Administrative Simplification

The HIPAA X12 835 remittance advice standard transaction must be reported to the highest specificity. Fields that are currently voluntary, such as the “allowed amount” (the contracted rate between the physician and payer), “class of contract” (specification of the product type) and “date of claim receipt” fields, should all be made mandatory, in order to move toward the complete automation of the health care billing and payment process. Additionally, the adoption of operational guidelines and instructions for electronic remittance advice code sets—that is, the claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs)—along with the requirement for full specificity and explanations of claim adjustments and denials via standard CARCs and RARCs is imperative.

The ASC X12 271 Health Care Eligibility Benefit Response standard transaction must be reported to the highest specificity and must be made binding. Currently voluntary fields should be made mandatory: (1) Underlying contracted fee schedule (the name of the entity that holds the underlying agreement with the physician (i.e., provider network) and the name of the specific product (e.g., Medicare Advantage PPO or commercial PPO product); (2) claim benefit status, indicating whether each service is in-network or out-of-network; (3) patient responsibility, remaining deductible and co-insurance for each specific procedure or service; and (4) the entity responsible for payment of the patient’s covered benefit.

The AMA also recommends that “health claims acknowledgement” be added to the list of HIPAA standard transactions, and specify that the standard shall be the ASC X12 277 Claim Status Response or its successor.  Further, this response which must be sent on an unsolicited basis at each of the following points in the claims adjudication process: (1) Electronic claim receipt; (2) acceptance/rejection of electronic claim for adjudication; (3) electronic claim forwarded to another entity or returned as “unprocessable”; and (4) electronic claim pended (in process, in review, requested information [waiting]).  The benefits of such transactions are clear when considering the consumer experience in the package delivery industry.  An individual can mail a package from anywhere in the country (indeed, the world) to any destination and track that package’s status at each point along its journey.  A tracking number allows consumers to check—in real time—when the package was placed on the loading dock, when it was put on the delivery vehicle, where it has stopped along the way, and, ultimately, when it was delivered to the recipient.  The recipient is even able to acknowledge receipt of the item with a real-time electronic signature.  The AMA, along with multiple stakeholders throughout the health care industry, believe that comparable efficiencies are achievable in the claims management revenue cycle through using and enhancing existing industry tools. 

The AMA supports MGMA’s recommendation to promulgate a final rule for the Electronic Claim Attachment standard by December 31, 2009.  The  lack of a standard format and requirements for electronic claim attachments contributes to higher administrative costs and complexity by increasing variation among attachment formats, increasing rework and resubmission of pended claims, and contributing to both health plan and vendor reluctance to support such standardized, electronic attachments, impeding provider adoption.  A Final Rule should not mandate the use of electronic claim attachments or allow health plans to force physicians to implement the standard transactions.  Physicians and the provider community must be able to implement the electronic transaction on a voluntary basis to meet their business needs.