In new era of e-health, feds take a step to cutting costs through new sets for codes
October 1, 2000 6 minutes read
In new era of e-health, feds take a step to cutting costs through new sets for codes
Not much change from the proposed rule
The first standard regarding electronic health information has finally arrived — and health information management (HIM) professionals should be pleased with the code sets.
The 1996 Health Insurance Portability and Accountabil-ity Act (HIPAA) mandated that the Department of Health and Human Services (HHS) in Washington, DC, adopt standards that would help reduce the costs of administrative and financial transactions in the health care industry. The first standard, Transactions and Code Sets, was published in the Federal Register on Aug. 17.1 The effective date of this rule is Oct. 16.
"The final rule is pretty close to the proposed rule and didn’t contain any big surprises," says Sue Prophet, RHIA, CCS, director for coding policy and compliance at the Chicago-based American Health Information Management Association (AHIMA). "On the whole, I would say we were pleased with it."
Specifically, Prophet says she was pleased to see that the official coding guidelines for ICD (International Classification of Diseases)-9-CM were included as part of a standard code set. "One of the biggest complaints we hear from our members is how payers aren’t following the official coding rules and how they want members to code things incorrectly. This causes all kinds of problems with inconsistency and noncomparability of data."
Here is how the final rule clarifies the use of the standard code sets:
• ICD-9-CM, Volumes 1 and 2 (including the Official ICD-9-CM Guidelines for Coding and Reporting), is the required code set for diseases, injuries, impairments, other health problems and their manifestations, and causes of injury, disease, impairment, or other health problems.
• ICD-9-CM Volume 3 Procedures (including the Official ICD-9-CM Guidelines for Coding and Reporting) is the required code set for the following procedures or other actions taken for diseases, injuries, and impairments on hospital inpatients reported by hospitals: prevention, diagnosis, treatment, and management.
• National Drug Council is the required code set for drugs and biologics.
• Code on Dental Procedures and Nomencla-ture is the code set for dental services.
• The combination of HCPCS (HCFA common procedure coding system) and CPT-4 (common procedure terminology) is the required code set for physician services and other health care services.
• HCPCS is the required code set for other substances, equipment, supplies, and other items used in health care services.
Prophet says she was also glad to see the rule specify the versions of the codes. "Another big complaint from our members is that some payers don’t necessarily update the code sets in their computer systems; they want providers to either continue to use the [older code] sets for months after they were supposed to have been effective with the new codes or, in some cases, use whatever code set was in effect two or three years ago rather than the version that is in existence today.
"This causes all types of problems when you are dealing with different payers that want different versions and that are taking different codes," she continues.
Prophet recommends that HIM professionals read and understand the final rule. Then, they should consider the interactions and issues they have with their payers. "One issue to consider is that CPT will be the standard procedural coding system for noninpatient hospitals services. There are some payers that have been requiring ICD-9-CM procedure codes for facility-based outpatient services. That will obviously be a change."
What else about the rule?
Chris Wierz, vice president and HIPAA practice leader of Phoenix Health Systems in Montgomery Village, MD, examined the final HIPAA standard and detailed some of the differences between the proposed and final rules. Here is what she found:
• Elimination of the on-line interactive transaction exception. In the proposed rule, interactions between server and browser, direct data entry, and fax back were exempt from the standards. In the final rule, those transmissions must now comply with the data content, but not with the data format. For example, with dumb terminals, where the provider directly keys data into a health plan’s computer, the format need not comply with the standard, but the data elements or content must comply. "The final rule makes it clear that a health plan may not offer an incentive for a health care provider to conduct a transaction under the direct data entry exception," she says.
• Elimination of the exception for standard transactions within a corporate entity. An exception in the proposed rule allowed nonstandard transactions to be used within a corporate entity, to minimize the burden of change. Under the final rule, covered entities must use a standard transaction when transmitting to another covered entity, whether the transmission is inside or outside the entity.
To help determine when entities must use standard transactions, descriptions of each transaction are now clarified in the final rule. In addition, the preamble in the final rule provides examples of when a standard transaction must be used. However, confusion remains on this issue and further clarification is being sought.
• Clarification of applicability to health plans. The proposed rule was unclear on whether a health plan must comply with a standard if it doesn’t currently support that standard electronically. The final rule requires a health plan to accept and/or send a standard transaction that it conducts but does not currently support electronically. Therefore, a health plan must be able to electronically transmit a standard that it currently only transmits on paper. Health plans may still choose to use a clearinghouse in order to comply.
• Clarification of applicability to paper transactions and noncovered entities. Many comments suggested that the final rule also cover paper transactions. The decision was made not to include them at this point since many paper forms do not support the data content required. Also, HHS indicates that applying the standards to both paper and electronic transmission would not support HIPAA’s overall objective to encourage standard electronic transmission.
Several commenters recommended that the standards should apply to employers/sponsors who use electronic data interchange because of their major role in health care administration. HHS has responded that since HIPAA doesn’t specifically require employers/sponsors to use the transaction standards, HHS will not apply the regulation to them. However, health plans may negotiate trading partner agreements with employers and sponsors that require the use of standard transactions.
• Clarification of small health plan definition. The proposed rule defined a small health plan as a health plan with fewer than 50 participants. The final rule uses the Small Business Administration’s size standards, specifying a small health plan as one with annual receipts totaling less than $5 million.
• Addition of case management to regulation. In the proposed rule, case management was considered an atypical service and therefore not subject to the standards. The final rule reverses this exception. Case management is now considered a health care service since it is directly related to the health of an individual and furnished by health care providers.
• Addition of several definitions. Several new definitions are included to clarify applicability and scope of the rule. These include trading partner agreement, covered entity, work force, business associate, and designated standard maintenance organization.
• Addition of suggested implementation time lines. Time line suggestions for implementation are included in the preamble. Given the complex implementation sequencing issues that are anticipated, health plans are encouraged not to require providers to use the standards during the first year after the final rule’s effective date. Health plans are also encouraged to give providers at least six months’ notice before requiring a standard transaction.
What remains unresolved?
Wierz also says that a number of issues remain unresolved in the final rule. These include:
• Pre-emption by states. The proposed rules did not offer pre-emption requirements. The final rule indicates that the pre-emption issue will be resolved in the context of the HIPAA Privacy final rule. Amendments to the Transactions and Code Sets rule will also be made at that time.
• Compliance assessment and enforcement. The issues of compliance, timing, appeals, self-assessment or certification demonstrating compliance will be addressed in an enforcement Notice of Proposed Rulemaking, to be published next year.
• Interaction with privacy. A statement concerning the importance of developing standards to protect the privacy of individually identifiable health information is included. HHS states that if the privacy standards are substantially delayed, or if Congress fails to adopt comprehensive privacy legislation, it would seriously consider suspending application of the transaction standards or withdrawing the rule.
"It appears that HHS is concerned that the public may view this rule as a new example of the lack of privacy of their health information," she says. "HHS may have re-emphasized the importance of privacy legislation to encourage public support and successful implementation of this first of the long-awaited final HIPAA rules."
Reference
1. 65 Fed Reg 50,311 (Aug. 17, 2000).
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