Written Paper

Professor Thatcher

Good afternoon. I want to take this opportunity to welcome you all to Dr. Julie Thatcher office. Our patients are our priority, and we want to provide the best care for them. We are happy to have you as part of our team. My name is Reynaldo Fuentes, and I am the office manager/CEO at Dr. Thatcher's office. We want you to understand that it is essential to know what EDI (Electronic Data Interchange) is and how it facilitates electronic exchanges. It is additionally fundamental that you understand how HIPAA (Health Insurance Portability and Accountability Act) has changed our healthcare information and how it is transmitted in EDI. I feel that it is my duty as your office manager to teach you as new employees on this subject as well as illustrate to you the relationship between Electronic Health records, reimbursement, HIPAA, and EDI transactions. If you have questions or concerns, please don’t hesitate to ask me or any of the staff members. Please make sure that you peruse through the ICD-10CM and CPT code manuals in the office because that will also help you to get a better understanding of coding as we begin our training. Once again, welcome to the office.

To start out, I want to explain what Electric Data Interchange (EDI) is. EDI is formally defined as a transfer of structured data, by agreed message standards, from one computer system to another without human intervention. EDI is the electronic interchange of business information using a standardized format; the process in which allows one company to send data to another company electronically rather than sending it by paper or mail. By moving from a paper-based exchange of healthcare document to one that is electronic, providers enjoy significant benefits such as reduced cost, increased processing speed, reduced errors and improved relationships with healthcare partners and patients. EDI replaces postal mail, fax, and email. Email is considered an electronic approach, the documents exchanged via email must still be handled by people rather than computers, which allows for errors to occur. Having people involved can slow down the process of the documents whereas just utilizing EDI, documents can flow straight through to the appropriate application on the receiver’s computer, and processing can begin immediately. In particular, electronic claim submission provides a more comfortable, faster way to submit claims. Today, tens of thousands of healthcare practitioners have eliminated paper claims and are submitting electronic applications. Some of the advantages of electronic claim submission: quicker claim submission, which means faster reimbursement to the office, no paper claims to stock and complete, simplified record keeping by eliminating lost claims paperwork, and reduced administrative time and the costs to process and mail paper claims. EDI system is there to aide with patient's records, and also ensuring claims are submitted, and insurers are getting compensated for their services. Healthcare facilities have standard HIPAA guidelines to follow. Due to these standard guidelines implemented by HIPAA, there are standardized EDI formats that are requiring specific transaction principles for eight types of EDI. It is crucial to know what HIPAA has standardized for EDI systems. The laws are set for the request, settlement of installment, application status, referrals, health arrangement premiums and also enlistment retail medication and wellbeing demand. HIPAA has instituted what is known as HIPAA Electronic Transaction, and Code Sets Standards. The Health Insurance Portability and Accountability Act (HIPAA) has mandated that all transactions are to be sent through electronically. The first way that we can communicate data is peer to peer. This form is where we can connect directly to the insurance company and transmit information. When we transfer the information this way, it will be streamed directly from the insurance company’s server with no interruptions. The second way we communicate EDI is through a value-added network (VAN). According to “Encyclopedia.com” (2016), “a VAN is a network dedicated exclusively to EDI” (Communication Methods). A VAN functions similar to telephone lines as far as transmission. However, they offer many amenities that are attractive to companies. For example; VAN’s contain storage areas that are similar to email storage. Businesses can group data to be sent to the insurance company in one place until all information is collected and ready to be forwarded. Some VAN’s offer translation services, data backup, and even warnings if EDI is not sent correctly. For companies to utilize a VAN, they must have a subscription that they are invoiced on a monthly basis. Each VAN is different in the way companies are charged, but it is a secure network to protect patients and offices on a daily basis. The last way we can transfer patient data electronically is through the internet. When the information is sent via the web, it must be encrypted in a way that only the insurance company can understand. We don’t want any of our patient’s information viewable for others to see and interpret for illegal use. Utilizing the Internet for EDI is our primary source of transferring electronic data/information. It is also more cost-efficient and more readily for all involved in billing. We utilize EDI because it proves to continue its major business value by lowering costs, improving speed, accuracy and business efficiency (“EDI Basics”, 2015).

