| Presented by: | Christopher J. Riopelle Chief Privacy Officer Gambro, Inc. Lakewood, Colorado 80215 |
Good afternoon Mr. Chairman and members of the Subcommittee. My name is Chris Riopelle and I am the Chief Privacy Officer for Gambro, Inc. Gambro, Inc. is the parent company for Gambro Healthcare, Inc. (“Gambro”), a large dialysis provider. Gambro provides hemodialysis, peritoneal dialysis and other related care to approximately 40,000 patients in the United States. We deliver our services in 32 states and the District of Columbia through approximately 530 dialysis clinics and the 12,000 employee members of our patient care team. Delivering the best patient care possible is Gambro’s number one objective.
I am here today to provide input and information relative to the impact of code set changes on a large provider who utilizes proprietary information systems. I will begin by giving a brief background on our information systems. Next, I will describe some of the impact of the Transactions Standards portion of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). Finally, I will address some additional considerations related to code set changes in a proprietary environment.
Unlike many of the organizations that have testified before this subcommittee, Gambro is not made up of thousands of constituents or members of an association, we are simply one large provider who is delivering high quality care to the chronically ill. Although we do not represent other health care companies here today, the challenges that code set changes create for Gambro will be similar to the challenges that many other proprietary system users will face.
We capture data on and submit claims for over six million patient treatments per year. The information systems that capture data and submit the claims were developed internally over the last 10 years. Gambro made the decision to “make” instead of “buy”, because at the time of the decision, there were not any commercially available applications that could adequately support our operations.
For the purposes of code set changes and HIPAA, we organize our systems activities around two main platforms, Renal Information Management System (“RIMS”) and Billing and Accounts Receivable (“BAR”). The RIMS system captures data at the clinical treatment level including necessary coding inputs. The RIMS system is a key component in generating reports on clinical activities. The BAR system extracts appropriate clinical data from RIMS in order to create and submit claims to payers. The BAR system serves as the fundamental basis for the running of all necessary finance and administrative reports.
For the last two years, Gambro has been working diligently to respond to the changes required by HIPAA. We are in the midst of the effort to respond both to the Privacy and the Transactions components of HIPAA and we wait with great anticipation for the final HIPAA Security regulation to be published.
The HIPAA Standard Transactions implementation effort is significant for Gambro as it is for other health care organizations. The major steps required are to plan, assess, implement, test and go live. The planning and assessment phases comprised several thousand hours of internal and external professional time at a significant six figure total cost. The implementation process will involve an estimated 30,000 hours of professional time and hardware purchases totaling to a mid seven figure total cost. This represents approximately 15% of Gambro’s total Information Technology Department capital budget for a year.
A representative project in the implementation process is the transition away from local codes. The transition away from local codes to standard code sets as required by HIPAA will be a significant undertaking for Gambro. The incidence of dialysis in a patient population is such that we have relationships with many different payers. It is not uncommon to have 4 or 5 patients who are insured by a particular payer. As such, we have over 13,000 payer arrangements in the BAR system. Most of these arrangements have local codes, approximately 23,000 in total. Although changing those codes to standard codes will provide some level of simplification, 23,000 iterations of the task is huge burden on Gambro and the payers.
The implementation process impacts many other areas within IT: Training, Reports, Data Warehouse, Planning, Testing, Electronic Medical Records, Billing Documentation, Translators and general infrastructure, to name just a few.
The specific areas of impact that need to be modified go beyond just information technology. The HIPAA Standard Transactions compliance effort requires a significant reengineering of business processes as well. We run approximately 300 reports on a regular basis within BAR and RIMS. To the extent the content of those reports change, the report running, interpretation process and training of staff must change as well. Additionally, changes in code sets and transaction standards impact our physicians and patient care workers as they capture the work they perform, our finance department and the general management of our business.
A final consideration in the area of HIPAA impact is the timing and interconnection of the each of the three subject matter areas, Privacy, Security and Transactions. Although the discussion today focused on code set changes, Privacy and Security will have very challenging system impacts as well. Managing the different compliance dates and their attendant systems impact is challenging, especially when the regulation has not yet been interpreted and final compliance dates and requirements are subject to change. It would be valuable to solicit input from affected organizations on how to effectively time the necessary system modifications for all large-scale changes. In some organizations depending on their systems and available resources, it may be optimal to execute all changes (Privacy, Security and Transactions) at once, in others, a long term phased in approach will be more effective.
