My name is Dr. William K. Rich. I am a practicing dentist in Williamstown, Kentucky and a member of the American Dental Association's Council on Federal and State Government Affairs and Federal Dental Services. It is my pleasure to appear this afternoon on behalf of the ADA before the National Committee on Vital and Health Statistics' Subcommittee on Health Data Needs, Standards, and Security. The ADA is a membership organization representing 74% of all dentists in the United States.
This statement summarizes the views and concerns of the dental profession regarding electronic transactions of health information as it relates to administrative simplification and health data standards addressed by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). As you know, pursuant to that law the Department of Health and Human Services (DHHS) is required to adopt standards for specified transactions to enable health information to be exchanged electronically. The law requires all health plans, clearinghouses, and providers who choose to conduct electronic transactions to comply with these standards. The dental profession is among those who generate information for electronic transactions. The following comments will address the questions the Subcommittee asked the Association to discuss, as well as other issues of concern to the profession.
1. What are your organization's expectations for the results of the Administrative Simplification standards requirements in the Health Insurance Portability and Accountability Act of 1996? In what ways will the outcome affect the members of your organization, both positively and negatively?
The Association believes that the implementation of uniform standards for electronic business and health care transactions is a more efficient and effective way of transmitting claims data. The present standards that have been developed for electronic transactions are based upon the paper method of performing the various transactions, such as filing claims, etc. While automating a paper environment allows data to be transmitted electronically, the paper methods are greatly flawed. Therefore, the standards need to be continually modified and uniformly implemented by all parties in order to attain the results anticipated by the administrative simplification requirements of the law.
Many standards developers and participants support ANSI as the central body responsible for the identification of a single, consistent set of voluntary standards called American National Standards. ANSI provides an open forum for all concerned interests to develop standard data transactions, and is recognized in the HIPAA as the starting point (and presumptive ending point) in the DHHS's search for appropriate standards.
The ADA suggests migration, rather than an immediate move, to the ASC X12 formats to permit the dental industry a reasonable adjustment period. In fact, requiring all health plans, clearinghouses, and providers to immediately comply with uniform standards could create such an upheaval in the dental community that the move to electronic transactions could be slowed.
Currently, a single dental EDI transaction generated from a dental office is normally handled by and dependent upon at least three different entities - a practice management vendor, a clearinghouse and a third-party payer. The vendors market and install the EDI services and determine which clearinghouse will be used. The clearinghouses, which are few in number, focus on building relationships with practice management vendors and do not directly market to dentists. The payers' loyalties are divided among selected clearinghouses, generally based upon their ability to secure the EDI services for the lowest possible charge. No single clearinghouse serves all payers.
Most of the electronic transactions are currently being transmitted using proprietary formats while only a very small percentage of electronic claims are transmitted using newly developed standards. At the present time, the ASC X12 837 transaction, batch method, is the only approved ANSI draft standard for trial use. However, the ASC X12 Interactive Claim standard will soon be finalized and, when approved, will be the preferred standard to be used for dental claims transactions.
The effects of proper implementation of standards to address administrative simplification should generally be positive for dentists. Increased operational efficiencies are likely. In addition, the ADA is pleased that steps are underway to address means of facilitating reimbursement of providers, including:
Interest was also expressed by 45% of dentists responding to a 1995 ADA survey in obtaining personal performance and outcome data, analyses of the utilization of various dental services, trends in reimbursement and new technologies. Standardized claims information should also facilitate these activities.
Only about 10% of dental claims each year are submitted electronically, but over 76% of dental offices have at least one computer in the office. At present, accounting systems comprise the largest category of computer use by dentists, followed by systems to handle expenses and insurance. Nearly 70% of the dental offices having computers have a modem and communications software which would enable them to connect to an external data network. Approximately 30% of dentists capable of accessing an external data network currently submit claims electronically.
The reasons given by those who have not submitted claims electronically include lack of equipment to access a network; cost of submitting the claims; third-party payers inability to accept claims electronically; and the burden of dealing with a clearinghouse. The small percentage of claims being filed electronically appears to be due primarily to the third-party payers' inability to accept dental claims electronically. Because dental insurance represents a very small percentage of business for many third-party payers, many payers continue to place a lower priority on electronic communications with dental offices than with physicians, hospitals and pharmacies.
