Break­ing the rules

In­sur­ers fail to meet cov­er­age query re­quire­ments

Modern Healthcare - - THE WEEK IN HEALTHCARE - Joseph Conn

Many pri­vate and pub­lic health in­sur­ers are vi­o­lat­ing fed­eral rules for the rapid elec­tronic han­dling of queries for in­for­ma­tion about pa­tients’ cov­er­age, ac­cord­ing to in­sur­ance claims trans­mis­sion ex­perts.

The rules, some of which have been in le­gal ef­fect for more than a year, are in­tended to help health­care providers and pa­tients fig­ure out be­fore the care is de­liv­ered whether pa­tients are cov­ered for par­tic­u­lar ser­vices and how much they will have to pay out of pocket. That’s par­tic­u­larly im­por­tant with the growth of high­d­e­ductible health plans, which make pa­tients more con­scious of how much they’ll have to pay.

In one case, the CMS, a health IT con­sul­tant and an agent rep­re­sent­ing a health­care provider teamed up suc­cess­fully to pres­sure one health in­surer to meet the rule re­quire­ments fol­low­ing the threat of sanc­tions un­der the Health In­sur­ance Porta­bil­ity and Ac­count­abil­ity Act.

“I’m aware of at least a dozen pay­ers—and they’re not small health plans, they’re ones that peo­ple know—that are not com­pli­ant,” said Joseph Gon­za­lez, se­nior vice pres­i­dent of Se­cure EDI, a health­care clear­ing­house head­quar­tered in Char­lotte, N.C., and the cur­rent pres­i­dent of the Co­op­er­a­tive Ex­change, the trade group rep­re­sent­ing the clear­ing­house in­dus­try.

Amer­ica’s Health In­sur­ance Plans and the Blue Cross and Blue Shield As­so­ci­a­tion did not comment by dead­line.

The CMS also did not pro­vide some­one to be in­ter­viewed for this story. Ac­cord­ing to its web­site, its “pri­mar­ily com­plaint driven” HIPAA en­force­ment strat­egy has been to “pro­vide tech­ni­cal as­sis­tance” and “seek co­op­er­a­tion of all par­ties.” Through Jan. 31, 2013, the CMS has re­ceived 839 com­plaints for al­leged HIPAA rules vi­o­la­tions, and all but 14 of those cases are closed. With the new rules, the CMS has “rec­og­nized the need for an en­hanced en­force­ment process,” that is “in de­vel­op­ment” with au­dits and “po­ten­tial non­com­pli­ance penal­ties.”

The con­sul­tant, Stan­ley Nachim­son, a Bal­ti­more-area spe­cial­ist in health IT is­sues, said he was rep­re­sent­ing a client who wanted to re­main anony­mous out of con­cern over pos­si­ble re­tal­i­a­tion by the plan. His client, an agent of a provider or­ga­ni­za­tion, wasn’t re­ceiv­ing all the in­for­ma­tion from a par­tic­u­lar health in­surer re­quired un­der the new stan- dards and op­er­at­ing rules. Nachim­son also de­clined to iden­tify the pri­vate in­surer.

One set of rules not be­ing met spell out a fed­eral man­date to use the ASC X12 Ver­sion 5010 stan­dards for elec­tronic claims trans­mis­sion, Nachim­son said. HHS re­quired the con­ver­sion prior to the ICD-10 di­ag­nos­tic and pro­ce­dural codes con­ver­sion next year. HHS was em­pow­ered to or­der the changes un­der the “ad­mi­nis- tra­tive sim­pli­fi­ca­tions” pro­vi­sions of the HIPAA law de­signed to squeeze costs out of the health­care sys­tem through com­put­er­i­za­tion.

The com­pli­ance dead­line for the 5010 rule was Jan. 1, 2012, but to ac­com­mo­date many strag­glers, HHS twice post­poned its en­force­ment date un­til July 1, 2012.

An­other set of rules not be­ing met, Nachim­son al­leged, are the op­er­at­ing rules that flowed out of the Pa­tient Pro­tec­tion and Af­ford­able Care Act. The com­pli­ance dead­line for claims sta­tus and el­i­gi­bil­ity trans­ac­tions of th­ese rules was Jan. 1, 2013.

