Is Your Practice Ready for HIPAA Transactions,

Code Sets and Testing?

Mark CharlesConsultant, Altarum

David McLauryDirector of Project Development

and Implementation

McLauryD@michigan.gov

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Are You Ready for HIPAA Transactions?• Realize current proprietary formats are going away

• Switch to the HIPAA compliant electronic transaction formats (e.g., 837 v.4010 format) and national code sets

• Begin integrity testingTest your internal systems first with a qualified third party before B2B transaction testing with MDCH

• Start B2B transaction testingGet your 837 v. 4010 claims in for testing with MDCH now

• Begin testing your other HIPAA Transactions in April 16, 2003

• Be HIPAA compliant by October 16, 2003

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HIPAA Mandated Standards

Administrative Simplification

Electronic Data Transmission Data Protection

Transactions Code Sets Identifiers Security Privacy

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What are the Benefits of HIPAA?HIPAA was designed to provide many benefits to both medical offices and patients.Some immediate benefits include:

• Reduces administrative burden and cost for providers and payers

• Creates a national standard for electronic transactions

• Increases speed of financial transactions resulting in faster payment for services

• Simplifies the exchange of information and reduces paperwork

• Provides a more complete picture of healthcare and improves quality

• Improves privacy and security of healthcare information

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HIPAA’s Impact on Health Care ProvidersPost HIPAA, health care providers are more likely to:

• Replace paper (encounter and billing sheets, medical records)with computerized processes

• Be paid electronically and more rapidly

• Use the Internet for healthcare business and information

• Use only national codes

• Use common identifiers (except for patients), and expect these identifiersto be accepted

• Be more security-conscious and expect this of others

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Electronic Transaction BenefitsElectronic transactions provide significant benefits compared with paper transactions:

• EDI streamlines transaction processing. Formats are pre-edited to reduce common errors in claims data entry. This reduces the re-entry of the same data. It also reduces delays caused by scanning and re-keying. EDI also reduces operating costs and increases staff productivity.

• Improves cash forecasting & cash flow. Faster submission of accurate claims results in quicker payments and reduced receivables.

• Provides positive acknowledgement of transaction receipt

• Eliminates the cost of handling and storing paper documents

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The Electronic Transactions

837 Institutional Claims and Encounters

837 Professional Claims and Encounters

837 Dental Claims and Encounters

835 Claim Payment andRemittance Advice

834 Enrollment and Disenrollment

820 Capitation Payment Transaction

276 Claim Status Request

277 Claim Status Response

270 Eligibility Request

271 Eligibility Response

278 Referral Authorization (Request)

278 Referral Authorization (Response)

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Preparing for HIPAA: Michigan’s Uniform Billing ProjectMichigan’s Governor mandated Uniform Billing for the state’s Medicaid Program. The new system simplified the old billing process; adopted standard healthcare industry claim formats and code sets; and was the first step toward HIPAA compliance.The project was initiated in early 2000.

• Replacing all proprietary claim formats with industry standard formats

• Working with affected associations and provider groups to communicate the changes

• Preparing and training thousands of billers and reimbursement specialists for conversion

• Testing claims

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Michigan MedicaidInformation System (MMIS)• The Michigan Department of Community Health (MDCH) is the single state agency

for Medicaid

• MDCH operates its own management information system and makes continual updates to its MMIS

• Converting the MMIS to HIPAA compliance has been a large multi-year project

• MDCH works with outside consultants to ensure MMIS is HIPAA compliant

• MDCH works with outside consultants to educate providers through outreach efforts

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Provider Education and OutreachMDCH is working with your association to ensure successful HIPAA conversion through:

• Education and outreach meetings and seminars with Providers like you

• MDCH web site www.michigan.gov/mdch

• HIPAA Primer at www.healthcare.mivu.org

• www.mihealth.org your link to Michigan Health Resources and complete details about HIPAA Transactions including updated questions & answers

• HIPAA Transactions Brochures

• HIPAA Transactions Newsletters

• Frequently Asked Questions – updated constantly on the MDCH (www.michigan.gov/mdch) and mihealth.org web sites

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MDCH HIPAA Transaction Compliance Plan• Stay in compliance with the HIPAA law and in sync with BCBSM and other large

payers’ (Medicare A and Medicare B) implementation plans

• Strongly encourage providers to send electronic transactions to take advantage of HIPAA’s benefits

• Implement electronic transactions incrementally

October 1, 2003: Began Accepting 837 v. 4010 Dental, Professional and Institutional Claims

January 1, 2003: Began Accepting 837 v. 4010 Encounters from Medicaid Health Plans

Began Accepting 837 v. 4010 Nursing Facility Claims

April 16, 2003: Begin Testing Other HIPAA Transactions

October 16, 2003: Only HIPAA compliant Claims and Transactions accepted

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Switch to the HIPAA Compliant Professional Services Claim Format

