1. Electronic Data Interchange: Transactions and Security
Chapter 8
Electronic Data Interchange: Transactions and Security
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2. Chapter 8
Lesson 8.1
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3. Learning Objectives
Summarize advantages of electronic claim submission.
Identify the transactions and code sets to use for insurance claims transmission.
State which insurance claim data elements are required or situational for the 837P standard transaction format.
Describe necessary components when adopting a practice management system.
Describe the use of patient encounter forms and scannable encounter forms in electronic claim submission.
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4. Electronic Data Interchange (EDI)
Used for transmission of health insurance claims
Transmitted data is encrypted
Improves efficiency of claims submissions
What is “EDI”? (The process by which understandable data items are sent back and forth via computer linkages between two or more entities that function alternatively as sender and receiver)
What is “encryption”? (To assign a code to represent data, for security purposes)
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5. Advantages of Electronic Claim Submission
No signatures or 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
Improved cash flow
Quicker processing time and payment
Reduced overhead and labor costs
Electronic claims are becoming the way business is done; it is efficient and reduces overhead.
Errors are reduced partly by computers with prompts to guide processors through a complete and accurate claim, and also by an online error-edit process that flags mistakes immediately so they can be fixed before filing.
Define “audit trail.” (A chronological record of submitted data that can be traced to the source to determine the place of origin)
Ask students if anyone has worked with coding. What were some of the challenges? (Answers will vary.)
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6. 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
What is a “clearinghouse”? (An entity that receives the electronic transmission of claims (EDI) from the healthcare provider’s office and translates it into a standard format prescribed in HIPAA regulations)
A clearinghouse should separate claims by carrier, perform software edits to check for errors, and transmit claims electronically to the correct payer.
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7. Advantages of a Clearinghouse
Translation of various formats to the HIPAA-compliant standard format
Reduction in time of claims preparation
Cost-effective method through loss prevention
Fewer claims rejections
Fewer delays in processing and quicker response time
More accurate coding with claims edits
Consistent reimbursement
Some medical practices have direct links to the insurance companies and don’t use clearinghouses.
CMS had created a standardized system for Medicare claims processing called the Medicare Transaction System (MTS).
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8. 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
HIPAA TCS was developed to make the healthcare system more efficient by achieving a single standard.
Standard transactions are the electronic files in which medical data are compiled to produce a format for use in the health care industry.
All healthcare organizations using electronic transactions accept the code set systems required by HIPAA.
What is a “code set”? (The allowable set of codes that anyone could use to enter into a specific field on a form)
See Table 8-1 for more on the benefits of TCS and EDI.
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9. 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
The listed code sets and data are HIPAA-approved and should be used for all submitted insurance claims.
What does “situational” mean? (That the items depends on the data content or context [See Example 8-1])
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10. Electronic Formats 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
It is important to use the correct diagnostic codes from either ICD-9-CM, CPT, or Medicare HCPCS in electronic claims.
Medicare has its own requirements. You should become familiar with the CMS-1500 claim form.
On January 1, 2012, providers, payers, and clearinghouses will use the ASC X12 Version This version allows providers payers to transmit either ICD-9 or ICD-10 data.
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11. Standard Unique Identifiers
Standard unique employer identifier
Standard unique healthcare provider identifier
Standard unique health plan identifier
Standard unique patient identifier
The employer identification number (EIN) is assigned by the Internal Revenue Service (IRS), and is used to identify employers for tax purposes.
HIPAA requires that a National Provider Identifier (NPI) be assigned to each provider for use in transactions with health plans. This is the standard unique healthcare provider identifier.
Explain why the idea of a standard unique patient identifier is seen as a threat to civil liberties. (Answers will vary.)
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12. 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, and mapping disclosures
An important function of a PMS is accounts receivable.
A clearinghouse will convert older PMS formats to HIPAA standard transactions.
Discuss how a good PMS can affect the medical office. (A PMS would improve office efficiency, reduce errors, and optimize reimbursement for services. Answers may vary from students.)
Some PMS vendors sell add-ons that link directly to carriers such as Medicare, Medicaid, and Blue Cross Blue Shield.
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13. HIPAA-Ready PMS 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
Remember that HIPAA standards apply only to the format in which data is transmitted. Data can be stored in any format within the PMS databases.
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14. 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
Doctors use crib sheets or summary forms with key information to ease the burden on them and allow them to focus on clinical matters instead of administrative matters.
Some encounter forms are designed so that they may be scanned.
An example of a scannable encounter form is in Fig Describe how a hypothetical patient’s primary and secondary diagnoses would be recorded on this form.
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15. Do’s and Don’ts 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 -21 or -22 electronically unless the carrier receives documents to justify more payment.
The use of macros saves time and key strokes when completing electronic claims.
Always do an edit check before submitting a claim, because the codes must match the documentation.
