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I want to thank the Subcommittee for extending the invitation to testify today representing the members of AFEHCT. It is a privilege and a special opportunity, not only for AFEHCT, my employer, ENVOY-NEIC, but also for myself.
I am coming today representing the Association For Electronic Health Care Transactions (AFEHCT). Preparing today's presentation, I have had meetings with a number of clearinghouses, large and small, as well as payers and practice management vendors members of AFEHCT, and the views I bring represent a summary of those meetings. It is important to note that although competing with each other in the market, AFEHCT members share common views regarding the need, benefits, expectations, and potential pitfalls of Administrative Simplification.
We want to thank Steve Barr, the Bureau of Program Operations of HCFA, the Department of Health and Human Services, and the NCVHS for having this hearing, bringing the attachment issue to the spotlight, and inviting us to testify.
Although we have known this issue was coming, the invitation to testify created a "critical mass" of AFEHCT member attention on the issue of attachments. As we have worked our way through this issue, it occurred to us that this is an area in which the private sector should come together and take the initiative to develop a consensus among payers, providers, clearinghouses and others. We in AFEHCT will start moving in this direction. We welcome the participation of all interested parties.
If some feel that some contents of this document steps on their toes, or the toes of others, please know that this is not our intent. Please regard this document as an invitation to come together and address the attachments problem. The industry needs to reach consensus before the government makes policy in this area.
The Association for Electronic Health Care Transactions (AFECHT) is a voluntary trade association comprised of:
A complete list of AFECHT members is available upon request.
In the paper claims environment, an attachment is any information used in the adjudication of the claim that is not part of the basic claim form. This additional information must be conveyed in a piece of paper different from the claim form itself, and "attached" to the form.
Since the paper claim form contains a limited number of fields for standard information, the paper attachments take a number of formats: pre-printed forms of several kinds, certifications, answers to questions, letters, reports, copies of parts of the medical record, tangible evidence of X-Rays or casts, dentures, orthopedic devices, etc.
In the electronic claim environment it is much more difficult to define what an attachment is. This difficulty comes from the fact that over the years the electronic format has been enlarged to include many items of information that do not fit into the paper form, and therefore are attachments when filed on paper, but are part of the electronic claim format.
Attachments may be necessary before the adjudication can complete. At least one of the parties, Payer or Provider, perceives they are necessary for adjudication.
Why are attachments necessary ? The fundamental question is one of lack of trust. The provider is compelled to demonstrate that he/she can show proof that the service was rendered as claimed, and a payment is due. Some providers are more trusted, and therefore they are compelled to produce fewer attachments. Other providers are not so trusted and produce many attachments.
Payers collectively must, by contract, administer hundreds of thousands (if not millions) of different health care benefit plans. Many of these plans conditionally or universally require administrative and/or clinical data that is not part of the basic claim. Accordingly providers routinely send universally required data, as attachments to the basic claim, and in an attempt to anticipate health benefit plan contract requirements also attach any perceived conditional data, to expedite payment. It is also appropriate to acknowledge the responsibility of all payers, as fiduciary agents, to minimize abuse and/or fraud in the health care system. Attachment data is used to ensure proper payment is made, which concurrently reduces abuse and fraud.
Traditionally, the claim form contains mostly administrative information. There is very little room for clinical information. Therefore clinical information has been considered an attachment. However a substantial number of attachments are in the gray area between administrative and clinical. For example: Certificates of Medical Necessity, Prescriptions, ambulance information, and others.
Some attachments are required in all cases in order to adjudicate certain claims. Other "attachments" are only produced after the payer requests it. In some cases there are statutory requirements for certain attachments (e.g. consent form for sterilization). In other cases it is a business practice, probably linked to health plan benefit issues, previous experience with fraud, etc. In a few cases the attachments document unusual medical circumstances. Most, if not all, payers request attachments or supporting documentation when the claim exceeds certain financial thresholds.
In those cases where the provider knows the attachment will be required (i.e. Durable Medical Equipment, Ambulance) the attachment will be filed at the same time as the claim. This expedites the claim processing and speeds up the reimbursement. The cost of filing these attachments is relatively low.
When the "attachment" is requested by the payer after the claim has been filed, the provider must retrieve the file, produce the attachment, and send it under separate cover. The process becomes much more expensive in terms of both money and time. These cases are not traditionally called Attachments, but "(Request for) Additional Information."
