[THIS TRANSCRIPT IS UNEDITED]
Hubert H. Humphrey Building
200 Independence Ave., SW
Washington,
D.C.
TABLE OF CONTENTS
Page
Committee meets prior to hearing 1
Call to Order 34
Panel on Health Plans 35
Panel on Payors 90
Subcommittee Business 129
P R O C E E D I N G S (8:15 a.m.)
MS. GREENBERG: I think that this subcommittee will lay out some type of research agenda say for the next five years, or four years as it could feed into those annual reports that would definitely require I think a contractual arrangement. They were talking about satisfaction possibly, they were talking about cost benefits, there was I thought a beginning of an interesting discussion about how we will evaluate whether we've really accomplished administrative simplification through this process. So that's something I think that would be very valuable to this subcommittee to be looking at. I don't think anybody else is really addressing himself to that.
MR. SCANLON: The other thing is this is not all as straightforward as I think the original drafters of this legislation thought, that there were standards to be adopted and then go from there. I think what we're hearing here, we're sort of getting a sense of really sort of clearing the way to what exactly is this process, what exactly are the standards needed, where do they stand now, what are people's concerns. That I guess I see as the first role of the committee, the idea of the forum for the others to come in. I don't think we know enough about what exactly these standards are, where we will be until we hear a little more.
DR. STARFIELD: There are people on this committee that work with the standard setting organizations. If they don't know --
MR. SCANLON: They believe they had standards, I'm not sure that's the case.
MR. MOORE: The standard setting organizations have been so collegial that there is no standard. There's just a lot of data being gathered and you pick and choose from the pile and work with your partner, be it a provider, and if you're a payor, then mainly the payors are the ones setting the standards and not the providers. The payors are the ones that go to the standard meetings and the vendors. They then set the standards.
You go to one of these standard meetings, you've got five people -- you don't have as many people in a room as we have here in an SCO meeting, setting a standard that everybody is going to use. You have technicians from companies, and most of them are -- HCFA sends a few people, but you have the Prudentials, the Aetnas, the Metropolitans and the EDSs and the big vendors there because they have a vested interest to be there.
They get what they need to do their business. That's why you have the attachment issues and all this. I want more documentation so I can prove without a shadow of a doubt if I can that this care was really needed, to my satisfaction, not the health care industry's satisfaction, to the payor's satisfaction. That's all that this has been. If you're going to make it more than that, you're going to have to entertain -- I heard yesterday for the first time from the AHA and the AMA that they think we should go to an X12 standard. If you leave it to me and Bill, I'm not going to -- well, it doesn't matter we would set a standard for the X12 for the claim and then work on what they needed in the content and all, like George says, but you change the time frame for implementing it, if that's what the industry says that they want.
It's not the payors who have the problem, it's the providers. They're the ones that are going to pay the price and that's what concerns HCFA. We can take any standard you want today and we can make our contractors take them on all the Medicare, it is not a big deal. What the problem is how much of a burden are we going to put on the providers to have to make all those changes and drive them crazy.
DR. IEZZONI: This kind of struck me like one of those unfunded mandates. Wasn't there legislation passed in the 104th Congress to prevent unfunded mandates to states that would cost over a certain amount of money? Well --
MR. MOORE: They pass it about every six years and they ignore it.
DR. IEZZONI: Yes, I was thinking that this sounds like an unfunded mandate to providers to do certain things too.
DR. STARFIELD: I think Clem would tell you the same thing. Clem would tell you to go with X12.
DR. LUMPKIN: I think that my operating hypothesis is that we're currently in an environment where any standard is better than no standard. If we take some base standard and work from that and migrate off of that, where we can get in five or 10 years will probably be where we want to go. We can look and test it. The difficulty is that we don't have a standard and we don't know where it is.
An example is we're in a situation of trying to arbitrate being going through the metric system and inches and feet and pounds. There's some very valid arguments on one side or the other, you can certainly make scientific measures in either system, one is more difficult than the other, but there really is no right answer. So by listening to these groups, I think it makes it, at least in the way that I think, it allows me to get to a hypothesis and to say now, if we think we're going to be able to get to a standard, what standard will be acceptable to the broadest groups that will give us a foundation to build off and to get started, because we need to make a first step. I'm not sure what direction that first step is, I just know we need to make it in order to get this process underway.
DR. STARFIELD: That's what I'm arguing for. I'm arguing for a clear work plan that's very specific that says what we want to gain from these hearings and how we're going -- what's the information gathering process and how are we going to synthesize the information that we get.
DR. IEZZONI: Because I still haven't heard a good answer to my question about what are we going to do with the testimony that we heard yesterday and we're going to be hearing today and what we're going to hear in February. We've listened to it and it will be put into minutes, but --
MS. GREENBERG: I think that's -- what do you want to do with it?
DR. IEZZONI: That's what we need to discuss.
MR. SCANLON: This committee could, there are different things to do actually. In a way, this is more like a legislative development process on the hill, what we're going through now in terms of hearings and this sort of thing, clarifying what the issues are and what the positions are. If the committee wants to provide advice to HHS in terms of what direction the standardization efforts should take and what are the things to watch out for, then this would be the sort of information that would feed in there.
Then secondly, as HHS develops some draft positions, I think we would want the committee to look at and give some advice. It's again based on the perspectives we're hearing here. But again, it's easy to minimize this effort as not being related to broad information policy, it very much is. This will be the claims data of the future. This will be the encounter data of the future. These are the data systems on which researchers and statisticians will rely in terms of administrative data, probably for quality related data, besides the surveys and direct data collection. So that's the other perspective to bear in mind.
MS. GREENBERG: This will be enrollment data.
MR. SCANLON: It's administrative data, but the potential uses are no less significant than the whole. This is what John Winthrop(?), used for example, for his work.
DR. IEZZONI: Yes, and we've seen how far it's gone. When you mention the word quality, it sets off all sorts of alarm bells in my head, but I still think I agree with Barbara. I second her statement that we need to have a clear work plan at things point because I thought that our committee wasn't just supposed to give a general sense of the direction of the field and the opinion makers. I thought that we were supposed to actually get specific, aren't we?
MS. GREENBERG: One thing I was wondering is whether it would be useful, we maybe don't have enough members to do this, but there are these six implementation teams that are now about to get off and running, right?
MR. MOORE: Some of them are running.
MS. GREENBERG: Some of them are already running, but I don't think --
MR. MOORE: Some of them are well beyond the starting point.
MS. GREENBERG: Okay, but I mean I don't think the incorporation of non-HCFA staff has really happened yet, but there are HCFA and other departmental staff on all of these committees. These are the implementation teams addressing the different transactions, addressing the Kennedy-Kassebaum. You might want to have, one thought is one member be a liaison to each one or some of them be liaisons. There's one on coding and classification, which is specifically going to be addressing medical diagnoses and procedures. They're going to have to do the specific work of coming out and evaluating and looking at needs and requirements and preferences, et cetera. There's another one looking at enrollment data, there's another one looking at the claims and claims attachments. There's one looking at security issues, which is in the title of this group, though we haven't really addressed security specifically very much. There's one looking at identifiers.
So I mean, it's very specific work that has to go on in the next several months to meet those targets. The question is how, in addition to serving as a forum and bringing in the groups as you do, how you want to interact with those specific work products and work groups.
MR. MOORE: What are you going to do when we come to you, after we go through all this information we're going to get from the SDOs this month, and we come back to you and we say here are all the data elements for an enrollment transaction set, there are some that we don't think are necessary, there are some that we think are missing, et cetera, based upon our discussions? We're going to present that to you.
DR. IEZZONI: I know exactly what we're going to do, because we've done it before so many times. We're going to say why weren't we aware of the process as it was going on? Why are you coming to us with a fait accompli? That's why I'm kind of thinking that Marjorie's idea is a good one. MR. MOORE: We can give you what we get from the SDOs, which will probably be about that thick, and you can go through it.
DR. STARFIELD: But it needs to be synthesized. That is the role of the work group is to synthesize all this information so it's put in a form that's useful.
MR. MOORE: Ask me to synthesize it.
DR. LUMPKIN: But I think that there is a synthesis process that will be going on within HHS. They have people who spend their work lives doing this. Unless we on this committee make that kind of commitment, we're not in the position to do that. So we're now in the position as a work group and a committee of taking their work product and evaluating it. What's the basis on which we evaluate it, what are the tests that we apply? The tests that we apply are our synthesis of what we're hearing in the outside world, what we hear at the hearings, what we know in our own experiences. That's why we're on the committee. So to my mind, we're looking at two parallel processes that will intersect at some point. They will both take a right turn and they're going to meet at us being asked to approve or disapprove or make recommendations.
So the kinds of fact finding that we're doing, and your question about what happens with it I think is an important one, but more so for the people who aren't here, because that's the information base on which we now make decisions and recommendations based upon the synthesis of the material that we give to the department.
DR. IEZZONI: John, I just have been in a number of situations here on the committee where we've seen interesting work done by staff within HHS, at HCFA and at the National Center for Health Statistics, and committee members wish that they could have known the direction that the work groups were going to be taking so they could have had some influence on the direction. That's what Marjorie is probably responding to, the many times --
MS. GREENBERG: You have the option of just waiting and getting this from the department.
DR. IEZZONI: Like waiting and getting it or helping to influence the direction. What you're saying about the time commitment is a genuine concern, but --
MS. GREENBERG: I'm not suggesting that anyone on the committee actually be -- I don't even think it's feasible for you to actually be a member of the work group, but you could select to have specific liaisons to different teams, as you feel is appropriate, or as time permits. I mean, they're going to be developing work plans, and you could consult with them, and then fill in the rest of the committee. That's the only way I can see that you could really be on the proactive way, rather than just waiting until the department brings you things.
DR. IEZZONI: Yes, reacting is what we've so many times.
MS. GREENBERG: It would probably be helpful. I don't think any -- maybe I'm speaking out of turn, but Bob or Bill, do you think there would be any problem with that? I mean you can't slow down the process.
DR. LUMPKIN: Yes, they can.
MS. GREENBERG: But I mean that's not an option.
DR. LUMPKIN: I'm just telling that I think I have sort of a schizophrenic perception. I got into government by being a chair of an advisory committee, and now I'm responsible for 50 advisory committees that all are advising me on various aspects. I know the interaction between what goes on internally just in developing a set of rules. There is no one on the outside who is going to spend the time and talk about every single aspect and how the rules interact. I don't think we can do that. So we really need to have a real task that we can do that can play an important role. Part of it is being that sort of sounding board for the various internal working groups that will prevent us from being in a position of getting down the road of saying okay now we've got it.
The second part, which I think is equally as important, is to immerse ourselves in the people whose lives are being changed, because we all have a different perspective on that, based upon our own experience. What we do by having others come in from the outside is give us their perspective. Then from that, we can synthesize and understand who we're going to impact.
There are questions that sort of came out of the meeting yesterday that I think we need to perhaps ask of all players, the vision issue, the issue of cost. We've got a number of people who talked about oh there's going to be some cost. We had the presentation from HCFA saying that some people are going to find a significant amount of costs from these kinds of changes. We need to quantify those. Those are the kinds of things that come out of these hearings that we want to delve in later. That's kind of how I would see it happen.
So, our group would be looking at those, flipping questions to the groups, the people who testify and then participating as much as we can in the internal process so that we're ready to make recommendations when the time comes, which will come very quickly.
DR. IEZZONI: You can't argue with what you just said. You can't, it's right.
DR. STARFIELD: The next time we have the subcommittee meeting, which is when, in March? Did we not revise the agenda yesterday? We still have a subcommittee meeting.
MS. GREENBERG: There's always supposed to be a subcommittee meeting.
DR. STARFIELD: It's not just the work group, right? I forgot what we did yesterday. But in any case, I think the subcommittee is going to ask you, John, to do exactly what you said just now and that is what's the process and rationale for the information gathering, your vision, the process of information synthesis, and the plans for reaction to the department, as specific as you can be about it.
DR. LUMPKIN: And we can have that ready by February, right?
DR. STARFIELD: Do we want to revise the questions for next time, or do we want to keep the same questions?
DR. COHN: I want to bring up one other issue, and I apologize for getting in the middle of the conversation here, but I think that the hearings are very important in terms of the information gathering that John brought up. I do think, however, that there is probably in terms of being proactive a need for us to understand the work plans of HHS and that maybe there needs to be some time in our schedules -- if we're going to be proactive, I agree with everyone, we can't spend three days a week here. But what we want to make sure is that we agree with the work plan. There's considerable amount of expertise now on the national committee, especially in some of these areas. If we can look at the work plan as proposed, then we may be able to be assured that we're going to have information that comes out that will be of value to all that we can do something with, as opposed to getting something that as Lisa and my comment, well gee, I wish I had known this was coming out.
DR. IEZZONI: I know, the coding, it would be very interesting to know, for example, what's going on in the coding committee, because are they including nursing. I mean we heard from nursing yesterday.
MS. GREENBERG: They are just getting started.
DR. IEZZONI: They're just getting started, but if we can at this point say we've heard from nursing, you need to think about them, et cetera. I think that being proactive is where we need to position ourselves.
PARTICIPANT: They're in the very early stages actually.
MS. GREENBERG: I think you have to realize that if you're asked to review something, you're going to maybe have a very quick turnaround.
DR. COHN: The question is does the whole work group have presentations on the work plans or do we do liaisons, as a person suggested, either, but it's a key role that I think we can play, because once again, we basically do know a lot about a lot of these areas.
DR. IEZZONI: I think we need to decide to do it as efficiently as possible. I would prefer not to have separate presentations from six work groups because I don't think we would enjoy it. We would learn a lot I'm sure, but it could go on for a very long time. So the notion of maybe pairing people one on one with the work groups and having us be liaisons and having us kind of report to the committee, or subcommittee because I lose track too, Barbara, of whether we're a subcommittee or a working group, report on things that we think are of important and current interest and need decisions or positions by the subcommittee or work group.
MS. GREENBERG: Or maybe need fuller presentations. The one plus is that these work groups, because they are interagency, they're going to be conducting their meetings a lot by vision conference call, e-mail, et cetera. So there's already an expectation that even members of the work group are not going to all be in the same room. I'm not suggesting you participate in these meetings on a regular basis, but I'm saying the opportunity to communicate in ways other than having to be at a meeting with them are certainly there.
DR. IEZZONI: Could I then kind of make a move that we ask John to, as the chair of our working group, to look at the six working groups that the department has set up and think about a staffing arrangement, or a liaison arrangement that could allow us to have information about decisions that are being made by these HHS working groups and proactively address concerns that we think relate to the work that we need to do?
DR. LUMPKIN: I don't think we need a motion to do that, but if we could perhaps just get a listing of those work groups and then people here -- see what the interests are.
MR. MOORE: We can make a list available to you today, Bill has it. It will identify the teams, who in the department are on the teams, what agencies are on those teams, what kind of expertise you have there, et cetera.
DR. IEZZONI: The problem is we have four people here today, Barbara, John, me and Simon. The reason I made it in a motion, John, was so we would have somebody who would take responsibility and make it happen.
DR. STARFIELD: He said he doesn't need a motion to do that.
DR. LUMPKIN: I've been tasked. I learned that word from our federal partners. I've been tasked. But I think the thing about the people who are here, because they're here, they get the first pick.
DR. IEZZONI: We won't argue.
DR. LUMPKIN: So that's the reason why I would like to pass it around here and then we will send it out to the other members of the working group.
DR. IEZZONI: I want coding.
DR. LUMPKIN: I couldn't tell.
DR. STARFIELD: There's one more point I want to make and that's the placeholders while we're doing this, the stuff about setting standards, we need placeholders for standards that aren't there yet and won't be there by the time we have to do it. For example, items seven to 12 on our core data elements, which are pretty well agreed even with MCQA, some of the demographics. We need to leave places for them. We probably need to leave places for a couple other things like reasons for visits, things like education level and occupation.
MR. SCANLON: I'm sorry, I don't understand what you're talking about. What are the core data sets?
DR. STARFIELD: There are items in the core data elements that pretty much everybody agrees we ought to have. Nobody is developing standards for them yet. When we think about recommendations on standard setting, we need to leave places for those things.
MR. MOORE: Most of the standards actually have that handled one way or another within their actual standards. I think that's one of the bits of exploration that we would probably need to go with. But if you think about it, a claims or remittance typically has an address or other demographic information. Whether or not they're all standard was part of I think the efforts across all the standards. I think that's part of the charge of the committee. I mean what I heard yesterday was that everyone feels that there's a need for standard data elements, and probably standard code sets within those data elements and that the envelopes are separate from that. It certainly seems to me even by HHS or by this committee that we ought to be spearheading some sort of agreement between all the standards that are going to be national standards in this area as accepted by K2 to make sure that they all have the same way of expressing these things.
DR. STARFIELD: I think I'm making a plea to consider the core data element when you deal with that. There are lots of other standards that need to be set besides what's in the core data elements, but to at least include those. I think you should read Ed Sondig's response to the core data elements. He's got very good suggestions in that, some of them relating to --
MS. GREENBERG: I passed that out.
DR. LUMPKIN: I think the direction that we need to pass on to those who are going to be more intimately involved with the work groups is that we would like to see if you're doing cross walks or evaluations of the various standards that look at the overlapping data elements and so forth, that there be some analysis of the inclusion of the core data sets and a map of where they are in various standards sets that are being developed. That would be one of our requests to the internal working groups.
DR. COHN: That's actually one of the reasons why I want to see the work plan to make sure that that gets handled.
MS. GREENBERG: I think what Barbara was talking about with placeholders, I remember this was a big issue with Paul Ortel(?) when he started going to the standards meetings. But some of the elements, if there's a lot of -- there's fair support that you need them, but they really aren't even in the medical record now or there isn't really an accepted standard way for them. They may not then as a result make it into the first wave of the data set, but then if you say okay you have to be able to accommodate this when it is ready to be collected, or there has to be a research agenda so we can bring it to prime time. That's one way to deal with elements that people feel are very important but they're not really the state of the art or the state of the field isn't there yet to pick them up and collect them.