Covered Entities Current Claim Format HIPAA Compliant Format

All Professional Services 837 v.3051 will be accepted 837 Professional v.4010Providers (listed below) until 10-16-03 is currently accepted

• Physicians

• Advanced Practice Nurses

• Podiatrists

• Chiropractors

• Independent Clinical Labs

• Independent Private Duty Nurses

• Medical Clinics

• Family Planning Clinics

• Children’s Waiver Service Providers

• Ambulance

• School-based Services

• Maternal/Infant Support Services Providers

• Hearing & Speech Centers

• Optometrists

• Medical Supply/DME Providers

• Orthotists/Prosthetists

• Optical Companies

• Oral Surgeons

• FQHCs/RHCs/IHCs

• Physical Therapists

• CMHSPs and Substance Abuse CAs

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The Mandated Code Sets• CPT and HCPCS Level II--all services billed on professional format

• CDT-Dental Services

• NDC-Drugs

• ICD-9-CM Vol. 3, Codes Inpatient Hospital procedures

• ICD-9-CM Vol. 1 & 2 Diagnosis codes for all providers

National codes will be updated on an annual basis

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What Providers Must Know about Code Sets• MDCH has replaced most local codes.

• Providers will have notice of any outstanding local procedure code conversion to national codes by August 1, 2003. If a code requires a policy change public comment will begin April 1.

• All Medicaid code sets must be utilized by date of service. If the date of service is prior to October 16--and a local code was in effect-- that local code must be used regardless of when the claim is submitted.

• Service rendered on or after October 16 will require standard HIPAA compliant codes.

• Submit your test claims with current codes until MDCH notifies you of changes

• Pay attention to your national code set group and MDCH for additional guidance.

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Re: Code Sets —Paper and Electronic Billers Need:• To PURCHASE your correct national code set manual

• MDCH Medicaid Billing manual with Chapter IV for your provider type

• MDCH numbered letters and bulletins for your provider type

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Testing Electronic TransactionsStage 1: System Integrity Testing

• MDCH recommends providers successfully complete third party testing from an independent service (like Foresight’s HIPAA Validator) prior to transaction (B2B) testing to confirm HIPAA compliance. Be advised that successful Integrity testing does not mean that your files meet all MDCH rules for Transaction (B2B) testing.

Stage 2: Transaction (B2B) Testing

• Transaction testing determines if trading partners can successfully transmit and receive HIPAA compliant transactions. Providers should submit a small but relevant sample of transactions to payers (i.e., MDCH, BCBSM) to assure business to business file compatibility.

Note:

• Instructions for the Foresight HIPAA Validator and for submitting test claims to MDCH can be found at www.michigan.gov/mdch and www.mihealth.org.

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Resources Needed Prior to Testing Electronic Transactions• National Implementation Guides and Clarification Documents

www.wpc-edi.com/hipaa/hipaa_40.asp

• Michigan Medicaid Clarification Documentswww.michigan.gov/mdch (click on Providers, Information for Medicaid Providers)

• MDCH Electronic Submission Manual www.michigan.gov/mdch (click on Providers, Information for Medicaid Providers)

Code Set Manuals for your Professional Provider Type

• CPT:www.ama-assn.org

• HCPCS: cms.hhs.gov/medicare/hcpcs/default.asp

• ICD-9:www.cdc.gov/nchs/datawh/ftpserv/ftpicd9/ftpicd9.htm

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Provider Checklist for 2003• Submit Electronic Transactions and Take Advantage of HIPAA’s Benefits

• Partner with a HIPAA Compliant Electronic Biller, Practice Management Vendor or Clearinghouse, or

• Purchase a HIPAA Compliant Software Billing Package

• Switch to the New Standard Formats and Code Sets

• Begin Testing Internal Systems First for Integrity and Syntax to Achieve HIPAA Compliance

• Begin Testing B2B Transactions with Payers to Assure Compatibility with Your System

• Start Testing 837 v. 4010 Claims Now

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Provider Checklist for 2003• Begin Testing All Other Transactions April 16, 2003

• Pay Special Attention to Your National Code Set Group and MDCH for Guidance

• Submit Test Claims with Current Codes until Notified Otherwise

• Purchase Your Correct Code Set Manual

• Download Your MDCH Provider Type Medicaid Billing Manual Chapter IV

• Review MDCH’s Numbered Letters and Bulletins for Your Provider Type

• Check with Other payers for Details about their HIPAA Implementation Plans, Key Dates, and Testing Schedules

• Be HIPAA Compliant by October 16, 2003

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For More InformationContact the Michigan Department of Community Health

• MDCH www.michigan.gov/mdch—official policy and information for HIPAA Transactions

• MDCH Provider Hotline 1-800-292-2550

• MDCH providersupport@michigan.gov

www.mihealth.org — your link to Michigan Health Resources and complete details about HIPAA Transactions including updated questions & answers

HIPAA Primer: www.healthcare.mivu.org

Slide Presentation Last Updated January 28, 2003