. Jan Root, the UHIN Standards Manager, became the primary author of the 837- Professional Health Care Claim implementation guide. UHIN was immediately able to make an impact on X12 and other national organizations - WEDI, HL7 – because UHIN is a coalition of payers, providers and government. At UHIN’s meetings we must consider the views of all three. Hence, UHIN is able to understand and represent more than a single perspective. Our national involvement has created immense value for our members as we are able to take UHIN’s positions on issue to the national discussions and, in turn, bring back the decisions, and the rationale for those decisions, to our membership. It has become an extremely beneficial flow of information that has allowed our members to have a much larger influence on the national dialogue that one would normally expect from a small rural, Western state.
As I mentioned earlier, one of our key factors in success was the development of a process to equitably and efficiently handle the numerous problems – both technical and political – that inevitably arise from working within a coalition. The central elements of that process are:
Open discussions: all meetings are open to any member who wishes to participate. There are no ‘closed door’ meetings.
Censensus: UHIN strives to achieve consensus in it’s decisions. Consensus means that all members must listen to everyone else as it is possible for a single vote to block a motion.
Participation: Those who participated in the discussions benefited in two ways (1) they often learned of ways to solve problems in their shops and (2) they were able to get their business needs met.
Flexibility: When UHIN began, it was truly an experiment. We proposed standards but it was frequently necessary to modify them when they were implemented and unforeseen problem arose. It is necessary to know that when adopting new standards, there are no guides to show you the way. You have to figure it out for yourself, pick the best path you can determine at the moment, and then have the freedom to quickly make changes as necessary.
Education: Moving from a paper environment to an electronic process is not a simple process. It has far reaching consequences that few of us could foresee. As the network users learn these painful lessons we have found that it is necessary to both teach newcomers and to remind ourselves frequently. Health care is a complex industry and we are still learning how electronc commerce impacts this business. Education is a necessary portion of the process if it is to success.
Trust - Probably our biggest challenge at the beginning of the process was to establish rules that would work to allow the various partners to have some sense of trust in UHIN and in each other – at least as far as their interactions concerning UHIN were concerned. I need to emphasize that most of the payers who initially formed UHIN as well as the providers, were, and still are, fierce competitors. UHIN enacted two key operating principals at the onset that allowed trust to form:
Consensus: the consensus rule meant that no one entity could control the Board or the Standards Committee meetings. Each entity that bought a seat on the board had one vote. As I mention before, consensus politics is very different than majority rule politics. As other industries have learned, the successful deployment of electronic commerce in a new industry requires that partners listen to each other and meet their data needs to the greatest extent possible. In the paper environment, providers listened to payers but payers did not listen to providers and each payer was asking for different things! The consensus decision assisted this new way of doing business.
Not opening the envelope: the not-opening-the-envelope decision was a radical departure from the traditional path taken by clearinghouses of being all things to all users; you (senders) give us data in any format and we’ll create crosswalks to put it into any other format (that the receiver wants). Because it was necessary to establish an environment where competitors could put all their data on one switch, the closed-envelope decision was made to increase the trust level between competitive network users. No user could have access to another user’s data. At the beginning, this was a key decision towards establishing trust between users.
Process – The early years of UHIN could be characterized as the trailblazer years. We didn’t quite know what we were doing but we knew we had a lot of problems to solve. Over the years we have evolved a process that (1) quickly identifies the problem, (2) brings the appropriate persons together to discuss solutions, (3) everyone uses the consensus process and (4) where, when possible, the solution is rapidly incorporated into the product. The process that UHIN has developed utilizes a monthly Standards Committee meeting which any user of the network can attend and vote.
The Standards Committee is the center of both discussions and problem resolutions and of information gathering. Any user of the network can bring a problem to the Standards Committee and it will be discussed and, if deemed appropriate, a subcommittee will be formed to discuss the issue in detail. The members of the subcommittee are not necessarily the same persons as those who attend Standards. Instead, the subcommittee attendees tend to be specialists in whatever topic is being discussed. Staff provide all the background material and training for the members and the subcommittees are chaired by a member of the group. Typically, the subcommittees review the topic in detail, bring a recommendation back to Standards where it is reviewed and then voted on. A unanimous vote takes the recommendation (as a draft Standard or Guideline) to the Board of Directors for final approval. There is a final 30 day waiting period during which any member can call attention to a problem with the Standard and then the Standard becomes incorporated into Utah State Rule under the Insurance Commissioners office.
If a Standard is later found to be problematic, then a network user can bring the issue back to the Standards Committee for further discussion and, if necessary, the Standard may be amended.
There have been three major areas which have been the focus of much discussion and debate in UHIN.
Codes – There are two areas in codes that have caused problems. (1) It is not uncommon for payers to use national code lists in different ways. Most payers try to stay with the original meanings of codes but some have found it expedient to use national codes in creative ways. (2) If it was not possible to stretch the meaning of a national code far enough, payers have, of necessity developed their own local codes. I addressed the Committee on the topics of local codes yesterday so I will not go into detail here.
Identification – Early on UHIN attempted to create a single state-wide system for identifying payers and providers, similar to what the country is struggling to do under HIPAA. As with the national discussion, the first question to answer was what was the number to be used for? While we resolved the issue of the payer identifier by utilizing it as a routing number, the provider identifier proved to be a very difficult nut to crack. We were on the verge of implementing a system when we heard of the development of the national provider identifier. We decided to wait until the national identifier was implemented rather than implementing our own system. We have followed the discussions on the national identifiers quite closely and it has been interesting to see how closely the national discussion has paralleled our state-wide discussions.
All-Payer All-Provider System - The third area we continually deal with is the challenge of creating and maintaining an all-payer all-provider system for all the various transactions. The health care industry in America is driven by creative and inventive solutions to the question of how to provider quality care for minimal cost. The challenge of keeping up with various payers and providers solutions is like trying to keep up with a 2-year old; you’re always a step behind and you never quite know where they’re going to go.
In conclusion, the success of UHIN is largely due to the fact that it has given value – immense value – to its users; to ALL of it’s users. The forces of competition constantly threaten to drive our members apart. It is only because of the value that the coalition provides that UHIN has not only survived but prospered.
However, we can never rest on our laurels. Success is always an ongoing process; there are always new areas of discussion, even contention, which must be ironed out. The appreciation of the consensus process must continually be renewed. Health care is a continually evolving industry and UHIN, in conjunction with the ongoing national discussion, will continue to work to find ways to bring value to our members.