HIPAA Transactions Testing and Certification

Larry WatkinsExecutive Vice President, Claredi Corporation

Co-chair, WEDI SNIPCo-chair, X12N Health Care Task Group

Member, DSMO Steering Committee

April 29, 2003

Topics

• HIPAA Transaction Addenda Rule• State of the HIPAA transactions• Current testing process• The WEDI SNIP testing model• Certification – What is it?• Measuring progress• Trading partner specific issues• Paradigm change

Transaction Addenda guides• X12N Version 4010A1 Implementation Guides

– Work started October 2000– First drafts completed June 2001– NPRM published May 31, 2002– Small changes in response to NPRM comments

• NDC, Taxonomy, anesthesia, etc.– Published November 7, 2002

• Final Rule published February 20, 2003– Adopts 4010A1 as standard versions for 10/16/03

compliance

Transaction schedule• X12N Implementation Guides for

HIPAA– May 2000

• Current version mandated for 10/16/02• Expected to be obsolete on 10/16/03

– Addenda A1• Published November 2002• Final Rule released in February 2003• Implementation required by 10/16/03• Mandated modification of the May 2000

version

PROVIDERS INSURANCE AND PAYERS SPONSORS

EligibilityVerification

Service Billing/Claim Submission

AccountsReceivable

Enrollment

Claim Acceptance

Accounts Payable

Enrollment

Claim Status Inquiries Adjudication

PretreatmentAuthorization and Referrals

Precertificationand

Adjudication

Enrollment

InvoicePayment Order

Elig. Inquiry

Elig. Response

Health Care Services Delivery

Claim

Patient Info.

Claim Status Inq.Patient Info.

Claim Status Rsp

Claim Payment

EligibilityVerification

Service Billing/Claim Submission

AccountsReceivable

Enrollment

Claim Acceptance

Accounts Payable

Enrollment

Claim Status Inquiries Adjudication

PretreatmentAuthorization and Referrals

Precertificationand

Adjudication

834

820

270

271

278

837I,P,D

835

PROVIDERS INSURANCE AND PAYERS SPONSORS

276

277

EligibilityVerification

Service Billing/Claim Submission

AccountsReceivable

Enrollment

Claim Acceptance

Accounts Payable

Enrollment

Claim Status Inquiries Adjudication

PretreatmentAuthorization and Referrals

Precertificationand

Adjudication

834A1

820A1

270A1

271A1

278A1

837A1

276A1

277A1

835A1

PROVIDERS INSURANCE AND PAYERS SPONSORS

Why Addenda?• The May 2000 versions of the

guides have severe flaws.– Addenda changes only the most critical

errors “required for implementation”– Most significant changes are to the

837’s and the 278• Other errors and omissions will be

corrected in version 4050

Future of transactions

• Version 4050 guides in development– Out for public comment in March

2003– Informational Forums in June

during X12 (Nashville, TN)– Expected approval in June 2003

• Will they be adopted under HIPAA?

New transactions in 4050• Available for voluntary use (not

mandated at this time)– Claim Acknowledgement 277– Coordination of benefits 269– IG Error Reporting 824– Eligibility Roster 271– Claims Attachments 275– Referral Attachments 275– Prescriptions (NCPDP Script)

Implementation Guide Interpretations

• Ambiguous situational language– Companion Documents necessary

• Interpretive issues minimal– Education a more significant factor

• X12N IG Interpretation Work Group– CMS has requested help from X12 on IG

interpretation questions– Single site to post questions– Central place to obtain answers– Expected in place by June 2003

HIPAA Transaction Testing• Finite period of time to HIPAA deadline

– Testing must start by April 16, 2003• Limited resources (internal & external)• Expected testing bubble in late 2003• Testing and production have conflicting

requirements– Testing: detect and reject errors proactively– Production: accept maximum number of

claims. Keep low rejection levels.

Testing Challenge

Payers

HMOs

Gov’t

Physician

Hospital

Pharmacy

Gartner Group: 2.9 million analyst months of end-to-end testing(Assumes 1 analyst hour for each trading partner relationship)

Compliant, or not Compliant?

• What is compliance?• What is a “transaction”?• Contingency Planning

– New Formats– New Business Process

• New data elements• New data requirements (situational)

– Big switch, or progressive steps?• HIPAA compliance or continued business?

