Electronic filing rule could delay payments

Physician groups foresee problems with implementation of this latest HIPAA requirement and are pushing for contingency plans.

By Joel B. Finkelstein, amednews staff. July 21, 2003.

Washington -- Federal electronic standards are headed for a "train wreck" that could mean delayed reimbursement, and physicians should prepare for the worst, according to health care consultants and medical groups.

"This industry-level convergence of unachievable goals and unanticipated consequences threatens to shake the fiscal foundation of the health care industry, which undergirds one-seventh of the U.S. economy," Martin Jensen wrote in an analysis of the coming standards. Jensen is a consultant with the APTi Group Inc., a project management company in Tulsa, Okla.

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Topic: HIPAA

Physicians and others covered by the standards must be in compliance by Oct. 16. The Dept. of Health and Human Services has offered little guidance for implementing this next hurdle mandated by the Health Insurance Portability and Accountability Act, Jensen said.

This has left physicians unclear about their roles in the implementation process, said Bud Meadows, vice president of sales at Medical Manager Health Systems, part of WebMD's claims clearinghouse services.

Consequently, physicians have had to wait for vendors and health plans to develop implementation plans, a process that was delayed by the relatively late publishing of final rules, said Robert Tennant, a health informatics specialist at the Medical Group Management Assn.

Jensen and the others are worried that confusion over the rules will drive many physicians to convert wholesale back to paper claims, clogging up the reimbursement process.

Oct. 16 is the HIPAA deadline for filing claims electronically.

Other problems may further delay claims processing, they said. For example, the lack of implementation guidance from HHS could lead to differing interpretations of compliance.

A physician's assessment of what constitutes a compliant claim may not meet a plan's interpretation. Therefore, even for those physicians who are ready, the possibility exists that their claims will be rejected by health plans, Tennant said.

Some plans are preparing for that possibility.

"We're going to be watching the metrics on a daily basis," said Judy Stocker, vice president of business system administration for CareFirst of Maryland.

Peaks in rejected claims or troughs in practice reimbursement will notify the plan that there is a problem, she said.

There are three basic components to implementation: format, syntax and data content. The first two are easy enough to agree on, but the last one poses a problem.

In order to be processed, the standardized form requires input of certain information, even if those data are not needed by the plan and may not be commonly collected by physicians' offices. This poses a problem for claims processing and physician payment. CareFirst has been identifying specific data elements that fall into this category and setting default variables, which its clearinghouse will input if the physician does not provide the information.

However, Stocker said, determining what data physicians are and are not capable of collecting is difficult, if not impossible.

Ready or not

Given these claims processing and payment uncertainties, physicians should be prepared with their own contingency plans, said Tennant.

If the practice does not have a rainy day fund, a line of credit can help deal with any interruption in revenue or the need to upgrade office computer or software systems, he said.

The standardized form requires data physicians don't have.

For practices that find themselves in a bind, one option would be to file claims through a clearinghouse. But these services, if ready in time, may reach capacity in the 11th hour, experts warned.

Physicians with low-volume practices also could fall back on direct-data-entry clearinghouses, which would allow them to file claims with online forms.

However, for physicians who are prepared and those who are not, contingency plans may not be enough.

The question remains "what will the government do to prevent this train wreck?" Tennant said.

Asking the feds for help

MGMA, along with the American Medical Association and 20 specialty societies, recently sent a letter to HHS Secretary Tommy Thompson urging the department to consider some contingency plans.

"Relatively few providers have successfully completed external testing," the letter stated. "Providers that have attempted to test are finding the process difficult and confusing. The federal government needs to take immediate steps to assist the industry in avoiding any cash flow disruptions."

In another letter to Thompson, the National Committee on Vital and Health Statistics explained its finding that a variety of physician practices, plans and other industry members will not be in compliance in time.

"There was overall agreement that the federal government should permit operational compliance, as opposed to strict technical compliance, for a limited time following the Oct. 16 deadline," the committee wrote.

While the panel did not recommend the deadline be extended, it advised flexibility in enforcing the rules during the transition period.

HHS has not said how it will deal with noncompliant physicians after the implementation date. Industry experts conjecture that this silence has two possible interpretations.

On one hand, the department might not want to show any weakness that could encourage a more relaxed view among physicians and other covered entities toward compliance on deadline.

Or, noncompliance will be met with nonpayment after Oct. 16.