Good morning. Thank you for the opportunity to present to this panel the recommendations of the National Council for Prescription Drug Programs (NCPDP), an ANSI Accredited standards development organization. I am Dan Staniec, RPh., MBA, NCPDP Executive Vice President of External Affairs. I am a member of several pharmacy organizations, including the American Pharmaceutical Association (APhA), National Community Pharmacist's Association (NCPA), the Academy of Managed Care Pharmacy (AMCP), as well as ASC X12, HL7, the Work Group for Electronic Data Interchange (WEDI), the Health Informatics Standards Board (HISB), and a participant at UN/ EDIFACT meetings. I am also a board member of the Computerized Patient Record Institute (CPRI), and the University of Arizona College of Pharmacy.
NCPDP is the only ANSI accredited standards development organization for the pharmacy services sector of the health care industry. Our ANSI approved scope statement reads: "The scope of the standards that NCPDP develops are those for information processing for the pharmacy services sector of the health care industry."
Regarding the development of pharmacy standards, NCPDP is THE forum whereby the pharmacy industry meets four times per year to develop standards. Our 1292 members are employed by organizations from virtually every type of pharmacy organization in the United States. Some examples of these types of organizations include: chain pharmacies, independent pharmacies, drug manufacturers, BCBS organizations, Federal/State Agencies, health maintenance organizations, pharmacy benefit management companies, telecommunication and systems vendors, and wholesale drug distributors.
Our membership consists of three specific categories, with a fairly equal number of members in each category. These categories are 1. Provider/Producer (353 members), 2. Payer/Processor (497 members), and 3. Telecommunication System Vendor/General Interest (436 members). As you can see, NCPDP does represent the voice of pharmacy in the standards development arena.
Our membership is extremely vocal and assertive, which is evident by the fact that NCPDP's members lobbying efforts successfully placed NCPDP in the Health Insurance Portability and Accountability Act of 1996.
NCPDP will be celebrating its 20th Anniversary next week during our Annual Membership Conference. This year's theme "Kaleidoscope" was chosen to represent the diversity of NCPDP's membership and the way we focus on Standards Development Organizations- when you look through a kaleidoscope, while the picture changes, there's still uniformity and consensus in the design. Over eight hundred NCPDP members will be in attendance during next week's conference. It is also important to note that over three hundred NCPDP members meet three other times throughout the year during our Technical Work Group meetings. A number of our work groups have over one hundred members present to develop standards, not just a few. This is true consensus building.
We are proud of our ANSI accreditation and the results of their appeals process, and we are uniquely positioned to further advance electronic commerce in the industry that starts from a level of EDI the other health care segments are now only striving to obtain. NCPDP supports your efforts to make the vision of Administrative Simplification a reality.
We have submitted NCPDP's Version 3.2 to ANSI to become an American National Standard (ANS) and look for this transaction to be one of the first health care transactions being considered by this committee to be awarded this honor.
"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?
NCPDP's expectations for the results of the Administrative Simplification standards requirements in the HIPAA center around the entire health care industry. The Administrations Simplification standards requirements will accomplish five goals for pharmacy:
1. The relative costs to the entire health care industry for claims payment will decrease significantly. As I mentioned earlier, the pharmacy services sector of the health care industry the most automated segment of the health care industry, with over 95% of all claims filed electronically. This impact to pharmacy's cost will be minimal because we are already there.
2. The ability to interconnect with other standards development organizations in the creation of a health care network can become a reality, and not just a vision. NCPDP has had two successful pilot projects with ASC X12 with their 834 and 835 business transaction data sets. Also, NCPDP is working with HL7 by cross mapping of two of our standards that connect the physician and the pharmacist electronically.
3. The development and adoption of identifiers by the Secretary will greatly improve the pharmaceutical industry's ability to complete clinical type services, such as Drug Utilization Review, and Professional Pharmacy Services. A unique identifier for providers will help solve this dilemma. NCPDP fully supports and has already endorsed the HCFA NPI effort. NCPDP has a dedicated work group (Work Group Three- Standard Identifiers) for this area.
4. The security of the standards is paramount in importance. Currently, we are utilizing closed or private networks along with proprietary payer information in order to maintain security. This process has been widely utilized and has been successful. However, we do realize that new security measures will need to be developed as various areas of health care begin to communicate. Our major concern is the potential costs of implementing these new security standards.
5. The overall quality of health care for the United States population will increase. Pharmaceutical care cannot be interrupted during this administration simplification process.
From a historical perspective, fifteen years ago pharmacy had the same problems that other health care segments are having now. There was a plethora of paper forms that created an administrative nightmare for the pharmacist to complete in order to be properly reimbursed for a pharmaceutical claim. NCPDP was created to standardize one form- The Pharmacy Universal Claim Form that resulted in over one billion paper claims in the early 1980's. In 1987, this universal claim form evolved into a standard format for on-line real- time adjudication of pharmacy claims. (NCPDP's Telecommunication Claim Standard Version 3.2)
NCPDP recommends the use of our standardized electronic claim format between pharmacy providers, insurance carriers, third-party administrators, and other responsible parties. This standard addresses the data format and content, the transmission protocol, and other appropriate telecommunication requirements and was developed to accommodate the eligibility verification process at the point of sale and to provide a consistent format for electronic claims processing. The standard supports the submission and adjudication of third party prescription drug claims in an on-line, real- time interactive environment.
