Dorel Harms

Vice President, Professional Services

Good Morning

My name is Dorel Harms and I represent the California Healthcare Association or CHA. CHA was previously the California Association of Hospitals and Health Systems. We represent over 450 hospitals and over 50 physician group practices in California. Today I'd like to make comments in my capacity as the Vice President, Quality and Professional Services of CHA and also as the acting President of the California Institute for Health Systems Performance, a collaborative effort designed to address comparability and the improvement of care in California hospitals. First, we applaud the purpose as stated in Subtitle F of Health Insurance Portability and Accountability Act to improve the MediCare and MediCal programs by encouraging the development of standards and requirements for electronic transmission of specified health information. CHA was instrumental in the development of the UB82 and UB92 and supports standardization.

Regarding answers to questions asked in the NCVHS communication.

I. When fully implemented the standards will have major impact on nearly every aspect of the health care arena. Because MediCare and MediCal represent the critical mass for many of the providers, standards set by the HIPAA may become universal which from many viewpoints is desirable.

Speaking more specifically, the time it takes to perform administrative transactions will be reduced. Educating employees and reformatting computers will be costly, maintaining privacy and confidentiality will be more of a challenge and the assignment of unique I.D. #s will allow collection of data across the continuum of care.

II. Currently several of these standards have been addressed as priority issues. Several hospital systems have standardized administrative transactions, coding sets and unique numbers for providers, plans and patients - within their system. "Within their system" is the issue for any organization, including the Institute that wishes to compare outcomes. The Institute was established to provide standardized, comparable information for hospitals internal use to improve care and for external use by payors to make decisions based on outcomes of the care provided. We do not have a starting point without standardized definitions and coding practices, and the ability to identify providers and patients by using unique numbers. Hospitals in systems cannot accurately compare themselves to providers outside their system without standardization. Hospitals are at various stages in attempting to address these issues. And, the Institute included standardization in it's strategic plan.

III. Unfortunately, many hospitals are not voicing concerns about the types of transactions specified. Hospitals are just beginning to realize the implications of the HIPAA. But, there is value in recognizing the lack of specific concerns due to a general information void. Providing care in California is changing rapidly- probably more so than in at least 45 other states. Managed care has affected every aspect of hospital performance and many hospitals are struggling with all the pressing issues. Many hospitals have not yet begun to prepare for or even think about the issues you are addressing today. It's not on their list of priorities- at least not yet.

As far as availability of data, much of the data is currently reported. Requiring standardization will necessitate format changes at about the same time other changes need to take place to accommodate the year 2,000. CHA recently learned that may of our hospitals have not begun to address millennium changes. Nearly every piece of equipment in a hospital has some type of timing device that will require adjustment. We are convening a work group to address the problem. Our concern is the HIPAA's required changes will take place at approximately the same time, creating exponential problems.

Quality of data has been an issue. For example, hospitals have been required to submit the patient data abstract to the state for every patient discharged from the in-patient setting. Penalties were not enforced and the data is not always accurate. There is also question about the edit process. Current activities are attempting to address this. A great deal could be achieved thru standardization, but it also needs to be a priority.

IV. Administrative simplification, clinical and payment needs will all be assisted if standardization occurs. The true balancing act is maintaining privacy. Precautions can be taken, but to be useful data must be transformed into information which can only be accomplished if the data is accessible. Accessibility makes the data vulnerable and security can be threatened. Choices will need to be made. Possible precautions include enforceable policies on usage, periodic security reviews and specific plans to protect data from attack. Encouraging a well thought out plan at every juncture should dilute the problem.

V. One way administrative simplification can be achieved while reducing administrative burden is to eliminate reporting duplication. Frequently the same basic information is requested in slightly different format. For example, MediCare requires one set of financial data - MediCal another and OSHPD yet another. The same is true in the private sector. Each contracted HMO requires the same basic data in a different format. And, the amount of data requested is growing. Eliminating of duplication is vital to simplification.

VI. Because we represent so many groups this question has multiple answers. I will leave it up to my colleagues to provide this information.

VII. Ambulatory and in-patient coding systems should not differ. Having separate systems was developed when procedures done in the ambulatory setting were different from those done as an in-patient. In many situations that is not longer true. Having separate coding systems is confusing and does not support the concept of standardization.

VIII.The year 2000 is once again targeted for change, this time in relation to the ICD-10-CM and ICD-10-PCS. I envision a massive meltdown with all the changes required of hospitals and their computer systems in 2000. Changes should be staggered when possible.

IX. Concerns have been addressed thru-out my comments. In summary, simplification thru standardization and the identification of all parties is long overdue. Reducing duplication would also be very helpful. Initially it will be an expensive process and we can expect delays in transactions. But simplification and reduced costs can be achieved. In closing, I'd like to emphasize that implementing these changes as we begin a new millennia will present additional challenges.

Thank you for inviting the C.H.A. We would like to assist in any way possible.