RelayHealth 5010 / ICD-10 Education and Readiness 1 July 19, 2011 Scott Gardner, Director of Product Management Tammy Mrotz, Account Executive Laurie Scherger, Director Account Executives

2 Are you riding the waves or is there going to be a wipeout? HIPAA

Why Is 5010 Important to Me? Version 4010 is outdated More than 10 years since initial implementation, but 8 years since balloting of the current version Many situational and required rules did not fit business practices of the industry Industry relied extensively on companion guides, limiting value of standards Many transactions were not implemented at all because of limited utility and value 3

How will 5010 make life better? The conversion to 5010 will make information exchange simpler and more straightforward, improving all aspects of healthcare business, and driving payers to improve business strategy. With more precise clinical documentation, payers can reduce medical loss ratios. Payers will be able to auto-adjudicate more claims. Prevent inappropriate payments (subrogation, fraud and abuse). Locating missing information will be easier, reducing time delays and costs. Replacing generic descriptions with specific descriptions streamlines the process. 4

Version 5010 / ICD-10 Link HIPAA legislation mandates that the healthcare industry use standard formats for electronic claims and related transactions Version 5010 standard implements the infrastructure preparation for ICD-10 Version 5010 accommodates ICD-10 CM & PCS code sets; Version 4010A1 does not. ICD-10 cannot function without Version 5010 in place first. 5

ICD-10 Foundation for Reimbursement ICD-10 codes are the foundation for reimbursement and much of Provider business analytics, while EDI is the transport tool for Provider claims. Not being ready for the compliance dates will dramatically affect Provider business. The Centers for Medicare & Medicaid Services (CMS) will not accept 4010 EDI transactions starting Jan. 1, 2012 and claims without ICD-10 coding starting October 1, CMS has been clear that they will be ready. RelayHealth wants you to be ready too. 6

Separates diagnosis code reporting Clarifies use of NPI Provides greater consistency between dental and professional claims Simplifies COB requirements Enables use of POA indicator Claims Allows prescription number reporting Eliminates sensitive information to satisfy privacy concerns Instructions for batch and real time use Claims Status Clarifies rules for use Eliminates “not advised” elements Clarifies and strengthens rules for balancing Can be used with 4010 claims Includes new medical policy segment Remits Provides specific information on conditions Asks for number of occurrences Separates segments for key patient conditions Supports and expands authorization exchanges Referrals/Authorizations Eligibility Mandates additional service types such as chiropractic, emergency services, pharmacy, vision and professional visits Clarifies dependent and subscriber relationships Requires alternate search support Enrollment Improves privacy protections Adds additional information, such as enrollment subtotals and coverage reasons Key Changes in

5010 / ICD-10 How We Got Here August 2000 – HIPAA final rule adopts standards for eight electronic health care transactions February 2003 – HHS publishes final rule to adopt addenda to Version 4010, eventually known as Version 4010A1 August 2008 – HHS publishes proposed adoption of updated Version 5010 administrative transaction standards beginning in 2010; receives more than 1,000 stakeholder comments, the majority of which favor adoption, but request date pushback January 2009 – HHS publishes final rule with Version 5010 compliance date of January 1, 2012, in response to industry input 8

5010 Timeline 9 Level I compliance means "that a covered entity can demonstrably create and receive compliant transactions. All design/build activities and internal testing are compliant" Level II compliance means “covered entities can successfully exchange standard transactions, and as appropriate, be able to process them successfully" Jan – Dec 2011 External testing begins. Readiness required by December 31 Jan - Dec Internal Testing Period Jan 16, Final rule passed Jan 1, Transactions Required Oct 1, 2013 ICD-10 Coding Required

