The long-anticipated final rule for healthcare electronic transactions and code sets was released on Thursday, August 17, 2000. This final rule (Rule) is the first of several anticipated for release by the Secretary of the Department of Health and Human Services (DHHS) over the next four months and covering the administrative simplification aspects of the Health Insurance Portability and Accountability Act of 1996 (HIPAA)-Public Law 104-191.
This analysis will cover the rule itself, any expected impacts on HIM, and resources for further information, training, and implementation. HIM professionals should note that fundamentally the Rule adopts the electronic transaction standards and codes published in the proposed rule published in May1998. How the rule affects on HIM functions, and how it responds to AHIMA's previous comments, is covered below. There are several changes and clarifications from the 1998 publication, and while this analysis highlights many of the pertinent changes, reading this summary is not a replacement for a close review of the entire rule.
The analysis includes:
Entitled Health Insurance Reform: Standards for Electronic Transactions, the Rule can be found in the Federal Register, Vol. 65, No. 160, Pages 50312-50372. A second accompanying rule related to designated standards maintenance organizations can be found on page 50373.
Copies of the Federal Register can be purchased individually from the Superintendent of Documents; however, it takes several weeks to receive such a copy1. A much easier way to obtain a copy is to go to the Federal Register and Government Printing Office Web Site at www.access.gpo.gov/su_docs/fedreg/a000817c.html. Downloading the Rule requires the use of Acrobat Software, which is available for free at the GPO Web site and is safe to use.
The Rule also contains a number of other Web sites that must be accessed to implement these regulations. These Web sites, and other resources to help understand the Rule and its standards, are included below.
While this final rule was printed on August 17, it does not become effective until October 16, 2000. Given the dollar impact of the regulation on the entire healthcare community, Congress technically can rescind its approval. This is not expected. The Rule calls for two separate dates of compliance, the earliest being October 16, 2002. As noted, there are be other proposed and final rules associated with HIPAA. According to DHHS staff, these rules should be released before the end of the year with a few exceptions, noted in the Rule and below.
One caveat appeared in the preamble of the Rule. The DHHS Secretary (secretary) indicates (65FR50365)2 that: "If the privacy standards are substantially delayed, or if Congress fails to adopt comprehensive and effective privacy standards that supersede the standards we (DHHS) are developing, we would seriously consider suspending the application of the transaction standards or taking action to withdraw this rule." DHHS staff members have told AHIMA and others that they do not believe the secretary would take such a suspension action. AHIMA will address its concerns on this issue with the secretary.
Application to Specific Entities
Essentially, the rule applies to:
Each of the entities above is defined in the Rule and being defined (identified or not identified), then determines when and how the transactions are to be used or accepted. Entities not covered in the Rule are still free, and are encouraged several times in the Rule's preamble, to use the standard electronic transactions.
The Rule adds a number of new and changed definitions (65FR50365) to clarify terms and situations not covered in the proposed rule. Of particular interest to HIM professionals, the Rule defines:
The functional transactions covered in the Rule include (65FR50370):
Each of these functional transactions is defined in the Rule (§§162.1101-162.1802). These definitions are extremely important, because they delineate who is and when participation becomes covered under the Rule.
The Rule also defines the specific standards that can be used for each transaction (§§162.1101-162.1802), the standards-setting organization whose standard must be use, and (65FR50368 § 162.920) where implementation specifications can be obtained.
HIPAA provides for two additional transactions, First Report of Injury and Attachments. The secretary is also authorized to establish additional standards, and the National Committee for Vital and Health Statistics (NCVHS), the secretary's advisor for HIPAA administrative simplification, has recently released a report recommending transactions covering clinical activities. The First Report of Injury was not finalized because the X12 did not have an implementation guide available in time for the final notice. HIPAA provides for the secretary to have an extra year to proclaim rules for Attachments.
The secretary has "adopted" electronic transaction standards that have been developed by Standard Setting Organizations. In effect, the secretary's rules provide for a standard use or way of using these electronic transaction standards developed by nongovernmental groups. DHHS is quick to point out that this is the first legislation that requires the government to "adopt" such standards. Organizations named in these initial rules include the Accredited Standards Committee X12N, known often as the X12 or the ASC X12 ("N" denotes the insurance committee), and the National Council for Prescription Drug Programs (NCPDP). Implementation guides to facilitate these electronic transaction standards are enumerated by the secretary and include the Washington Publishing Company for ASC X12N and the NCPDP.
The secretary's transactions, and the transaction standards of the X12N and NCPDP, also use code sets including medical data code sets (65FR50370);
The Official ICD-9-CM Guidelines for Coding and Reporting are named as a required component of the ICD-9-CM code set, and, therefore, adherence to those guidelines is required in order to be in compliance with this rule. DHHS acknowledges that standardization of code set guidelines is highly desirable and beneficial, but recognizes that the operational guidelines for some code sets are more complete than others, objective and operational definitions for most codes are not available, and the level of details varies widely from code to code. Thus, the rule does not specify adherence to guideline for code sets other than ICD-9-CM in this rule (65FR50323).
The Rule makes it clear that the use of ICD-9-CM procedure codes is restricted to the reporting of inpatient procedures by hospitals and that the combination of CPT and HCPCS level 2 codes will be used for physician and other healthcare services (also see 65FR50325). There is no clear commitment to resolve duplication and overlap between CPT and HCPCS level 2 codes (for example, HCFA's G codes that duplicate services described by CPT codes).
Local HCPCS codes (level 3) will be eliminated. In instances where no national CPT or HCPCS level 2 code exists to replace the use of a local code, payers may request the establishment of a national code. However, for those local codes designed to describe health-plan-specific information rather than identify an item or service, a national code will not be established. Such information can not be embedded in the national codes, and must be obtained through another mechanism (65FR50330).