– WEDI White Paper being drafted

Testing today• Find trading partner that agrees to test

with you– Typically one that will eventually benefit

from your transactions.– They must be ready. Or “readier” than

you are.• Send or get test files• Get test report from/to trading partner• Correct errors found with trading

partner• Repeat the cycle until no more errors

Graphical view• EDI Submitter contract• Telecom / connectivity• X12 syntax• HIPAA syntax• Situational requirements• Code sets• Balancing• Line of business testing• Trading partner specifics

1-2 days

3-4 days

2-3 weeks

3-4 weeks

Testing with multiple Trading Partners

TP Specific

TP Specific

Common in HIPAA(2-3 weeks each)

Today’s Testing• Creates a bottleneck

– Cannot start until both trading partners are ready

• If trading partner does not care about certain data elements– No errors reported this time

• If trading partner requires some data elements– Not an error for anybody else

• Is the error in the sender or the receiver of the transaction?– Cannot tell for sure.– Different interpretations.

• Unfair cost for the “readier” partner.– They end up debugging their trading partners.

Result from Today’s Testing

• Repeat the testing for each trading partner

• Common HIPAA requirements tested again from scratch each time

• Never sure of whether the testing is:– Complete, correct, repeatable

• Very time consuming, expensive, wasteful process

• Certifiable “capabilities”– Type of claim

» Specialty, POS, other– Medicare payer

» Primary, MSP, COB– Additional claim “features”

» Claim level, service level, identifiers, COB, etc.• Overwhelming number of possible permutations!• Is it useful to certify “capabilities” and “features”

by themselves instead of all the permutations?– Is it feasible to do otherwise?

Testing Complexities

Breaking the cycle• First phase: Testing

– Start testing as early as possible. HIPAA IG’s.– Confidential Testing against a neutral third

party test tool, not with my trading partners.– You know where you are. Interpret the results.

• Second phase: Certification– Now I am really ready. Third party verification.– I want the world to know.– I want to start engaging trading partners.

• Third Phase: Business to Business– Repeat for each “companion document” / TP

Certification is:

• Third party verification of the capability to send or receive HIPAA transactions, for specific business purposes, in compliance with the HIPAA Implementation Guides

• Testing• A guarantee that all transactions will be forever

perfect• The assurance that there are no errors in the

transactions

Certification is not:

Valuable Transaction Certification

It’s about production!

• Testing solution must consider all aspects of transaction success

TransactionError Free

Errors

Compliant

Non-Compliant

Relevant

IrrelevantRational

Irrational

Don’t stop here!

Testing in Complex Environment

• Is testing of vendor, billing service, or clearinghouse enough?– Specific business process differences

• Examples: Referring Dr., Secondary payer, Patient relationship to Subscriber

– Entire process must be tested:Data collection

Data formatting Reformatting (if applicable)

Trading partner acceptance

Medicare

MCOs

Commercial

HMOs

BCBS Plans

Medicaid

Beneficiary

Physicians

Labs

Hospitals

Surgicenters

Billing Agents

IDS/LDS

ClearinghousesPPMS Vendors

HIS VendorsVANS

Private NetworksLDS/IDS Initiatives

Telecom Companies

The EnvironmentThe Environment

Clearinghouse

Clearinghouse

VAN VAN

Payer

Payer

Provider

Provider

BillingService

P

P

P

P

P

Simplified Connectivity Model

ConnectivityConnectivity

BeneficiaryBeneficiary ProviderProvider PPMS/HISSystem

PPMS/HISSystem

BillingAgent

BillingAgent

MSOMSO

VANVAN

NationalClearing-

house

NationalClearing-

house

Proprietary/Private

Network

Proprietary/Private

Network

Private

MCO

HMO

PAYORS Blue

Medicare

MedicaidProprietary/Private

Clearinghouse

Proprietary/Private

Clearinghouse

InformationFlow

InformationInformationFlowFlow

Today’s ComplexEDI EnvironmentToday’s ComplexToday’s ComplexEDI EnvironmentEDI Environment

Elements of ProcessData CollectionData FormattingData Re-formattingData Reception

Elements of ProcessData CollectionData FormattingData Re-formattingData Reception

CollectionCollection FormattingFormatting Re-formattingRe-formatting ReceptionReception

• Certify your HIPAA compliance– Indicates capabilities related to requirement to

comply with the HIPAA law– Utilizes “learning curve” time effectively

• Certify the transaction capabilities you can demonstrate– Ensure compliance of complete information

flow – Collection through Reception– Reduce interpretation battles– Reduce amount of trading partner testing

required

Valuable Transaction Certification

Progress not perfection

• Certification of the capability– Certif. for some transactions, not others– Certif. for some Bill Types, not others

• Not all claims will be compliant– Gap filling issues– Implementation guide errors– Legacy data, data errors

• Perfection may be impossible

How are you doing?• EDI implementation of the claim

takes about 6 months– Compare with 2-3 weeks for NSF or

UB92• Waiting for your trading partners?

– Are they waiting for you?• What is the plan to start testing?

– ASCA deadline April 15, 2003• Avoid last minute rush!

One locust is called a grasshopper.

A Plague.A Plague.

Put a few thousand in one place and we call it…

TEST NOW!TEST NOW!