1. Payer Typology: What You Need To Know September 2007 Prepared by Bob Davis Representing the Public Health Data Standards Consortium, Payer Type Workgroup

2. Topics Purpose and potential users of Payer Typology Use of Payer Typology Available Documentation Status of Pilots Relationship to National Standards Maintenance Activities

3. Purpose of Payer Typology To provide a standardized, flexible, and complete code set that classifies payer (e.g., Medicare, VA, private insurance, charity care) and when possible, to differentiate organization of payment (e.g., HMO, PPO, private insurance)

4. Purpose of Payer Typology The Payer Typology incorporates typical state specific requirements, as well as being flexible enough to be used as a code set in surveys and other data collected for research or policy purposes.

5. Potential Users of Payer Typology Researchers Policymakers Health services researchers Public health departments Health administrators Health care practitioners Others concerned with the relationship between payer and health care access, quality of care, utilization patterns, and treatment outcomes

6. Need for Payer typology There is currently no national standard for reporting and classifying source of payment data. Existing ASC X12N 837 categories in the subscriber section are currently neither mutually exclusive nor comprehensive. Ability to compare source of payment data across databases is critical to policymakers and researchers examining effects of payment policy. PlanID is not expected to meet the Committee’s goals.

7. Current Claim Filing Indicator List used in 837 implementation Guides 09Self-pay 10 Central Certification 11 Other Non-Federal Programs 12 Preferred Provider Organization (PPO) 13 Point of Service (POS) 14 Exclusive Provider Organization (EPO) 15 Indemnity Insurance 16 Health Maintenance Organization (HMO) Medicare Risk AM Automobile Medical BL Blue Cross/Blue Shield CH Champus CI Commercial Insurance Co. DS Disability HM Health Maintenance Organization LI Liability LM Liability Medical MA Medicare Part A MB Medicare Part B MC Medicaid OF Other Federal Program TV Title V VA Veteran Administration Plan WC Workers’ Compensation Health Claim ZZ Mutually Defined / Unknown

8. Need for Payer typology Examples of deficiencies in existing code set: “HMO” cannot distinguish among Medicare, Medicaid or privately financed HMOs There is no way to distinguish among different types of Medicare Advantage Plans “Champus” no longer exists “Self-pay” cannot distinguish among charity care, professional courtesy, and bad debt Some codes are adminstrative hold-overs (e.g. “Central Certification”)

9. Use of Payer Typology Hierarchical Value Set – –Enables reporting at lowest level of granularity available – –Enables use at highest level of granularity needed

10. Use of Payer Typology Payer Type codes are defined as up to six left- justified alpha numeric characters. Each character from the left to the right represents a new hierarchical level in the value set. The typology is loosely modeled on the ICD classification system for disease, which codes to the most specific disease possible.

11. Use of Payer Typology The first digit of each code is the organization that provides the funds for the care; Additional digits provide more information about the specifics of the plan or mechanism through which these funds are provided.

12. Major Payor Codes 123456789MedicareMedicaid Other Government ( not Medicare, Medicaid or corrections) Department of Corrections Private Health Insurance Blue Cross/Blue Shield Managed Care, unspecified (*) No payment from organization Miscellaneous/other

13. Example of second- and third-digit codes 1MEDICARE 11 Medicare (Managed Care) 111 Medicare HMO 112 Medicare PPO 113 Medicare POS 119 Medicare Managed Care Other 12 Medicare (Non-managed Care) 121 Medicare FFS 122 Medicare Drug Benefit 123 Medicare Medical Savings Account (MSA) 129 Medicare Non-managed Care Other 19 Medicare Other

14. Example of second- and third-digit codes 8NOPAYMENT from an Organization/Agency/Program/Private Payor Listed 81 Self-pay 82 No Charge 821 Charity 822 Professional Courtesy 823 Research/Clinical Trial 83 Refusal to Pay/Bad Debt 84 Hill Burton Free Care 85 Research/Donor 89 No Payment, Other

15. Use of Payer Typology Explanation of Example – –Current payer classification value sets typically have only ONE category for non-payment. – –If a patient’s care is reported as CHARITY, the researchers could analyze those patients receiving CHARITY Care, or include those patients with other patients with NO CHARGE for care, or include those patients with any where NOPAYMENT for services to the provider.

