The deadline for HIPAA claims transactions was originally set for October 16, 2002. When CMS recognized that not only would providers and health plans fail to meet this deadline but they also would not be compliant, this deadline was extended to October 16, 2003. And now it is 6 months past that deadline, and is everyone billing at 100% compliance to the HIPAA guidelines? The answer is no. Providers as well as health plans still struggle to successfully convert their claims to the 837 format. Even after the successful conversion to the new format, the content of the claim is not always compliant either.

The bottom line is that this lack of compliance is impacting provider reimbursement as many providers are struggling to identify the problems and find solutions. The state Medicaids are one of the areas that health care providers are finding to be a challenge through the HIPAA transaction changes.

What did the Medicaid HIPAA regulation revisions require for electronic billing? The answer is important because providers submitting electronically have to use the national standard transactions established by HIPAA. Basically, any entity that exchanges standard electronic transactions must have an approved agreement on file.

One of the most important ways to solve the state Medicaid HIPAA puzzle is to really understand what is causing the problem. There are fingers being pointed in every direction, and providers are saying that they are not getting to the bottom of the issue because of this avoidance. The software vendors say they have made the changes needed to be HIPAA compliant and it is the claims clearinghouse that has the problem. The claims clearinghouse says it is not them either, it is really the state Medicaid electronic data interchange (EDI) that is causing the problem. And the state says it is the software that is not compliant. If everyone says they are HIPAA compliant and it is always someone else’s fault, what can providers do to get to the bottom of it?

1) Know your software vendor and what they have done on HIPAA

Many times they state they are HIPAA compliant but make sure it is not just on the Medicare side. This should be for all payors. Develop your contacts well at the vendor so that if problems do occur, you are not just stuck in the loop of calling customer service. If the problems are not being resolved quickly, your cash is at risk. Be persistent and obtain a resolution. Also remember that if you are having a problem, it is likely you are not the only one. If there is a user support group, get on it and make contacts with other providers. They may have gotten their issues resolved using a different method than you knew about!

Just because the new format is in place is not a guarantee that the correct information is going into the format. Know your resources. Review your rejection reports and correct the issues on a daily basis to minimize the impact to your cash flow.

Have an expert on your staff that can review the implementation guide and compare it to your billing system’s output. The need for this resource on your staff will not go away—the electronic standards are here to stay.

2) Billing clearinghouse and the use of the 837 format

Most billing clearinghouses state they are also HIPAA compliant and using the new format. But are they using it consistently and with all the payors that are already using it as well?

One provider told me about a clearinghouse that was using the new format only with some payors and only some of the time due to their system server issues. So the claim was sometimes billed with the old format and sometimes billed with the new format. The provider had no way to know when they would choose either format. The content of each format was different, and therefore, they had many rejections and denials and were forced to bill paper. For instance, on the old format, the physician identifier was the UPIN. On the new format, it was the state Medicaid provider number. This is a common change for many of the state Medicaids.

Many of the billing clearinghouses have published information for their payors and providers on how the data would be converted and what decisions they would make on claim format. Be familiar with this material. Ask for the HIPAA processing edits and companion guide. Most clearinghouses were not completely compliant on October 16 since the payors drive the format that can be sent. The competent clearinghouse will have a transition plan mapped out for each of their direct-connect payors. Payors were required to notify the billing clearinghouses if any of these edits would alter adjudication of a claim. Providers have got to know what happens to their claims if they are using a claims clearinghouse.

3) State Medicaid implementation challenges

Know where your state Medicaid is and use online resources to keep up-to-date on changes. Develop internal contacts within the EDI and HIPAA areas if you are experiencing issues getting your claims processed. Persistency and consistency are the key in this area. Also be active in your state association. If you are a small provider, you do not have a loud voice—but as a group, you can make greater progress.

Keep in mind that many of the state Medicaid programs had their own internal billing codes established for home care providers, for example, Medi-Cal, Colorado Medicaid, and Missouri Medicaid. Historically, state Medicaids did not necessarily follow Medicare coding guidelines or HCPCS coding applied directly from the books. Those “local codes” were prohibited for use in the compliant 837 transaction. Also well known is that state Medicaid programs do not have great financial resources or technical support.

Strategies among the various states have varied widely. As these programs have made the leap to be HIPAA compliant, they have essentially chosen the following ways to solve their challenge:

• Use of an EDI translator along with the existing software.
• Install a totally new system.
• Use of a clearinghouse.
• Major system renovation.

More than 90% of the state Medicaid programs have made the transition, many of which were forced to develop contingency plans and have had to use them along the way.

In the long run, it will be easier for providers and they will not have to know the special billing codes for all the different plans that used to require them. But the struggle to get there will cause some cash flow problems for many providers.

There are other resources available to providers that can help you resolve your problems. Remember that CMS not only administers the Medicare program but it works in partnership with the states to administer Medicaid. CMS is also responsible for the administrative simplification standards from HIPAA. CMS has developed many tools to assist the state Medicaid agencies to be HIPAA compliant and make the necessary changes to accept and process claims in the 837 format.

CMS has done significant work with the individual states through workshops, conferences, administration teams and resource development to ensure that the state Medicaids can successfully meet the HIPAA deadlines as required. These efforts can be resourced on the CMS Web site: www.cms.gov/ medicaid/hipaa/adminsim/—with direct links to every state Medicaid through this site.

If you as a provider have not yet begun using the Web sites for your state Medicaid, you should start. There is up to date information on these Web sites that will help you to know quickly when something changes so you can make sure you respond as needed. There are Medicaid HIPAA coordinators established for every state.

What Does the Future Hold?
Many providers are just waiting to see if the bugs get worked out and are continuing to bill in the national standard format (NSF) or legacy format. They are still able to submit electronically and are getting reimbursed in that 15-day window that Medicaid is paying on electronically billed claims.

The provider community will meet yet another challenge on July 1, 2004, when any electronic claims received in the Legacy format or NSF format will not be paid for at least 27 days. They will essentially be treated as paper claims after July 1. If you have not been able to successfully bill in the new HIPAA format and it has not yet affected your cash flow, it will after July 1. Get this one resolved before then so you can put it behind you as just one more hurdle cleared.

Gemma Perry English is president and owner of HealthCare Solutions Plus (www.hcsplus.net), a Phoenix-based consulting company focused on reimbursement. She can be reached via phone: (480) 704-5502 or email: info@hcsplus.net.