It can easily be argued that a "Request for Additional Information" may include the same data as an "Attachment". However, a "Request for Additional Information" requires a more costly procedure to produce and process.
Another division of attachments can be made along the lines of formatted data versus unformatted or free text information. Some argue that formatted or field-oriented data belongs in the claim and non-field-oriented data belongs in an attachment. However, there is a gray area in clinical information that could be expressed in a well defined format such as HL7, or as free text. The two camps are still battling this issue.
There are several other boundaries over which the Claims vs. Attachments lines could be drawn. There seems to be little consensus in the industry over what is actually an attachment, as we know attachments today.
Most players seem to agree that some of the items of information currently sent up-front with the electronic claim are traditional attachments. Also there seems to be agreement that more attachments need to be sent, and processed, electronically than what is happening today. And that the pendulum should not swing too far in the opposite direction, where everything on the claim becomes an "attachment" to a minimalistic claim.
Currently, using the NSF, UB92, or ASC X12 837 there are three ways to send attachments, all three are in widespread use in different segments of our industry. It is important to understand this, so we don't break a process that works. These forms are described below.
A substantial percentage of the claims filed today are either filed with attachments, or, in fewer numbers, will need additional information filed at a later time. These claims are being processed and paid. Having the ability to file more attachments electronically will, no doubt, lower the cost of healthcare.
Some sectors of the industry incorrectly perceive that without the ability to file attachments electronically, the goal of achieving 100 percent electronic claims will never be reached.
Although AFEHCT recognizes that electronic attachments can generate substantial savings, we also believe that, with proper education of the industry in this matter, the goal of 100 percent electronic claims is not necessarily linked to electronic attachments.
A substantial number of Medicare Durable Medical Equipment, Home Health, Ambulance, Home Infusion, Parenteral and Enteral Nutrition, Home Health, Chiropractic, Ambulance, Podiatry, Oxygen, and other claims are filed electronically with information inside the electronic claim format that has no equivalent on the paper claim.
The electronic claim formats, over the last few years, have been expanded to cover these paper attachments inside the electronic claim format itself. Not as a separate attachment, but as information in the electronic claim that only applies to certain specialties, that has no correspondence on the paper claim form, and that if filed on paper would certainly be considered an attachment.
There are millions of these claims being processed today. Medicare has certainly been the leader in this area, and the rest of the industry is following in Medicare footsteps as they try to automate new lines of electronic claims business.
If this attachment information was to be pulled out of the electronic claim format in the immediate future, the cost and damage to the industry would be substantial.
All current electronic claim formats allow for an attachment indicator that links the electronic claim with an external attachment. Typically it can be an attachment control number, or a reference number of some sort.
This is the mechanism in use today for cases where the attachment is needed in every instance, but it is not possible to convey it electronically as part of the standard claim. For example this is used by dentists to send X-Rays or denture casts, by DME suppliers to send certain original prescriptions, or by surgeons to send releases and consent forms.
The claim can certainly be filed electronically, even when the attachment, by its nature cannot be sent electronically. Both claim and attachment are tied together by a reference or control number.
It is likely that this category will continue, even after attachments are automated, since the nature of these attachments requires either an object or an original signature on a piece of paper as the transmittal method.
These could be properly termed "additional information" sent upon the payer request, rather than true attachments.
In the last few years we have seen a mass migration of the commercial payers to this type of attachments. It used to be that when filing paper claims the providers felt compelled to send all sorts of additional information as attachments. The adjudication cycle was so long that they attempted to get paid in the first try, by sending everything that the payer was likely going to need later. Most of this attachment information was not needed and caused great expense at both ends.
With the reduction of the adjudication cycle from weeks to days, and the ability of payers to communicate electronically with the providers, the commercial payers are now requesting that the claim be sent electronically without attachments, and that attachments only be sent upon request from the payer. Most attachments are sent by non-electronic means.
This is a new paradigm for the industry, made possible by the communication channel in both directions that the payers have established with the providers through clearinghouses.
Even though a sizable number of electronic claims require that additional information be sent later, the percentage of such claims has dropped dramatically when compared with the claims that were sent with attachments under the old paper paradigm. The savings to the commercial payers are substantial.
The work of the Attachments Workgroup in ASC X12 and HCFA is progressing and showing very encouraging results. In the future there will be new classes of attachments that will be able to flow electronically, further reducing some of the paper attachments that have to be sent off-line today. These may constitute a completely new classification of attachments that are sent electronically, but detached from the claim transaction itself.