DR. COHN: I think you're right though, I would remind that the core data element activity, which I thought was an excellent activity, wound up I remember being a consensus activity, observing where there was uniformity and where there was difference. We have an opportunity -- just like many of the other activities you saw yesterday where there is voluntary efforts, there's typically an opportunity for variation. I think we have an opportunity, not that one data set or code sets may be better than another, but to assist in trying to really reach consensus and narrowing down the choices.
I think many of us with the HIS B meeting in December, Krashoot(?) presented an example of this one data element looking across the UB-92 onto the X12 and all that. The data elements were described the same way. It's just that the code set, one of them was one through 10 with certain identifiers, the other one was A through Z with different ways of describing the code set. I think we really have an opportunity here, probably a responsibility, if we don't, HHS will, to -- not that one is right and one is wrong -- but to try to reach consensus between those two or at least recommend that.
DR. IEZZONI: Again, back to our work plan, how are we going to achieve that, Simon?
DR. COHN: I'm expecting that out of our review of the work plan from HHS that we can ask them to do the analysis, to identify where there is consistency and where there is inconsistency between the data elements and the code sets on the requisite standards. I have attempted to do that myself on nights and weekends, and I will tell you it is not a small task.
MS. GREENBERG: That was Chris' conclusion I think.
DR. COHN: We really had attempted to do that as a voluntary effort to HIS-B but became aware very rapidly that that is really something that people should be paid to do and should be really part of the HHS activity. Now it is our responsibility to make sure that that work happens, that it's done in a way where we feel that the analysis comes out with information that we can use and identifies where the issues are so that we can either ourselves make recommendations or mobilize other groups in the industry to help assist us with what is the answer to these problems. Does that sound good?
MR. MOORE: But let's first get to your question about having input to the teams before they do the work. If you say I want the core data set evaluated, then I want to know where those elements are located and what transaction sets, and if they're not there, well what is there, and then this consistency and inconsistency across the data sets, one of the things that we're doing now is working with the data and going through and identifying where the same element is identified and you have things like admission date spelled out in multiple locations and in different ways.
MS. GREENBERG: Even the most basic of elements, I think that was Chris, I can't remember who looked at it, but it was pretty basic.
DR. LUMPKIN: I think that we need to make some assessment of what are the important differences, admission dates as an example. Whoever has got an admission date in one format pretty much can develop some sort of algorithm to convert to another. It's where you start dealing with code sets where you have one that goes one through 10 and the other one A through Z. You've got a 26 to 10, there's no way to cross walk that. You're either going to have to add some kind of information because one has lost granularity by going down to a 10, and if you transform that into a 26, you're going to have to map that, or vice versa.
It's those kind of issues that we need to, as we become aware of those, say this is something that we're going to be asking about where we're asked to prove a data set or a code group or whatever as part of the recommendations. These are the kinds of questions we're going to ask. We're going to ask about nursing codes, or other codes. Is there room, if there are no existing codes, where are they going to fit when those code sets are developed. Those are the kinds of questions I think we will ask based upon what we heard yesterday.
So it's those kind of things as we hear in hearings, and I think why we need to have the meeting like we're going to next time where we're going to have some time to sit down and talk about what we hear, to throw these questions into the work groups so that they can refine their product that they deliver to us and to the secretary.
DR. STARFIELD: I guess ultimately our charge is to report to the secretary, give advice. That advice mainly is going to be reaction to the department's plans, right?
MR. SCANLON: That could be one. Really, that's expected to be one of the avenues. You may have some --
DR. STARFIELD: Well yes, it could be preemptory. MS. GREENBERG: Well yes, to some degree that would be proactive by participating, or giving feedback to the process. I suppose if in doing that you felt that there was some whole area that was not being addressed, or you wanted the department -- then you could make a recommendation to the Data Council putting this in. Your point of view of giving advice, you're really not limited.
DR. STARFIELD: The only question is does the Data Council, would they like to try to head off any kind of preemptory action? And if so, we ought to set up a process whereby we take care of it.
MR. SCANLON: We are all kind of -- this is a new way of doing business. Even in HHS, everyone has to work together and part of working groups, I don't think the Data Council would try to prevent anything like that.
DR. COHN: I was going to say I think that that is exactly the sort of structure we're trying to set up. I think we would like at the end of the day, and I think the public at large would be served if at the end of this entire process we come away with the statement being we agree with everything that HHS has done, because we've been able to work in the process and sort of affect things as they occur as opposed to having a 40 page document at the end putting out inconsistencies and problems that occurred. That would be an interesting document, but certainly not one worthy of us coming in a meeting and looking very hard at.
I actually really think that the idea of getting involved with the work groups and trying to work them through and having us really come back and report would be an excellent way of doing that so that small issues can be brought up early on for both our discussion, and hopefully for wider discussion to get input from so that we can affect things at an early stage.
MR. SCANLON: In terms of the standards themselves, except for the provider ID and payor ID, which were well in the pipeline before Kassebaum-Kennedy, the working groups are more or less starting at the beginning here.
MR. MOORE: We're not going to start them until we get the work from the SDOs. That's going to be the starting point, when they tell us here's what's here and then we can start doing the analysis and putting it together and then drawing conclusions or whatever and getting back to them to find out where there are gaps or whatever.
MR. SCANLON: Theoretically, that inventory that the standards development -- that theoretically is the universe potentially of the candidate standards that the field I guess accepts now or identifies now.
MS. GREENBERG: I have a message on my voice mail yesterday at the end of the day from Jeff Boyer, you may have too, he also called Don Detmer. Jeff has been one of the leaders in the ANSI -- putting together this inventory, and I believe -- he wants to be on the agenda of the February meeting -- I believe it's in relationship to this inventory.
DR. BRAITHWAITE: He would like to present the inventory to this committee.
MS. GREENBERG: Yes. So I just share that with you. It took me days to print it out because I had to print it out at home because we don't have Word at work.
DR. STARFIELD: A practical question. Do we want to change, or do anything with the question that we're asking? Are we happy with the questions we used yesterday and today for the February meeting?
MS. GREENBERG: Or do you want to develop follow-up questions as well?
DR. STARFIELD: Because the letters for the February people haven't gone out yet, right? We have the opportunity to change them if we want to.
MS. GREENBERG: If you want a synthesis also of these hearings in addition to minutes, you need to identify what you want somebody to try to pull out of them. That would be a separate product, but I think it's something we could try to contract for.
MR. SCANLON: A compilation of the papers we've gotten, plus we probably need some sort of summary theme or summary of the transcript as well, actually would be a nice background document. Now, for the February meeting, a fair number of presenters are from the SDOs themselves. The questions actually might be a little different. For the February meeting, they're really not quite the same as what the impact would be on your organization for example or on your members as they are sort of about the standards and their readiness and their use and problems with those standards I would think might be appropriate questions.
MS. GREENBERG: Actually, part of the purpose wasn't it, of staging it this way was to bring back to the standards organizations some of the concerns you heard yesterday and today. So that --
DR. STARFIELD: So Bill, are you going to try drafting the questions? Do you want input -- and then send them around like you did last time? I think you need to do it relatively early while this stuff is fresh in our minds.
DR. BRAITHWAITE: The plan then would be to give the -- well, to continue to give the same questions to those panelists who were just talking about the general effect on their membership, but having separate sort of questions to give to the SDOs based on what we've heard today and our considerations.
DR. LUMPKIN: But I think that, and I think it's important for the committee to think about that, we probably do want to reframe those. We did get answers, maybe not quite the way that we wanted them. One of the things is how will we know -- I think we would like to get them to differentiate in their minds the difference between standards and simplification, how will we know when we've achieved simplification based upon their members. I think that certainly is one question that I think we tried to get to, but we didn't get to well enough in our questions.
DR. STARFIELD: You will work with Bill to --
DR. LUMPKIN: Oh yes.
DR. COHN: I was going to add that maybe you want to e-mail around the questions so we can all provide some input to them. I certainly found that your early comments or introduction about the issues of variability are really the essence of what we're trying to come to. In terms of the SDOs, it might be very interesting to understand from them what their views are about how much variability is appropriate versus not, because I think that's once again an important stakeholder in all of that.
DR. LUMPKIN: I think also as a follow-up question because I really believe that as we refine the questions we need to send them back out to the people who presented for additional comment. But I think what I'm not clear on is when we look at setting standards, do we set a standard for the basic 1040, or do we set standards for all the optional schedules.
MR. SCANLON: You're talking about the IRS on that one.
DR. LUMPKIN: When you do the basic form that everybody uses, then there's optional schedules that people may have, only if they're pertinent to what they're doing, how far out do we set our scope of the standards, how far out do they see as being an infringement, particularly the payors and so forth.
DR. COHN: You're talking about private partner agreements and how far we get into those. Is that what you were referencing?
DR. LUMPKIN: Well, we know that we're asked to address the issue of attachments, that's one --
DR. COHN: But that's six months later.
DR. LUMPKIN: So as we start addressing the issue of attachments, you know I heard some of the groups say yesterday we need to just say this is what's required and nothing else can be asked.
MR. SCANLON: Okay, that's one view.
DR. LUMPKIN: That's one view, that's the 1040 view. That's the 1040 and don't ask for anything else. Then there's others, I'm sure the payors would like to say but we want to ask some additional stuff. Now, the compromise may be you can ask for additional stuff, but when we ask for it, it will be in the following format. So that's saying that there are optional schedules that you can use. If they ask for it, then they're going to get it in this format. It's just a question of the scope of which the initial set of recommendations will be.
DR. COHN: John, is that a question for today for the payors?
DR. LUMPKIN: I think it will be a question today for the payors, I think it will be a question for yesterday for the providers that we would send out to them. So I'm saying that there are some questions that will sort of come to mind as we're listening that we may want to add to the list and that, particularly for people who come early, it doesn't mean that they lost their shot. We would just continue to send it out and get written comments back.
DR. BRAITHWAITE: John, I think the providers were pretty clear about the fact that they wanted as little variability as possible. Some went to the extreme and said we want the 1040EZ, which doesn't allow any attachments. Others said 1040 is okay, but we want to make sure everything is in dollars and not some people who want the form in francs and pounds and things. Definitions have to be precise and then it's okay. But we don't want any of this contractual variation. Any field that is not filled in every time has to be defined on the basis of the situation with the patient, not the situation with the contract between the payor and the provider. Then, of course, the payors which we will ask for today, may want some more variability than that, but that's where the optional forms come in for which we probably won't set standards under Kassebaum-Kennedy in the first round.
DR. COHN: I would actually further comment that you could take this analogy one step further and see if we can kill this one. It's really what we're talking about and what we were hearing yesterday was they wanted the 1040, they would grumble about the CD and whatever forms, but they didn't want an audit, which in some ways is what claims attachments really are. A claims attachment in a nice way is send me all your stuff and let me take a look through it, send me a lot of your stuff. That really has been a lot of what the claims attachments, at least to my understanding, have really been about, like send me your x-ray of X and prove to me it really was an X.
DR. LUMPKIN: So I think to perhaps bring this conversation to a close, we're going to be massaging the questions, trying to focus it. We will send out a draft. Feel free to, unsolicited, send comments to either Bill or myself or both as we're formulating these questions any thoughts that may come to mind on the airplane on the way home so that we can have a set that's specific for the group that will be coming in, but also other questions that we will be sending to people who have already presented to fill in some of the gaps.
MS. GREENBERG: Okay. This meeting is in two and a half weeks, this next meeting. It's very soon. I think you need to come to closure on the agenda, with the groups at least --
DR. STARFIELD: We did. We revised the agenda.
MS. GREENBERG: Yesterday, right, but I think we're going to bring ANSI HISBIN(?) on the 11th also. I don't know if you can close quite as early. You want to start --
DR. STARFIELD: Do you want to switch it? Do you want to put the ANSI -- we've got it on both days.
MS. GREENBERG: No, I think that's probably where they belong.
MR. SCANLON: You're talking about the inventory.
DR. BRAITHWAITE: The only question outstanding about the agenda for February is do we allow the presentation of the ANSI inventory as part of the SDO's presentations. It could be short, it shouldn't be a problem.
DR. STARFIELD: Okay, I think we need to bring this session to a close. Do you need a couple minutes break or can we move on?
MS. GREENBERG: Can I just say one more thing? The sooner you know what kind of synthesis you might want, the sooner we can start trying to identify someone to do it. So from these two sets of hearings --
MR. MOORE: Are you going to let us know which members want to work with which teams so that I can let the team co-chairs know that they're going to be having considerably more interaction with the committee and which members on the committee they are to answer to or whatever?
DR. LUMPKIN: Could you write the list here before folks leave and then let folks sign up and we will sort of arbitrate the two people who want to go on the coding group. Maybe let us hear it and then have to stretch ourselves in some other areas.
MS. GREENBERG: One piece of clarification. The coding classification does not include code sets. The code sets for elements, as I understand it, will be dealt with in the respective transactions.
MR. MOORE: Because they're the best people to handle like what's the type of service, the place of service, those kinds of conditions that don't require the expertise that medical coding requires.
MS. GREENBERG: In the infrastructure, there will be kind of a data dictionary process, so they're trying to bring those where they have the same code sets. So the coding and classification is specifically medical diagnoses and procedures as I understand it.
DR. COHN: I have one question, I know we need to get started, but maybe at some point today we can have Bob or one of the others maybe present for four or five minutes on the various work groups and what their charters are just very briefly, because it sounds like sending around the title isn't going to quite give us an idea of really what the charter is. Not now.
DR. LUMPKIN: One other thing. With the agreement of the work group, the refined question list, there were a number of groups that we contacted to present to us who got the response oh my goodness, that's affecting us. I can't make a presentation because we have to bring it to our board and get an official position. If it's agreeable, I would like to send the questions to them, the refined question list and let them submit, because there are some that we had selected that we particularly wanted to hear from but chose not to come.
DR. STARFIELD: Okay, we are hereby convened. We will follow the agenda as listed for Wednesday, January 22. This is the meeting of the Subcommittee on Health Data Needs, Standards and Security of the National Committee on Vital and Health Statistics, in particular the Work Group on Implementation of Administrative Simplification Provisions, Public Law 104-191.
I'm Dr. Starfield. I think pretty much we know who each other is. Is there anyone new here today that wasn't here yesterday that would like to introduce themselves?
[Introductions were made.]
Thank you very much. I'm going to turn it over to Dr. Lumpkin who is Chair of the Work Group.
DR. LUMPKIN: Good morning. We're going to continue on with the hearing from the panels. Let me just first announce a change in the schedule. We are going to begin with the panel presentations now. We will go through lunch. The subcommittee may conduct some residual business at the end of the last panel. Then at that point we will recess.
The HHS Survey Integration Plan has been rescheduled to our next meeting. We will be getting out early today. For those of you who feel obligated to sit, the room will be available but we won't be here. Okay?
Is Marion Ramey here? Then let's go with Frank Pokorny.
MR. POKORNY: Good morning. My name is Frank Pokorny. I'm with the Blue Cross and Blue Shield Association. My responsibilities include promotion of electronic commerce within the Blue Cross and Blue Shield Confederation of Plans, and also represent the association at various national standards organizations such as ANSI, ASEX(?)12N, the National Uniform Claim Committee and the National Uniform Billing Committee.
With that, Dr. Starfield, members of the subcommittee, and my colleagues in the health care community, thank you for this opportunity to provide a perspective from the Blue Cross and Blue Shield Association and the Confederation of 62 independent Blue Cross and Blue Shield Plans on the administrative simplification provisions contained in the Health Insurance Portability and Accountability Act of 1996.
The Confederation of Blue Cross and Blue Shield Plans has a continuing interest and demonstrated success in implementing standardized and automated processes for the administrative of health care benefits and services to our customers. Our customer base includes the provider community, employers and individuals who are the ultimate recipients of timely, cost effective and quality health care.
Standardized and automated processes have served the Confederation of Plans for several decades, first at the local level between a plan and its provider and member community and then at the national level for service to both multiple location employer groups and individual members who may require health care when away from home. For plan members who are traveling, the Blue Cross and Blue Shield teleprocessing systems handles over 260,000 claim transactions every day. Across the board, I anticipate that the threshold of one billion electronic claims annually will be crossed in 1997.
In addition to recognizing the value of internal standards and automation as a tool to manage administrative costs, the Blue Cross and Blue Shield Association and Confederation of Plans have been active participants in national standards development activities. The Blue Cross and Blue Shield Association has been a voting member of the National Uniform Billing Committee since its inception in the 1970s, and likewise, is a voting member of the National Uniform Claim Committee as reconstituted in 1995, and in its original structure under the name Uniform Claim Form Task Force.
Both the association and over one-half of Blue Cross and Blue Shield Plans are voting members of the American National Standards Institute, Accredited Standards Committee X12. Association and plan staff are active leaders and participants in the development of standard electronic data interchange transactions under the auspices of X12's health care task group.
Of particular relevance to the Health Insurance Portability and Accountability Act of 1996 has been the association's active sponsorship and leadership since its inception in the Work Group for Electronic Data Interchange, or WEDI. During the course of WEDI's deliberations and as captured in its milestone 1992 and 1993 reports, administrative simplification issues and objectives from the national perspective were on the forefront. WEDI's concerns and recommendations covered the range of administrative issues addressed by HIPAA, unique health identifiers, standard transactions, code sets, privacy and security. Endorsements of WEDI's recommendations in these areas and more was given by the Blue Cross and Blue Shield Association and Confederation of Plans in the EDI White Paper issued in September of 1994. Since then, we have continued to pursue the objectives stated in the WEDI document that have now been given legislative credence and impetus.
The subcommittee has asked that a response be given to four questions and I will do so to the best of my ability at this time. Before doing so, I would like to note that as a result of prior contact between the Department of Health and Human Services and the Association's Office of Policy and Representation, arrangements had been made to convene a meeting of representatives from all Blue Cross and Blue Shield Plans to discuss the administrative simplifications of HIPAA and their effect on plan operations and practices. The results are to be reported and discussed with the department. This meeting is scheduled for tomorrow, January 23, and the discussion with the department by the end of the month.
