Dear Members of the Subcommittee:
On behalf of Aetna U.S. Healthcare I am enclosing a statement to provide the Subcommittee with our views, perspectives and concerns with respect to the standards to be developed (as required by Pub. L. No. 104-191) to regulate how health care information is to be exchanged electronically.
As the country's largest managed care company we are naturally quite interested in just how the Administrative Simplification Subtitle of the Health Insurance Portability and Accountability Act of l996 will operate in the real world of health data generators and users. We have long supported administrative simplification (as an active member of any number of EDI groups including WEDI) and look forward to working with the Subcommittee and the Committee to implement the best standards and rules under the Act.
To this end I have enclosed a statement that directly responds to the four questions you posed in the announcement of the Subcommittee's hearings on this subject. I have enclosed a computer disc so that you may include our statement on your Web Page.
Please contact me should any of our answers need elaboration, if you have additional questions generated by our statement or if you would like additional comment from Aetna U.S. Healthcare on some other related subject area.
Sincerely,
Timothy E. Nolan
1. What are your organization's expectations for the results of the Administrative Simplification standards requirements in the Health Insurance Portability and Accountability Act of 1996 (HIPAA)? In what ways will the outcome affect the members of your organization, both positively and negatively?
Aetna U.S. Healthcare has positive expectations for this legislation. Upon implementation we anticipate that administrative transactions will be processed in a consistent and high quality manner. This effort complements our activities over the past several years to aggressively implement EDI solutions that reduce administrative expenses in all phases of healthcare delivery while supporting increased quality of care.
We have long held the position that significant increases in the volume of EDI transactions would be supported by the implementation of national industry standards. To that end, we have worked closely with the American National Standards Institute (ANSI) Accredited Standards Committee (ASC) X12N toward the development and implementation of standard transaction formats. We have also been an active supporter of various industry work groups that share this philosophy including the Workgroup for Electronic Data Interchange (WEDI), National Uniform Billing Committee (NUBC), National Uniform Claim Committee (NUCC) and the American Dental Association (ADA).
We anticipate that the outcome of this legislation will enable the employees of our organization to effectively and efficiently provide the highest level of service to our customers - members, providers, and plan sponsors.
For members, the implementation of standards based EDI will improve the timeliness and accuracy of key data necessary to administer their plan benefits. Reduction in costs associated with these services will address some of the ongoing concerns over the cost of health care, now and in the future. Reduced administrative hassles as a result of access to timely and accurate data will serve to improve access to medical care.
For providers, our expectation is that improved efficiencies in administrative operations will serve to improve the quality of care delivered to patients. Streamlined processes for eligibility, claims, encounters, referrals and other transactions covered in the legislation will serve to remove hindrances that could affect the timely delivery of care. As these improved processes are implemented, administrative savings at the provider site will contribute to the reduction in the growth of health care costs.
For plan sponsors, the changes will provide them with the standards necessary to improve the timeliness of data transfer in support of the administration of their health benefit plans. Plan Sponsors initiate many key data elements in support of healthcare administration and all downstream processing is dependent upon the receipt of high quality data. Our internal processes will benefit from the implementation of these changes and facilitate the processing of other transactions.
Changes to the technical support architecture and business process will be a significant effort. As with all change we can anticipate some resistance and varying viewpoints as the alternatives become available. We need to strive to eliminate any disruption in service levels, particularly those that involve delivery of care to patients. As we move forward, there will be significant costs associated with the retooling of systems and business processes for all players.
Increased specificity in the objectives of the standards, roles of the entities involved, technical infrastructure and process flows are necessary to properly assess the full impact of these changes. We will continue to assess these changes and anticipate ongoing opportunity to provide feedback to NCVHS.
2. Does your organization have any concerns about the process being undertaken by the Department of Health and Human Services to carry out the Administrative Simplification requirements of this law? If so, what are those concerns and what suggestions do you have for improvement?
We support the approach taken to date regarding the implementation of the requirements of the law. We encourage HHS to continue with the approach of providing a means for us to provide input and influence the implementation of these changes.
A major concern is the risk of moving forward with some specific changes that have been initiated in the past few years by the Health Care Financing Administration (HCFA) to streamline the processing of Medicare plans, particularly with respect to the National Provider Identifier and the Payer ID. While leveraging this effort will result in standards being adopted in the near term, the concern centers around the original intent of these standards. These standards were designed and developed to support a limited range of health plans currently in place in the market. As such, we are uncertain that they can properly address the needs of the overall market. We do acknowledge that HCFA expressed similar concerns and has been very active in soliciting input on how these standards will address these concerns. We need to continue that process and also recognize that previously established implementation timelines may need to be adjusted to reflect the requirements of the industry. Implementation of standards that are not properly structured to meet these requirements will require significant modifications at a later date and increase the overall costs of implementation. These standards are critical to the effective processing of all transaction sets and should be implemented as part of the entire industry effort.