One of the issues with the work being done by the ASC X12 Attachments workgroup concerns the use of an encapsulation technique to include a clinical HL7 message inside an X12 transaction. This scenario allows the transmission of clinical data over EDI networks, taking advantage of the existing EDI infrastructure, while at the same time using HL7, which is the format most appropriate for clinical data.
As far as the clearinghouses are concerned, we view the BIN segment of the X12 transaction as a Binary Large Object (BLOB) that can be transferred by clearinghouses without knowledge of the actual contents of the BLOB. It may contain an HL7 message, or a DICOM image, but that aspect of the encapsulation will most likely be hidden during the clearinghouse processing.
One item that will require further investigation prior to large scale deployment, is the economic impact of such large objects, as they consume greater resources than traditional administrative transactions. At this point it is difficult to quantify the resource consumption, because there is no measurable installed base.
As far as the integration of both standards, X12 and HL7, at the provider, this will be a new capability for most providers. Even though HL7 is widely used in hospitals and large clinics, there are fewer than ten thousand of those in the country, as opposed to several hundred thousand smaller providers. Those small providers that use HL7, do so mostly to download demographic information from the hospital into their practice management system, rather than to transfer clinical information, with the exception of laboratory test results.
So, in our view, the ability of small providers to use HL7 in a meaningful way to satisfy requests for additional information coming from a payer, is, at this time, practically non existent. This does not mean that the market could not develop very quickly.
We are not aware of any payers with the ability to receive clinical information in HL7 format and integrate it into their claims processing system at this time. Of course, since the 275 implementation guide is still in development, we are not aware of payers with the ability to process HL7 encapsulated inside a 275 in a production environment. The exception to these two statements are those X12 members that are currently participating in the 275 proof of concept.
Or rather, the lack of preparedness. In order to process electronic attachments, the adjudication systems must be prepared for them. Today most are not. Most adjudication systems are incapable of handling claims attachments automatically, and attachments cause human intervention during the adjudication of the claim, thus increasing the cost. This is why the commercial carriers prefer the providers not send attachments at all, unless additional information is specifically requested.
Medicare, and a handful of Medicaid programs, are notable exceptions. These government programs can automatically adjudicate claims that contain the extra information in the electronic format at the time of filing. Again, they have shown their leadership in this area.
However, no payer system can automatically adjudicate a claim that contains an attachment that requires human intervention. Even Medicare systems must suspend for manual review those claims that contain narrative attachments today, thus increasing the cost of processing and causing delays. Attachments must be codified as much as possible, in order to facilitate the automated adjudication process.
Some of the future attachments being considered as candidates for electronic submission require special hardware devices or high resolution graphic terminals, in order to be properly displayed. It is doubtful that the investment in diagnostic quality display devices will be made by the payers in the near future in order to view digitized X-Rays or other imaging forms. It is also doubtful that these diagnostic quality displays will be used in preference to the current photographic representation method, especially by the smaller payers and/or providers. The cost of these devices, when compared with traditional methods, and when considering that the automated interpretation of these attachments is still in the research labs, needs to be taken into account by the workgroups.
The business process to handle attachments varies from payer to payer and from provider to provider. There seems to be no standard method of handling the attachments or the requests for additional information.
As we have discussed, the Medicare process seems to be very different from the Commercial payer process. For Medicare, it is advantageous to receive as much information as possible up front, since the Medicare automated systems can process it and adjudicate the claim without operator intervention. For the commercial payers, their preference is to receive less information up front, as any extraneous information causes the claim to suspend and require manual intervention. Their process is more prepared to only receiving the additional information they request at a later time.
Some providers prefer to send all available information up-front, since the cost of retrieving the information at a later date exceeds the cost of sending it up front. Other providers prefer to send a minimum of information, as they have a low cost when retrieving it at a later time. It is likely that these habits will not change when the attachments are sent electronically rather than on paper.
And, of course, the statutory requirements vary from state to state and from one specialty to another.
One of the items that will produce immediate savings is to define what an "attachment" is and standardize the requests for additional information, and the requests for attachments. Regardless of whether the attachment is sent electronically, on paper, or otherwise.