NCPDP's standard fulfills the unique needs of prescription benefit programs that allow pharmacies to submit the claim during the dispensing process. As the prescription record is being completed in the pharmacy's system, the NCPDP standard claim is transmitted to a multitude of payers and usually within 20 seconds a response is returned with the claim fully adjudicated. The selection of NCPDP's Version 3.2 will allow this state of the art communication standard to continue.
Over 8,000 prescription drug benefit plans support on-line, real-time processing and pharmacy systems are engineered to exacting response time standards. These claims cannot be submitted via batch, or even a fast batch, since this would require patients to wait longer for prescriptions, or even worse, come back several hours later to pick up their prescriptions. A recommendation of this committee for either a batch type standard or to an untested and unproven interactive claim standard for our current on line interactive claim standard is counterproductive to the progress of the last 9 years.
If the NCPDP Standard is not selected, then this action would have a significant negative financial impact to the entire pharmaceutical industry. 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 health care providers.
NCPDP and ASC X12 have been in the process of developing a Memo of Understanding over the last 6 months. Our meetings have been very productive, and I am personally pleased with our progress so far. Part of the Memo of Understanding is to identify and enumerate the direct and indirect costs, benefits, and the time required for the pharmacy services sector of the healthcare industry to convert from the NCPDP syntax to the proposed ASC X12 interactive claim in EDIFACT syntax, to convert from current NCPDP Version 3.2 to the next version in NCPDP syntax, and the economies realized by new or additional implementations X12/EDIFACT syntax transactions versus NCPDP syntax transactions. WEDI has agreed to help us coordinate a key pharmacy industry executive meeting that would establish an open forum concept by asking these questions during this meeting.
Does your organization have any concerns about the process being undertaken by the Department of Health and Human Service to carry out the Administrative simplification requirements of this law? If so, what are those concerns and what suggestions do you have for improvement?
NCPDP is very pleased with the process that the Department of Health and Human Services is making. We hope that they continue the process of open dialogue available through the ANSI Health Informatics Standards Board (HISB), other SDOs, WEDI, and associations like the National Association of Chain Drug Stores (NACDS), the National Community Pharmacists Association (NCPA), and the American Pharmaceutical Association (APhA).
10. NCPDP hopes that this process continues in the future, in order to satisfy the needs of the pharmaceutical industry.
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?
As I mentioned earlier, the NCPDP standard for electronic claims meets pharmacy's current needs. The NCPDP standard has proven successful for over 9 years by continually changing and growing to accommodate the needs of the pharmaceutical industry. The following highlights the degree of utilization of NCPDP's Telecommunication Claim Standard:
The generators and the users of the data receive the necessary information from the NCPDP standard to fit their business needs. Business needs drive the ever evolving NCPDP standard. NCPDP has a dedicated staff that distributes standards to our members.
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. NCVHS needs to recommend proven tested standards that have wide implementation. (NCPDP's Telecommunication Claim Standard Version 3.2).
Interoperability would allow pharmacies to communicate with other parties that use other standards and syntaxes if new business needs arise. Standardization should take place at the data content level (including data dictionaries) where there should be no variability. Conversations have already begun between NCPDP, ASC X12, and HL7 so that translators can inexpensively convert from one standard syntax to another standard syntax ensuring interoperability….. Variability can cost effectively exist between different syntaxes. One standard syntax is simply a political vision, which in pharmacy's case is not based on business needs or cost savings.
Interoperability is the key to maximize communication opportunities. ASC X12 , HL7, and NCPDP are currently investigating migrating from its current syntax to an object oriented technology.
The vision of administration simplification is cost effective communication. It is estimated that forcing pharmacy to move from the NCPDP standard syntax to the UN/EDIFACT interactive standard syntax, would cost pharmacy approximately $200 million and pharmacy would not be buying any additional benefit.
In support of this argument, the NCPDP Work Group One (Telecommunication) developed a white paper to provide information to the NCPDP members about the future syntax of our 3.2 standard. In November 1996, the vote was unanimous to continue to use the NCPDP syntax, since there is no compelling business reason to change syntaxes at this time.
I would also like to mention that it was discovered during the ASC X12 Trimester meeting in San Francisco on February 4, 1997 that the pharmacy/medical/dental/institutional interactive claim under development must go through the UN/EDIFACT process, not through the ASC X12 balloting process.
At the present time, ASC X12 has stated that no national messages using the UN/EDIFACT syntax will be processed through X12, but must go through the UN/EDIFACT process.
Regarding this issue about NCPDP's standard versus a ASC X12 non-tested non-proven non-balloted proposed standard for pharmacy should be moot, because such a standard in ASC X12 for pharmacy does not exist.
Thank you for this opportunity to present the recommendations of NCPDP. I look forward to responding to your questions.