Presented by:
Bob Beckley
PDX, Inc.
Good afternoon. Thank you for the opportunity to present to you the views of software vendors in the pharmacy services sector of the healthcare industry. I am Bob Beckley, Senior Vice President, External Affairs for PDX, Inc. PDX is the largest pharmacy software vendor in the United States. Approximately 9,500 pharmacies use our software to dispense about 20% of all prescriptions filled in the United States. Because I am a member of NCPDP, HL7 and X12, and a participant of EDIFACT meetings for the last two years, the topic of standardization is of great concern to me. The recommendations that this committee makes will have a significant impact on my company and the pharmacies that we serve.
What are your organization's expectations for the results of the Administrative Simplification standards requirements in the Health Insurance Portability and Accountability Act of 1996 (HIPAA)? In what ways will the outcome affect the members of your organization, both positively and negatively?
We at PDX hope for and expect that this committee will recommend the continued use of current standards, joint development between standards development organizations (SDOs) for new standards, and coordinated initiatives for the creation of standard identifiers and security.
Without argument, standard transaction sets are necessary to expand and enhance electronic communication capabilities between healthcare providers and payers. In the late 1980s, certain segments of the healthcare industry realized this need and formed standards development organizations (SDOs) to create standard transaction sets. Most of these early SDOs are now fully ANSI accredited and a significant percentage of the healthcare industry currently use the standard transaction sets they developed. PDX believes that—regardless of the standard's syntax or developing SDO—enhancing one of the consensus-built standards, which a significant percentage of the healthcare industry already uses, is far more beneficial to the healthcare industry because of the financial impact associated with developing, testing, and implementing a new standard. Therefore, we hope that this subcommittee considers the following before making their recommendations on existing standards.
The one outcome that would have the greatest negative impact on the pharmacy service sector of healthcare would be changing the electronic claim standard that pharmacy currently uses for approximately 70% of all prescriptions filled. NCPDP's Telecommunications Standard has proven successful for over 9 years by continually changing and growing with the pharmacy industry. Over 54,000 pharmacies, 90 payers, and 43 state Medicaid agencies exchanged over 1 billion electronic claims for 100 million patients in 1996 using this standard. Changing this standard would have a significant financial impact on the entire pharmacy services sector. In addition, all the time spent on changing to a new standard would prevent the pharmacy services sector from continuing to advance in other areas, such as drug utilization review, patient education, disease management, and electronic communication with other healthcare providers.
In today's environment, a single SDO cannot develop all the standards for healthcare. Therefore, PDX hopes that the various SDOs will join together in the development of new standards. Then the SDOs can more easily plan for and communicate with each other when requirements overlap, and thus eliminate a duplication of effort. As different sectors of the healthcare industry further develop electronic communications between healthcare providers, coordination of effort will be crucial to the success of these new standards. PDX's goal is to belong to the SDO that best meets our needs and to provide the input and support necessary to obtain the standards that will support our business.
The standardization of identifiers will help accelerate the sharing of information between healthcare providers. Software vendors spend an inordinate amount of time creating programs that will store, cross-reference and convert the many identifiers that are attached to a single patient or healthcare provider. Along with the identifiers, we need to implement security measures that will protect this information without creating unnecessary bottlenecks that could prevent the efficient exchange of healthcare information.
Does your organization have any concerns about the process being undertaken by the Department of Health and Human Services to carry out the Administrative Simplification requirements of this law? If so, what are those concerns and what suggestions do you have for improvements?
We are very pleased with the process that the Department of Health and Human Services is undertaking. We hope that the Department continues to utilize the expertise that is available within the SDOs, ANSI-HISB, WEDI and associations like the National Association of Chain Drug Stores (NACDS), the National Community Pharmacists Association (NCPA) and the American Pharmaceutical Association (APhA). Our only concern at this time is the exclusion of a pharmacy committee or organization, in the HIPAA, for consultation before a standard can be adopted or modified.
What major problems are experienced by the members of your organization with the current transactions specified under the HIPAA? For generators of the data, how readily available is the information that you need to provide for the transactions and how meaningful is that information from a clinical perspective? For users of the data, are you receiving the information you need from the transactions to pay the bill, manage the care process, etc., and what is your perception of its quality?
The NCPDP standard for electronic claims meets our current needs. The standard has continued to evolve as our requirements have changed. In the areas of payment reconciliation and eligibility verification, our industry segment, through NCPDP, has and is working with X12 to implement X12's batch standards in these areas. Because the pharmacy services sector has been utilizing electronic claims for over 9 years, this area is quite stable and not in need of major change.
One of our major concerns is that the HIPAA did not include any transactions of a clinical nature in its list of standards. To improve our nation's healthcare, we believe that the transmission of clinical information is essential. Therefore, over the past few years, NCPDP has been developing transactions that facilitate the passing of clinical data between healthcare providers and payers. In 1994, NCPDP developed a standard which facilitates the sharing of drug utilization review information between pharmacy and payers. Also, last year NCPDP started a joint development project with HL7 for the electronic transmission of prescriptions and patient information. Development of additional clinical standards will help improve the quality of healthcare by making critical data more easily available to healthcare providers.
How can the goal of administrative simplification best be achieved while meeting the business needs of all stakeholders?
You can obtain this goal by continuing your current process of meeting with the different segments of the healthcare industry. Recommend standards that already have industry-wide implementation and concentrate on the areas that have limited and fractured implementations. Because the many segments of healthcare have different requirements, base decisions on industry segments, not healthcare in general.
To accelerate the process of joint development for new projects, establish procedures for the SDOs to work together as equals. Finally, make standard identifiers a top priority. The recommendation and rapid implementation of identifiers, like HCFA's NPI, is needed for the standardization of communications and data content between healthcare providers.
The standardization of healthcare transactions is a formidable but obtainable task. All of the SDOs and trade associations can help you in this process. Please continue to use all the resources available to you, not just a select few. By continuing to follow the course you have started with these meetings, we feel that you will succeed.
Thank you.