Sharon A. Ferrell, President

Larry Matejka, Vice President

California Medical Billing Association

The California Medical Billing Association was formed for the purpose of presenting a unified voice for third party medical billers, and to lead the way in attaining a higher level of professionalism in medical billing throughout the State's healthcare industry.

Our Strategic Goals are to:

• Take a proactive position in advocating changes to improve our industry
• Provide a source of continuing, advanced level of education
• Establish and maintain professional standards
• Provide an open forum and network for the free exchange of information and ideas
• Promote member companies to other associations and groups within the state as industry leaders with unequaled professionalism, integrity, and knowledge.

As third party medical billers, we deal with the full spectrum of provider specialties as well as third party payers and have become all too familiar with the complexity of rules, regulations, and contractual requirements that already exist. Efforts to simplify or standardize the collection and transmission of administrative healthcare data are heartily welcomed in theory, however, experience has demonstrated that prior attempts at simplification have only led to yet another layer of complexity. All of the issues addressed in the Health Insurance Portability & Accountability Act are important, and directly impact our members, and in turn, the healthcare providers they serve. These issues are the nuts and bolts of our daily operations.

While we can understand the need to collect and report more comprehensive data and to facilitate the dissemination of that information, the burden of implementing changes of the scope and magnitude proposed under HIPAA should not be shifted entirely to the administrative arena. California has felt the impact of managed care to an extent not fully appreciated in most other states in the country. Efforts to reduce the cost of healthcare have drastically increased administrative costs born by the provider while simultaneously decreasing revenue. Practices are experiencing 200% to 300% increases in the administrative resources necessary to deal with utilization review, referrals, authorizations, and inefficient IPA's. This leaves them ill-equipped to absorb additional new requirements or adapt to radical changes. The cost of infrastructure changes should be carefully considered. The ripple effect of even a small change such as the National Provider Identification Number can mean hundreds of millions of dollars in computer software, telecommunications programming, printing costs and time loss. What ever the end result of these hearings we would urge you to consider the potential impact of your recommendations on those who must comply and allow ample time for implementation. (i.e. E&M codes introduced in 1992 are still not fully understood by many physicians using them to report encounters)

The inclusion of the phrase indicating those " who choose to conduct transactions electronically " is particularly troublesome and could be seen as an inducement to take a giant step backwards as we have experienced with the California Medi-Cal Managed Care Program. When the various plans were implemented through out the state, there was no requirement on behalf of the payors to accept electronic claim submission. The result is millions of paper claims suddenly being reintroduced into a system that was previously highly automated. HMO's and other payors may accept transactions electronically when submitted directly, however, most physicians in California are contracted through IPA's, a vast majority of whom do not accept electronic claims. It might prove easier and/or less costly to revert to paper claim submission than to comply with new electronic standards thereby shifting the burden to the provider's office or to the billing services we represent. Our recommendation would be that any standard formats adopted should, at the very least, be mandatory for all intermediaries working with government plans including IPA's.

True simplification can only be accomplished through wide scale implementation of the proposed changes. Anything less will only add that additional layer of complexity which was mentioned earlier. We presently have a Medi-Cal/Medicaid program which uses different codes than are allowed with Medicare. Our workers compensation carriers and private payer can opt to use different codes, home healthcare, ambulance, and pathology all have different code sets and even programs within the Medi-Cal system such as CHDP use different coding systems. While this situation serves to illustrate the point that standardization is needed, it also stands as a glowing example of the need for wide spread public and private sector implementation.

Question #1

Changes to the present coding system should be viewed in light of how the multitude of existing coding systems have increased the complexity of medical billing and reporting. The introduction of additional requirements or a totally new coding structure which does not incorporate a majority of the current elements in use could prove counter productive. Any coding system adopted should be universal in that it is one set of codes that will encompass all disciplines and specialties. It should include and incorporate as much of the existing coding structure as possible with the inclusion of addition of digits or combining of code sets to achieve the desired end result. Incremental steps toward the long term goal would be the least disruptive while a total overhaul or a totally new coding system could have devastating effects. Allowing HMO's and IPA's to opt out of using it would only serve to complicate an already bad situation.