In our next step of the training, I would like to concentrate on understanding the changes HIPAA has implemented and how healthcare information is transmitted in EDI. To improve the efficiency and effectiveness of the healthcare system, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), included Administrative Simplification provisions that required HHS (Health and Human Services) to adopt national standards for electronic health care transactions and code sets, unique health identifiers, and security (“HealthPartners”, 2015). Also, the Department of Health and Human Services' website presents guidelines for technical securiin the four following areas: access control, audit controls, integrity controls and transmission security. It is essential to understand how HIPAA affects EDI because if we submit claims not by their rules and regulations, it could result in non-reimbursement of requests that we have sent, and re-coding of claims. Re-coding of claims is not an efficient business practice and wastes valuable time and money. HIPAA has standardized the use of ICD, CPT, and HCPCS codes, so all information is coded the same for any party involved in EDI. I want to give you a look at the eight transactions required by HIPAA, so, that you can further understand electronic transmission (Gartee, 2011).

1. Claims or equivalent encounters and coordination of benefits (ANSI 837). Due to differences in reimbursement methodologies, variations were made in this format to accommodate different providers. The formats are ANSI 837-P (professional claims), ANSI 837-I (institutional claims), and ANSI 835-D (dental claims).

2. Remittance and Payments advice (ANSI 835, Health Care Claim Payment/Advice).

3. Claim status inquiry and response (ANSI 276, Health Care Claim Status Request; ANSI 277, Health Care Claim Status Response).

4. Eligibility benefit inquiry and response (ANSI 270, Health Care Eligibility Benefit Inquiry; ANSI 271, Health Care Eligibility Benefit Response).

5. Referral certification and authorization (ANSI 278, Health Care Services Request for Review and Response).

6. Health plan premium payments (ANSI 820, Payroll Deducted and Other Group Premium Payment for Insurance Products).

7. Enrollment and de-enrollment in health plan (ANSI 834, Benefit Enrollment and Maintenance)

8. Retail drug claims, coordination of drug benefits and eligibility inquiry (NCPDP 5.1, Version D.0) (pp. 241-242).

These are all important stages/steps in how to submitt electronic data per HIPAA, and all steps are required to be fully compliant. Adhering to these standards set forth by HIPAA allows a relationship between our electronic health records, reimbursements, and transmission of EDI to become a more efficient paperless office. EHR, Reimbursement, HIPAA & EDI. For coders, billers, and other healthcare business experts, an instruction on EDI is essential because of HIPAA necessities that cover all elements required in transmitting electronic health services data (e.g., health care plans, medical service clearinghouses, and certain health care suppliers).

Many changes that have occurred within healthcare have been directives to enhance productivity and effectiveness through standardization. According to “USF Health,” (2016), “A key provision of the American Recovery and Reinvestment Act of 2009 is about to go into effect, and healthcare providers across the country are preparing to comply. As of January 1, 2014, all public and private healthcare providers and other eligible professionals (EP) must use this tool of electronic medical records (EMR). So, that they can maintain their existing Medicaid and Medicare reimbursement level "Federal Mandates for Healthcare: Digital Record-Keeping Will Be Required of Public and Private Healthcare Providers". Our office has complied with the Recovery Act of 2009, and right now we are using this tool, because the majority of our patients are on Medicare and Medicaid (CMS). We did not want our reimbursements from CMS to decline, and we want to be acquiescent in our records. In our office, we provide electronic records for patients, and we submit billing for reimbursements through continuous usage of EDI. Our office has adopted EHR so that we can communicate with laboratories and other health facilities that serve our patients. With the incorporation of EHR, we have the complete picture of a patient’s health when treating them in the office. When we treat patients, it is important to be aware that the code the for a diagnosis that the physician is referring, is correct. So, that our office can reimbursed the appropriate amount for the particular patient. The diagnosis codes are input into the patient’s EHR and then sent through EDI to the right insurance agencies. Once the insurance companies have completed the reviews on a patient chart, we will receive the reimbursement funds for the patient’s services we provided. All of these steps are very significant to our operation, and it is imperative to understand the relationship between our electronic health records (EHR), the reimbursements we receive, and the effect that HIPAA has on our EDI transactions.

I know that these are a lot of information to take in, but I hope it has been an informative session/lesson to assist you on your journey. I hope it will get you a better understanding of how our office operates. To know what EDI is and how it is utilized within our office setting will put you on the proper path to submit a patient information to the insurance companies. Learning how essential and mandatory EDI transmission through HIPAA is, will assist you in becoming a better coder and biller for our office. My advice to you as new employee is, that we can gain knowledge and also know about the importance of EDI to the facility and the part you would play in assisting with this successful process. It is very important to comply with the rules that are set so that we can save our office money, make reimbursements faster and supply better quality care for our patients. Our doctor's office is happy to have you as new staff members, and we believe that you all will be of a great asset to Dr. Thatcher and her team. Please feel free to contact me directly if you have any further questions or concerns.

Best regards,

Reynaldo Fuentes, CEO (Office Manager)