1. Electronic Data Interchange: Transactions and Security
Chapter 8
Electronic Data Interchange: Transactions and Security
Today we will review the basic principles and terminology of electronic data interchange and demonstrate the understanding of computers, records management, and electronic claims submission.

2. Focus Advantages of electronic claim submission
Transactions and code sets used for insurance claims transmissions
Insurance claim data elements required or situational for the 837P standard transaction format
Necessary components for a practice management system

3. Electronic Data Interchange (EDI)
Sending and receiving health information electronically
Used for transmission of insurance claims
Transmitted data is encrypted
Computer code in place of standard text for security
Improves efficiency of claims submission
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

4. Covered Entity
If you are a provider who bills to Medicare AND you bill electronically to any payer AND you have more than ten full-time employees
THEN…..
You are a covered entity and must file electronically

5. ADVANTAGES OF ELECTRONIC CLAIM SUBMISSION
No signatures or stamps
No searching for an insurance carrier’s address
No postage costs or trips to the 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
An audit trail is a chronological record of submitted data that can be traced to the source to determine the place of origin

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 PROVIDER’S OFFICE AND TRANSLATES IT INTO A STANDARD FORMAT ACCORDING TO HIPAA REGULATIONS
A clearinghouse should separate claims by carrier, perform software edit checks to check for errors, and transmit claims electronically to the correct payer

7. Advantages of a Clearinghouse
Translation into HIPAA 5010 format
Claim scrubbing
Audit trail
Proof of timely filing
Improved cash flow
Less time processing claims for submission
Faster payment

8. Code sets
The allowable set of codes used to enter data elements into a field on the CMS-1500
CPT
HCPCS
ICD-9
ICD-9-PCS
ICD-10
Taxonomy codes
Patient account number
Relationship to patient
Facility code value
Patient signature source code
The term “situational” means that items depend on whether or not the data content or context is required for the case

9. Codes Sets and Relative Data Elements
CPT and ICD-9-PCS
Procedures, physician services, PT/OT svcs, radiologic/lab/diagnostic tests, hearing/vision, transportation
ICD-9 and ICD-10
Diseases, injuries, impairments, other health related problems and their manifestations
causes of injury, disease, impairment, or other health-related problems
Code on Dental Procedures and Nomenclature
Dental services
National Drug Codes (NDC)
Pharmaceuticals

10. Standard unique identifiers
Standard unique employer identifier (EIN)
Standard unique healthcare provider identifier (NPI)
Standard unique health plan identifier (NEIC)
Standard unique patient identifier (Acct or Claim)
The employer identification number EIN is assigned by the Internal Revenue Service and used to identify employers for tax purposes
HIPAA requires that an NPI number be assigned to each provider for use in transactions with health plans. This is the standard unique healthcare provider identifier

11. The Insurance Specialist
Understand how practice management software works
How PM pulls from data entry onto the claim
How claims are transmitted from PM to clearinghouse
Work rejection edits
Receipt and download of electronic remits for posting
Understand which codes are required
Understand claims scrubbing and edits

12. The Way it Works Data entry PM claim scrubbing
Electronic submission to clearinghouse
Clearinghouse claim scrubbing
Correction of errors and resubmission
Sent to carrier
Claim processed
ERA received by clearinghouse
Downloaded into PM and posted

13. 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
An important function of a PMS is accounts receivable
A clearinghouse will convert older PMS formats to HIPAA standard transactions
A good PMS can effect the medical office by improving office efficiency, reducing errors, optimizing reimbursement for services.
Some PMS vendors sell add-ons that link directly to carriers such as Medicare, Medicaid, and BCBS.

14. Do’s and don’ts for keying insurance data for claim submission
DO: use patient account numbers to differentiate between patients with similar names
DO: use correct numeric locations of service codes, current valid CPT OR HCPCS 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

15. Do’s and don’ts for keying insurance data for claim submission
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

16. Clean electronic claims submission
Claim scrubber software
Encoder sofware
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

18. 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
There are several transactions that can be done in real time: eligibility verification, deductible status, claim inquires, status of claims

19. Electronic remittance advice (ERA)
ERA: online transaction about the status of a claim
Medicare ERA
Formerly called the Medicare explanation of benefits (EOMB or EOB)
Based on 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 EOB
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.

20. Procedure s 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 the basic procedures
More detailed steps may be required for different payers to ensure secure data transmission

21. 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 carrier won’t accept claims directly from the physician’s office.

22. Transmission Reports Send and Receive Files
Files received by clearinghouse
Batch Claim Report Billed Summary
Patient’s name and total charges billed
Batch number, billing number
Insurance company billed
Chronologically the date(s) claim was transmitted
Scrubber Report
Total number of claims, charges, and dollar amounts received and scrubbed by the clearinghouse
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 transmission. See Table 8-7 (p308) for a schedule of daily, weekly, and monthly scheduling protocols

23. Transmission Reports (cont’d)
Transaction Transmission Summary
Number of claims originally received by the clearinghouse and/or payer
How many claims were rejected automatically
Rejection Analysis Report
Identifies most common reasons claims are rejected
indicates what claims were not included for processing
Corrections made and claim resubmitted
Electronic Inquiry Claim Status
Files received from the providers office
Indicates the progress of the claim

24. HOMEWORK Workbook Workbook Know your key terms and key abbreviations
Assignment 8-1 Critical Thinking for Medical and Nonmedical Code Sets for 837P Electronic Claims Submission
Assignment 8-3 Input Data Into Element for Place of Service Codes for 837P Electronic Claims Submissions
Workbook
Assignment 8-4 Select the Correct Individual Relationship Code Number for 837P Electronic Claims Submission
Assignment 8-5 Select the Correct Taxonomy Code for Medical Specialists for 837P Electronic Claims Submission

25. Upcoming events Chapter 7 Chapter 9
11-12: SKILLS ASSESSMENT Complete an Insurance Claim Form using Evolve
11-12: TEST Chapters 7-8
Chapter 9
11-14 Read Chapter 9 before class
11-14 Complete Workbook Assignment 9-1 Review Questions before class