Another concern regards the communication and education of all those affected by this legislation. Addressing this now will set the stage for increased participation to ensure all requirements and concerns are addressed. It will also facilitate the implementation of these changes by providing the maximum lead time for planning and assessing the alternatives available to the market to support the requirements.
As the l05th Congress gets underway, one issue of significant importance will be how to protect the confidentiality of patient health information. The Administrative Simplification Subtitle of HIPAA (Section 264) asks the Secretary to provide Congress with the Department's recommendations in this area by August of l997 and Congress has 24 months thereafter to enact legislation. Independently of this statutory mandate to enact such legislation, consumers, health plans, providers, researchers and employers alike have all expressed support for passage of meaningful and balanced federal confidentiality standards before expiration of the HIPAA timeframes. The key to resolving the confidentiality issue is balance. While consumers' concerns over the confidentiality of health information must be addressed, we must be careful not to adopt prescriptive standards that undermine the ability of the health care industry to provide these same consumers with the high quality, affordable health care services they demand. In addition, any such standards must adequately recognize and reflect the manner in which most health care services are currently delivered--through some form of managed care. These systems are distinguished by a commitment to enhancing quality of care through innovative quality assurance and health management programs and rely heavily on their own research activities as well as the research conducted by pharmaceutical and device manufacturers. To maintain the needed balance and to continue to facilitate the effective and efficient delivery of high quality care, Congress must adopt federal confidentiality standards that focus on appropriate versus inappropriate uses of patient health information and that establish the primacy of federal law (over state law) in this arena. Doing so will strike the appropriate balance that not only provides patients with meaningful confidentiality assurances, but that will also allow the health care industry to continue to engage in quality-enhancing activities that benefit consumers.
3. What major problems are experienced by the members of your organization with the current transactions specified under HIPAA? For generators of the data, how readily available is the information that you need to provide for the transactions and how meaningful in 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 greatest problems we have today regarding the specific transactions cited in the law are related to the receipt and processing of claims, encounters and referrals.
For claims and encounters, we currently receive transactions in multiple formats that can vary by specific providers, and in some instances individual providers deal with multiple formats. This environment requires significant processing support, both technical and manual in order to ensure timely and accurate payment to the provider of care. Limitations of the current formats inhibit our ability to analyze the quality of care in a manner that exceeds current industry standards. Providing a means to effectively gather data in a consistent format will enhance our ability to provide quality care while reducing the burden on providers to supply that information.
Referrals are an integral part of our managed care processes. The current processes in place require significant manual processing, and we continue to move aggressively toward EDI solutions for these transactions. In doing so, we need to view the implementation of all transaction sets and recognize the interdependencies inherent in the overall process. The timing of the receipt of a referral along with the quality of the data elements are critical to the delivery of high quality care and the processing of subsequent transactions such as claims and encounters.
Claim attachments are another major concern. Current technology exists to process many attachments electronically, but the implementation is severely restricted by the lack of standards for both content, format and telecommunication protocols. There is also a concern that attachments, as part of the medical record, need to be addressed in the context of computerized patient records. While the law provides for an extended timeline to establish attachment standards, those standards need to address the clinical record requirements in addition to the administrative requirements.
For all transactions, the use of free form text should be held to a minimum and focus should be on the use of specific data elements whenever possible. This approach will serve to support the automatic adjudication of claims which would lead to improved accuracy, timeliness of payments, and further reduction in administrative expenses.
4. How can the goal of administrative simplification best be achieved while meeting the business needs of all stakeholders?
Proper identification of the stakeholders early in the process and providing them with the opportunity to contribute to the definition, design, development and implementation phases of the effort is key to achieving the goals of administrative simplification. From what we have observed to date, HHS is taking this approach and we appreciate the opportunity to partake in the process and encourage you to continue on this path.
Given the high number of stakeholders, the logistics of this approach can be overwhelming. To ensure the highest level of participation, we encourage the use of existing entities that represent a broad based constituency. This includes, but is not limited to, ANSI ASC X12, WEDI, NUCC, NUBC, and the ADA organizations. However, these organizations need to recognize their role and should be encouraged to aggressively perform this function in a timely manner. As active members of these groups, we need to continue to support this effort in addition to providing direct input as you have allowed us to do today.
To achieve the maximum potential of the legislation, exemptions to states for specific provisions should be avoided. While the individual merits of such exemptions may be justifiable, they need to be carefully weighted against the overall goals of the legislation and industry. These exemptions could result in additional burdens being place on payers, providers and other stakeholders and result in excessively complex processing requirements. As resources are diverted to support these exemptions, this would result in fewer resources available to address the national implementation of the new standards and excessive costs associated with the old.