I would not presume to speak on the overarching matters that will be conveyed at a later date, however, I am prepared to address the issues contained in the four questions from the perspective of unique health identifiers.
During the past two weeks, there has been much discussion within the Blue Cross and Blue Shield Confederation of Plans about unique health identifiers as required under HIPAA. This has been prompted by both a growing interest in the legislation among the plans, and as a result of specific inquiries from both HCFA and WEDI regarding HCFA's proposal for a selection of payor ID and the national provider identifier as the national standard.
Of January 8, 1997, the association convened a special work group of Blue Cross and Blue Shield Plan and Association staff, representing a number of constituencies that would be affected by the law's requirements for unique health identifiers. This 26-person work group represented plan constituencies that included provider relations, information systems, electronic data interchange, Medicare, the Blue Card Program for coverage to plan members who are out of area, the federal employee program, national managed care services and the Association's Office of Policy and Representation.
The work group's rich deliberations have been distilled into a concise and relevant letter to HCFA and WEDI. Wider distribution of this letter to the consulting entities cited in the HIPAA has been anticipated and the accompanying copy is for the National Committee on Vital Health Statistic's permanent record.
Moving to the first of four questions that have been posed, we have what I believe are straightforward expectations regarding the results of the administrative simplification standards requirements. The outcomes should establish a basic set of rules for the exchange of administrative information between distinct entities in a clear manner that is neither open to interpretation nor burdensome in compliance.
For example, within the HIPAA, there is a variable and pervasive level of ambiguity in definitions that can open the door to establishing rules of interchange at a very detailed level. Such ambiguity in, for example, the definition of health plans raises great concern that the rules may require application of a national identifier to a specific certificate of coverage offered by an insurer. This form of micromanagement would be burdensome for both the insurer and any administrator of the identifier by virtue of dynamic number and nature of coverages that are offered in the marketplace. A more positive course in this example would be clearly defining health plan as the payor who has the responsibility for covering a patient's episode of care.
Question two inquires about concerns that Blue Cross and Blue Shield Association and the Confederation of Plans may have about the process being undertaken by the department to carry out the requirements of the law. If the process is exemplified by the actions taken by NCVHS and this subcommittee, no concern arises with the apparent goal of soliciting the widest range of commentary from all sectors of the health care community. Indeed, achievement of the HIPAA's overall objectives requires not only the force of law, but also the participation and cooperation of the parties that will be affected.
There is, however, one concern that has arisen during discussions with colleagues both within the Blue Cross and Blue Shield Confederation and with associates in other organizations. That concern is the lack of a clear overall description of the process and time table to be followed that will result in promulgation of the regulations required by the act.
There is a clear sense of urgency, but aside from HCFA's published time table for NPID and payor ID, there is on other information on the street. It would be a counterproductive mistake if an overall process and timetable has been set but the health care community at large is unaware of its existence.
The third question, concerning experience with the transactions specified under the HIPAA, is one that I can address indirectly as the provision of health care and administration of benefits is the province of individual Blue Cross and Blue Shield Plans. I am also confident that this matter will be more fully explored in the meetings to be held between the association and the department that I mentioned earlier.
That being said, I can note that Blue Cross and Blue Shield Plans have developed automated processes to administer the transactions specified in the act in accordance to the needs of their respective markets and their provider and member employer customers. As conditions and requirements change, plans respond in the most effective manner possible. Likewise, interplan programs supported by the association are continually evolving to meet the needs of the managed care marketplace in promotion of effective preventive and palliative care. Neither plans nor the administration are static in their efforts to obtain and utilize meaningful administrative and clinical information.
As to the final question, how can the goal of administrative simplification best be achieved while meeting the business needs of all stakeholders, there is no simple answer to that question. A partial answer may be to ensure that there is a high degree of sensitivity to the changes that will occur in all parts of the health care community. Perhaps the following three comments that arose during the special meeting of plan and association representatives to discuss the unique identifier requirements of the HIPAA may give some dimension to this point.
One, clarity of purpose is crucial. Two, business needs for the Medicare program are relatively simple and straightforward because Medicare is essentially a single uniform coverage. The private sector programs are extraordinarily diverse, are heavily focused on managed care, are custom tailored to many large groups, include administrative services only contracts, must comply with many non-uniform state laws, and are administered much differently from federal programs. Thirdly, in any system there comes a point where automated processing of unique or very infrequent situations is more costly than handling these situations manually as an exception. Dealing with the exceptions should be viewed as an inherent process in the overall scheme, rather than a major obstacle to adoption of a national identifier.
Let me close by expressing my appreciation of the interest expressed by this subcommittee in learning of the Blue Cross and Blue Shield Association's views and experiences on administrative simplification in general and in the context of the HIPAA. Today is but another step along the path that we believe will serve us well as we move to the next millennium. Thank you very much for your time and attention.
DR. LUMPKIN: Marion Ramey.
MS. RAMEY: Dr. Starfield, members of the committee and colleagues, my name is Marion Ramey. I'm the Chairman of the Association of Federal Health Organizations as well as Executive Director of the Special Agents Mutual Benefit Association. The Association of Federal Health Organizations is an association of federal employee health benefit plans, fee-for-service plans, that are sponsored by employee organization carriers such as my organization. Approximately 1,180,000 federal and postal employees and annuitants are covered in the FEHB plans sponsored by the AFHO member organizations. The FEHB Program itself is the largest employer sponsored program in the U.S.
On behalf of the AFHO member organizations, I thank you for this invitation to make this statement regarding the administrative simplification procedures of the Health Insurance Portability and Accountability Act.
FEHB plans are established by federal government procurement contracts between the U.S. Office of Personnel Management and the sponsoring plan carrier. FEHB plans generally are regulated by the FEHB Act, 5USC1809 and implementing OPM regulations and directives. Among those directives is OPM's electronic claims filing initiative which mandates that FEHB plans use the HCFA standard claim form such as HCFA1500 and encourage FEHB plans to increase the volume of claims received electronically. I have attached this directive as Attachment A to my statement.
FEHB plans are hopeful that HIPAA's administrative simplification procedures will catalyze the fundamental process of converting to a paperless claims processing environment. You have requested I respond to four questions that you have concerning the impacts and the goals of these administrative simplification procedures. I am pleased to do so.
Your first question concerns our expectations for the results of HIPAA's administrative simplification procedures. Our organizations expect these provisions will permit plans to receive and process electronically submitted benefit claims and related information such as enrollment data with a minimum of manual intervention. This paperless environment is anticipated to reduce health plan administrative expenses, expedite claim processing, enhance communication and relieve plan members, health care providers and the plans themselves of a significant paperwork burden. This would improve the health care financing system overall.
Your second question is process oriented. Our initial impression of the HHS effort to implement HIPAA's administrative simplification procedures is certainly favorable. We encourage HHS to continue to hold hearings regarding administrative simplification procedures. It's important to maintain open communications to discuss the options and alternatives available to generators and users alike. In general, we would like to see as much involvement as possible by industry representatives who have successfully implemented electronic data interchange solutions.
In order for the administrative simplification procedures and provisions to be achieved, while at the same time meeting business needs, AFHO recommends that HHS develop standards by focusing on the core areas that represent a majority of the current transaction types. HHS should develop a standard format for the following core areas, enrollment and disenrollment information, claims and explanation of benefit statements, coordination of benefit procedures, claims status, coverage information and benefit eligibility.
Furthermore, once a standard is initially selected, organizations should be given an opportunity to test it. After this trial period, HHS should again hold hearings to determine whether the standard can in effect be implemented efficiently and effectively. In addition, we encourage HHS to avoid imposing unfunded mandates. HHS and OPM therefore should allow federal health plans necessary freedom from expenditure caps and prior approval processes for activities related to the simplifying, reengineering, or otherwise attempting to reduce transaction costs and complexity.
Your third question inquires about the problems that we confront with current electronic data interchange transactions. Perhaps our greatest problem, which we expect others will address, is the lack of a national health care provider number. I was pleased to note from some of the information provided from yesterday's hearing that we're way down the road to this.
Most plans rely now on the taxpayer identification number because this information is captured on the HCFA1500 form and is a prerequisite to the preparation of the IRS 1099 forms that health plans must send to all health care providers. EINs however are ineffective provider identification numbers, principally because the EINs can be changed with little effort. In our experience, physicians often change their EIN when a new practice starts or when one doctor moves from one group to another. Changing EINs are difficult for us to track. Without consistent universal provider identifiers, claims transactions can be automated only to the point of receipt, foregoing the greater savings that would be realized if they were electronically adjudicated after receipt.
The practice of changing EINs also hinders plan efforts to keep track of those providers who have been debarred by the federal government who are known to submit suspicion claims. AFHO therefore recommends that once a provider number is assigned, the number should not change and a provider should use the same number for all transactions. Alternately, if HHS determines that a provider number may change in certain limited circumstances, there should be an administrative process that a provider must follow which provides notice to all health plans.
HHS should also ensure that the identification number of individual providers are linked to the number of the medical group in which they practice and also to the uniform EDI formats continues to capture the benefit payee's EIN on claims assigned to the health care provider so that the plans will have the necessary information to complete the IRS form 1099 reporting process.
Health plans also confront the problem of electronically transmitted information that is incomplete or inaccurate. For example, it is often difficult to obtain accurate data about the identity and physical location of the provider who actually rendered the service, even though current standards provide for this data element. It seems the standards which are perceived by health care providers as burdensome invite either omission of the data altogether or plugging entries in a field to force claims through the system.
Some providers also have been known to deliberately obscure location of treatment information in order to increase reimbursement because allowable charges are often geographically based. HHS should clearly articulate to the health care providers the obligation to accurately complete required information and establish an appropriate and useful enforcement mechanism.
Unlike provider identifiers, health plans generally are able to track and maintain patient identifiers by using the patient's social security number. Social security numbers are now assigned at birth and remain constant throughout a person's life. SSNs currently are captured on the HCFA 1500 form and other standard claims forms as the patient identifier. Our member organizations therefore suggest that social security numbers should be adopted as the patient identifier with appropriate confidentiality safeguards.
Another problem our member organizations experience occurs when trying to coordinate benefits with another plan. When another plan adjudicates a claim as primary to an FEHB plan, the FEHB plan must know exactly how the primary plan adjudicated the claim in order to determine the proper benefit payment. Many FEHB plans have crossover contracts with Medicare intermediaries and carriers. These contracts allow the Medicare payor to transmit claims data to the FEHB plan for coordination of benefits. Historically, FEHB plans experienced data that was transmitted in almost 30 different formats which made the process inefficient to say the least.
Although most of these format problems were corrected when the claim format standard was implemented, it evidences the need for national standards. Even though there is a standard for claims, payment data necessary for coordination of benefits should also be standardized.
Your fourth question concerns how to best achieve the goals of administrative simplification while meeting the business needs of the stakeholders. We are concerned that well intentioned standard setting efforts could be coupled with unrealistic implementation time tables resulting in an unnecessarily increased administrative cost for payors, which are then passed on to health plan members. Consequently, we have some recommendations for your consideration.
AFHO recommends that the committee adopt one organization for all sets of standards. For example, if the committee decides to implement a standard developed by ANSI, then all remaining standards should also be ANSI standards to ensure consistency and uniformity with the methodology. Moreover, if there's a future transaction that is developed at a later time, the same organization that was chosen for the initial standards should develop the new transaction standards.
AFHO also recommends that the transition period will be accelerated if initially adopted standards are frozen for an extended period of one to two years. Existing health care transaction sets, for example the ANSI 837 claim, are extremely complex and the frequent version updates in the past few years have totally perplexed the system developers as we've tried to implement these new forms.
Confidentiality issues tend to be the most politicized and publicized concern about electronic interchange of individually identifiable medical data. We consider OPM's confidentiality of medical records provisions to be a sensible approach that balances the business needs of carriers with the confidentiality rights of plan members. I have attached a copy of that presentation to my testimony as Attachment D.
We recommend that HHS use this provision as a model when drafting the confidentiality rules mandated by HIPAA. Furthermore, we urge HHS to give consideration to developing the safeguards necessary to preserve system security and prevent unauthorized system access that may become more prevalent with the implementation of the provisions.
Thank you for your consideration of these comments. I welcome any questions you may have.
DR. LUMPKIN: Thank you. The last member of the panel, Bill Decker.
MR. DECKER: Good morning. Mr. Chairman, members of the subcommittee, thank you for the opportunity to offer a statement regarding the identification and adoption of uniform health care information data standards. I am William F. Decker, a Senior Health Care Policy Analyst with the American Association of Retired Persons. One of my policy specialty areas includes those issues involved with the promotion of administrative efficiencies in the health care system. I'm also the chair elect of the Board of Directors of the Work Group for Electronic Data Interchange, or WEDI. Some of the panel members may be somewhat familiar with WEDI.
As you know, WEDI is presently working with the Secretary and with the National Committee on Vital and Health Statistics as we all respond to the mandate to identify, agree to and adopt health care information data standards. I lead my remarks this morning with this minor disclaimer. My remarks do not necessarily represent the official business or policy positions of AARP. This is the Panel on Health Plans after all, and while AARP has been characterized as being a lot of things, a health plan is not one of them.
But I, and the organizations that I represent, have an interest in furthering the development of a smoothly functioning health care delivery system in which practitioners are hardly aware of the functioning of the systems' administrative backbone, the costs of operating that backbone are maintained at their lowest optimal levels, and a large part of one of the benefits of an efficient cost effective administrative system, widely accessible, high quality care services accrues to patients.
You posed a series of questions as a framework for our remarks. I will attempt to respond to all of them. First, what are the expectations for the results of standards requirements? I don't think you will find any widespread disagreement that our goal here is both necessary and desired. If financial and administrative transactions in the health care system are made smoothly, easily and at the lowest possible costs to those involved, everybody who is involved will be satisfied, and patients, consumers, as well as the systems trading partners will benefit.
Might there be problems? At the risk of very likely repeating the testimony of others, let me mention a few that concern me. Costs, no entity whether a purchaser of care or a provider of care will be happy if they have to spend any money as a result of these mandates, at least any serious money. The definition of serious will depend on a lot of factors that we here in Washington will be accused of either not knowing or simply ignoring. But the fact is these mandates will be costly for most players, at least many players.
Retail pharmacists, for example, are quite satisfied with their dedicated pharmacy administrative standards. Migrating to mandated ANSI standards as replacements just for example will be technically doable, but this particular part of the industry wants to know why they need to switch if what they have works. And more importantly, they want to know why they should adopt different standards if they don't know how much the switch will cost and they don't know who is going to cover the costs that will be involved.
I suggest that the entity that is finally responsible for identifying the sets of standards that must be used acknowledge at least that during the transition to new standards, new spending is going to be required. It may be useful to try to identify for plans and other trading partners where some of the money to pay for the migration to new standards might come from. A question for you, have subsidies for those that will be most adversely affected been considered?
Time. In many cases, it will take a fair amount of time for players to install and to become comfortable with the new uniform standards. The HIPAA builds in a two year window for most plans and the entities they correspond with to accomplish the transition. I think this is enough, but I'm not sure. At this point, the planning horizon for a lot of organizations seems to extend from roughly a year to perhaps 18 months. I think that an educational or reminder process will be necessary during the first year or so after the decided upon standards have been published to keep on the screens of some organizations the fact that the standards now have to be adopted and used.
I'm not suggesting that such a responsibility belong to HHS or the National Committee on Vital and Health Statistics. That task should fall to organizations like WEDI. I am suggesting that a training or educational component be built into the regulatory or legal framework that the HIPAA requires.
To end this section, while I know that the HIPAA states that the paramount goal of the adoption of uniform standards is to reduce or at least control administrative costs, I don't want us to lose sight of the fact that the reason the health care system exists is to help patients. A major benefit of increased administrative efficiencies should be the achievement of better health outcomes.
Regarding your second question, any concerns I might have about how HHS is meeting the HIPAA's requirements were expressed or at least alluded to in my previous comments. More generally, at this point in the process the variety of ways that have been made available to us in which we can interact with you I very much appreciated.
Third, you asked about the problems the trading partners might be having now. It is likely that you have already heard that most purchasers of services are ordinarily satisfied with present administrative transactions. Purchasers can require adequacy of providers in the technical details of these information exchanges in order to justify the resulting financial transaction. The undertaking of that is, of course, the point of these business interactions.
But an impression I get from a variety of trading partners is that while one on one transactions now work well, even though the need to engage in a large number of separate one on one transactions is often quite costly, there is some concern that when a migration to uniform transaction standards is complete some types of data now requested and collected might no longer be available. For example, some insurers or plans may have products that require knowledge of particular non-standard information. If those data can no longer be obtained, such products could be, or could become unusable. How will ongoing special information needs be accommodated in the context of uniform national standards? Will the new standards permit the simultaneous carrying of nonstandard data between a set of trading partners?
Finally, you ask about the methods to best achieve optimal administrative simplification while continuing to meet the business needs of the trading partners. I think the key is to get all the business entities that will be involved completely informed and educated about this process, particularly now that the process has actually started.
From my work with WEDI, I have a very strong sense that many in the business of health care haven't yet paid a great deal of attention to the implications of the HIPAA's administrative simplification section. At this point, a pervasive attitude seems to be that whatever happens is going to happen a long time from now, well beyond that 12 to 18 month planning horizon I mentioned earlier. But that sort of thinking will very likely lead to some presently unknown amount of disorder a little way down the road. We all know that.
I think that all of us who will be affected have to raise the noise level about the ongoing identification or development of acceptable uniform national health information data standards. The potential and anticipated implications of the HIPAA's requirements in the area of health care system administration need to penetrate more deeply into the institutional infrastructure of the delivery systems trading partners. I think we all have a part to address that responsibility.
Again, thank you for the opportunity to deliver these remarks. I appreciate the opportunity you've given me and I will be happy to address your questions.
DR. LUMPKIN: One of the issues that has come up, and I will address this to all three panelists, how much variability?
DR. COHN: Is that your question?
DR. LUMPKIN: Yes. You ask it so much more eloquently than I do, so please feel free.