See Figs. 8-5 and 8-6.
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16. Encoder Signature requirements Physician Patient
An encoder is a PMS add-on software that can greatly reduce the time required to build or review a claim before batching.
A signed carrier agreement must be in place for each insurer accepting your electronic claim submissions (ECSs).
Other signature requirements are needed for the physician and patient.
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17. Clean Electronic Claims Submission
Claim scrubber software
Encoder software
Electronic clearinghouse
Single and batch claims review
“Dirty” claims can increase costs in the medical office. These methods increase the likelihood of clean electronic claims.
Encoders and other software require an initial investment, but result in increased efficiency in the claims process.
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18. Chapter 8
Lesson 8.2
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19. Learning Objectives
Name some methods of interactive computer transactions for transmitting insurance claims.
Explain the difference between carrier-direct and clearinghouse electronically transmitted insurance claims.
List computer transmission problems that can occur.
List HIPAA administrative safeguards for electronic protected health information.
State measures used to secure privacy of electronic mail, Internet, and instant messaging.
Explain the handling of data storage and data disposal for good electronic records management.
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20. 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
Name several transactions that can be done in real time. (Eligibility verification, deductible status, claim inquiries, status of claims. Answers will vary.)
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21. 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
The use of ANSI 835 Version 4010 generates an electronic Medicare remittance advice instead of the paper RA.
ANSI 835 allows the electronic funds transfer (EFT) of Medicare payments to the physician’s bank account via direct deposit. This improves cash flow in the medical office.
An example of a computer-generated Medicare RA is found in Fig. 8-8.
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22. 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.
These are basic procedures.
More detailed steps may be required for different payers or to ensure secure data transmission.
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23. Methods for Sending Claims
Cable modem
Digital subscriber line (DSL)
T-1
Direct data entry (DDE)
Application service provider (ASP)
Another dimension of a computer system is the network it is connected to, which is important in EDI.
The medical office may use various methods, including data transmission (cable modem, DSL, T-1), DDE using dial-up or Internet, and ASP, or “renting” a PMS over the Internet.
The ASP server houses the data, and accounts are managed by the health care provider’s staff. Claims are batched as though the software was on the desktop at the provider’s office.
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24. 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.
Fiscal agents for Medicare and Medicaid and also many private insurers use the carrier-direct system.
A clearinghouse is used if the physician’s system cannot be linked with the insurance carrier or if the insurer won’t accept claims directly from the physician’s office.
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25. Transmission Reports Send and receive file reports Scrubber report
Transaction transmission summary
Rejection analysis report
Electronic inquiry or claims status review
Transmission reports are generated for both carrier-direct and clearinghouse claims.
A status report of claims is sent from the insurance company to indicate electronic processing problems.
Maintaining a schedule can help with EDI transmissions. See Table 8.7 (p. 308) for a schedule of daily, weekly, and monthly scheduling protocols.
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26. Administrative Simplification Enforcement Tool (ASET)
Online tool
Assists healthcare providers, payers, clearinghouses, and others to submit complaints regarding the HIPAA TCS rule
ASET was implemented by the federal government.
ASET addresses issues of noncompliance in regard to the transaction code set (TCS) rule.
Discuss possible reasons for the use of ASET.
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27. 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
When employees are terminated, their access to PHI should be removed. This means that passwords and security pass codes should be changed, and former employees’ accounts should be removed.
Audit controls keep track of log-ins to the computer system, administrative activity, and data changes.
Automatic log-offs can prevent unauthorized users from accessing an unattended computer.
User names and passwords restrict access and identify computer users.
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28. The Security Rule (cont’d.)
Physical safeguards
media and equipment controls
physical access controls
secure workstation
Office policies and procedures (P&P) should dictate the destruction of obsolete data disks and software containing PHI, as well as the recycling of computers.
Pass codes may be used to restrict access to administrative offices where patient files and data are kept.
Ask students to consider a physician's office they have visited. Are they aware of the presence of physical safeguards?
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29. 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
A firewall and antivirus program will keep amateurs out of the system, but professional hackers can access electronic equipment with internal memory.
Passwords should be changed at regular intervals and should never be written down.
Have students discuss computer security measures they use at home or at school. Do they use a password? Antivirus protection?
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30. Records Management Data storage: back up data frequently
Electronic power protection: surge suppressors or uninterruptible power supply (UPS)
Automated, computer-initiated data backup is available in most programs.
A verification process should be done once a week, to compare original records with copies.
Backup copies of data should be stored away from the office to protect against fire, flood, or theft.
An all-office or whole-office surge suppressor can be installed near a circuit breaker panel to protect all office systems from damage.
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31. 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
This slide lists several points to consider when shopping for computers for the office.
Most considerations relate to the costs.
Describe some other costs and considerations to take into account when planning to buy a computer system.
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