There are many other considerations, not specific to the HIPAA mandated code set changes that are worth noting. One is the effort required to support old formats for the purpose of retrospective review. Depending on the change required and solution identified, new code sets may require that we create additional systems instead of just adapting current systems in order to support the ability to run retrospective reports. Changes may require a transition period during which there are two systems to maintain. Operating two systems could be a significant undertaking.
Another consideration is compliance. Because most of our patients ultimately become Medicare beneficiaries, Gambro’s most significant payer is Medicare. Following the necessary billing and documentation requirements for billing Medicare is a critical skill for our organization. To the extent the coding and related documentation requirements change, retraining our workforce to continue to submit accurate compliant claims is a tremendous undertaking with potentially severe penalties and other consequences.
An additional consideration in evaluating the impact of code set changes is how different types of organizations are impacted by the changes. I would urge the Subcommittee to consider the differences between a commercial software vendor and a proprietary user as it determines its guidance. As a proprietary user, there are a limited number of people focused on adapting to new legislative changes or system enhancements. Our information technology talent must necessarily spend its time responding to ongoing business issues and, as a result, proprietary users like Gambro are forced to react to legislative change instead of proactively searching out potential changes. A commercial vendor, in the business of providing the latest and greatest applications, for a fee, has a significant financial incentive to be proactive in the area of legislated change. They can afford to have the human capital resources available to study new changes and develop new products in response.
It is important to acknowledge another difference between commercial vendors and proprietary users: bearing the cost of change. A commercial vendor may be obligated under current licensing and updating agreements to incorporate the necessary regulatory changes into new versions of its products. These updates and new versions are part of an economic price and exchange between a commercial vendor and a customer. The costs of these changes are borne by hundreds or in some cases thousands of customers. A proprietary user bears the cost of the change by itself, and its most obvious benefit is the ability to be compliant and stay in business, not necessarily to recognize new revenue from more sales.
In addition to providing some examples of the challenges and difficulties of changing code sets in a proprietary environment, a key objective today was to provide some concrete recommendations to the Subcommittee on how to make code set changes more effective for the proprietary user.
If there was one key driver that I could highlight for the Subcommittee it is that of lead-time. In order to effectively integrate code set changes in the proprietary environment a minimum of three years of lead-time is necessary. Because of the significant budget and business resource impact on a proprietary user, planning three years in advance is absolutely necessary to make the change and continue to operate our business. This lead-time needs to begin when the change is final, after it has been tested, comprehensively endorsed by the key constituents in the healthcare industry and funding support identified if at all possible.
We cannot afford to be in a constant state of legislated change in the health care industry. Final comprehensive changes need to be released with detailed action plans supporting them.
New changes must be tested and endorsed by all the key constituents in the health care business. The health care industry can drive change. Changes will be much more effective when they are pulled by the industry rather than being pushed by regulatory bodies. The changes need to be tested to ensure that they will be appropriate, industry-wide solutions.
With change comes significant additional cost. Although reimbursement levels occasionally increase, in our business they historically have not increased at a rate adequate to support the funding of wide scale information technology changes. We would encourage an evaluation of the estimated cost of changes and identification of potential funding sources supporting such change.
In order to accomplish the objectives above and thereby ensure more effective code set changes in the future, we would support the suggestion made by other organizations in previous testimony on this subject before the Subcommittee that a multidisciplinary team be established, which includes proprietary users, to evaluate all of the impacts of changing from one code set to another.
I recognize that some of the issues presented today are not unique to the members of the Subcommittee, you have been dealing with these policy issues longer than most. My remarks today have not been technical; there are many organizations that have presented the technical considerations much more effectively than I could. However, I do hope that the information has shed some additional light on the specific challenges that HIPAA and other code set changes create for those proprietary users who are trying to bear the cost of change while continuing to deliver high quality care to its patients.
In closing, let me be very clear, we are supportive of changes in coding that will provide for more effective capture of clinical data and more effective reimbursement. However, it is critical that such changes are required only after the appropriate planning, testing and lead time have been thoroughly evaluated with special emphasis on the impact to those proprietary users in the health care industry.
Thank you for the opportunity to be with you today.