It may be difficult to interpret some requests for additional information. So the response to these requests is going to be expensive to fulfill. It is also very difficult for the provider to know what attachments need to be sent to what payers under what circumstances. There are no clear rules among payers. Sometimes there seems to be no rules, even for one payer.
Even though most of the time attachments are used correctly, attachments, or requests for additional information, can sometimes be misused by both health plans and providers. Other times they can be used beyond the legitimate need to document a specific case. In some cases they are viewed as a "prove it" document. Or a provider may obscure the legitimacy of a claim by excessive use of attachments. This potentially creates an antagonistic situation.
However, a potential for greater misuse is lingering on the horizon: attachment overflow. In the past, attachments have been expensive to handle by both parties. If all of a sudden this balance is tilted, the party that finds attachments as an inexpensive resource could flood the other party with attachments, or with requests for additional information, possibly causing a system collapse.
Given that the computing capacity of the different parties involved covers a wide spectrum, it is possible that a party could very inexpensively generate unnecessary attachments or electronic requests for information, thus making the "standard claim" less effective than intended, bypassing HIPAA's standardization efforts.
The balance concerning attachments is rather delicate. On one hand we all want to see more information filed electronically rather than on paper. On the other hand we don't want to shift claims that are currently being filed electronically over to the paper filing method because we abruptly change the way attachments are handled. Neither do we want to force electronic attachments on an industry that will be largely not prepared to handle them, thus causing a cost increase.
In some cases, the "inertia" of the healthcare system is such that change becomes almost impossible. When asked the question "How does this specific attachment help in the adjudication decision of the claim ?", the answer is, most of the time, that the attachment is kept on file "for the future" or "for documentation purposes". In other cases, the attachment has been requested for many years and nobody wants to change the system. It is in these cases that the practice of requesting the attachment could be discontinued, and only request the information when it is really needed, or in case of an audit. The payers have a fiduciary duty to the health plans; the health plans should have the duty to keep the administrative costs low.
One of the most important issues is the fact that there are so many unanswered questions concerning attachments. Beginning with the fact that not everyone agrees what is an attachment, to all the issues raised here, and more.
The healthcare industry has not reached a consensus position in this issue. However, HIPAA compliance requires certain time frames that do not leave much room for error or even hesitation. It is critical that the industry continue to meet on these issues, in order to achieve consensus, so some of these questions can be answered, before we proceed much further.
Payers should accept all claims electronically, as required by HIPAA. Even when the claim requires an attachment or additional information, the claim submission itself should be electronic. The attachment may be under separate cover: electronic, paper, or otherwise. This is a step towards the goal of 100 percent electronic claims.
The industry needs to achieve consensus on this issue. From the definition of attachment, to the standardization of the requests for additional information, to the definition of when certain attachments are needed. In these areas, all the DHHS departments involved should actively participate in an industry consensus, providing assistance to the rest of the industry.
The attachments must not replace the claim. Claim information that clearly belongs in the claim should not be allowed to escape to the attachments. Attachment information that is currently in the claim could be migrated over time out of the claim and into a separate attachment transaction. But the attachment should not become a "black box" that can be used for administrative information that clearly belongs in the claim, thus creating a situation where the attachment is used for just about anything.
There are millions of claims filed today with attachments. Any changes must take into account this existing business and provide a smooth transition.
A realistic cost benefit analysis of the implementation of electronic attachments should be conducted. This analysis should be done with a business view rather than a technology view. One of the biggest challenges is to change the business process, or rather, to put a business process in place, to handle electronic attachments as part of the adjudication process.
The relationship between attachments and the electronic medical record must be established. There needs to be some boundaries which define an administrative transaction required for payment of a claim, versus a medical record transferred to a payer for other purposes. Issues such as Privacy, Confidentiality, and Security must be addressed in the attachment debate.
A concerted effort must be made to discourage the use of attachments whenever possible. Making it easier to file electronic standard attachments must be accompanied by an education campaign to discourage their use. Otherwise we may easily see the cost of healthcare administration skyrocket, as unregulated requests for attachments flood the providers. The Secretary should endorse the industry consensus on the requests for attachments and additional information. Standardizing the technical format without consensus for attachment requirements could be counterproductive.
Whenever attachments can be automated and codified, the coding system in the base claim should be considered for improvement. This may yield a reduction of attachments such as Op Notes and other descriptions of procedures that are not specifically described in the current coding systems.
Thank you for the opportunity to present this testimony to you.