5010 Level 1 / Level 2 Compliance Level 1 compliance deadline December 21, 2010 RelayHealth has been ready to receive 5010 test transactions ahead of the deadline. Providers were able to send test files to RelayHealth PCS beginning June 1, 2010 Level 2 compliance deadline December 31, 2011 RelayHealth began end-to-end testing with trading partners January 31, 2011 to meet the deadline – most payers started testing after April 11, 2011 RelayHealth has already updated our products to comply with 5010 standards. Can convert 4010 files to the 5010 format, or vice versa, based on what the provider is submitting and the payer is accepting 10

Payer Readiness Payer – 5010 Internal Readiness Payer Readiness with RelayHealth (and all trading partners!) Payer Sending and Receiving 5010 Transactions 11 Payer Live (Dual or 5010 only) Readiness with RelayHealth Payer Internal Readiness

Coordinating with Payers RelayHealth has contacted all of our payers and understands their 5010 readiness plans We’ve been actively planning and testing with Payers for over 6 months on behalf of providers We will continue to plan and test with Payers until all are ready 12

RelayHealth ProvidersPayers Proprietary Today 4010 Dual (4010 and 5010)

RelayHealth ProvidersPayers Proprietary /1/12 Dual (4010 and 5010)

RelayHealth ProvidersPayers Proprietary 5010 Standard Dual (4010 and 5010) 4010

Three Common Approaches 16 Ignore It and Hope It Goes Away Self Managed Coordinated Vendor Management Long Live Paper! Build the Road Test All Routes Manage the Changes Focus on Provider strengths Choose proven partners Communicate, Listen Track & Validate

What You Need to Do Now Review the Companion Guide and additional 5010 resources to understand 5010 changes and prepare Provider organization for the new standards. Organize a 5010 Team and develop a time line for provider organization Educate Provider executive team about key dates and requirements Purchase Implementation Guides Inventory provider system portfolio to identify at-risk systems Contact system vendors now to confirm provider contract includes support for appropriate regulatory updates and ask the system vendor when the system will be upgraded to ensure compliance with testing and implementation requirements Start communications with trading partners Reliance on legacy formats will require additional work or rework of claims and could negatively impact revenue cycle cash flow. 17 (Talk to your software provider or clearinghouse about these items.)

Be Aware of Errata What are Errata? “Any changes to the original version of the transaction specification” Several errors found after adoption No major, controversial or technically impactful issues Largely typographical & minor technical clarifications CMS updated Payer adoption to include 5010 plus the Errata Also changed Payer readiness timeline Hits all the major transactions Eligibility, Claims, Remittance Understand the payer specific schedules and update payer specific edits as they go live 18

What Else? Continue to improve claim file content and prepare files to meet 5010 standards. Be prepared to process both 4010 and 5010 transactions and both ICD-9 and ICD-10 codes simultaneously because provider and trading partner readiness and conversions to 5010 and ICD-10 will vary Engage with providers to update reimbursement contracts to reflect the new codes and to communicate the health plan’s target dates for 5010 and ICD-10 conversion Assess and monitor application vendor and trading partner readiness for 5010 and ICD-10 compliance Modify internal business operations to handle the additional granularity available in ICD-10 Identify all areas within the organization that use ICD-9 codes to determine the full impact and remediation required to achieve ICD-10 compliance. 19

20 Be Prepared to Ride the Wave!

5010 Additional Information 4. Payer Readiness 21 How can I get more information on these changes? You can find more information on the 5010 changes outlined on the following websites:

ASC X12 HIPAA Interpretation Portal External Code Sources Workgroup for Electronic Interchange (WEDI) The Accredited Standards Committee (ASC) X12 Resources 22

ASC X TR3s I GAP ANALYSIS TGH gap analysis – Gale Scott to request: CMS Side by side comparison: CHANGE MANUALS e-Emergence, Inc. Washington Publishing Company, Inc.: / Resources 23

Questions? MDI Achieve clients: Please contact us with any questions you may have. Call our Client Support department or send an to 24

Tammy Mrotz, Account Executive Office/Mobile Voice: Client Engagement Group Laurie Scherger, Director - Account Executive Group - West Office / Mobile: Scott Gardner, Director of Product Management Office / Direct: