chapter 8 electronic data interchange: transactions and security electronic data interchange:...

Chapter 8Chapter 8

Electronic Data Interchange: Electronic Data Interchange: Transactions and Security Transactions and Security

Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc.Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc.

22Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc.Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc.

Electronic Data Interchange Electronic Data Interchange (EDI)(EDI)

Used for transmission of health insurance Used for transmission of health insurance claimsclaims

Transmitted data is encryptedTransmitted data is encrypted Improves efficiency of claims submissionsImproves efficiency of claims submissions


Advantages of Electronic Claim Advantages of Electronic Claim SubmissionSubmission

No signatures or signature stampsNo signatures or signature stamps No searching for an insurance carrier’s No searching for an insurance carrier’s

addressaddress No postage costs or trips to post officeNo postage costs or trips to post office No need to store or file claim formsNo need to store or file claim forms Electronic claims leave an audit trailElectronic claims leave an audit trail Quicker processing time and payment Quicker processing time and payment

thereby improving cash flowthereby improving cash flow Reduced overhead and labor costsReduced overhead and labor costs


ClearinghousesClearinghouses

Claims are checked electronicallyClaims are checked electronically Claims with missing/incorrect information are Claims with missing/incorrect information are

rejectedrejected Rejected claims are sent back to the provider Rejected claims are sent back to the provider

with a reportwith a report Batches of acceptable claims are sent to the Batches of acceptable claims are sent to the

appropriate payerappropriate payer Corrected claims are reprocessedCorrected claims are reprocessed


Advantages of a ClearinghouseAdvantages of a Clearinghouse Translation of various formats to the HIPAA-Translation of various formats to the HIPAA-

compliant standard formatcompliant standard format Reduction in time of claims preparationReduction in time of claims preparation Fewer claims rejectionsFewer claims rejections Fewer delays in processing and quicker Fewer delays in processing and quicker

response timeresponse time More accurate coding with claims editsMore accurate coding with claims edits Consistent reimbursementConsistent reimbursement


HIPAA Transaction and Code Set HIPAA Transaction and Code Set (TCS) Benefits(TCS) Benefits

More reliable and timely processingMore reliable and timely processing Improved data accuracyImproved data accuracy Easier and more efficient information accessEasier and more efficient information access Better tracking of transactionsBetter tracking of transactions Reduction of data entry/manual laborReduction of data entry/manual labor Reduction of office expensesReduction of office expenses


HIPAA Required Code and Data HIPAA Required Code and Data SetsSets

ICD-9-CM codesICD-9-CM codes CPT-4 codesCPT-4 codes CDT codesCDT codes NDC codesNDC codes ICD-10-CM/ICD-10-PCS codesICD-10-CM/ICD-10-PCS codes Taxonomy codesTaxonomy codes Patient account numberPatient account number Relationship to patientRelationship to patient Facility code valueFacility code value Patient signature source codePatient signature source code


Electronic Formats Now PossibleElectronic Formats Now Possible

Specialist authorizationSpecialist authorization Reimbursement claimsReimbursement claims Request and respond to additional informationRequest and respond to additional information Healthcare claims/attachments/claims statusHealthcare claims/attachments/claims status Coordination of benefitsCoordination of benefits Healthcare payment and remittance adviceHealthcare payment and remittance advice Plan enrollment/disenrollment/eligibilityPlan enrollment/disenrollment/eligibility Premium paymentsPremium payments ReferralsReferrals First report of injuryFirst report of injury


Standard Unique IdentifiersStandard Unique Identifiers

Standard unique employer identifierStandard unique employer identifier Standard unique healthcare provider identifierStandard unique healthcare provider identifier Standard unique health plan identifierStandard unique health plan identifier Standard unique patient identifierStandard unique patient identifier


Practice Management SystemPractice Management System

Should be able to prepare, send, receive, and Should be able to prepare, send, receive, and process HIPAA standard electronic process HIPAA standard electronic transactionstransactions

Can help track receipt of Notice of Privacy Can help track receipt of Notice of Privacy Practices (NPP), patient treatment consents Practices (NPP), patient treatment consents or authorization, several various possibilities or authorization, several various possibilities based on how many bells and whistles the based on how many bells and whistles the program hasprogram has


HIPAA-Ready PMSHIPAA-Ready PMS( Practice Management Systems ) ( Practice Management Systems )

Set security access to patient files in the Set security access to patient files in the softwaresoftware

Indicate date of receipt and signing of NPPIndicate date of receipt and signing of NPP Insert date of patient’s authorizationInsert date of patient’s authorization Maintain files of practice’s authorization and Maintain files of practice’s authorization and

notification formsnotification forms Track requests for amendments, restrictions on Track requests for amendments, restrictions on

disclosure of PHI, and physician response to disclosure of PHI, and physician response to requestrequest

Track expiration datesTrack expiration dates


Encounter or Multipurpose Billing Encounter or Multipurpose Billing FormsForms

Also called charge slip, multipurpose billing Also called charge slip, multipurpose billing form, patient service slip, routing form, form, patient service slip, routing form, superbill, transaction slip ….superbill, transaction slip ….

Customized to meet the needs of the Customized to meet the needs of the healthcare officehealthcare office

May include preprinted procedural or May include preprinted procedural or diagnostic codesdiagnostic codes

Scannable encounter forms save timeScannable encounter forms save time


Do’s and Dont’s for Keying Do’s and Dont’s for Keying Insurance Data for Claims Insurance Data for Claims

SubmissionSubmission DO: Use the patient account numbers to differentiate between DO: Use the patient account numbers to differentiate between

patients with similar names.patients with similar names.

DO: Use correct numeric locations of service codes, current, valid DO: Use correct numeric locations of service codes, current, valid CPT or HCPCS procedures codes.CPT or HCPCS procedures codes.

DO: Print an insurance billing worksheet or perform a front-end edit 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 to look for and correct all errors before the claim is transmitted to the third-party payer.the third-party payer.

DO: Request electronic-error reports from the third-party payer to DO: Request electronic-error reports from the third-party payer to make corrections to the system.make corrections to the system.

DO: Obtain and cross-check the electronic status report against all DO: Obtain and cross-check the electronic status report against all claims transmitted.claims transmitted.

DON’T: Use special characters.DON’T: Use special characters.

DON’T: Bill codes using modifiers -22 electronically unless the DON’T: Bill codes using modifiers -22 electronically unless the carrier receives documents to justify more payment.carrier receives documents to justify more payment.


EncoderEncoder

Signature requirementsSignature requirements PhysicianPhysician PatientPatient


Clean Electronic Claims Clean Electronic Claims SubmissionSubmission

Claim scrubber softwareClaim scrubber software Encoder softwareEncoder software Electronic clearinghouseElectronic clearinghouse Single and batch claims reviewSingle and batch claims review


Interactive TransactionsInteractive Transactions

Back-and-forth communication between two Back-and-forth communication between two computer systemscomputer systems

Real time communication allows instant Real time communication allows instant information transferinformation transfer

Electronic funds transfer (EFT) can speed up Electronic funds transfer (EFT) can speed up reimbursementreimbursement


Electronic Remittance Advice Electronic Remittance Advice (ERA)(ERA)

ERA: Online transaction about the status of a ERA: Online transaction about the status of a claimclaim

Medicare ERAMedicare ERA formerly called Medicare explanation of benefits formerly called Medicare explanation of benefits

(EOMB or EOB)(EOMB or EOB) based on American National Standards Institute based on American National Standards Institute

(ANSI) Accredited Standards Committee X12 (ANSI) Accredited Standards Committee X12 (ASC X12) Health Care Claim Payment/Advice (ASC X12) Health Care Claim Payment/Advice (835) or ANSI 835(835) or ANSI 835


Procedures for Claim Procedures for Claim TransmissionTransmission

Set up the database.Set up the database. Enter data.Enter data. Batch or compile a group of claims.Batch or compile a group of claims. Connect the computerized database with the Connect the computerized database with the

clearinghouse or direct to the payer.clearinghouse or direct to the payer. Transmit the claims.Transmit the claims. Review the clearinghouse reports.Review the clearinghouse reports.


Methods for Sending ClaimsMethods for Sending Claims

Cable modemCable modem Digital subscriber line (DSL)Digital subscriber line (DSL) T-1T-1 Direct data entry (DDE)Direct data entry (DDE) Application service provider (ASP)Application service provider (ASP)


Computer Claims SystemsComputer Claims Systems

Carrier-directCarrier-direct The medical practice has its own computer and The medical practice has its own computer and

software to process claims. software to process claims. The insurer sometimes leases a dedicated The insurer sometimes leases a dedicated

terminal to the physician.terminal to the physician. ClearinghouseClearinghouse

The physician’s office sends paper claims or a The physician’s office sends paper claims or a disk or tape to the clearinghouse, which forwards disk or tape to the clearinghouse, which forwards a batch of claims to the insurer.a batch of claims to the insurer.


Transmission ReportsTransmission Reports

Send and receive file reportsSend and receive file reports Scrubber reportScrubber report Transaction transmission summaryTransaction transmission summary Rejection analysis reportRejection analysis report Electronic inquiry or claims status reviewElectronic inquiry or claims status review


Administrative Simplification Administrative Simplification Enforcement Tool (ASET)Enforcement Tool (ASET)

Online toolOnline tool Assists healthcare providers, payers, Assists healthcare providers, payers,

clearinghouses, and others to submit clearinghouses, and others to submit complaints regarding the HIPAA TCS rulecomplaints regarding the HIPAA TCS rule


The Security Rule: The Security Rule: Administrative, Physical, and Administrative, Physical, and

Technical SafeguardsTechnical Safeguards Administrative safeguardsAdministrative safeguards

information access controlsinformation access controls internal auditsinternal audits risk analysis and managementrisk analysis and management termination procedurestermination procedures

Technical safeguardsTechnical safeguards access controlsaccess controls audit controlsaudit controls automatic log-offsautomatic log-offs use of passwordsuse of passwords


The Security Rule (cont’d.)The Security Rule (cont’d.)

Physical safeguardsPhysical safeguards media and equipment controlsmedia and equipment controls physical access controlsphysical access controls secure workstationsecure workstation


Computer Security Prevention Computer Security Prevention MeasuresMeasures

Use software that stores files in coded formUse software that stores files in coded form Never leave disks or tapes unguardedNever leave disks or tapes unguarded Use a privacy filter on the computer monitorUse a privacy filter on the computer monitor Log off computer before leaving work stationLog off computer before leaving work station Double-check credentials of all consultantsDouble-check credentials of all consultants Read equipment manuals, especially “Security Read equipment manuals, especially “Security

Controls” information, and follow all directionsControls” information, and follow all directions Store confidential data on diskettes or “zip” disks, not Store confidential data on diskettes or “zip” disks, not

the hard drivethe hard drive Store all diskettes in a locked, secure locationStore all diskettes in a locked, secure location Use firewall and antivirus softwareUse firewall and antivirus software Develop passwords for all computer usersDevelop passwords for all computer users Use only account numbers in e-mailUse only account numbers in e-mail


Records ManagementRecords Management

Data storage: back up data frequentlyData storage: back up data frequently Electronic power protection: surge Electronic power protection: surge

suppressors or uninterruptible power supply suppressors or uninterruptible power supply (UPS)(UPS)


Selection of an Selection of an Office Computer System Office Computer System

Cost of basic equipment—purchase or lease?Cost of basic equipment—purchase or lease? AccessoriesAccessories Space requirementsSpace requirements Electrical/transmission linesElectrical/transmission lines Separate fax and modem lines?Separate fax and modem lines? Costs of electricityCosts of electricity Telephone linesTelephone lines MaintenanceMaintenance SoftwareSoftware

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