April 2002 Bulletin

Standardized electronic health care transactions

What orthopaedic practices need to know

By Ronald B. Sterling, CPA, MBA

With the rule requiring standardized electronic interchange of health care transactions required by the Administrative Simplification Section of the Healthcare Insurance Portability and Accountability Act (HIPAA) orthopaedic practices face dramatic changes in how they interact with a wide range of healthcare organizations. The initial HIPAA transactions covered under the rule that are relevant to orthopaedic practices include claims, claim attachments, first report of injury, claim inquiries, eligibility checks, and authorization/certification requests. The impact of these transactions on your practice and your business partners could be significant.

Transaction Standards

The HIPAA transactions include a minimum implementation standard as well as extended capabilities that could be used by specific payers. For example, the HIPAA eligibility transaction allows you to inquire about whether the insurance company covers a patient.

The eligibility transaction can also query on the type of services covered (i.e., Physical Therapy), as well as coverage for specific procedures on a specific date. You may have different exchanges with different payers.

Integration with Your Practice

The transaction set presents a wide range of workflow opportunities, but your existing computer system will impact your ability to capitalize on these changes. In order to check the capability of your software and hardware to accommodate HIPAA transactions, consider the following issues:

Data Items. HIPAA transactions include new data elements that are not kept by many systems. Lack of these items may prevent your practice from formulating HIPAA transactions or limit your use of the transactions. For example, many systems lack data items (ex. date and time verified, status, source) to track eligibility verification.

Workflow Support. HIPAA transactions involve an action on your part, such as submitting an eligibility check or claim inquiry and a relevant response from the payer or sponsor. In order to manage these interactions, your system should track the outstanding transaction, match the incoming response with the transaction, and allow you to follow-up on the response. Such workflow tracking features are missing from many systems today since the current process is manual. For example, claim status requests are mainly handled through paper requests and resubmitted claims. Similarly, many electronic EOB features do not maintain strong audit trails between the various transactions within the same check.

In many other cases, systems do not allow you to track claims, but manage procedure line items only. As you move forward with HIPPA compliance, make sure that your system lets you take advantage of the transactions and does not limit your practice to functions that were not designed to support electronic exchanges.

Policies and Procedures. Current procedures for insurance verification, patient intake, and surgical scheduling will be streamlined by electronic exchanges and online tracking of the status of patient issues and coverage. However, if you do not change your practice policies and procedures to capitalize on these capabilities, your staff could continue to use the manual process they rely on today. For example, some practices continue to use paper schedules, even though they have a computerized scheduler in their system.

To avoid this problem, you should carefully track the developments of your software vendor to insure that it is developing the tools that will allow you to take advantage of the HIPAA transactions and "not just do someone else’s keypunching." Your staff should meet to discuss the specific changes to patient service interactions, scheduling, surgery management, billing, and administration that will allow you to capitalize on the transactions throughout your practice.

Make sure that you have the right tools and the right process to capitalize on the advantages that HIPAA transactions offer in your working relationship with insurers and other healthcare organizations.

Ronald B. Sterling, CPA, MBA, of Sterling Solutions, Silver Spring, Md., is a nationally recognized expert on electronic medical record and practice management systems.

Computer Link welcomes suggestions about future topics for the column and questions about the use of computers in orthopaedic practice. Send your suggestions to the Bulletin at AAOS, 6300 N. River Rd., Rosemont, Ill. 60018.


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