DR. LUMPKIN: It's bad. We've only been here for two days and we're already thinking alike, that's trouble. The question comes of variability. How much variability do each one of the panelists believe ought to be in this kind of system? We certainly are of the opinion that the variability that we have right now where you can use a standardized form, but in any variable number of ways, may not be acceptable but there's a lot of room between that and there's one form and that's it.
MR. RAMEY: One of the points I made, I think in developing your forms, we should concentrate on the core areas. I can't conceive of forms being developed that will answer every possible question that everyone sitting around this table would like to see at some given time in this. That's why I suggested that we concentrate on the core areas that everyone needs and leave some bit of variable on the side that an individual provider, plan, insurance company, member, if there's other information that needs to be included, maybe be a screen there that can include this. But standardize the forms, I think we're going to have to have that with the electronic data interchange, but concentrate on the core areas. Leave some degree of flexibility with the users in the plan to add a few other things that they may need for their particular administration, but would not detract from the overall need. I think everyone basically agrees we need a standardized form to simplify and to make efficient the operation that we're all working with.
MR. POKORNY: If I can answer in part, I believe that there is no one size fits all. Perhaps moving towards the view that -- go for a super set, if you will, of data elements within a particular transaction to satisfy most of the requirements of the participants and the processing of that transaction may be the safest way to go with respect to that. It would allow those entities that do not need a piece of information to throw it into what's being called the bit box. For those entities that are not going to be receiving everything they would have had, I think that is going to be an issue that comes up no matter what standard is going to be adopted. I would suggest that a standard be one that is broader in its inclusion of data elements as opposed to being restrictive, but that it recognize that a particular payor, for example, in a receipt of a claim, may only require 87 percent of the data elements and that's fine.
I think there's another aspect of this too. Once a transaction enters a particular payor's walls for example, a claim coming from a provider, that a payor may need the right or the option to take that transaction of those data elements, add whatever data elements it needs for its own internal processing to convey that within various parts of its own organization.
We within the Blue Cross and Blue Shield system have what we call the Blue Card Program, which I mentioned during my testimony. One of the values of that is that in order to serve our customer, both the individual member who is receiving service and the employer who is ultimately paying for the cost of the coverage, there is proprietary information that's exchanged between a host plan where the member is receiving service and the home plan in which the member is enrolled that allows for effective administration of the claim and payment of the claim. To have a standard that precludes that exchange of information internally between Blue Cross and Blue Shield Plans is one that will be detrimental.
So I guess I am asking for two things. One is a standard that is broader in the bits of information that can be transmitted, and second one that does not preclude any additional information being added to a specific transaction for internal processing purposes.
MR. DECKER: I tend to agree with that. I think in the information exchange, the oldest part of this art is what information is actually needed to complete the transaction. What do you actually have to have. Those will clearly have to be included in the standards. Many partners in the business are going to think that they need more information than that, and I suggest to you that as you publish standards or trial balloon standards, you will find out what traders believe they need to have more information.
There's got to be some flexibility built into the standard sets to allow information exchange of data types that are sort of the outside on either edge of the bell curve. But on the other hand, you're going to have to reach a finely honed area of dynamic tension here where you don't make standards that are just too inclusive or could be too inclusive, carry too much information. That's not going to get you any efficiency.
Those, I suspect, that the parameters of the data sets, what's going to be needed, will actually become evident to all of us who are involved in this process very quickly, especially as standards are proposed and we will see where the outliers might be. We're going to have to work with those outliers to find out how we can accommodate their needs, but I think overall aiming for the middle with some flexibility on the edges is what you should be looking to do.
MR. POKORNY: If I may add, I think Bill's point is well taken. If you look to the work that's going on right now within the National Uniform Claim Committee, is an exhaustive review of the non-institutional data set to determine within -- I don't even know the number of data elements in total -- but there is a concerted effort to pare that down into a truly representative and necessary data set that will convey the necessary administrative and clinical information to both process a particular claim and also to satisfy the information needs of the health care community.
The committee is very active in trying to cull this data set down, but it's also being done in a consensual process where various member organizations are not only expressing their views, but also the views of their constituencies, such as in my case, the 62 Blue Cross and Blue Shield plans, getting information as a result of survey discussion and the like.
I think there's another model that can be looked at to help us determine that the nature and the number of data elements within a particular transaction data set, and that's the efforts that are underway right now within ANSI, ASEX12(?), where the transaction sets themselves are defined through an open industry participation, a consensual process with free and open balloting. I think that there are some models that exist right now within the health care community that can help determine the nature and number of data elements within a particular data set or a transaction.
DR. COHN: I would actually like to pursue this discussion a little bit further. I'm well aware that it's very easy to speak on a high level about business needs and all of that. I actually would like to hear from each of you a little more around this variability. We heard yesterday from many of the providers that they feel that there is a burdensome aspect of the current environment where each insurance policy, each insurer is requiring specific separate items based on the plan and they find themselves in the situation where they're having to -- while there may be standard forms -- they've having to complete them in many, many different ways. This adds to the cost of care.
Now, I think the question I would have for you is you've really spoken very much of maintaining the status quo, a number of you. Certainly a single form which exists now does not mean standard data elements or standards from one state to another or even one plan to another. What data -- I mean how much variability do you really think you need between various offerings? And the second question is if one were to accept the standard, for example something like the X12 standards, could you live with them as they currently exist? Would they meet your needs?
MR. DECKER; I'll take a crack at it. As far as to answer your second question, my organization, my principal employer reports to me that we have little problem with the way we transact business electronically and on paper with our trading partners at this time. We don't have a major problem. It could be simply that the products that we deal with are relatively simple.
I do want to say to the committee that I'm not in the business side of AARP, although as I said, I will preface that remark, it has been reported to me that we do not as an organization have a problem there.
As to the first part, I think that the point here is to standardize the transactions that go on between the trading partners and the business. I mean work with WEDI over the years has certainly shown that whereas an interaction between one set of trading partners can be relatively simple and straightforward, one player interacting with 20 or 30 different trading partners all using different form sets, all using different data needs, can be quite costly and very inefficient. I think one of the major points that is built into, one of the major goals built into the design of the HIPAA's requirements in administrative simplification is to smooth that out. I would be looking toward work that would reduce the amount of variability in an interaction.
MR. RAMEY: I certainly endorse what he said. We are looking to some degree of standardization. I think just to hark back to where we were just not long ago with the Medicare crossover claims to the other federal health plans, we had 30 plus Medicare payors, each had their own set of data standards, and as we were trying to automate this to some degree and get the electronic data interchange, we were dealing with 30 different systems, trying to match ours which was different from each of these others. We've gone a long way toward that standardization and we see the efforts on the HIPAA as really proceeding along that same line to get everybody closer to the same page and to really simplify things for us.
I'm not sure that anyone can identify exactly the little pieces of information on the outlying edges that maybe some of us would need or would want to administer our particular piece of this operation, but I think all of us endorse a standardized form that would benefit everyone in this processing and make it more efficient and much less costly.
MR. POKORNY: I'm not prepared to state what bits of information could be removed from the data set right now. I would be very surprised if anybody in this room would be able to say what can be removed effectively. We anticipate -- and I'm using we in the very broad sense, the Blue Cross and Blue Shield Confederation of Plans, that the data sets that we see as a result of the actions being take as a result of the law are going to give us something different than what we receive right now. The objective would be to determine how to best integrate this changed business environment or information environment into the current plan systems.
There is one thing that would help that process. If indeed we know that one particular transaction data set for whatever the business purpose be, and I think we need to be sure that we're looking beyond the claim here, we're looking to the other transactions that are being specified, the enrollment transaction, the eligibility inquiry response, the first report of injury. All those things right now come in in different forms, depending on the originator and in some cases the requirements of the receiver.
I think we have to go back and look at the big picture that way and also realize that these transactions that are going to be presented to the subcommittee and NCVHS as a whole are going to be developed as a result of groups gathering together to answer just that question that has been posed. If there is a demonstrable business need for a particular data element on an X12 transaction set, it's up to the entity that proposes that to build a case and have that case be accepted, not only within a particular work that creates a transaction set, but by the X12 body at large during the normal balloting process.
The changes that are going to be coming out of that process, or the adoption of the transactions developed by that process are recognized. The effect of those changes may be the bigger question. How do we deal with what will be different, what will be less in some cases, richer in other cases depending on what you get right now.
So there is no one answer to that question and as to how much variability should be allowed, I think the industry is beginning to tell us through the mechanisms that exist, through ANSI, through the National Uniform Billing Committee, the National Uniform Claim Committee. The more important question is can we live with them. The answer is we need to find a way to live with them when we look at what can come to a particular payor, for example, with the claim, or to a particular payor with an enrollment transaction.
The other question is to what extent is the committee interested and will the law allow separate trading partner agreements. That may be the bigger question. What latitude is there to allow two entities by their own free will -- free may be too idealistic a word, we all live under somewhat constrained free will I guess -- but if there is indeed a willingness to supply additional information. Should the committee, does the law allow for that? Is there an interest in allowing that too?
DR. LUMPKIN: I don't know if we can directly answer that question, but as to your description of a free interchange agreement, my wife up until last year was in a solo private practice. One of the plans that she worked with, it was not one of yours but could have been, offered her to freely change over from a PPO to an MCO, or one of their particular plans that was called an MCO. And of course, her option was to lose 20 percent of her patient base or to participate. I think that part of the reason why we're here is because people have freely entered into agreements which have created a very complicated web of requirements. So I think we would have to clearly define what we mean by agreements and that sort of arrangement, but I personally would tend to be a little bit leery given that's how we got to where we are.
But I have a follow-up question for you. That is because in many ways my experience has taught me that in trying to reach a standard agreement, one of the things that we did in Illinois was to try to come up with common data definitions across seven governmental agencies, that the first six months was trying to come up with the common data definition within our own agency. Then it was a lot easier to then negotiate across the seven agencies. Do you believe that your organization, which is a conglomeration of 62 independent entities, can come up with one standard?
MR. POKORNY: The association, or the Confederation of Plans, has come up with one standard if we look to the interplan teleprocessing system, which is the system created to support the exchange of information between plans that are in a home post situation which would be serving a traveling member away from home, or in the case of a multi-location employer group where there is, we call it a control plan, where the employer normally has its headquarters and the participating plan where individual members may be enrolled and served. So that we do have a standardized mechanism, if you will, for that exchange. We had done that internally. We recognize the value of that internally.
It has generated, forgive me for not knowing the specific number, but hundreds of millions of savings I believe. I don't want to quote a figure offhand, but I will stand by in the hundreds of millions of dollars, because of the ability to exchange information in a standardized format rapidly and efficiently.
DR. STARFIELD: All of you to some extent have talked about the need to pare down to a minimum core. It's what we do with the additional stuff is what we've been discussing in the last few minutes. But now, getting back to the core, to what extent is the report on the core data elements that was published by this committee this past summer known in the field and to what extent might it be helpful in decisions about medical information that needs to be standardized?
MR. POKORNY: Talking from my own perspective, I don't know the full extent of knowledge of the plans' awareness of the core data set. There is a interest that we have at the association in ensuring that information is conveyed and understood. We do have a commitment at high levels within the association and board level committees of the importance of moving ahead with standardization, but I can't answer your question specifically as to how many plans are fully aware of the committee's report that was issued last year and any specifics on it. It's a question that I realize you asked because it's a question that I need to get the answer to. I appreciate you asking it.
DR. STARFIELD: We would appreciate having the answer when you get it. What about you?
MR. RAMEY: The same thing for the federal plans. They're aware of the efforts in this area. I'm not sure that the plans that I represent are fully aware or have full cognizance of the data that you released last summer on these core elements. I'm a little bit surprised that the Office of Personnel Management doesn't have a seat at the table so to speak, since they basically administer the largest employer based plan in the country. We oftentimes maybe too much rely on OPM to get information out to us and this hasn't been forthcoming from OPM directly, though as I say, I think all the plans are in general aware of it. I'm not sure that many of us have really taken to heart what's there and where we're heading with it. We're all looking to the standardization but unfortunately too many are sitting back waiting for somebody else to come forward and tell us what to do.
MR. DECKER: My own organization is well aware, very well aware of the standard set that was proposed. We actually commented on the set when it was first circulated. The business side of the organization is well aware. The members of WEDI as an organization, the members themselves are fairly -- I would characterize them as being quite well aware what those standard sets are. But as I mentioned in my prepared remarks, my feeling is that there are a lot of health care entities out in the real world that have not been brought completely up to speed on the implications of either that data set or the requirements in the HIPAA. I think there has to be, as I said in my prepared remarks, I think we need to do more work on getting that information out. That is one of the responsibilities that WEDI has. It's a responsibility that a number of us in our organizations here should share.
DR. STARFIELD: Can I just ask for your personal opinions then on the extent to which you think it might be helpful in decisions that your organizations have to make deciding on basic --
MR. DECKER: To the extent it might be helpful to have that information --
DR. STARFIELD: The extent to which the core data elements could help you all in thinking about what needs to be standardized, the basic core that needs to be standardized.
MR. RAMEY: I think it would help all of us. Just as an indication, from the meeting yesterday on where we are with the national payor identifier number, I think most of us were unaware we were that far down the road to implementing that. It's something we've all said hey we need, there's a need for it, but maybe I've missed somewhere on the communications loop on some of this. I think that all of us need to make sure that everyone is aware of where we're proceeding and how rapidly.
MR. DECKER: The health care business needs to focus on what's going on here. These hearings will help that focus. The wide dissemination of that data set will help to achieve that focus. Anything that will help to achieve that focus is useful, but that's why that data set is very useful. Seeing what's there and seeing the definitions and seeing the discussion about those definitions should be very useful to folks who are going to have to deal with the administrative efficiencies that are called for in the HIPAA very soon down the road.
MR. POKORNY: I don't think I have anything to add, aside from the thought that correlating the core data set with the, the development activities, with the review of the data sets that's being undertaken by NUCC and also some comparison of the data set maintained by the National Uniform Billing Committee is a necessary part of the process.
DR. IEZZONI: Just picking up on one phrase that Mr. Decker said and then putting my question forward, you said, perhaps it was just a rhetorical argument, that we have to make sure that we don't affect patient care deleteriously through anything that we're doing. I'm not going to ask you to indicate whether you think HIPAA will have a negative impact on patient care, but if you care to comment on that we wouldn't object hearing about it.
But my question is I want to kind of play off the issue of variability that the questions were led off on. As I've been sitting here listening to this, I've been hearing payment as the subtext of most of the arguments, but I'm sitting here thinking about quality of care, and thinking that one of the tensions is going to be the fact that a lot of the data that you generate are used by people, admittedly kicking and screaming sometimes and saying these data are imperfect, to nonetheless evaluate quality of are. Can you just expand a little bit on if there is a tension between when we're talking ultimately about what the data elements should be and there's a tension between the core set that you might need for payment purposes, but would really like to have one or two more things to think about quality of care, how you might balance those two competing interests.
MR. DECKER: I will address your question directed at me first. I want to make it clear for you and for the other members of the subcommittee here that, as I said in my prepared remarks, I honestly believe that a goal of the work that you are all doing and we are all doing is to contribute to access and to the quality of health care that is received by consumers, by patients. I don't think that any work that we are doing will benefit the ultimate -- I don't think that what we do should not benefit the ultimate goal of the health care system, which is to deliver high quality health care to patients, any patients anywhere. I think that administrative efficiency, building more administrative efficiencies in the system should help. It's very much like discussions of medical savings accounts, it may get more access to health insurance for some people, but we don't know yet.
If the administrative system in the health care business operated at its optimal efficiency, would patient care benefit? That is a question that the policy community has debated and studied endlessly. Unfortunately we don't have optimal administrative efficiency yet, so we don't know the answer to that. The point is that if we are going to seek to achieve optimal administrative efficiency in the delivery system, one of the goals of achieving that efficiency is to increase the quality of the health care delivered by the system and to benefit the patients who are the direct recipients of all the business in the health care business.
That is where my organization, where AARP comes down on this as policy and why we're interested in it as a policy issue. We certainly would not -- none of the organizations I'm associated with would support any initiatives that we thought would in any way decrease the amount of accessibility to the health care system, or add to administrative inefficiencies or not improve the quality in the health care system that is already out there.
DR. IEZZONI: I guess what I would also like -- I guess you're a member of WEDI or the group that you've been mentioning, when you are at the table looking at the data elements for the initiatives that you pursue under that auspice, is quality of care at the table? Is it one of the goals that you think about when you're thinking about which data elements to include and how to define them?
MR. DECKER: Broadly speaking, the members of WEDI and the other members, the trading partners, do have quality of care in mind. After all, they're selling a product. If the product is not of good decent quality, purchasers won't buy the product. That's quite clearly a goal of the trading partners in the business.
DR. IEZZONI: I guess I'm getting at specific data elements to look specifically at quality of care. Maybe some of the others could jump in, if there is that tension.
MR. DECKER: I will segue with my remarks into their comments with that the reflection that quality of care data elements are often times clinical care data elements. Oftentimes, clinical care data elements are not considered in administrative and technical financial relationships necessarily. Of course, there are certainly some clinical care data elements that are required when a billing transaction takes place for example. But getting into clinical care data elements as a data set is not directly what administrative transactions are about. I will toss it to you to handle it from here.
MR. POKORNY: I will try and catch as best I can. What goes through my mind when we talk about the administrative transactions, the financial transactions, the clinical transactions, I think about some of the efforts that have gone on within the realm of HL7 for example, within the realm of X12 where we have a patient information transaction. The need for clinical information is there and what's going through my mind is how do we serve both. A claim, as it currently exists, tends to do a lot more than just tell you what was done and stands as the basis of reimbursement for the expense of rendering care.
I'm talking from my gut right now. I think that the transactions have to serve specific business functions and a claim administrative transaction is different than a transaction that gives the kind of information that's needed and looked for to ensure effective care to the individual member, to convey the clinical information that's needed to support information systems that can be accessed by a provider number, no matter where they're located, to ensure that the provider has enough history to render effective care at the time, to make decisions in the best interest of the individual member or the patient. It's two separate things.
