FACT SHEET
OVERVIEW
The U.S Department of Health and Human Services (HHS) proposed a rule that would adopt updated versions of the standards for electronic transactions under the authority of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The proposed rule would also adopt a standard for the Medicaid pharmacy subrogation transaction. The updated standards would replace the current standards, and would promote the efficiencies needed in electronic transactions.
BACKGROUND
HIPAA requires the Secretary of HHS to adopt standards that covered entities are required to use in electronically conducting certain health care administrative transactions, such as claims, remittance, eligibility, and claims status requests and responses. Covered entities include health plans, health care clearinghouses, and certain health care providers. The Transactions and Code Sets final rule, published on August 17, 2000, adopted standards for the statutorily-designed transactions. Modifications to some of the standards adopted in that first final rule were made in a subsequent final rule published on February 20, 2003. Covered entities must use only the standards that have been adopted by HHS, and are not permitted to use newer versions of the standards unless they are adopted by HHS.
The current versions of the standards, the Accredited Standards Committee X12 Version 4010/4010A1 (Version 4010/4010A1), for health care transactions, and the National Council for Prescription Drug Programs Version 5.1 (Version 5.1), for pharmacy transactions, are widely recognized as outdated and lacking certain functionality needed by the health care industry. The proposed rule announced would replace the current versions with Version 5010 and Version D.0, respectively.
The rule also proposes the adoption of a standard for the Medicaid pharmacy subrogation transaction. Medicaid pharmacy subrogation is the process by which State Medicaid agencies recoup funds for payments they have made for pharmacy services for Medicaid recipients, in cases where another third party payer has primary financial responsibility. No HIPAA standard had been adopted for this transaction. The adoption of a standard for this transaction would increase efficiencies and reduce costs in this sector.
Version 5010 (Health Care Transactions)
The updated version of the health care transactions standard would replace Version 4010/4010A1. The new version, Version 5010, includes structural, front matter, technical, and data content improvements. Because the updated versions are more specific in requiring the data that is needed, collected, and transmitted in a transaction, their adoption would reduce ambiguities. Version 5010 also would address a variety of currently unmet business needs, including, for example, providing on institutional claims an indicator for conditions that were “present on admission.” Version 5010 would also accommodate the use of the International Classification of Diseases, Tenth Revision (ICD-10) code sets, which are not supported by Version 4010/4010A1. CMS also issued a proposed regulation to adopt the ICD-10 code sets.
Version D.0 (Pharmacy Claims)
The updated version of the pharmacy claims transactions standard would replace the current Version 5.1 with Version D.0. Version D.0 specifically addresses business needs that have evolved with the implementation of the Medicare prescription drug benefit (Part D) as well as changes within the health care industry. New data elements and rejection codes in Version D.0 would facilitate both coordination of benefits claims processing and Medicare Part D claims processing. In addition, Version D.0 would:
- Provide more complete eligibility information for Medicare Part D and other insurance coverage;
- Better identify patient responsibility, benefits stages, and coverage gaps on secondary claims; and
- Facilitate the billing of multiple ingredients in processing claims for compounded drugs.
Medicaid Pharmacy Subrogation Standard
Currently there is no adopted standard for the Medicaid pharmacy subrogation transaction, although many States conduct this transaction electronically. Presently, States employ a variety of standards with different payors. The adoption of a standard for use across the industry would improve efficiencies while reducing costs for Medicaid programs.
HHS proposes a compliance date for implementing Version 5010 and Version D.0 of April 1, 2010. For the Medicaid pharmacy subrogation standard, HHS proposes a compliance date two years after the effective date of the final rule, except for small health plans, which would have an additional year to comply.
The updated transaction standards proposed rule and the ICD-10 code sets proposed rule may be viewed at www.cms.hhs.gov/TransactionCodeSetsStands/02_TransactionsandCodeSetsRegulations.asp#TopOfPage.
Comments on the updated transaction standards proposed rule are due by 5:00 p.m. Eastern time on Oct. 21, 2008.
Comments on the ICD-10 code sets proposed rule are due by 5:00 p.m. Eastern time on Oct. 21, 2008. A fact sheet on the ICD-10 proposed rule may be viewed at http://www.cms.gov/About-CMS/Public-Affairs/MediaReleaseDatabase/Fact-Sheets/index.html
A news release on both proposed rules may be viewed at http://www.hhs.gov/news/press/2008pres/08/20080815a.html.
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