X12 HIPAA Recommendations Proof of Concept and Pilot Program Update

X12 convened a group inclusive of X12 Licensing Partners to assess and validate the enhancements supported in the 008020 version of the Health Care Claims and Payments transactions. Their analysis and prototype testing covered the 837 Professional, 837 Institutional, 837 Dental and 835 Remittance Advice implementation guides through the “Proof of Concept” (PoC) process. Thousands of updates were made to the X12 implementation guides with the goal to yield better health care for the patient, clearer regulation for the industry, more transparent payments to the providers, and more thorough information for the benefit of all parties. The PoC’s aim has been and remains to vet the new version of these transaction sets demonstrating that functionality available in the currently mandated version of the implementation guides will still function efficiently in the corresponding 008020 version, the expected benefits are achievable, and the high-level implementation estimates are reasonably accurate. Referencing these goals, the below table summarizes the results.

Using X12 supplied technical materials, multiple PoC participants have independently developed 008020 parsers that enabled them to develop, share and test 008020 files. The group also validated the transactions for at least standard & guide syntax, balancing, and semantics (formerly known as WEDI SNIP Types 1, 2, 3 & 4). They’ve developed a library of 008020 feature scenarios demonstrating different beneficial features specific to 008020 transactions, proving that the 008020 benefits are achievable. The group also converted every published 005010 X12 business scenario example from examples.X12.org into an 008020-equivalent to verify migratory success.

Enhancements and Benefits

X12 provided a list of important enhancements made to the current HIPAA mandated transactions that are included in the 008020 version of the three 837s and the 835 implementation guides as an appendix in its recommendation letter.

Additionally, X12 provided a categorized list of changes between the versions of the respective implementation guides that can be filtered and sorted at recommendations.X12.org. There are also links to all of the related publicly-available information on the respective X12 News & Events page. The list of changes between versions can be viewed after signing in with a free X12|ID.

A high-level summary of the key benefits confirmed by the PoC group include:

• Standardized forward balance and overpayment recovery process
• Ability to re-associate recovery amount to a specific claim to reduce manual processes
• More granular source of payment codes - more transparency in how claims were adjudicated
• Enhanced CoB reporting of adjustments for claims involving government programs
• Ability to report industry remark codes not supported by existing RARCs
• Ability to identify atypical providers who lack NPIs
• Added ability to report tooth information for dental claims
• Added Support for Device Identifiers
• Support the association of Adjustment Reason Codes and Remark Codes and better synchronization with the Claim Payment/Advice
• Added Health Care Remark Codes to support remark codes not associated with a claim support for CoB Allowed amounts
• Added support for Factoring Agents

The PoC specifically focuses on quantitative enhancements where the benefits are objectively verified with transactional data - EDI files - exchanged between simulated trading partners. It should be noted that in addition to the quantitative enhancements, there are thousands of qualitative enhancements that the PoC participants have agreed will increase clarity and therefore, efficiency of operations with and between trading partners.

Insight and Guidance

The group has not identified any instances where cross-version compatibility – exchanging different versions of related X12 transactions – present obstacles that can’t be overcome between trading partners. This confirms one of the program’s key objectives – the new version doesn’t negatively impact things that work well with the current version. Further, the PoC process re-confirmed that X12 transactions enhance interoperability and flexibility across multiple, diverse transactions. Different versions of related transactions can be exchanged at the same time, allowing for more streamlined communication with a broader range of entities – payers, providers, clearinghouses, and more. These newer versions of X12 transactions also ensure standardized data remains intact among the impacted entities, ultimately providing them with the opportunity to leverage their existing investment in handling X12 transactions as technology advancements continue driving operational improvement with more granular data.

For example, between the 005010 and 008020 versions of the implementation guides there are several instances where the maximum length of the same data element has increased. Following this example, although the 008020 version of the 837 claims allows a patient control number to have up to 35 characters, the 005010 version of the 277 Claim Acknowledgment only allows 20 characters. Until the newer version of all these related implementation guides are utilized, trading partners should be expected to work together to accommodate it through a transition period. Managing changes like this is always expected through any transition period from an older to newer version of related standardized transactions.

Another example of potential transition challenges includes qualifier changes between the versions. An example of this instance in the 837 Professional Claim implementation guide is in the 2330F loop for REF02, where in the 005010 version there can be 4 qualifiers, while in the 008020 version, there’s only 1 qualifier. To address this, it’s reasonable to expect trading partners and clearinghouses to independently complete a detailed analysis between the two versions to create or update mapping tables based on their business scenarios.

One of the more significant enhancements includes replacing the CAS (Claim Adjustment) segment with the new RAS (Reason Adjustment) segment that is utilized in claims processing, adjudication, and reporting, and as referenced in the respective 837s and 835 implementation guides. The resulting change presents a short-term technical challenge, likely requiring the most resource-intensive level of effort, though providing significant long-term industry benefits. This enhancement allows health care providers to receive more detailed information regarding how their claims were adjudicated and why adjustments were made, yielding greater transparency and increased efficiency in the revenue and claims processing cycles.

Implementation Cost Estimates

While the group worked through this process, they reviewed and discussed X12 estimates that were referenced at a summary level in the recommendation letter.

“As a part of the change summary preparation, X12 estimated the costs of implementing these versions based on the complexity of the enhancement, and whether business analysts, programmers, or both would need to assess the revisions. Using these calculations and estimated labor rates from reputable online hiring platforms, X12 estimates the average costs as shown below.”

At a high level the PoC participants agreed that X12’s estimates were conservative in that small and agile solution providers should be able to implement the functionality to support the enhancements for less that the estimated cost, though the structural changes – such as changing from the CAS to RAS segment – could exceed the estimate. The group also recognized that the resource requirements and timeline for large organizations that may follow a more rigorous process and stringent process would likely be much greater than a smaller entity.  The group has also commented that we should not ignore the fact that the benefits a larger organization would recognize are expected to be much greater, and with the significant reach larger organizations typically have, the industry-wide benefits are exponentially larger. As such, these estimates are useful as a baseline that changes in proportion to the scale of the implementation recognizing the corollary impact of the benefits.

Conclusion

The PoC group successfully demonstrated that the benefits of the 008020 version enhancements are achievable without disrupting existing processes and solution providers should be able to implement support for these enhancements at reasonable costs. The group acknowledges the diligent work of the individuals that participated in the X12 work groups, task groups, and subcommittees in developing and ultimately publishing these guides over the past several years. Through objective demonstrations using X12 artifacts, the PoC confirmed that compliance with the 008020 implementation guides will deliver significant tangible benefits to the health care and insurance industry. Moreover, the group stands ready to assess potential impacts should the scope change in the future to support newer versions introducing incrementally more benefits to the industry.