I don't know how to say to the subcommittee and the committee what the answer is, but I think you can hear from my comments and my voice that the clinical information needs in health care are very important. Looking at some of the work done by Blue Cross and Blue Shield plans, different plans in different ways, a very great interest in providing not only individual members but providers, the kinds of tools that they need to make informed decisions, capable decisions for rendering care. Again, there is no one size answer fits all for Blue Cross and Blue Shield, the Confederation of Plans because we have different plans with different market needs, different business needs and different capabilities. But the interest is there.
DR. IEZZONI: Can I just -- I don't want to take up too much time -- but can I just give you one example? If we knew that a discharge diagnosis code on a hospital discharge summary, that the diagnosis represented by that code occurred subsequent to the patient entering the hospital versus being preexisting, that would give us some insight into quality of care. We're already collecting ICD-9CM diagnosis codes, we know that we define the principal as the condition for which the patient entered the hospital, so obviously by definition it was preexisting, but we have fields for like nine more codes or whatever. If we had an identifier that said the condition occurred subsequent to the patient entering the hospital, it could give us some insight into quality of care.
So I'm not talking about excessive clinical data, I'm just talking about and thinking about the kind of core data elements that you probably include in the claims transactions, but if you thought creatively and you added one more space, or one more little tweaking piece of information, it could help give you some insight into quality. So that's what I was trying to kind of get at to see how you would balance the tension there and whether you have people at the table thinking creatively about those kind of issues.
DR. STARFIELD: Could I ask you another question? I think a lot of the things you're talking about really apply to a situation where there is a bill. I think every day now a smaller and smaller proportion of transactions are generated bills.
MR. POKORNY: They generate encounter information.
DR. STARFIELD: Encounter information, but for a different purpose, and that different purpose might in fact be looked at as a quality of care purpose rather than a billing purpose.
To what extent are your remarks tempered by the fact that a lot of your experience is with billing information and in the future it may be less so?
MR. POKORNY: To what extent are my remarks tempered?
DR. STARFIELD: Tempered by your past experience.
MR. POKORNY: They probably are. The silence that you hear from me right now -- that doesn't make a lot of sense, does it -- but I think we're moving down a series of questions that I do not, as a matter of fact, I know we're moving down a series of questions that I do not have a clear answer to, I don't have enough information for. What I would like to do with the subcommittee's and the committee's indulgence is to add this to the list of questions that have already been posed, attempt to incorporate them into some of the further discussions that will be taking place tomorrow and in days after and try and bring more information on these back to the committee.
I'm recalling some of the discussion that took place before we formally convened at 9:00 with the identification of a series of additional questions that need to be developed and posed. I think these are the types of questions that I believe fall into that category. I would appreciate having some additional time to do the necessary research and come back with a meaningful answer to you.
DR. LUMPKIN: Let me perhaps interject at this particular point that it is the intent of the work group and the subcommittee to offer multiple opportunities for people to have written input. This should not be considered to be your last shot at this or if other ideas come forward. We will also be sending out additional questions to people who have testified yesterday, as well as people who were invited to testify but weren't prepared so that we can get as much information as possible.
MR. RAMEY: We appreciate that. I would like to just comment on one thing that the Office of Personnel Management is doing. Through the Foundation for Accountability, they have put in a contract of all the federal plans an agreement that we will collect certain data to help them at least start down the road to outcomes measurement. They're looking first at breast cancer and asthma, and a couple of things, will probably limit it to specific geographic areas to start with as they test this. But to our discussion here, I think most of us were looking at this as a claims payment process and had not really addressed it as far as outcomes measurement and all the many, many additional privacy concerns that that generates if we try to make one form fit all or one data set fit everything. I think the outcomes measurement data collection should be a separate issue as far as what we're addressing here on the standardization. I agree with Dr. Iezzoni that there might be a little bit of information that could be gathered, as she mentioned on the discharge diagnosis, but I'm not sure how far down the line the outcomes measurement or quality that's going to get at.
DR. COHN: I have a couple comments. First of all, I want to thank the panel members for allowing us to ask questions that were really very far afield from the questions that we had provided for you in advance and I appreciate you trying to answer them as best you can.
I did want to comment in terms of the additional element that Dr. Iezzoni had commented, at least on my memory, that was actually suggested initially by Dr. Mark Brumberg(?) from Kaiser Permanente a number of years ago, if my memory serves right.
DR. IEZZONI: And the National Committee has --
DR. COHN: Exactly, so I do appreciate being reminded of that fact.
Now, I actually wanted to get back to some of the questions that we had asked earlier. Certainly a number of you are major payors in the field and have talked about, pretty strongly about the need for a significant amount of variability, the fact that you would like to be able to have business partner agreements, private agreements with specific groups to get "additional" information. I'm sure you're sitting here -- you are going to have to at some point probably figure out in the new world whether less variability, what's important and what's not and how we might get it.
I'm actually wondering, and maybe this is not a question for today, but maybe to get responses back from you, I know certainly Blue Cross is having a meeting over the next two days to consider some of these issues. But in an environment where there is less variability and less choice of what sort of data elements you may prescribe in various fields, are you then going to be requiring that everybody submit attachments with that additional information. I think that would be question number one.
Question number two is I am well aware in many of our environments that there is tremendous variability from one plan to another, yet similar product offerings, in the sense that there may be a lack in our business of agreement on what is the best practice regarding certain product offerings and data needed to deal with that. I'm wondering how much there may be in your association in regards to that, for example, similar offerings but really radically different data requirements reflected across geographic regions. I'm wondering if there may be some information we can get back on that just to give us an idea.
MR. POKORNY: I would have to look to see what kind of variations there are because I am confident there are variations in the number and nature of product offerings. I'm not quite sure if the variability in information requirements is as great as the number of different offerings may be, because the nature of the offerings may be just something more specific to a particular employer group, for example, which raises the question in my mind too to what extent is the call for information above and beyond that necessary for payment being driven by the employer's request for information to help them determine what indeed is being done to instill confidence in them that their employees are being properly served.
Maybe what we need to do is look to the employer community to become more part of the standard setting process to see what will role they are truly playing in the shaping of the face of health care right now. I'm thinking, for example, there's an employer identifier requirement within the law. What's the reason for that? What's the real objective? Is that to help bring them into the whole process of coming up with a more effective simplified administrative program? I don't know, but perhaps I'm suggesting to the committee to extend an invitation to that portion of the community to bring the in and get some additional perspective, because there are four, five, six, seven different corners to this whole area. I think we need to bring those in. That might help answer the kinds of questions that you just raised.
DR. LUMPKIN: I think we as a committee would appreciate any insight that you could give us based upon talking to your members on the degree of variability that you believe is due to what you require as a payor versus what you're required to as a payor representing an employer because that certainly is an area that we haven't really dealt with a lot and would be very useful to get an understanding of are we perhaps barking up the wrong tree and putting that at your doorstep -- talk about mixed metaphors.
[Laughter.]
And perhaps need to have and to look at some issues related to employers that we have not addressed. So thank you for that.
MR. SCANLON: The HIPAA also asks that standards be developed in the security area and all of you have experience now with electronic commerce. In your view, is there now an existing standard, state of the art or whatever, or set of practices for protecting the security of the information that's now being transmitted electronically and if there are practices or existing standards, what are they and are they the types of standards that could be implemented on a widespread basis cost effectively?
MR. POKORNY: If I may answer that quickly, I understand that there are -- my background does not allow me to really comment and answer your question, but I do understand it.
MR. DECKER: I concur with that statement.
[Laughter.]
MR. RAMEY: I think all of us have a concern about the privacy issue and I attached to my statement the Office of Personnel Management's standards for the use of the data. I plead, as these two gentlemen did, that I don't have the technical background to really address it from the EDI standpoint.
MR. POKORNY: If I can add just one side comment, there is great value and importance to security and confidentiality. One of the challenges in coming up with the rules, if you will, to ensure that that was maintained I think has to address the technologies that are in place to transmit information and an audit trail can be burdensome if it becomes very, very rigorous. By that I mean it is theoretically possible to have a transaction be conveyed across the Internet that uses various recognized encryption methods that could bounce around several different locations before it gets to its ultimate recipient. To require each particular point which it bounces to maintain an audit trail could be a horrendous problem. I think there is a level that needs to be identified beyond which it would be going too far.
MR. GELLMAN: Mr. Ramey, your statement raises a couple of confidentiality points that I would like to ask you about. The said the social security number should be adopted as the patient identifier with appropriate confidentiality safeguards. Social security numbers are used for a wide variety of public and private purposes. There are private repositories of social security numbers all around the country and you can buy anyone's social security number off the Internet for a few dollars. They will link names to numbers and numbers to names. I'm wondering what you think are appropriate confidentiality safeguards that might be provided for social security numbers.
MR. RAMEY: As I see from my statement, I didn't really try to define what would be appropriate. I know that from discussions there is always the issue any time we deal with social security numbers in the federal sector with our plans there is always the issue of confidentiality to identify these numbers. I know they've used everything from driver's licenses ad infinitum. It's kind of the common number that all of us have. There's still in some legislation are some requirements for confidentiality. I was just saying let's not publish something out on the Internet that will identify everybody's social security number, name that could possibly tie it into medical records and get into the confidentiality issues that follow from that.
MR. GELLMAN: Let me ask a second question. You supported and suggested that we take a look at the OPM confidentiality requirements, which you've attached to your statement. Just to pick out one of them, one of them permits disclosure of information to government officials for investigation or prosecution of alleged civil or criminal actions. This allows basically any of this information to be used without notice to the patient, without an opportunity for the patient to object, without any balancing of interests, without any restrictions on how the information is being used by the recipient. Do you think that's really a particularly strong model of confidentiality protection?
MR. RAMEY: Perhaps as it is spelled out there it is not especially strong. That exception was placed in OPM's guidelines in my understanding to provide them an opportunity to pursue instances of fraud, fraudulent claims that might be submitted or allegations of fraudulent claims that might be submitted.
MR. GELLMAN: It might be very nice if it said that. I'm just suggesting that it's not a particularly good model at all from a patient perspective.
MS. GREENBERG: Getting back a little bit to the variability question, I wanted to pick up on something you had said, Frank, and particularly because there are obviously Blue Cross/Blue Shield plans I guess in every state. You had mentioned that some of the unique requirements, information requirements might be related to state requirements. I just wondered to what extent you thought that would be a significant issue in trying to standardize the data set or the data elements, the extent to which that really does create a fair amount of variability or whether this would be kind of on the margin.
MR. POKORNY: State variability, that was a supposition on my part. I do not know what the extent of that would be. I think we have some indications, at least on the claims side of what that might be, because there are separate state uniform billing committees, the institutional claim that had their own additional code sets and requirements above and beyond that specified by the National Uniform Billing Committee. If I recall George Arges' testimony yesterday, he said that that is an issue that needs to be addressed. So at least at the claim level on the institutional side, there is some. Beyond that, I do not know enough to really give you an idea of how pervasive those differences would be.
DR. LUMPKIN: Thank you. We will now take a break. I would like to thank the panel for coming. We will reconvene at 10:45.
[Brief recess.]
DR. LUMPKIN: Before we get started with the panel, I will make a brief apology that I was just paged, I have a final, final negotiating session with the Bureau of the Budget in the State of Illinois. They're going to page me when they're ready. They're going to do our Medicaid agency first. So if I'm gone, hopefully very briefly, you will understand it's not that I don't find what you have to say is very interesting. I'm sure it's going to be much more fun than my conference call with the Bureau of the Budget. I always seem to come out of those meetings a couple of million dollars lighter than I go into them.
[Laughter.]
Okay, we will start off with John Lavin.
MR. LAVIN: Thank you. Dr. Lumpkin, other panel members, my name is John Lavin. I am the Director of Network Management at PCS Health Systems, Inc. PCS is the nation's oldest and largest prescription benefit management company. We process over 350 million prescription claims each year, covering nearly 56 million patients. One of my primary responsibilities at PCS is to ensure that each of the 54,000 pharmacies across the nation that do business with PCS can electronically communicate claims and related clinical information to us.
PCS has a tremendous stake in the final recommendations of this committee. Therefore, I want to thank you for the opportunity to address the committee.
In regard to the first question, the expectations that PCS has and how this will affect -- the administrative simplification standards will affect PCS. PCS hopes that the requirements of HIPAA will build upon the accomplishments that have already been made in the prescription benefit management industry, especially in regard to electronic point of service claims. We are arguably the most automated section of health care related to claims payment.
There are three major areas of interest to PCS as related to the administrative simplification standards. These are the transaction standard, the transaction content standards, and the security standards.
PCS has been adjudicating electronic claims since 1986. Our industry has utilized a standard electronic transaction for several years. Prior to that, we used a proprietary standard because we were the only people doing it at that time. The current transaction standard is the National Council of Prescription Drug Programs, or NCPDP version 3.2. This standard has been in place since 1992 and is widely used by retail pharmacies, payors and third party administrators. All 54,000 pharmacies representing over 200 different software programs or vendors that process claims through PCS utilize this NCPDP version 3.2 standard. Just to give you an idea of how widespread the NCPDP 3.2 standard is, as of January 1997, PCS received 99 percent of our claims electronically at the point of service.
In order to build and maintain this electronic environment, PCS and our business partners have invested a huge amount of resources into the current system. We urge the committee to adopt the NCPDP version 3.2 as the standard for interactive electronic prescription claims. The adoption of any different standard would be prohibitively expensive for PCS and all other industry stakeholders. The interactive electronic prescription claim works well and we do not see a reason to create a new standard at this time.
The second major area of interest to us is the standardization of the content of the electronic messaging. Initiatives to create unique identifiers for providers and payors are extremely important to us. While the National Association of Boards of Pharmacy, the NABP number is sufficient for identifying pharmacy providers, for claims transactions, there is a great need for a unique physician and for payor identifiers. As PCS continues to integrate prescription information with other health care data, this need will only increase. If these projects are to be successful, they will reduce overall administrative costs to our providers and improve the integration of medical data for our patients.
The third area of interest is security standards. Currently, we are utilizing closed or private networks along with proprietary payor information in order to maintain security. This has been widely utilized and successful in the prescription claims processing industry. However, we do realize that the new security measures will need to be developed as various areas of health care begin to communicate. Our major concern is with the potential cost of implementing these new security standards.
In summary, we do not expect any major benefits or costs from the adoption of an electronic claims standard for prescription drugs since we have been utilizing a standard for several years. Of course, we are expecting that the NCPDP version 3.2 will be the standard. If a new standard is adopted, the potential conversion costs will be great.
In regards to question number two, we are not greatly concerned about the process, but are greatly concerned about the final results. As stated earlier, the results of this process will greatly affect our core business, which is electronic prescription claims. The process appears to be fair and comprehensive. We would like the Department of Health and Human Services to build upon the current standards as it implements the administrative simplification requirements of HIPAA.
I believe by utilizing the current standards where they exist, there will be more widespread acceptance of the new requirements, faster implementation and lower implementation costs. We realize we will most likely need to make some new investments as a result of this effort. However, we do not want to start from scratch. However, that would ensure my job security for several years to come, so I may want to regard that.
In regards to question number three, as I stated earlier, PCS processes close to 35 million prescription claims per year, of which nearly 100 percent are electronic at the point of service. PCS adjudicates these claims and provides an average response time of two seconds for these claims. So at the time they come into our house, and the time we send them back to the provider, it's two seconds. All in all, it's probably about 10 or 15 seconds as this information goes across the country. Because of this experience, we believe that the current electronic claims standard is effective and efficient. As we move towards more clinically based programs such as disease management, the need for standard identifiers and new types of transactions will continue to grow. There will probably be the need for implementation of new standards, or of current standards.
Speaking strictly for prescription drug transactions, the information we receive from pharmacy providers is relatively good. The claim information is readily available to the providers and results in a very high electronic adjudication rate, somewhere in the high 90 percent. The clinical information still needs improvement. The implementation of a standard physician identifier will help tremendously.
Question four in regards to the goal of the administrative simplification and how can it best be achieved, with the large number of organizations involved in health care delivery and financing systems, implementing any change is difficult. I believe the goal of administrative simplification can best be achieved by utilizing current standards where they exist and are being used. Secondly, HHS can provide incentives of mandates for implementation of new standards in a timely manner. This is essential to eliminating the costs of maintaining multiple standards and processes.
The last is it is most important to ask questions. I'm constantly amazed at the fact that many of my ideas will not work within the provider or payor community. That is why I make it a policy to ask those who would be affected by my proposals how will this work for you. Since I'm hear talking to you, I know you're asking those questions and I appreciate the opportunity to give you PCS's perspective.
DR. LUMPKIN: Thank you. We will have the remaining members of the panel and then we will move into questions. Next is Richard Sheldon.
MR. SHELDON: Thank you. Thanks for having me. After I see everybody that's been here, I guess I'm probably representing the smallest company that you will hear from. We're a third party administrator in Cleveland and total between our two TPAs, we have about 100 employees, but we're pretty representative of what you will find out there from third party administrators. I will try to represent them as I can. We vary so widely. There are so many of us, there are over 1,000 of us in the country.
Our two companies, what we do, we provide administrative services to providers that operate their own health plans, HMOs and so forth. We provide administrator services to employers and also to insurance companies who want to farm out some of their responsibilities and functions.
To get into the questions. In question one, our expectation of this project is that a standard method of transmitting health information will be established, and acceleration of the use of electronic transmission by all parties and lower cost of servicing a health plan. The positive outcomes that we see are more data flowing electronically. We started two and a half years ago receiving claims in the A37(?) format. We've been very pleased with it with one exception. In 1995, only six percent of our claims came in in that format. In 1996, it only grew to eight percent. We were hoping to get a lot bigger bang for our buck out of it than that. So we see this as a positive approach to get those numbers up because we've been trying to head this direction for a long time.
It will help increase our productivity and competitiveness in the marketplace and it will result in better service to all providers, to the providers and to our employers and to our patients that are covered by our plan. It will also help us get more comprehensive data for the analysis of the health care delivery system. We need this especially for our provider customers in giving them data feedback to look at their practices and so forth. When we get the claim in electronically, we get far more data than we do on a paper claim and we can store it so easily. When we get on paper claim, we actually have to sit there and key it all in. So needless to say, we don't key in as much data.