A common schedule for implementing new versions of code sets is not established by this rule. Some of the adopted standard code sets are updated annually, such as ICD-9-CM and CPT, and others. DHHS notes that different federal laws mandate the implementation of annual updates to ICD-9-CM on October 1, and annual updates to CPT on January 1, and that changing either of these dates would require congressional action.
"Maintenance" is clearly differentiated from "modification" of a code set. "Maintenance" encompasses the activities necessary to support the use of a standard, including enhancements, additions, or deletions to a code set. Public comment and notification are required, as part of the maintenance process, but regulatory action would not be required. Changes that are substantial enough to justify publication of a new version of an implementation specification are considered to be "modifications," and would require regulatory action. Therefore, adoption of ICD-10-CM would require regulatory action, but the annual ICD-9-CM and CPT revisions would not (65FR50322).
In the Rules preamble, DHHS notes its concern and trepidation raised by others in the healthcare industry, regarding the processes and openness of the groups who oversee the decisions to add, delete, or modify code sets. DHHS indicates it has addressed these concerns to these groups and expects changes by the time the Rule is implemented.
Other code sets currently used in claims transactions, such as the UB-92 and the HCFA 1500, are indirectly acknowledged in the Rule. At this time, the Designated Standards Maintenance Organizations (DSMO) named in a separate rule (65FR50373), will be the maintainers of these code sets, subject to the maintenance and modification requirements previously noted. Similar to the concerns addressed about the processes and openness of the medical coding groups, the Rule's preamble also address these same concerns to these DSMOs.
The Rule makes it quite clear that business relationships are affected by these rules and that covered entities cannot avoid the requirements of the Rule by subcontracting any of the covered electronic transactions. On the other hand, covered entities can use subcontracting-generally through clearinghouses-to meet the Rule's requirements. Institutions, such as providers that outsource their claims processing, are required to ensure the subcontractor meets these requirements or be subject to HIPAA penalties. It is fully expected that the Security and Privacy HIPAA rules will further define the responsibilities associated with subcontracting.
The Rule also refuses to classify a corporate entity for purposes of defining whether or not an electronic transaction must meet the standard. Essentially, HCFA states that with the complexity of the healthcare industry and the constant shifting of entities, it would be impossible to define a corporate entity and determine when the standards must apply. Therefore, for the most part, the requirement rests on the actual electronic transaction being performed, and not necessarily who is performing it.
HIPAA was intended to bring simplification and uniformity to the healthcare "claims" process. The Rule now begins to define how this will work.
The Rule essentially states that covered health plans must accept standard electronic transactions. The Rule further protects providers such that (65FR50369):
Reaction to AHIMA's Previous Comments
AHIMA responded to the original May 1998 proposed rule on transactions and code sets with a number of comments. DHHS responded to these comments directly and indirectly in this Rule:
The Rule specifically addresses the required and designated uses of the different code sets (see above). ICD-9-CM, Volume 3, covering procedure coding, must only be used for hospital inpatient reporting. HCPCS level 2 codes would be required for reporting services in skilled nursing facilities. SNF services are included in "other healthcare services" under the explanation of CPT-4 and HCPCS (§162.1002, 65FR50370).
Administrative simplification and uniformity have been a goal of the healthcare industry for several decades. In the early 90s, industry leaders decided that this goal could only be achieved in if the various sectors of the industry were mandated to use uniform transactions, data definitions and data sets, and so forth. Efforts begun in 1993 finally paid off with the inclusion of administrative simplification language being in legislation covering health insurance portability and fraud and abuse; the Health Insurance Portability and Accountability Act of 1996, or HIPAA. While HIPAA included many of the technical aspects requested by the healthcare industry, it also incorporated the desires of members of Congress that altered the industry's earlier concepts.
The original HIPAA legislative requirements included not only the transactions and codes-included in the August 17 rule-but also identifiers, coordination of benefits rules, security standards, privacy standards, and penalties for not using the standards. HIPAA required that the rules be issued 18 months after the law was signed (August 21, 1996), with implementation to occur two to three years after that. For a variety of reasons, including high industry and public interest, passage of the Balanced Budget Act of 1997, and the Y2K occurrence, the secretary did not release the first proposed rule until May 1998. It is this first proposed rule that is essentially finalized with the release of the August 17 Final Rules.
The rule notes a number of Web sites for providers and plans to utilize in implementing and using the standards and code sets. These include:
ICD-9-CM (Volumes 1 and 2)
http://www.cdc.gov/nchs/about/otheract/icd9/maint/maint.htm
ICD-9-CM (Volume 3)
http://www.hcfa.gov/medicare/icd9cm.htm
CPT-4
http://www.ama-assn.org
HCPCS
http://www.hcfa.gov/medicare/hcpcs.htm
Code on Dental Procedures and Nomenclature
http://www.ada.org/p&s/benefits/cdtguide.html#guidelines
NCPDP
http://www.ncpdp.org
Washington Publishing Company (implementation guides for X12N standards)
http://wpc-edi.com
DHHS Administrative Simplification Web site
http://aspe.os.dhhs.gov/admnsimp/
Data Interchange Standards Association (Secretariat of the X12N)
http://www.disa.org
Workgroup on EDI (group working on HIPAA transaction implementation)
http://www.wedi.org
National Uniform Billing Committee (UB-92)
http://www.nubc.org
National Uniform Claims Committee (HCFA 1500)
http://www.nucc.org
Medicare EDI Information
http://www.hcfa.gov/Medicare/edi/edi.htm
ASTM HIPAA Information
ASTM
Committee E31 on Healthcare Informatics
Click here for link to AHIMA resources.
Notes