2. Does your organization have any concerns about the process being undertaken by the Department of Health and Human Services to carry out the Administrative Simplification requirements of the law? If so, what are those concerns and what suggestions do you have for improvements?
To date, the ADA is comfortable with the opportunities to address NCVHS and work with appropriate HCFA staff in a manner that enables the Association to clearly convey its message. In creating a process to achieve administrative simplification, the ADA believes that the Secretary of DHHS should adopt ANSI standards for specified transactions to enable health information to be exchanged electronically. In addition to the adoption of standards, uniform implementation of the standards must be required in order to expect favorable outcomes. This means that implementation guides for the standard transactions must be developed and adopted consistently across the industry. EDI involves the exchange of information not only between parties (trading partners) and their computers, but also between business applications. When communication is exchanged electronically, each party reformats its outbound message from its internal processing format into a standardized data format. This process is referred to as data translation and is performed for both inbound data and outbound data. For example, the trading partner that receives a standardized-formatted electronic message translates the incoming message into their own internal format before processing the message in its application system. By using a standardized message, including the envelope and uniform data content, organizations can communicate effectively with each other.
The ADA has actively participated in ANSI's Accredited Standards Committees for many years. The ANSI ASC X12 standards, which are being developed for electronic insurance transactions, focus on the "envelope" used to transmit data electronically. The ADA has been working with the ASC X12 for the past six years in order to define the data content placed in that envelope and is responsible for the data as it pertains to dental claims. The National Uniform Claim Committee (NUCC) and the National Uniform Billing Committee (NUBC) focus on the non-institutional and institutional data sets.
The ADA looks forward to continued dialogue as significant work lies ahead for all those involved in establishing and modifying the standards, ensuring uniformity in the use of standard transactions, and overseeing and updating the process as needed.
3. What major problems are experienced by the members of your organization with the current transactions specified under the HIPAA? For generators of the data, how readily available is the information that you need to provide for the transactions and how meaningful is that information from a clinical perspective?
The ADA supports the adoption of standards for the financial and administrative transactions listed in the HIPAA, except with regard to health claims attachments. The ADA believes attachments are not needed in dental claims transactions, as only administrative data are necessary to process the claim. Standardization of claims attachment information should be limited to a well defined set of possible attachments and eventually eliminated as a requirement. If the claims transactions consisted of uniform data content and the third-party payers were required to standardize their processing methods, attachments could be eliminated.
Claims attachments, as specified in the law, are not synonymous with the patient health records or detailed clinical information, though some attachment information may be derived from a patient's clinical record. There is a natural tendency to believe that administrative data (claims data) will satisfy the needs of providers, payers, plan purchasers, researchers, and most importantly, contribute to more efficient and effective care of patients. Dental claims data in its current form does not provide researchers with the ability to study treatment patterns and the outcomes of care. Only the service provided to the patient, not the condition being treated, is reported in a dental claim. Therefore, before a reliable aggregate database can be developed there are a number of components that need to be created and finalized, such as the computer-based patient record and the terminology to capture the clinical detail and identifying characteristics.
The ADA supports the development of a computer-based patient record. In fact, the Association is actively participating in the development of such standards. When electronic patient record standards are addressed , safeguards protecting patients' privacy should be paramount.
4. How can the goal of administrative simplification best be achieved while meeting the business needs of all stakeholders?
The Association suggests that administrative simplification can be accomplished in a climate that recognizes and addresses the needs of all stakeholders by ensuring that the agency's rules or regulations are concise and clear. Standards should not be adopted on a piecemeal basis, rather migration should be enforced to a single set of standards, optimizing the use of resources needed for implementation. Lastly, the agency and the NCVHS should develop the migration timeline with input from the key stakeholders and consultants as identified in HIPAA.
The following points summarize our statement and recommendations for achieving the goals intended by administrative simplification:
Thank you for the opportunity to present our perspectives on issues associated with administrative simplification. The ADA looks forward to a continued and productive relationship with the NCVHS and the Subcommittee on Health Data Needs, Standards, and Security.