16. Available Documentation The Payer Typology – – –http://www.phdsc.org/about/committees/pmt_typology.htm – –The complete hierarchical list of payer categories The Payer Typology User Guide – –http://phdsc.org/standards/payer-typology.asphttp://phdsc.org/standards/payer-typology.asp – –& click on Users Guide for Source of Payment Typology – –Payer Category definitions and relevant standards information Public Health Data Standards Consortium Payer Work Group – –http://phdsc.org/standards/payer-typology.asphttp://phdsc.org/standards/payer-typology.asp – –Group responsible for development and maintenance of Payer Typology

17. Status of Pilots State of Georgia – –Implementation of Payer Typology hierarchies by January 2008 for all Georgia discharges for calendar year 2007. – –Georgia hospitals will be given an opportunity to stage the reporting of Payer Typology categories between now and next year. – –NOTE: Georgia is implementing three (3) hierarchical levels of full Payer Typology, which currently provides granularity to five (5) hierarchical levels.

18. Status of Pilots State of California – –Deficiencies of all current payer type code sets have been identified. – –Staged migration plane for their inpatient collection system to use ANSI X12 837 and UB-04. Establish an electronic connection between the State and providers Migrate legacy system to use standard data content Full migration to national formats – –Anticipated that the Payer Typology will replace their legacy code system with migration to ANSI 837 and UB- 04

19. Status of Pilots State of Massachusetts – –The proprietary payer type code list used by the State of Massachusetts is problematic. – –The state data agency is planning to solicit the hospital feedback during calendar year 2007 on the merits or deficiencies of the Payer Typology as a replacement to their current proprietary payer type classification list.

20. Relationship to National Standards Currently Data Maintenance in progress to reference the typology in the ANSI X12 standards within the 837 transaction. Currently Data Maintenance in progress to reference the typology in the ANSI X12 standards within the 837 transaction. It is anticipated that the October 2007 (5050) and beyond versions of the ANSI X12 standards will provide support for the reporting of the Payer Typology. It is anticipated that the October 2007 (5050) and beyond versions of the ANSI X12 standards will provide support for the reporting of the Payer Typology. It is anticipated that 5050 and beyond versions of the Health Care Service Data Reporting Guide will support the reporting of the Payer Typology. It is anticipated that 5050 and beyond versions of the Health Care Service Data Reporting Guide will support the reporting of the Payer Typology. Current versions of 837 implementation guides could support reporting of the Payer Typology in the K3 segment with approval of the ANSI X12N Health Claims Work Group (TG2 WG2) Current versions of 837 implementation guides could support reporting of the Payer Typology in the K3 segment with approval of the ANSI X12N Health Claims Work Group (TG2 WG2)

21. Maintenance Activities The Source of Payment Typology is maintained by the National Center for Health Statistics / Centers for Disease Control and Prevention. (http://phdsc.org/standards/payer-typology.asp) Requests to change typology should be directed to the Payer Type Subcommittee of the Data Standards Committee of the Public Health Data Standards Consortium. (http://phdsc.org/standards/payer-typology.asp)http://phdsc.org/standards/payer-typology.asp

22. Bob Davis Health Data Standards Consultant rdavis@nahdo.org 518-456-1735

23. Maintenance Activities Changes to the Source of Payment Typology are made bi-annually in October and April. Any interested industry representative can make recommendations for additions or modifications by sending their comments via email to the committee co-chairs. committee co-chairs These recommendations would be voted on by members of the Payer Type Subcommittee for possible inclusion in the Source of Payment Typology.