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By Celeste Daye and Sou Chon Young Editor’s note: Celeste Daye is Director Up to now, whoever had the most “muscle” of Patient Accounting with Dana Farber had the ability to make others conform to Cancer Institute, and Sou Chon Young their “language,” by customizing their system, building interfaces or creating new is a Health Care Industries Consultant with PricewaterhouseCoopers. work. Rather then utilizing technology to Mr. Young may be reached by e-mail improve processes, workflows were created to at sou.chon.young@us.pwc.com accommodate technology. It was January 2003 when the HIPAA has given the industry the opportunities not only to review our workflows but Health Insurance Portability and Accountability Act (HIPAA) 835 also to shave off non-value added (NVA) Transaction Code Set (TCS) project at steps, which will reduce costs and improve Dana Farber Cancer Institute (DFCI) efficiency. DFCI saw this opportunity and started; it was to be a short three- to sixmonth engagement working to configure a didn’t anticipate was the complexity involved wanted to capitalize on HIPAA. What we few new modules in the legacy patient with becoming compliant and adopting the accounting system and bring the highest HIPAA 835 TCS, as well as the additional revenue payors live with the 835 HIPAA1 opportunities that the 835 would provide. Transaction Code Set. Two years later we are finally live with all of these major Experience payors and there is still plenty of work DFCI’s legacy patient accounting system had related to the 835 TCS. come out with a few new modules and functionality such as the EDI Toolkit, Line Item October 2002 was the mandated live date Payment Posting, and Rejection Subsystem, (October 2003 if you filed for an extension) which needed to be configured, tested, and set by the Department of Health and moved into live. At the same time, some payors had their own implementation guides in Human Services, but most of the industry is still not using the 835 TCS. addition to the ANSI X12N 835 Implementation Guide (IG), which needed Intent to be taken into consideration when configuring the legacy patient accounting system. One of the goals of HIPAA was to simplify the health care business. What seemed like Most of this work seemed straightforward common sense, to simplify communication but given all the different components, it was within the health care industry, has finally only a matter of time before we ran into been put down into a plan: standardization. some significant roadblocks. Negative experiences Patient Accounting System Vendor We quickly realized we had a challenge ahead of us when the vendor documentation was incomplete or incorrect, functionality was not working properly and others were changing as we tested, and some major components of the 835 files were not incorporated into the system. The vendor had unknowingly made us a beta site; and after several conference calls with the vendor’s senior management, a support team was dedicated to DFCI to address some of the problems we were encountering. Despite all of this, the vendor was one of the early adopters of the HIPAA TCS and had sophisticated systems in place. Payors Like most providers, we scheduled Medicare first on the list for these reasons: ■ Medicare is the biggest payor with the highest revenue in DFCI’s book of business ■ Medicare already had the most experience using the standard code sets, which are part of the ANSI X12N ■ There were threats and fines for those who did not adopt the TCS (specifically the 837), so we decided to test in parallel the two TCS Again, we quickly realized we had a challenge ahead of us. For one, there was little or no response from their EDI support team; we were on our own. After much analysis and testing we were able to handle some of the nuances Medicare had, such as cost outliers, PLB interpretation, and using certain reason codes inconsistently (i.e., to report both a contractual allowance in some instances and then denials in others). Now, a system can be configured for binary decisions (yes/no) but usually cannot “think” without additional logic and parameters created and set into place; so we began a discussion about a “pre-processor” January 2006 34 Health Care Compliance Association • 888-580-8373 • www.hcca-info.org
that would provide the intelligence and handle some of these non-standard situations. Each payor we activated had its own nuances and idiosyncrasies. Issues ranged from limitations in the payors’ legacy system that led to difficulty translating proprietary codes into the HIPAA compliant codes or taking codes from primary payors and passing them through, to having different interpretations of the IG, all of which we had to overcome. The ship had set sail and there was no turning back; we had to make things work. We are still challenged by the multiple interpretations of the same claim adjustment reason code (CARC), the inconsistency in which an individual payor may report the frequency in which it changes its files. And our inability to recognize when changes are being made makes the work extremely challenging. Positive experiences by stakeholder To help develop collaboration between payors and providers Many of us know that with anything new, several unforeseen issues arise—what some might call opportunities. For example, the issues encountered when testing with payors created an opportunity to work collaboratively with some local payors. Subcommittees were established, which provided a forum for addressing issues with those working hands on. Not only were new relationships formed and old ones strengthened, but also trust increased and (silos) and walls began to come down. Historically, payors and providers were seen as being on opposing sides, but much less so now, at least not from the EDI perspective. For example, when DFCI encountered an issue with the local Blue Cross Blue Shield (BCBS) 835 file, we worked with a representative and the company’s EDI team, which held weekly meetings for local providers to understand issues providers were having. They not only listened but they also worked with us to come up with a solution. Several months later they were able to come through and shortly afterwards we flipped the switch and converted from the old proprietary format to the 835 with them. Harvard Pilgrim Health Plan also held weekly calls for users/testers to discuss issues, to ask questions, and to share experiences with one another. These types of calls also helped form relationships among the provider community. As the industry moved toward the new EDI world, it forced processes to be reviewed in order to integrate EDI, which provided the opportunity to improve processes and remove NVA steps. Denial management Another opportunity that presented itself in implementing the 835 was the ability to create a denial management program. Since payors are now required to use the same denial codes (CARC), denial reports could be generated for all payors that DFCI posts with the 835 file. PricewaterhouseCoopers has such a product, TurboDM, utilizing the 835 TCS to standardize denial reports and work-lists. Prior to HIPAA, DFCI had denial reports but crosswalks had to be built for each payor’s proprietary denial codes. These lists of codes were not only cumbersome to maintain but they required additional manual intervention to integrate each payor into one standard report. Performance improvement When analyzing 835 files prior to go live, several other issues were uncovered. It ranged from contracting, to claim creation and edits, to coding, and ran the whole gamut as far as the revenue cycle was concerned. The 835 is full of information and if tapped into can reveal so many areas for performance improvement, specifically surrounding the revenue cycle. Some examples are: ■ Coding—HCPC code and modifiers ■ Payment—DRG and APC payments (depending on if payor is sending back information) ■ Contracting: – Allowed and contractual amounts – Bundling – High-level payment analysis ■ Billing In addition, we had hoped customized processors built to handle payor specific file/tape formats, prior to HIPAA TCS, can now be sunset, which will reduce maintenance for the IT staff. The return on investment (ROI) is large, both from a tangible and intangible prospective. Short-term ROI involves reducing full-time employee’s (FTE’s) dedicated to manual cash and denial posting; automation of denial workflows is now a possibility. Now add to that compliance benefits such as reduced cost for archiving (paper versus electronic) and ease of locating an electronic remittance versus a paper remittance advice. The list goes on— the benefits are endless as we move into the EDI world. Future The journey has just begun. As the industry works toward tightening the implementation guides (such as version 4050 and 5010) and further collaboration, we will fully realize the simplification intended when first mandated. In addition, an entity or board will need to surface to govern and lead the rest of the industry (such as HHS, WEDI, etc.) and impose penalties on those who do not work Continued on page 37 Health Care Compliance Association • 888-580-8373 • www.hcca-info.org January 2006 35
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Page 5 and 6: Join us for the following HCCA Audi
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