Jeanne Schulte Scott

Association for Electronic Health Care Transactions (AFEHCT)
Director of Government Relations
National Data Corporation
Immediate Past Chair - AFEHCT

1706 Great Falls Street
McLean, Virginia 22101-5062
(703) 893-5717

Please consider these additional comments from the Association for Electronic Health Care Transactions (AFEHCT) as points of consideration regarding the testimony heard from the 1st panel (Insurers, Health Plans and Providers) during the morning of June 3, 1997.

(1) Testimony was received that many providers have only recently become aware of the HIPAA provisions regarding administrative simplification -- and that therefore they are "unprepared" to meet the statutory timeframes in HIPAA.

AFEHCT expresses its surprise that these providers are so unaware of the requirements in HIPAA. Provider organizations, including the AMA, AHA and ADA, all played very active roles in the legislative process leading to the enactment of HIPAA. We believe that the potential problems in implementing the required HIPAA changes in the timeframes stipulated are not nearly as complex as the testimony seemed to imply.

Virtually every one of the proposed standards being discussed has already been implemented to varying degrees within the provider community.

Testifiers on June 3 did not seem to recognize the extent to which the industry has already moved to adopt and begin utilizing these standards.

Issues surrounding the troublesome "claims/encounter" transaction are being addressed through discussions among the players agreeing on a single format. Actual implementation of the format within the timeframes is not all that troublesome -- once agreement is reached.

(2) No mention was made of the role of system vendors and clearinghouses in expediting transition. The providers testifying expressed concern about the cost of transition. Virtually every provider uses an outside vendor to help expedite the EDI process. Competition in the marketplace of these vendors, suppliers and clearinghouse is very keen. This competition has already brought the price of EDI services and transactions down dramatically and the decline continues. There is every expectation that this competition will continue through the HIPAA transition.

It is the vendors, suppliers and clearinghouses that will bear most of the costs and the technical aspects of meeting the HIPAA deadlines, not the providers directly.

(3) Undoubtedly -- and it is clear given the legal recognition of clearinghouses in HIPAA -- that the new law anticipated the use of clearinghouses and translator software at both ends of the health care EDI transaction.

(4) Clearinghouses will see their role expanded. While the law does not (and should not) call for government regulation of clearinghouses -- there is a definite need for the Secretary to establish clear standards by which the performance of clearinghouses can/should be measured. The Secretary should reserve this authority, looking to the industry's own accreditation and quality measures for a guide.

Thank you for this opportunity to comment on the testimony received June 3, 1997.