Chapter 8 Electronic Data Interchange: Transactions and Security Electronic Data Interchange: Transactions and Security Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc.

2 Electronic Data Interchange (EDI)  Used for transmission of health insurance claims  Transmitted data is encrypted  Improves efficiency of claims submissions

3Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Advantages of Electronic Claim Submission  No signatures or signature stamps  No searching for an insurance carrier’s address  No postage costs or trips to post office  No need to store or file claim forms  Electronic claims leave an audit trail  Quicker processing time and payment thereby improving cash flow  Reduced overhead and labor costs

4Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Clearinghouses  Claims are checked electronically  Claims with missing/incorrect information are rejected  Rejected claims are sent back to the provider with a report  Batches of acceptable claims are sent to the appropriate payer  Corrected claims are reprocessed

5Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Advantages of a Clearinghouse  Translation of various formats to the HIPAA- compliant standard format  Reduction in time of claims preparation  Fewer claims rejections  Fewer delays in processing and quicker response time  More accurate coding with claims edits  Consistent reimbursement

6Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. HIPAA Transaction and Code Set (TCS) Benefits  More reliable and timely processing  Improved data accuracy  Easier and more efficient information access  Better tracking of transactions  Reduction of data entry/manual labor  Reduction of office expenses

7Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. HIPAA Required Code and Data Sets  ICD-9-CM codes  CPT-4 codes  CDT codes  NDC codes  ICD-10-CM/ICD-10-PCS codes  Taxonomy codes  Patient account number  Relationship to patient  Facility code value  Patient signature source code

8Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Electronic Formats Now Possible  Specialist authorization  Reimbursement claims  Request and respond to additional information  Healthcare claims/attachments/claims status  Coordination of benefits  Healthcare payment and remittance advice  Plan enrollment/disenrollment/eligibility  Premium payments  Referrals  First report of injury

9Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Standard Unique Identifiers  Standard unique employer identifier  Standard unique healthcare provider identifier  Standard unique health plan identifier  Standard unique patient identifier

10Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Practice Management System  Should be able to prepare, send, receive, and process HIPAA standard electronic transactions  Can help track receipt of Notice of Privacy Practices (NPP), patient treatment consents or authorization, several various possibilities based on how many bells and whistles the program has

11Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. HIPAA-Ready PMS ( Practice Management Systems )  Set security access to patient files in the software  Indicate date of receipt and signing of NPP  Insert date of patient’s authorization  Maintain files of practice’s authorization and notification forms  Track requests for amendments, restrictions on disclosure of PHI, and physician response to request  Track expiration dates

12Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Encounter or Multipurpose Billing Forms  Also called charge slip, multipurpose billing form, patient service slip, routing form, superbill, transaction slip ….  Customized to meet the needs of the healthcare office  May include preprinted procedural or diagnostic codes  Scannable encounter forms save time

13Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Do’s and Dont’s for Keying Insurance Data for Claims Submission DO: Use the patient account numbers to differentiate between patients with similar names. DO: Use correct numeric locations of service codes, current, valid CPT or HCPCS procedures codes. DO: Print an insurance billing worksheet or perform a front-end edit to look for and correct all errors before the claim is transmitted to the third-party payer. DO: Request electronic-error reports from the third-party payer to make corrections to the system. DO: Obtain and cross-check the electronic status report against all claims transmitted. DON’T: Use special characters. DON’T: Bill codes using modifiers -22 electronically unless the carrier receives documents to justify more payment.

14Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Encoder  Signature requirements  Physician  Patient

15Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Clean Electronic Claims Submission  Claim scrubber software  Encoder software  Electronic clearinghouse  Single and batch claims review

16Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Interactive Transactions  Back-and-forth communication between two computer systems  Real time communication allows instant information transfer  Electronic funds transfer (EFT) can speed up reimbursement

17Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Electronic Remittance Advice (ERA)  ERA: Online transaction about the status of a claim  Medicare ERA  formerly called Medicare explanation of benefits (EOMB or EOB)  based on American National Standards Institute (ANSI) Accredited Standards Committee X12 (ASC X12) Health Care Claim Payment/Advice (835) or ANSI 835

18Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Procedures for Claim Transmission  Set up the database.  Enter data.  Batch or compile a group of claims.  Connect the computerized database with the clearinghouse or direct to the payer.  Transmit the claims.  Review the clearinghouse reports.

19Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Methods for Sending Claims  Cable modem  Digital subscriber line (DSL)  T-1  Direct data entry (DDE)  Application service provider (ASP)

20Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Computer Claims Systems  Carrier-direct  The medical practice has its own computer and software to process claims.  The insurer sometimes leases a dedicated terminal to the physician.  Clearinghouse  The physician’s office sends paper claims or a disk or tape to the clearinghouse, which forwards a batch of claims to the insurer.

21Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Transmission Reports  Send and receive file reports  Scrubber report  Transaction transmission summary  Rejection analysis report  Electronic inquiry or claims status review

22Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Administrative Simplification Enforcement Tool (ASET)  Online tool  Assists healthcare providers, payers, clearinghouses, and others to submit complaints regarding the HIPAA TCS rule

23Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. The Security Rule: Administrative, Physical, and Technical Safeguards  Administrative safeguards  information access controls  internal audits  risk analysis and management  termination procedures  Technical safeguards  access controls  audit controls  automatic log-offs  use of passwords

24Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. The Security Rule (cont’d.)  Physical safeguards  media and equipment controls  physical access controls  secure workstation

25Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Computer Security Prevention Measures  Use software that stores files in coded form  Never leave disks or tapes unguarded  Use a privacy filter on the computer monitor  Log off computer before leaving work station  Double-check credentials of all consultants  Read equipment manuals, especially “Security Controls” information, and follow all directions  Store confidential data on diskettes or “zip” disks, not the hard drive  Store all diskettes in a locked, secure location  Use firewall and antivirus software  Develop passwords for all computer users  Use only account numbers in

26Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Records Management  Data storage: back up data frequently  Electronic power protection: surge suppressors or uninterruptible power supply (UPS)

27Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Selection of an Office Computer System  Cost of basic equipment—purchase or lease?  Accessories  Space requirements  Electrical/transmission lines  Separate fax and modem lines?  Costs of electricity  Telephone lines  Maintenance  Software