It will also help us eliminate paper and increase the accuracy rate. Every time a claim goes through some place and it has to be rekeyed, it can get into trouble.
As far as the negative outcomes that we see in the short-term, we think this is going to be a little more expensive. Right now we're chasing the health care industry. There are so many changes going on now at such a rapid pace, 10 percent of our employees are MIS people, and we're just trying to keep up with everybody's new ideas. This would just be on top of that.
And right now for our A37, we do use a clearinghouse. A lot of TPAs just have not gotten into that because there's kind of a cost barrier in there. We have to pay $10,000 a year to get into the thing and then we're charged 60 cents a claim. In talking with other TPAs around the country, they're telling me that they're inputting -- and it's kind of similar in our shop -- to manually input that claim for 40 cents. People have contacted me trying to get our business to input our claims for a quarter. I'm sure they're using some kind of OCR type thing on the HCFA 1500, UB92s and so forth in order to get down that low. But we really do believe that in the long run it's going to be a lot less.
We think that this may reduce administrative options. There are a lot of employers out there who are still processing their own claims and they're not going to be able to set up to do this, so they will probably have to find some other avenue. I think there are some smaller people in our business, even we're small, there are a lot of TPAs that are smaller. They will probably not be able to meet the financial requirements to pull this off either. So the market will probably shrink some.
We're a little bit concerned with the state laws being allowed to supersede the federal standards because it just flies in the face of a standard in our mind. We don't exactly know what that's going to mean to us, but we do have some concern there.
As far as some of the other items that our MIS people are concerned with, maybe not so much in our shop that we know of, but the timing of all this coincides with the year 2000 problem with computer software. You're right in this same time frame and people are going to have to pay attention to that first because they will totally shut down. So they've got to put that task out in front of this task.
On the electronic signatures, we're a little concerned if it goes the image route of a signature. We would rather see some kind of a -- we don't have the answer, a pin number or some kind of a signature on file, check a box or something because we really at claims processing don't want to have to verify signatures visually. We're trying to get to do more of our things electronically.
As far as the second question, some of our concerns about the process, we think the time frame is awfully aggressive, too aggressive. A lot of these standards, hopefully some of them have already been tested. We know they have, if you adopt ANSI. There's a testing phase and you have to implement and everything else. Once everybody gets out and it's decided and it's communicated out to everybody in the country, people in our business, then they have to look at their own software. Their own software, hardware may not be able to handle this so they either have to buy other modules or they have to go out and shop for new software vendors. I know we've done that in the past and the last time it took us six months to find one, and then they said it was six to nine to implement. We didn't believe them, and it was. Then beyond that, if everybody is doing this at the same time, the software companies probably don't have the staff to deliver the new software in that time. They will quote you back, well we can get to you in six months or in 12 months or something like that. So it's just another thing to keep in mind.
Also, we're concerned about the communication of the whole thing and how to use it, some kind of a manual instruction, something. We just don't want it to look like federal regulation.
The third area, this is a real big -- question three, provider identification is one of the major problems that we're experiencing today the way it's set up. I heard one of the speakers talking about it earlier. As he mentioned, the taxpayer identification number is what we see on a claim. This is just an enormous problem for us. You have the Cleveland Clinic Foundation and other foundations have hundreds of physicians working for them and they're all in the clinic itself and they're all using that same taxpayer ID number. So to actually get down to which physician performed the service and everything can be relatively tricky. It would just help out so much.
In addition to that, in our business, most of our employers have multiple locations. They need multiple managed care organizations because usually a national one doesn't work real well. You have to pick who is strong in a particular area. We have about 200 clients and we have like 40 of these that we have to keep in our database. They have to be updated every month. Every time they send in an update, our provider file gets bigger. The problem is even coming in on the regular paper claims as well because we have to go down to the name to do the identification because you can't use the taxpayer ID number. It will come in like Dr. John Smith, or Smith, John, or John Smith, M.D. or sometimes no period and a space here or there. The computer just can't match those up very well. So you have to sit there and take all this information and merge it altogether and try to clean it out. I know there are people in our business that have whole departments that just sit there and try to visually look at all these to get them down and get everybody in the proper file.
We do know that in A37, there is a spot that's I think the Medicare number of the provider site ID. There's a UPIN(?) number that Medicare has. I know my brother is a physician, and he has such a number. That field seems to always be populated. That's the only place. Even if we use that, that's only eight percent of our claims.
In addition to that, if you solve this problem with the number, we want to make sure that for the people who are still transmitting claims on paper that there's a box or something put on the HCFA 1500 for that, because we can't have it only solved on the electronic side and the paper side not get that taken care of.
Another area that we're a little concerned with based on what we see today would be correct routing. Claims have to go -- I'm talking here about maybe a payor ID number and how that would flow through the system. Right now there's a lot of stops for claims. Like I said, we have a lot of PPOs, managed care organizations, sometimes the claim is required to go to them first and then on to us for final adjudication. Or sometimes it's supposed to come to us and then to them and back to us, but there could be stops at UR firms and other. Who all knows where some of these claims have to go? There almost needs to be a multiple routing or some way to handle that particular issue.
The other thing that we don't see a lot of I guess, but it's miscoding. That seems to be getting better and better all the time, but we do find that sometimes the physician community will put things in a box and it looks great to them, but then when it gets to us it doesn't really mean anything because they interpret that box a little bit differently. That gets back to an education process.
Then to go to question four, what can we do to meet the needs of all stakeholders. I think that one thing we need to build on the current standards that are out there. We highly encourage you follow the ANSI standards and the A37 and so forth. This really needs a good planning stage like you're going through. Then we suggest, if it's possible, to perhaps stagger the implementation dates, like maybe start with A37 and then a year later or whatever go into eligibility and that kind of thing.
The only other thing I might add, there are two good sources that would help for our industry. They do have offices here in Washington. I put them on the back. The Self Insurance Institute of America has 1,000 members. They're made up of employer groups. You talked about employer groups earlier. They are members. They have third party administrators like ourselves as members and they also have insurance companies in it. They've got like a real broad spectrum.
The other is the Society of Professional Benefit Administrators. They are just made up of 400 TPAs. But they would be real good sources for you to contact for additional information. You could go far deeper than you could go from just one TPA like myself. Thanks.
DR. LUMPKIN: Thank you. Susan Jensson.
MS. JENSSON: My name is Sue Jensson. I am a Director in the Systems Department. On behalf of the State Farm Insurance Companies, I appreciate the opportunity to testify before the subcommittee.
State Farm, as one of the largest individual health insurers and the largest automobile and homeowner insurer in the nation, has a major stake in the Department's forthcoming regulations. These regulations will very significantly affect how State Farm processes the millions of claims for medical care reimbursement that it receives annually under its health, automobile, homeowners, worker compensation, commercial liability and umbrella insurance policies.
In my remarks today, I will briefly describe State Farm's current involvement with electronic data interchange, and then address the specific questions posed in connection with this hearing. I would be happy to respond to any additional questions the subcommittee may have.
State Farm is currently using industry EDI standards with more than 800 business partners. In the health care context we have begun, and are expanding implementation of EDI for health claims, claim payments and eligibility requests. When fully implemented, EDI will significantly facilitate our processing of the more than 346,000 individual health claims and 950,000 group health claims that we receive each year. More than 1.3 million medical bill transactions are associated with those claims. These figures relate solely to our health insurance policies and do not include the millions of transactions required for medical claim processing each year under our property casualty insurance policies. In 1995 alone, State Farm paid over $3.4 billion for medical treatment under property casualty policies.
State Farm participates in the ANSI ASC X12 committee and is also a member of WEDI. We anticipate that the Department's EDI standards will in general have very positive results. The potential benefits include efficiency gains through the reduction and cost of manually processing information, customer service enhancements through more rapid accurate settlement and payment of claims, reductions in general operating costs, including for supplies, overhead and personnel, relief from the cumbersome and expensive process of conforming to different standards in different states, aid in combatting insurance fraud by facilitating data checks and tracking of claims, and finally, improved communications required for coordination of benefits and subrogation among insurers.
State Farm foresees few adverse results from the Department's forthcoming standards, so long as they take into account the needs of all potential users and adhere to Congress' intent with respect of the purposes of administrative simplification. In particular, State Farm expects the Department will conform to Congress' express direction not to impose any requirement for information collection or reporting.
State Farm is impressed with the Department's demonstrated willingness to solicit the views of interested parties regarding the standards. The Department appears to be adhering closely to Congress' mandate that it consult with the established standard setting organizations and give deference to the standards endorsed by those organizations.
State Farm has not experienced major problems with the X12 standards that will be covered by the Department's standards. State Farm strongly believes that the single most effective means of achieving the goals of administrative simplification is to adopt the X12 standards, and to ensure that the standards are effectively implemented.
In light of the aggressive schedule for adoption of the Department's standards, State Farm agrees that some phase-in of particular standards may be appropriate. To ensure effective implementation, we strongly advocate that the Department undertake a comprehensive educational program for all users of the forthcoming standards. EDI is a simple concept, but many transactions are complex. Education is critical to deal with that complexity.
Finally and most importantly, State Farm urges the Department to design its standards for application by property casualty insurers as well as health insurers in order that the standards may be used to facilitate all medical insurance transactions. It simply makes no sense to prescribe standards with the objective of achieving widespread efficiency and yet exclude a major portion of the payor population from consideration as potential users of the standard.
Although the administrative simplification statute does not refer to property casualty insurers as health plans, as a practical matter, property casualty insurers will inevitably be compelled to use the Department's standards in order to conduct electronic transactions with providers and other users. In this context, State Farm is encouraged by the fact that Congress explicitly included first report of injury among the transactions covered by the Department's EDI standards. Congress' recognition of the need for standardization of injury onset information reflects the comprehensive goals of administrative simplification and underscores the importance of the Department taking property casualty insurers' data needs into account.
In summary, State Farm strongly supports adoption of uniform EDI health transaction standards for all relevant parties on a national basis. Such standards promise to produce a more rational and efficient medical insurance system and in the long run the anticipated cost savings from the EDI standards could serve to make health care more affordable for all Americans. Thank you.
DR. LUMPKIN: Thank you very much. Questions? Simon, I know you've got a question. And I could guess what that question is.
DR. COHN: I wasn't going to ask that one, not yet anyway. This is actually a question for Mr. Sheldon, actually probably for the others as well having to do with the number of claims you're currently receiving electronically. I was somewhat stunned by the very low percentage of claims that you currently have electronically. I was aware that Mr. Lavin receives virtually everything electronically. From your view, can you explain a little further why only eight percent of your claims are accepted electronically and why you think that is? Maybe Ms. Jensson can also comment.
MR. SHELDON: Yes. As I mentioned, we do a lot of work with PPOs. In some cases, the PPOs do require that they get the claim first. If they don't receive it electronically, we're stuck. So even though we're out there, we use NEIC(?), even though a provider could go to them to get to us, they're a barrier. So they have to be able to receive the claim and then transmit it to us electronically for us to get it. An awful lot of our plans are under such arrangements.
Now, where the PPO let's us to the total work, the total repricing, then that helps bring those numbers up considerably. But I would have to say that's probably one of the biggest factors because more and more every day people are accepting the A37 and we realize it. We think that's one of our biggest barriers.
As far as the PCS goes, we do use them and that's true. We would love to get all of our drug claims through PCS. It's ideal.
MR. LAVIN: We would like to have all of them as well.
[Laughter.]
DR. COHN: Just to make sure I understand, you're saying the stuff goes electronically to the PPOs, but it doesn't go electronically to you?
MR. SHELDON: No, a lot of PPOs aren't set up to accept electronic, which is a problem. We even get the stuff from them where some of them aren't even using computers. We find they take the HCFA 1500, they cross out the price from the physician and they write in their contracted price beside it in pencil, then they send it to us so that's a problem, because even if we wanted to go OCR we couldn't read that.
MS. JENSSON: From our perspective, we feel like we're probably a little late coming to the table in some regards for some of these transactions. We've been utilizing electronic transactions in a number of other areas and are relatively latecomers to this particular arena. The internal recognition of what needs to take place is indeed a fast moving process. I must say that our electronic development in the health care arena is rather recent and it has just begun. But it is a mountain that we hope to climb very, very rapidly because of the realization of where the savings are in that process and as such, are into negotiations and finalizing contracts with clearinghouses such as NEIC and the like and will move rather quickly into this arena.
The nature of the beast of where we have been as a company is pretty much a paper driven company up until the last few years where the realization of what can happen electronically across all facets of our organization has really opened our eyes. We are very aggressively moving our organization towards an electronic commerce process.
MR. SCANLON: If you would elaborate a bit, you mentioned some of the potential impact on employers that now run their own self insurance plans. Some of them process their own claims, you indicated, others use third party administrators and others. Would you elaborate a little bit more? You suggested that some of them will get out of the business of processing their own claims as a result of the standards.
MR. SHELDON: Some of them aren't using computers and they're doing them by hand. Probably the time for that is over anyway.
[Laughter.]
Some of them do go out and by systems and do it on their own, which is fine. That's a great market for us. If that happens, we do have employers that lease our software basically from us and they do log on and we train their people so that they can actually do their own processing. But if that's not available, if they want to go out and use some of these systems that they're using, they're just not going to be able to do it or they may not have the money to do it. It may just drive them to a different way of doing things, that's all. Some of that is not all bad.
DR. BRAITHWAITE: It seems that the consensus of this panel and the others we've heard today and yesterday is that the X12 standards, with one exception, seems to be the base that everybody is looking toward. Some people have particular things they want to be looked after like save our code set or add our code set or do it slowly, migrate so it doesn't cost us too much money. There are caveats that go with it, but it really seems like the impression of everyone except the pharmacists is do X12.
The pharmacists see we're already doing everything so don't bother us, and if you want to do X12 great, translate it somewhere else. We will coordinate with X12 so that translation can happen, but don't bother us with it either financially or otherwise. I'm wondering, John, if that's -- I know that groups, the pharmacists in general are negotiating with X12, but I don't know if that means that they're going to migrate toward X12 type transactions or you just want to not be bothered about it.
MR. LAVIN: No, we're definitely, through our industry group, NCPDP, and as a company, PCS ourselves, we are involved with X12. For the claims transaction, it is true we have our own standard. For the other transactions, NCPDP I believe is accepting the X12, for instance for the enrollment and for some of the other transactions, they will be X12. I think hopefully that will answer your question. We already have a claims standard and I think X12 is trying to develop an interactive claims standard. It's primarily been a batch mode up until this point in time. That would be our major concern is for the interactive claim. For the other transactions, I think X12 would make sense.
DR. BRAITHWAITE: Does the rest of the panel agree that that seems to be the direction everything is moving, everything go to X12 except for the interactive pharmacy claims?
MS. JENSSON: I can't comment on the pharmacy claim itself. I can only say that from our perspective, the process that X12 has used, the bringing of individual people to the table with business requirements and meeting those requirements through the development of the standards in an X12 environment has functioned very, very well. It's a consensus building body. I do feel that whatever the business requirements are can be handled through that process.
We have an outside comment I guess regarding interactive EDI, we have what we call immediate response. It's not interactive EDI, but we are right now using -- it's not in the health care arena, but we are using an EDI X12 standard in an immediate response mode and my non-systems lingo says that's itty bitty batches really, really fast. It works quite well for us without it being conversational or interactive. So there is flexibility there, I think, to meet a number of the various requirements that are needed and the body is there that functions quite well and I think it has proven itself over the last several years.
So we feel that even the A37, as complex as it is, it truly comes down to an educational process. It can happen. You need your technical mappers, you need your technical expertise in the same room as the people that have the business requirements and you can through that process make the transaction do what it needs to do to settle the business needs.
MR. BRAITHWAITE: The only other exception might be the attachments standard, which as I understand very few people are using the ANSI X12 for that and that perhaps HL7 or some combination ought to be considered for transmitting the more medically clinically oriented information involved in attachments.
MS. JENSSON: I must admit from our perspective, we have not even begun to look at that.
DR. LUMPKIN: So the issue of the interactive transactions may be somewhat of a bitter pill to swallow in relationship to the pharmacies?
[Laughter.]
This is a tough group.
DR. COHN: I have a question for Susan just to follow on to all of that -- I'm going to stay away from the pharmacy discussion -- which had to do about your comments about property and casualty insurers and all that. In your view, what concerns should HHS or the National Committee have in relationship to these standards for applicability in that area? Are they fine the way they are, or are there concerns that we should be --
MS. JENSSON: We are presently undertaking in house a very detailed review of the implementation guides that have been published through the X12 process for the health care transactions. They've been built through health care with very little input or, from our perspective anyway, we have not been a part of that process. So we are now in the process of reviewing in detail what has been developed and looking at it from a property and casualty point of view. There are very few concerns that those transactions cannot meet our needs. There are some critical data elements that we will be going back to the process and asking for them to be included. In specific, I can think of like date of loss. That's something that is very important to us in a property and casualty point of view. So we want to make certain that minor code changes, if they're not already there, do indeed have the applicability in the transaction to meet those needs. The changes that we are seeing to date in our review are very, very minor in nature.
MS. FRAWLEY: I guess the one question that I have for all of you is that there seems to be some consensus that the X12 standards are the approach to go, but each of you have indicated that you thought the time frame is much too aggressive. If you're saying that you think these standards are usable, could you give us a little bit more detail on why you're concerned about the time frames.
MR. SHELDON: I can. So far, understand that A37 is supposedly the most difficult. It did take us a while to get that up, and we're still doing some things with it and so forth. To be honest with you, all the other ones we've kind of looked at, but we haven't tried to implement those yet. So judging by the amount of time it took us to get A37 up, we're not really sure how long it will take us to do all of the others. I know that we have some software in our office that does them all, but then we have to build the links into our computer systems. So we're just a little concerned.
Then of course, in our industry I'm in the minority. Very few TPAs are using A37, so they've got to do what I've already done, and that was quite difficult. Once you're up, it's great.
MR. LAVIN: One of the other issues is it's not just internally, at least in PCS, to develop a standard. We have to roll that out to 54,000 pharmacies and that takes a lot longer. We have one group, for me it's much harder to work with the outside groups, they have different abilities and resources sometimes to do that. So just because a standard comes about, software developers have to take that standard, they have to write to it, then you have to have 54,000 diskettes. When you get into the physician's offices, it only multiplies since you're talking about maybe half a million physicians at various office sites. It's not just creating a standard and then a few large insurance companies, payors, third parties developing it, it's getting that out into all the different offices that are going to be the site where that information comes from. So that's where that takes longer.
MS. JENSSON: I would add to that only from the standpoint of we are starting as well with the A37 and moving forward with that. It would be difficult for us to work on all of them all at the same time. We're starting with the A37 because we think it has a great deal of the backbone that we will need for all of the other transactions as well. We expect that to pick up as we go, but we don't know that yet. We haven't marched down that trail yet. It's not from a standpoint of we can't do them, it's from the standpoint of we just can't drop them all into the system at the same time. We have to plan our course of action through those transactions.
DR. COHN: I was just going to comment that you all have noticed that our chair had to leave for a couple of minutes. He asked me to take his place.
MR. CLARKE: My name is David Clarke, I'm with the Health Care Financing Administration. I had a question for Mr. Lavin concerning the NCPDP standards for claims processing. Given the obvious movement in the country in terms of managed care, how would we mine or realize the benefit or promise of disease management if the PBMs stay with the present standards for claims processing and not move toward the X12 standards that the rest of the industry would be using?
MR. LAVIN: Hopefully we would hope that X12 would adopt the NCPDP standard, or at least have some kind of transaction where you could read the data sets. We're starting disease management and managed care ourselves, so we agree that the data will have to be the same and will have to be able to be compatible. From the pharmacy, I personally don't know very many people that are using the current X12, so basically no one is using it, so I think it would be better to start with where the industry already is and then make that compatible with the other information.
For instance, at PCS we take almost all of our eligibility information from -- we have about 5,000 different payors we do business with. We have hundreds of different electronic standards -- I guess they're not standards -- but we have electronic formats that we have to support. We would like to support the X12. If that went into place, we already are supporting that today, if that were mandated for everybody next week, we would really like that. That would save us a lot of money.
I think PCS would be typical of the other PBMs that we support that transaction over to X12. We just want the claims to interact. I don't think, since there's nothing really out there implemented, that that should really be an issue.
DR. COHN: Thank you. Other comments or questions?
MR. SCANLON: You indicated that the state law and state practice to some extent in the standards area might create somewhat of an impediment to the implementation of the standards. How great a problem do you see that in terms of states having to set the requirements?
MR. SHELDON: As I stated anyway, we don't know for sure. We read it in the law, we just don't know what it means. So it's just a potential problem.
MS. JENSSON: For us, we're national, we know of states that are enacting legislation similar to this. I believe Iowa is the latest one that I've seen. For us to react to 50 different states doing their own thing in their own way causes us a lot of grief. That's part of the reason why we're here. We would appreciate having one path to follow and think that it should be, from the standpoint of the common language that we use to communicate with, a national standard.
MR. SHELDON: We either have a standard or we don't.
DR. BRAITHWAITE: That's an excellent segue to the variability question that we inevitably come up with for each panel. I think it's my turn to ask it. You guys are the ones that are always pointed at, the payors are to blame that providers sit around and have to provide information to the payors in 400 different forms because very payor has its own peculiar way of looking at it, its own peculiar need for information to feel confident that they can pay the claim and that nothing terrible is going on, or they use it as an excuse to not pay a claim either forever or for some period of time. What's your sense of how much variability is in fact required in claims to be paid by different payors? Could we in fact come up with a claim that contained a set of information that was constant across all payors, as is envisioned by the Kassebaum-Kennedy bill that all payors could accept and would not require lots of additional stuff from providers?
MS. JENSSON: I will start by pointing informally within our State Farm organization. We have multiple -- we're a health care insurer, we have the automobile, we have the homeowner, and guess what, they're all different. They all want different pieces of information. We are in the process internally of doing exactly that. When we come down to a lot of our conversation and boil it down to the basics, it's a language problem to a great extent. We ask for the same types of information, we call it differently. What's a bill to one is a claim to another. Until you get that understanding and that education out there, that's a major row to hoe internally as well as I think nationally.
I think part of the -- I personally don't think that we are dealing with huge variability between the various plans or companies or whatever basis you want to look at it from. It's a language issue and it's an implementation guide issue. If you point to an implementation guide and you point to the proper education and get everyone reading out of the same chapter of the same book, if you will, then you have a huge leap forward in terms of solving that issue. I have a hard time believing that when we look internally in our organization at the information needs that we need to settle claims, and then when we look at the implementation guides that have been published on X12 from a health care perspective, and we have looked at it from a property and casualty perspective, what's there is meeting the vast majority of the needs from our perspective. I don't see variability as a huge issue. I think it boils down to more of a common language, talking the same English issue, more than a variability issue.
MR. SHELDON: I think that on most claims in our office, I would say that for physicians, the HCFA 1500 information is working well most always. I think where we get into the problems with physicians is where something is flagged there in the system that this doesn't make sense and we go back and ask for information, or because of some policy considerations or whatever we may need to look and see whether it's medically necessary and that kind of thing. We will ask the physician for notes and that kind of thing and I know that that's a big irritation to physicians. It's usually requested by our medical director so that a physician can take a look at it. But if there was some way to do those as attachments when they're needed in some kind of a nice way, that would be nice. But that's still in a minority of the time. It should be able to be done. I don't have the answers though, I know that.
MR. LAVIN: I deal with this almost every day. I think one of the issues or why this arises is that the plans are competing among themselves. If everyone is using a standard, then gee if I go to one it's the same as the other one. For instance, I was talking outside in the hall, there's an issue of a copay. If you look at plans, there are thousands of different types of copays, but there's a copay. So as far as a standard, you have to have a field for what is the patient's copay. So within that, there can be a lot of variability with what the plans do. I think the transaction set, I don't see there's any reason why that can't be standardized. The code sets within that, and how the companies want to use that may vary.
I think what will have to happen is the other companies that want to get involved with have to be involved with ANSI or the other standard setting organizations and get the way they want to do business, they need to get that on the table and get that part of the standard. I think that's going to make the standard setting organizations more important to all the players as they go forward. I don't think -- I see there's no reason why we can't set the standard within -- the variability will actually be done on the code sets and then how the individual business partners want to decide what that means.
DR. COHN: Actually can I just follow that one up? Comment a little more about what you mean by the variability in the code sets. One uses one code set and another one uses another.
MR. LAVIN: Well, there may be one code set, but they may -- what will happen, I can speak for one of the more interesting things we've been working on in the pharmacy industry. We passed some new codes, we call it professional pharmacy services codes. As we moved from strictly this is drug A and this is how you sent it to me and we will pay for that, to something where a physician counsels a patient. We never had anything that says gee, I'm going to pay -- we never had anything that's told us that this pharmacist went out and talked to a patient and counseled him because he had say a drug interaction or was taking multiple medication. We now are utilizing that. So it took about a year and a half. It took about a year and a half, PCS and some other organizations, other people brought that to our industry standards organization and said we need to be able to do this and we want to be able to do it within the claim transaction. After a year and a half of going around, we came up with a set of codes. Now, there's many more codes than what PCS wants to use. We're not going to use every code within that code set. We only use a very specific number of those, actually a pretty limited number of those. We use nine. So we use nine within -- I don't know it off the top of my head, there may be 100. There are still issues with providers because they still have to -- their systems hopefully will have to be smart enough to know if I'm with PCS this is what codes I need to use to get paid for this thing. So I don't think -- standards are not going to be a panacea for all any variability. The providers are still going to have to, and the payors are going to have to work with the providers to come up with these agreed upon business rules to use these standards.
Hopefully, that answers your question. We only chose a small section of the standard. The standards generally should be broad, and hopefully very inclusive to include everyone's need, where they make sense.
DR. BRAITHWAITE: That's a good example of a problem that was brought up by a speaker on the previous panel where they said that we have a code set, we know we have to use this code set to fill in this blank on the form, paper or electronic, but every single one of the 700 different payors that we deal with only allows a certain subset of that. We have to have a book and we have to have training for every payor. That's ridiculous. The standard should be if the code set is what we're going to use, we use the code set. Then it's up to the payor to figure out what those codes mean in terms of what they're going to pay for and don't reject the claim just because you don't accept a valid code out of that code set. What's your reaction to that?
MR. LAVIN: That's true. The standard, the closer it gets -- for instance, on the claim payment for a prescription there's only about nine different elements. It's actually very simple and I don't think that usually becomes an issue. As we're moving into the new payment for other services, it's much more difficult than it is for a prescription. There's a simple code and that's it. It's not a whole lot of variability.
There's no easy answer to that. It depends, if the standard is broad, there's going to be interpretation. You're not going to use all those different sets within that. If there's only three, then there's not a whole lot of variability you're going to be able to use. I think it comes down to is how the standard is going to end up being set, as opposed to which standards HHS adopts as their standard.
MS. JENSSON: I would tack on one thing to that from the standpoint of going back again to what I said earlier about making certain that the meaning that we have for the various codes mean the same for everyone. We proliferate codes at times just because that's the term we use in a given setting. It really is that term means the same in another setting and we just haven't discovered that yet. Through this process, we have to boil all of those various elements down to exactly what is the common language between the various areas. I think that's been a continuing struggle that a number of organizations are attempting to deal with, including X12, trying to find out what those data elements are and what is exactly the meaning associated with them.
The process is there for us to do that though, it's just a matter of us being smarter in the way we get at that, and making certain that the right business people are there with the right business requirements to give the meaning to the code. It's one thing to have a technical person there without the knowledge and the understanding of what it's used for. That's where the critical learning happens.
DR. COHN: I was actually going to make a comment and then I actually have a question that I wanted to make sure it got answered at our next session. I think we've talked a little bit about the recognition that a lot of the standards are going to be met by X12 most likely, and have observed about this issue of pharmacy and the NCPDP standards, which we're all familiar with.
Now, John, I don't expect you to answer this today, though I do see some representations from NCPDP in the audience, which I expect we will be talking with at our next session. I think it becomes very important in any decision around standards, recognizing that we've all I think pretty much have said we want common data across standards and all of this, that as we talk about the envelopes and the decisions about the envelopes, we need to be aware of the financial and technical ramifications of going from one standard versus two. I would certainly like to know from X12 and NCPDP about financial ramifications and other ramifications that might occur to pharmacists or others in a world where pharmacists somehow needed to migrate to X12 and what ramifications that might have, versus a world where both standards existed but that, for example, pharmacists might have certain data coming down using NCPDP standards or using X12 standards and really what that world might look like and what the costs might be, as well as what implications it might have for disease management and others. Really what would -- is that going to be a problem? Is it going to be an extra cost, and if so, how much?
As I said, since I see some people in the audience, I'm hoping that we will be able to have --
MR. LAVIN: They may be better to answer it than me. DR. COHN: I don't expect you to answer that on the spot.
DR. LUMPKIN: Other questions? Thank you very much for coming. As typical, when you're dealing with a behemoth like HCFA or public aid, public health just gets postponed, because our budget problems are only rounding errors, compared with the bigger agencies.
[Laughter.]
We have completed our formal hearings. We now have work group business. I think other than getting a brief report on the work groups, then that will allow people to indicate their preferences, I'm not sure we have other work group business left.
DR. COHN: I guess I would ask the work group -- one other option we might have would be also to talk about what we might do at a third set of hearings and begin to brainstorm on that. That would be the only other thing I would --
DR. LUMPKIN: So, as I've learned my lesson from yesterday, that when the work group wants to take a break, they want to take a break -- no? My colleague from California had suggested that. We will take five.
[Brief recess.]
DR. LUMPKIN: We're going to have a brief presentation of the work groups and then we're going to have a little bit of -- I would like to, since we do have some time, maybe do a little bit of discussion about what we've learned and maybe how we're going to focus in on the third, or if we need a third session, and some issues that I think have come to mind as I've been listening to the testimony. So let's go first with the work groups.
MR. MOORE: Some of the people here may have heard some of this, others have not. On December 5, the Deputy Secretary approved the work plan that we had spent two and a half months working throughout the Department to develop. We were asked to prepare a press release on that work plan. We had hoped to have that press release available today to give to everyone. It isn't available. It's been cleared by just about everyone, including God, but it is not --
PARTICIPANT: There's a good player in the standards process.
PARTICIPANT: Excuse me, you said we. Could you define if it's HCFA or this committee.
MR. MOORE: It's the committee. Let me clarify one thing, there are a lot of people who say HCFA is doing this. I keep saying HCFA is a player in this. To be perfectly honest, the first plan, HCFA was asked to develop a plan, we did. We sent it up to our Administrator, Bruce Vladeck, he said it was too one way. It was not giving the rest of the Department and the rest of the federal agencies an equal voice in how these standards were developed and he sent it back down to me to redo, because I wasn't collegial. So that's why I took two and a half months because everyone in the Department had to have a say in it, and we did. It became almost like the standards that we've been talking about for the last two days, that it had everything in it that everyone ever wanted.
MS. GREENBERG: But he is talking about the Department.
MR. MOORE: Yes, it is the Department. Today, there are two of us who are co-chairing that under the Data Council, Dr. Braithwaite and myself, Bill. I look at him as the senior partner in this team, because he has a lot more experience in doing this than I do, although we've been involved in it, HCFA has. HCFA has been involved in it from our perspective as a payor. We've been involved in it as to what we need for the Medicare and the Medicaid programs, not what the industry needs. One of the things that we've talked about with OMB and others along the way over the last five or six weeks is that this is a national standard that all health care is going to be using, not one that just the Department is going to be using, or one that the federal agencies are going to be using. So we have to have a different process here that's going to be more open and involve people, because I don't think that we in any way know what's needed for all of us to do business.
One of the things that kind of frightens me when I look at this, because I took off two weeks in the middle there at Christmas time, and while I was away, when you're in the middle of this process, you just forget about the obstacles. You run over them, you try to get around them, you fix them, you talk to people about it, but then when you step back and you get away from it you say, oh hell, I'm up here with no net.
[Laughter.]
This is not good. What we've done is we've broken the standards that were identified in the legislation into five basic groupings. One, we've broken the transactions into two categories, one related to claims and those types of activities, a claim or remittance advice, then another group to be enrollment and encounter, eligibility type things related to premium collection because they have a unique, we felt -- this was an agreement that was again throughout the Department and others. We even mentioned this to other people, like WEDI and other groups that we've consulted with including the NCVHS. We asked for people within the Department, including HCFA. HCFA has a great interest in this, in fact, 31 people have been volunteered to work on this project within the agency and a number of them are here. Since this means so much to us, because we've been told by the Administrator that we will use these standards in the MTS and all the work that we do. We are not exempted from any of these standards in our business.
So as these standards are developed, we're going to have a very close involvement, because it's everything that we do in the Medicare and Medicaid. I know it concerns the Medicaid people because HCFA doesn't have control over the state agencies. We have influence, but we don't have control and you all know that. But when the other teams are identifier teams -- and those of you who were here yesterday, three of the four identifiers within the legislation, the unique identifier, the payor, the provider and the employer, we think we've been working on a process on the provider for almost three years now, maybe more than three years, and also on the payor for the last two years to come up with a unique identifier. When we started our work on the Medicare transaction system, that is the move from 70 different activities working on Medicare to coming down to one single system that processes all the Medicare claims in a limited number of sites, we knew that we were going to have to solve the unique identifier problem because we have five identifiers that we use internally, plus the six that the contract, the carriers use for other practitioner types that aren't one of those five. So we had to solve that problem.
We had to solve the payor ID problem to handle the coordination of benefits for Medicare. So we started out on that, and we've talked with this council in the past. We've talked with a number of you out there. I think several years ago when we started this, we had at least 40 or 50 different organizations working with us on the provider ID. Not all of you may have been included in that but a number of people, a very large cross section around the country.
The other team would be the security team, and the fifth team would be the coding. One of the things that we've discussed extensively and come to a conclusion is that in the coding area we're trying to separate the medical coding and classification from the coding of the other transaction sets, that is what's a type of service, what's a place of service, what are the codes that are administrative in nature. There was considerable difference between the clinical and medical coding, and you've heard some of the problems that have been expressed here today about that.
We have a sixth team that is an infrastructure team. That team is trying to look at all the cross cutting issues that are happening within the five teams. Each of the teams have people from across the Department, whether it's HCFA, CDC, the National Center for Health Statistics, the National Library of Medicine, and it will include people from the Office of Personnel Management, the VA, all of the federal agencies.
We initially proposed that we have people from the private sector, the SDOs and others, participate on these teams. When we bounced that off of our Office of General Counsel, the legal advisors, they said that we couldn't do that. That becomes one of the -- what is it called? It's a federal advisory committee, that's what this committee is. You have to go through an elaborate process to set up those and then you have to have the meetings and everyone is invited. We would never get through this process.
So what we're working to do is to -- we met with the standard organizations, the Health Care Informatics Standards Board in September, which was right after the legislation was passed. We asked them and they in a short period of time, three weeks, gave us what would be an inventory, a very quick view of what was out there in the standards world. They felt they needed more time. We met with them in December, the 13th I believe, in Chicago. They presented us with a more elaborate draft from what they had given us in September. They are on the time schedule to give us on the 31st, they're going to submit to the Secretary their final work on where they are in all the standard organizations with all of the standards as spelled out in that legislation. That's going to become the starting point for these teams to work with.
We're going to break that information down. I have heard people say they would like to have a schedule. There is a schedule that's in the law that says we have to do certain things by certain times. I've been asked by other people like are you going to make those dates. I'm going to try, but I'm not going to say that we're going to fail. I think there are some things, as was mentioned in a couple of the sessions here, we've asked some questions which are the standards that we believe are attainable quickly, which are ones that may take more time. Some things fall into different time frames there.
I've also heard today for the first time, or in these two sessions, that the industry may need more time. That's something that we will have to take into consideration and work out a schedule for how that would happen because of cost constraints and resources that are not available. I've lost my train there.
I want to get with the team. Bill is the co-chair on this. We've asked these teams, once we get the material in from the SDOs, that they have specific areas to review that material, to determine what resources are required to complete that analysis where we will be going through an analysis, looking at all the data elements, looking at all the code sets within those data elements and determining, working back through the other organizations to reach an agreement as to what would be the standard, as best we can define it.
Once that has been arrived at, we will then bring that back to this committee, bring it back to the Data Council, do it in an open forum, put it on the Web site so everybody can look at what we're -- there will be progress reports coming up. I need to have input from those teams, once they've looked at the material, as to what are the time frames for working through that process, to a point where they reach the development, after consultation with the industry and others, of a proposed regulation.
When we have that, that's got to be circulated and moved around through this Department, through the other federal agencies, through the Office of Management and Budget and that's an iterative process I found before you can come out with that. It's taken us six weeks to get a generic three page saying what we're going to do. I can tell you here what we're going to do.
When we reach that point, we then will publish to the community at large and it will include the data elements and the code sets and things of that nature, so you have sufficient information.
DR. LUMPKIN: If I understand this, this is going to be a batch process?
[Laughter.]
I think it's going to be interactive if we have anything to say about it.
DR. COHN: Bob, can I ask a question? You talked about six groups, transactions, claims, enrollment, encounter eligibility, security, coding, medical coding, administrative and then infrastructure.
MR. MOORE: The administrative data code sets are part of each of the transaction teams. People who are working on the claim, when they're looking at the data element, I would expect they would be the right people to know and understand what are the --
DR. COHN: In that case, very quickly just list the teams, the four teams.
MR. MAYES: I will list them for you. There's the claims/encounter group, --
MR. MOORE: Do you want to say what transactions -- do you have that there?
MR. MAYES: The claims/encounters, enrollment/eligibility is the second group -- and actually Dave Clarke is the co-chair of that, so if you have specific questions you can meet him. Identifiers is the third team and Karen Trudell and Mary Emerson -- Karen Trudell who was here yesterday and spoke briefly is the co-chair of that. The claims/encounter co-chair at this time is Barbara Reading. I can give you e-mails for all these if you want. There is a systems/security group, and John Armagiani(?) is the co-chair of that. There's the medical coding classification group and Pat Brooks, who is still here, is the co-chair of that.
MR. MOORE: There are other co-chairs in the Department to be named on all of these teams.
MR. MAYES: That's right. These are just the HCFA people that we have initially on the team. Then there's the infrastructure and cross cutting issues group, which I'm the HCFA co-chair for.
DR. COHN: I was actually going to ask about the identifiers, which is one of the most difficult issues and you hadn't mentioned it at all. So thank you for the clarification.
DR. LUMPKIN: Any preference you would like to indicate?
DR. COHN: Yes, I would like to take the lead on the infrastructure team and serve as a back-up hopefully to Lisa on the medical coding classification.
MS. FRAWLEY: Actually I probably would like to go with systems security.
DR. LUMPKIN: Okay, so we've got you down for the identifier.
[Laughter.]
DR. IEZZONI: Do I have to state verbally my preference, I was sending it to you, coding please.
DR. LUMPKIN: I got that. Okay. We will corral the rest of the group as to their preferences. So far, we've splint them.
MS. GREENBERG: Convenient, six members, six groups.
DR. LUMPKIN: I will probably do identifiers.
MS. GREENBERG: Good.
PARTICIPANT: Everyone wants to stay away claims.
MS. GREENBERG: No one is claiming that one? We can't attach it to anybody? I'm still trying to follow up on that bitter pill, and I can't come up with the right --
DR. LUMPKIN: I know it was hard to swallow, but let's move on.
The next and last item is really to do a little summary discussion and look towards what we may want to do with a third session. It may be useful for us to just sort of come to some conclusions. Perhaps I will start off with some of the thoughts that I had based upon what we've heard today and yesterday.
I'm actually surprised by the fair degree of uniformity, particularly in regards to the X12 standards. But I think that in regards to those, an issue has arisen that we will probably need to spend a little bit of time on, which Simon characterizes as the envelope issues versus the content issues. To the extent, and it came up most sharply in the last panel when we were discussing the issue of the batch versus the interactive mode, and to the extent that one of our speakers on the first day charged us to not adopt standards that may stifle innovation, and to what extent those standards look at the kinds of interactions or the kinds of things that providers do.
That, as many of you know, is kind of my bias. The content, the coding systems and the format are what determine what an individual provider does on their screen. It doesn't matter if it's on paper or electronic, it's what you have to fill out on the form. The front end system takes that form and adds on the batch mode identifiers and codes or the interactive modes or does the range checks and then sends it off into cyberspace where it's received through multiple routes, whether it be through the Internet or a data interchange firm or whoever or modified by a PPO and sent off finally to the eventual payor. But all that sort of happens transparent to the provider of service.
So in a sense, if we're going to deal with the first step and my priority for administrative simplification, which is to make it easier for the person who is actually taking care of the patient to do their job and that's dependent upon how much time they spend with the patient versus how much time they spend entering data, that I think can be a focus. So, to the extent that we look at the pieces of X12 that impact that versus the pieces of X12 that impact the business of a lot of other people who have presented, and I might even be comfortable with a subset of X12, such as an X12 interactive and a subset X12 batch or X12 something or other. There's certainly a heart of that that seems to be some common agreement about format, content and coding systems that we may want to try to dissect and at least understand, because I'm not sure I fully understand what I just said either.
But I think that's certainly one of the things that I've pulled out. The second thing that I think we've identified is the need to get back to many of the groups that presented to ask them how will we know whether we've done the right thing. What is the vision that they would see out of administrative simplification? That is something that we will hopefully get back to all the groups who presented.
So those are some of my thoughts after ending this session. I think it's been very useful for me. Any other thoughts and comments?
DR. COHN: I actually was going to agree with you in terms of you did a wonderful job summarizing I think some of the warnings in the last day and a half. I think some of it may be reflected in how we may want the questions we will be asking the SDOs in terms of trying to piece out the envelope issues from the data issues in terms of some of the things that we ask them to present in February, knowing that there isn't much time for that, to give them new questions, but I think certainly we've asked NCPDP some things that I had commented on. We may really want to come up with a much greater understanding of the issues around both of those.
MS. GREENBERG: I think you were talking about asking some more specific questions, particularly around this whole issue of implementation and time frames of sense of resources, costs, whatever, associated with the migration. We just kept hearing over and over again that there was less diversity and thought about what the goal was than the process for getting there. Those are hard things I know. Particularly, if you look at cost/benefit, you always can load up the costs and it's hard to quantify the benefits. But I don't know if some additional questions might relate to at least what they think is reasonable for them and see where that is. If a majority of groups feel the current schedule is not reasonable, then that should say something.
There's also a little bit the fear that we heard a lot -- actually, first I want to say I really want to personally, as acting Exec Sec, congratulate and thank Bob and Bill for I think lining up a very good set of speakers. I know it wasn't easy. I know we bugged you constantly. It's a problem I'm sure for people who wanted to know exactly who was going to be on the agenda and when. But I think we did have a good -- I think that's what I've heard around the table.
But partly, we may have heard a lot of the same thing because there are some people we didn't ask that we should have, I don't know. I mean I know that a lot of the people who are really supportive of the X12 process, which does seem to be the really solid standard that's out there for the claim, said they would participate in the process, and yet we know that there are groups that don't participate in the process that these decisions will impact on, providers to start off with of course.
I think Lisa was pursuing an important track where it's not so much adding even all these additional clinical elements, which is obviously not the vehicle for doing and there's not a lot of support for doing it among those who are really doing these transactions. But even the elements that are currently being collected that have clinical value or could have more clinical value, this issue of only certain codes are valid forcing people to actually call something different than what it really was, which just destroys the clinical value of the information.
So I think just within the context of the elements and a little tweaking here and there, there could be ways that just those elements that are appropriate everyone agrees for the administrative transactions could be more useful clinically. I think the committee has a lot of experience in looking at that. There may be other groups that you want to talk to about that would be my only caveat, but I think that in a short time it put together a really good group. So thanks Bill and Bob.
And thanks to the NCHS staff who dealt with all the last minute and daily changes. Thank goodness for e-mail.
DR. LUMPKIN: I think we have February pretty much set. I would ask that everyone who has some thoughts on questions, because the time frames are very tight between now and February, to please give them to Bill and myself. We will probably need to touch base sometime on Monday or so. Get them to us electronically.
For those of you -- I'm not sure if some of you still send me e-mail, but it would be better if you send it to J.R. Lumpkin at IDPD, so and so, not director.
MS. GREENBERG: The one you gave us at the last meeting.
DR. LUMPKIN: Right, the one I gave, because the other one goes, it takes a little while to get to me because I don't read that one directly.
MS. GREENBERG: If we can do another agenda for the February -- without names, again it doesn't need names, but for February, then that would be good, because I think we talked about starting earlier, moving certain things around. The sooner we can get that out to people so they can make their plans.
DR. LUMPKIN: Bill has one, he was sort of doing it on the fly as we had our discussion last night. You wanted to discuss an issue about perhaps --
DR. COHN: A third set of meetings, yes. I actually think this is none too soon, if we're going to do something in either March or April, to identify -- I don't think today we need to identify the exact date, but we need to come to agreement about a time frame, and particularly the types of things we may discuss. I actually have a couple suggestions I wanted to bring up that I talked a little bit about with Lisa, a little bit. I will throw them out and you can disagree with them or whatever.
I thought that there needed to be a third set of sessions. I thought that coding issues, which we began to touch upon the last day, really need to be looked at. I think with the medical coding classification group, we may come up with a better set of questions around that. But certainly from my view, key questions that I would want to have us explore would have to do about the suitability of ICD-10 as a standard, since we're talking about the year 2000. I think we also need to understand more about where CPT-4 might fit in. Also, I personally need more information about HCPCS(?), and not so much about level one, level two, but I want to understand about the regional variability of level three, which sounds to me very similar to some of the other issues of variability we may have had. Lisa, you have a couple of other issues?
DR. IEZZONI: Simon, can I just elaborate on that? Simon told me during the break that we tilted at windmills a little bit on the committee over the last couple of years trying to pursue moving people towards a single procedure classification system. Let me just comment on one thing that I think maybe Donna can correct me if I'm wrong. We stand on kind of a precipice right now, not to be overly dramatic about it, but --
DR. COHN: Precipice of state(?) --
DR. IEZZONI: No, no, no, this is coding, we're talking coding. We're about to think about implementing a whole new diagnostic coding system, ICD-10, and we're also about to think about implementing a whole new procedure coding system, which is the one that HCFA has been developed with 3M. So I actually think that now is a good time to revisit the question about simplification and the process of implementing entirely new systems of diagnostic coding and procedure coding and how we might head towards doing that if we decide that it's in all of our interest to do that. But also, maybe step back and say that there's such a thing as sunk costs in economic terms, and even though we spent a lot of money to develop a new procedure classification system, is this the time to implement it.
So I think that there's a lot of volatility in the field of coding right now, and a lot of kind of notion that the next couple of years are going to see some major changes, even if there was not this administrative simplification mandate that we have right now. We have to keep coming back to what John has repeatedly reminded us of for the last couple of days, which is the word simplification in the title of all of this.
So I would like to think a little bit with you, Simon, and maybe with some other members of the committee, over maybe the next week. Let's try to put a really short time frame about it to think what a couple of days of hearings around coding would look like, because I think I would like to hear what the implementation issues would be like for coding changes as well. We've been talking about implementation for computer systems and information sets, but implementation for coding, retraining all of these people. This new coding method is not going to be a trivial issue at all by any stretch of the imagination.
So I would like to maybe not finalize what we're going to do right now, but just try to agree that in the next week we will come up with some ideas.
DR. LUMPKIN:n I would just like to add to that. If we could, and this is kind of looking forward, but I think that we would be remiss in looking at coding systems if we don't have some thought of how that links to the computerized patient record --
DR. IEZZONI: Exactly.
DR. LUMPKIN: -- and the things that are being done by NLM and others who are looking at the algorithms to go from natural medical language into a coding system. So that we are at least cognizant of anything that we may talk about in the coding system does not preclude the technological advance that may be on the horizon with that.
DR. IEZZONI: Right, and one other point. I don't know whether the ANSI formats that we've been talking about have placeholders for functional status in them. I know that at one point I remembered that there was a discussion about that. Marjorie, you're nodding your head yes.
MS. GREENBERG: I think the HL7 has been dealing with that, but I don't know that the X12 has, although as I understand the X12, it really, its goal is not to define content but to accommodate content to some degree, whereas the NUCC and the NUBC kind of have the charge in that environment to define content.
DR. IEZZONI: Because let me just take that where I was heading.
MS. GREENBERG: I don't think they have it.
DR. IEZZONI: Yes, I think that that is going to be a decision that we're going to have to make about whether we start to talk about coding for functional status as well. The International Classification of Disabilities and Handicaps, the IC --
MS. GREENBERG: The Impairments.
DR. IEZZONI: Right, I can never that title -- Paul talked to me about it before. Then the classification for primary care as well, which may be of more interest to doctors in their offices practicing out-patient medicine. But I think we're going to have to set perimeters around what we're doing, but I do recall that at one of our NCVHS meetings, Marjorie maybe a couple of times ago, that some of the ANSI people said that they were thinking about functional status information and a placeholder in the form. We should maybe begin to think about coding for that as well.
MS. GREENBERG: I can just say, and I think this is the sort of thing you might want to hear more about, is that Donna Pickett and her staff, which makes it sound like it's a cast of thousands, it's one other person, but are looking in the clinical modification of ICD-10 how to pick up on some of the primary care things that are not currently in there from, for example, the ICPC looking at what's in ICIDH. I know the ULMS is incorporating ICIDH. So you're not really on the fringe by talking about these things. There again, you're talking about short-term, maybe medium and long-term, but I think those are all appropriate.
DR. COHN: I think that one of the things that in our discussions we will have to identify is what needs to be done now versus what is the work over the next three years. I certainly don't believe that in one day or even a day and a half that we are going to solve or come to complete closure on all the questions of medical coding. We know of many people who have made their careers doing it.
DR. IEZZONI: Yes, Simon, and some of them have been really superb at doing it. I just think that there is a value in repeatedly reminding people about the fact that there are other aspects of clinical care that are coded beyond what we might be talking about in the first go round. I completely agree that we have to start with what we have to start with, but I just want to keep in people's subconsciousness that we need to keep those issues --
DR. LUMPKIN: As we talked about earlier, what is the role of the work group and the subcommittee. The issue comes as we have the internal HHS committee's developing their process, and we will in fact hopefully try to give them or help give them some reality testing, that person who is kind of off a distance without taking two weeks vacation to get that perspective. But the other way that we --
MS. GREENBERG: We're not letting him go on any other vacations until this is done.
DR. LUMPKIN: The other way we may help with that perspective is if we can keep our eyes on the future, at least we can frame the issues that will help make sure that we don't preclude innovation in the future. That may be an important role for the work group.
DR. COHN: I had one other thing in terms of -- I mean to move from coding for just a second, because I wasn't sure whether -- we can spend days on coding. But in terms of a third session, one should be aware that we have not talked about personal identifiers at all. Whether or not we want to do that alone, whether or not we want to do that in conjunction with security and confidentiality, we need to somehow figure out -- I mean the third session either is the whole committee, or whatever that needs to be approached.
DR. LUMPKIN: And we haven't discussed security. The other piece that I was just writing down from our discussion today and your comment was that one of the things that we may want to do is spend at least a little time looking at issues around envelopes and data that may not be quite as standard as the current envelope standards or whatever just to get some sort of an idea of what the future evolution may be looking like to help us make appropriate recommendations. I think we're all aware that the year 2000, while not very far, we don't want to make obsolete recommendations, which I know Bob Moore has been very concerned about.
MS. GREENBERG: I did hear that the field is salivating for a national provider identifier, which I think is good because that's the first, at least something to meet that need as the first proposal out of the gate. So I think there's enormous support for at least the concept for sure.
DR. LUMPKIN: So we have a little subcommittee who are going to come up with a little something. Meanwhile, we will start to work on trying to allocate some time. I know for me April and May are the last two months of our legislative session and it gets harder and harder for me to get out of the state. So the sooner we can lock this down and the earlier we can do it the better.
MS. GREENBERG: I heard yesterday that probably the subcommittee is going to want the opportunity to meet as a subcommittee during the March meeting. I would think within that context, the work group as well. We haven't started to plan the March meeting much at all at this point. But it sounds as if we should leave ample time during that meeting for subcommittees and work groups.
DR. IEZZONI: If there is some overlap with what Gellman(?) is doing on his committee with the patient identifier, the confidentiality issues around that and security, we should identify those overlaps.
DR. LUMPKIN: To follow up on that idea because --
MS. FRAWLEY: We really have pretty much left security and identifiers to this subcommittee.
DR. IEZZONI: Oh really.
MS. GREENBERG: What they're talking about is access to personally identified data and what should the rules by and that type of thing. But as to what the actual definition should be I don't think is really under discussion.
MR. SCANLON: It doesn't look like it will be a separate hearing, no. They're just hearing from all of the various perspectives about privacy and confidentiality issues. MS. FRAWLEY: It does come up but not equally -- in terms of what different people's needs are for data.
DR. LUMPKIN: But as an overlap issue between the two committees, that's when the full committee meeting might lend itself to a discussion of that issue.
DR. IEZZONI: That's where I was heading that that might be a really good agenda item for the full committee.
DR. COHN: I was also personally going to speak that we not try to add on all the coding hearings, either to the NCVHS meeting. That would be a long, long meeting.
MS. GREENBERG: Yes, it would be a killer.
DR. LUMPKIN: Okay, so we've got a plan. I would like to thank everyone for working very hard these last two days and all the presenters, those of you who are still left, and those of you who hung in there. As I said before, we were adjourning early, so thank you once again. We're looking forward to seeing as many of you who will make it here in February.
[Whereupon at 12:50 p.m., the meeting was adjourned.]