On real-time queries, the re­sponse time is sup­posed to be 20 sec­onds. On el­i­gi­bil­ity in­quiries sub­mit­ted in batches, overnight re­sponses are deemed com­pli­ant. Nachim­son said the fast turn­arounds en­able providers to tell pa­tients in ad­vance, “You haven’t met your de­ductible yet this year, or your cov­er­age is 80/20, the bill is $100, you owe us $20. There is a lot ben­e­fit in th­ese (new) stan­dards if the plans use them.”

By not com­ply­ing with the rules, this par­tic­u­lar in­surer, which of­fers cov­er­age in about half of U.S. states, was caus­ing providers “a sig­nif­i­cant dis­ad­van­tage in not know­ing the full ex­tent of a pa­tient’s in­sur­ance cov­er­age,” Nachim­son said.

Af­ter talk­ing with the plan and get­ting nowhere, Nachim­son con­tacted the CMS, which has en­force­ment au­thor­ity for ad­min­is­tra­tive sim­pli­fi­ca­tion un­der HIPAA. “We filed a com­plaint and sent it in to CMS and said th­ese guys are not com­pli­ant and showed them 10 or 12 places where they were not,” he said. That was around May. 1. The CMS for­warded his com­plaint to the payer, he said.

The in­surer replied Aug. 1. “They said, ‘OK, we’re go­ing to change all of th­ese,’ ” he said. “The vast ma­jor­ity were done by the be­gin­ning of Au­gust.” Th­ese changes ben­e­fit all trad­ing part­ners of the in­surer, not just the one fil­ing the com­plaint, he noted.

“It’s a huge win for providers,” said Robert Ten­nant, se­nior pol­icy ad­viser for the MGMA, par­tic­u­larly as pa­tients face higher de­ductibles, co­pay­ments and other cost-shar­ing un­der their plan de­signs. “It’s one thing to miss out on a $20 co­pay, it’s an­other thing to miss out on a $1,000 de­ductible.”

Nachim­son said he and his client are sat­is­fied with the in­surer’s re­me­dial ac­tions. “The way this in­dus­try moves, three months isn’t bad.” Nachim­son and other ex­perts say many in­sur­ers are not com­ply­ing with the rules. “I wouldn’t say it’s en­demic, but it’s not an un­com­mon prac­tice for this to hap­pen,” he said. “I would guess there are plenty of health plans, Med­i­caid in­cluded, that are not yet fol­low­ing the rules.”

John Kelly, a prin­ci­pal busi­ness ad­viser at Ed­ifecs, Belle­vue, Wash., a claims-man­age­ment ser­vices provider to pay­ers and providers, cor­rob­o­rated that. He said there are some plans with “an­ti­quated sys­tems.” When it comes to state Med­i­caid pro­grams, he said, lots of peo­ple say their trans­ac­tions “are not com­pli­ant.”

Kelly said the state Med­i­caid agen­cies “will flat out say, yes, we know. We’re work­ing on it.” They “feel a lit­tle less threat­ened that they would get pe­nal­ized” and thus have been “a lit­tle bit slower” to seek com­pli­ance.

But clear­ing­house of­fi­cials are re­luc­tant to re­port non­com­pli­ant in­sur­ers, said Tim McMullen, ex­ec­u­tive di­rec­tor of the Co­op­er­a­tive Ex­change. “We see our role as clear­ing­houses to me­di­ate as much as pos­si­ble.”

Se­cure EDI’s Gon­za­lez said that for in­sur­ers, with all the other health­care re­form is­sues they face, fix­ing their sys­tems to meet the elec­tronic re­port­ing re­quire­ments to providers on pa­tients’ in­sur­ance cov­er­age “is not in the top 10 things they’re wor­ried about.” He at­trib­uted in­sur­ers’ lack of con­cern and com­pli­ance to their per­cep­tion of a re­laxed fed­eral en­force­ment cli­mate.

The plans won’t fo­cus on th­ese rules, he said, “un­less there are fines, and they have to be sub­stan­tial. The first per­son to get fined $1 mil­lion is go­ing to wake ev­ery­body else up.”

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