A National Provider ID can provide a much needed measure of standardization as long as it is true simplification and is used across the board and doesn't just add another "unique" number to the list. ID Numbers for Plans could greatly simplify the process of submitting claims by being able to identify which of the many options a patient might have is being billed. This ID should have to be included on all insurance id cards. The ID number could take advantage of the familiar medigap number or NEIC designation with a plan suffix.

We recognize the need for confidentiality of medical records and privacy considerations, however restricted access to necessary billing information could cause an extreme hardship such as in the case of proposed legislation requiring original authorizations for all parties with access to medical records. Such a system would be extremely cumbersome and costly. What is needed is a clear definition of who may or may not be authorized to view or receive medical information and providers should be able to designate persons acting on his or her behalf. The same consideration should be given to security issues in that there should be a universal system which would provide access for billers who are acting on behalf of the provider.

Question #2

The level of comprehension and understanding of existing coding sets and administrative procedures is relatively low when compared to the overall requirements demanded by the healthcare industry. Many if not all of our members express concern and frustration in finding qualified personnel. Providers are experiencing a shrinking budget for education and training, leaving a serious shortage of qualified medical billers. Changes such as those mandated by HIPAA can only serve to exacerbate the problem. The CMBA is addressing these needs through annual conferences, educational workshops, and an advanced program to certify medical billers. The CMBA will continue to do whatever is necessary to help disseminate information and provide the training necessary for our members to implement the new standards.

Question # 3

Major concerns about the type of transactions specified under HIPAA are:

Additional reporting requirements

Cost of implementation such as

Time Necessary to Train Providers

New Collection formats (i.e. superbills, forms, etc.)

Additional Storage or programming to store new data

Re-programming to allow for transmission of new data

Question #4

Administrative simplification might best be achieved while balancing clinical and payment needs with the need to maintain individual privacy by; carefully defining what the privacy concerns are, proper identification of who is allowed access to sensitive records, higher security standards for data elements which could be used to identify the individual, and enforcement of civil penalties for wrongful dissemination of data.

Question #5

A coding approach that incorporates as much of the current coding systems as possible with additional data elements or digits to capture additional data would provide the least amount of disruption.

Question #6

Our members currently use most if not all of the current code sets such as; ICD-9 CM, DME, Home health, HCPCS, Medi-Cal, CPT-4

The strengths are that providers and billers are familiar with codes and have learned to live with any weaknesses they might have.

The major weakness of the codes presently in use is that often times they are not specific enough, leaving us to interpret which is most appropriate. Present systems are very weak in enrollment data and are totally inadequate. (i.e. determining which IPA vs. Plan is responsible especially since patients can change plans every 30 days without updating information and IPA's are not accountable for inaccurate information)

Question #7

Use of CPT-4 as the initial standard for outpatient transactions would cause the least disruption. It is not practical to move to a single procedure classification on the schedule required for implementation of administrative standards. To attempt to do so would have devastating effects. It is better that it be done with careful consideration and done right the first time than to adhere to an arbitrary time schedule.

Given the vastly disparate reporting requirements between inpatient and outpatient services different procedure coding systems should continue to be used and perhaps slowly revised into a more uniform system.

Question #8

The ICD-10-CM and ICD-10 PCS have not been thoroughly evaluated, however, it is our understanding that no system for calculating reimbursemt such as RBRVS has been developed for the ICD-10 PCS. ICD should be used for for the reporting of diagnosis information and not for administrative transactions.

Question #9

Our only words of advice are to take your time, think it out and do it right the first time. Poorly timed implementation of changes on this order of magnitude could be extremely detrimental to our industry by increasing the cost of doing business at a time when managed care is forcing us all to tighten our belts.

Standards must be widely adopted and must include HMO's and IPA's.

Those standards which are implemented must be communicated with clear, concise, and exact instructions leaving little room for intermediary interpretation which at the present time can vary greatly from region to region.

The California Medical Billing Association and our membership are supportive of all efforts to simplify and standardize administrative transactions in the healthcare industry, provided that this ultimate objective is achieved and that the burden of implementation is not unfairly placed in our collective laps. As an association, we offer our support and services for data collection, beta testing and evaluation or to assist in any way possible because we believe that only by being part of the process can we stay in the forefront of change and serve our members.