Paper Claims and Encounter Data

Addressing the Confusion Related to CMS’s Encounter Data Mandate

Whether it is the various industry calls, conferences or even CMS’s own meetings, the question about what to do with paper claims keeps coming up. This is a short look at the issue including background, unknowns and an attempt to surmise what is most likely to happen.

Background

Paper to dataCMS has decided to replace the current method of reporting risk adjustment information called RAPS with a new process called the Encounter Data Processing System (EDPS). This process requires plans to submit EDI transactions that contain much more information about members, providers, dates of service, diagnosis, treatments and amounts. The EDPS mandate also requires every encounter to be submitted, even if denied. When compared to the 7 or so fields required under RAPS, EDPS means that plans have to submit somewhere around 500 times as much data as they did before.

Many MAOs are frustrated with various areas of the effort from slipping deadlines to changing requirements, but this article will focus on unique problems associated with paper claims.

EDPS calls for data post adjudication
Perhaps this is the most important thing to remember when trying to figure out any problem relating to the paper claims issue. The data that CMS has asked for is not simply a forwarded copy of whatever the provider submitted to the MAO. Instead, CMS is asking for not only the “claim” data, but also the results of the claim through the adjudication process. One simple way to look at the EDPS requirements is as a combination of the originally submitted claim combined with the explanation of benefits / payments. CMS wants to see what lines were accepted, for how much, as well as what lines were denied. Even in a best case, the claim – paper or electronic – only tells half the story.

Paper claims typically get into the claims system in one of two ways:

  •  Paper Claims are entered directly into the system.
  •  Paper claims are scanned, OCRed and typically converted to EDI.

The “paper” EDI is injected into the same EDI stream or a parallel EDI stream to be processed in much the same way as any other inbound electronic claim. Either way, the claims are paid using the same system and rules after the data is entered. This means that to comply with CMS’s Encounter Data Mandate, the data for the outbound file should be pulled from a common pool (usually the plan’s claims system), regardless of submission type. When paper claims are done being processed (paid or denied) they are hard to distinguish from claims that were entered electronically. As such we need to ask ourselves what is so different about a paper claim? To do this we should look at three things:

  1. Identify what data cannot be put on a paper claim form
  2. Examine what data can be put on a form but generally is NOT by the submitter
  3. Find out if any information is present on the paper claim, but not entered into the system for any reason.

After looking at these three areas, we can see what situations a valid 5010 which will comply with the CMS requirements can NOT be created from a claim that originally came in on paper. For area one, it usually turns out that the paper claim has the ability to contain all the information needed. Most of the cases where there are deltas reflect the fact that the paper claims can make a valid but DATA POOR transaction when submitted. For example, there are only 4 spaces available for diagnosis codes. This is an example of a limitation of the paper form when conducting business with a MAO plan, but certainly there is no requirement that there has to be MORE than 4 codes when submitting 5010. While all the data needed by CMS is not available on the form to make a valid transaction, most of that can be added such as the submitter and receiver information. One good example of data that really doesn’t have a place on a professional claim is a Coordination of Benefits (COB) claim.
As it turns out, areas 2 and 3 are where the real problems come up. To make a valid submission, plans need to submit NPI numbers for billing and rendering providers. If providers are not accustomed to providing things like NPI over the years, they may not give it to the plan. In this case, the data CAN be put on the form, but the MAO has never complained about it not being there and so it is skipped. In very much the same way, even when data is put on the form, it might not be entered. On the UB-04, there is actually a place to note an ambulance pick up and drop off location for institutional claims. This field is rarely if ever filled out on an ambulance claim, but even if it were, there may be no place to put that data in the claim system. If the plan doesn’t require it of the ambulance company to get payment and the data is not tracked, it simply won’t be keyed in.
Enforcement of missing data on a paper claim is much tougher than with electronic claims. With an EDI claim, rules can be put in to reject the claim at the EDI gateway. Paper claims are already in the door and rejecting it for something like a missing NPI is most likely more work than simply looking it up. NPI can many times be populated with internal provider tables already integrated into the claims process. If claims tables still don’t have the data, integrating an NPI look up from the NPPES database would certainly help.
Most of the required data for EDPS would be required by the claim system to begin with – paper or EDI. For example, EDPS requires treatment codes where RAPS did not. This has no impact though since every claim system on the planet requires treatment codes anyway at this point. The areas that are required under EDPS that are often not available on the paper claim (for any of the three reasons listed) happen to be areas that are not required or provided in the EDI file. This means that the problems from paper claims may not be unique to paper claims. Instead they are issues with the EDPS requirements as a whole.

Could CMS Offer Eased Requirements for Paper Claims if They Wanted To?
While anything is possible, it is highly unlikely. First off, CMS vastly underestimates the amount of paper being submitted to plans today. Medicare FFS sees very little if any paper and so they can’t seem to imagine why would it be any different at a commercial plan. As such, the fix to them is less important than all the other areas that are making noise in Encounter Data Processing. Second, if we assumed that CMS was interested in doing something about paper claims, the issue is that there isn’t really a reliable way for CMS to know the claim was originally paper in the first place. This is due to:

  • CMS EDPS / EDI 837 v5010 does not have a paper claims indicator
  • Even if there were an indicator, most plans claims systems would not be able to populate it reliably

If these two issues were ever worked out though, the resulting requirements should be a very reasonable bar to hit. Paper claims contain all the fields to report risk, show utilization and price the claims – the stated goals of collecting encounter data in the first place. If paper claim data requirements are ever defined by CMS, treating them as defacto standards for other data types would likely yield a comprehensive, reasonable set of requirements for EDPS as a whole instead of the reach that many requirements are.

What should plans do?
In almost every case, claims that were submitted on paper to the MAO can be turned into a valid, submittable EDPS transaction for CMS. At worst, these transactions may be “data poor” due to less ability to submit diagnosis codes, however that would be true of both RAPS and EDPS. The claims that are truly unsubmittable to CMS due to a missing data element such as COB data or Ambulance Pick Up address are very likely also problems for the native EDI claims as well.
Perhaps instead of trying to work out every possible scenario where a paper claim would present a problem, plans should push back at CMS on the requirements that don’t directly relate to the purpose of EDPS.

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The Office of the Future

Scientific American has an interview with Xerox’s Palo Alto Research Center (PARC) research fellow David Biegelsen who has been at the lab since the beginning.  It is a really interesting look back 40 years at “The Office of The Future”.  If you are unfamiliar with PARC (as I was) from the article:

Xerox established its Palo Alto Research Center (better known as Xerox PARC) in June 1970 as a West Coast extension of its research and development laboratories. PARC researchers proved wildly successful in pioneering many contemporary business technologies—the PC (the first was called the “Alto”), graphical user interface (GUI), Ethernet local area computer network (LAN) and laser printing, to name just a few. Xerox, however, was considerably less successful (and less interested) in commercializing much of PARC’s technology itself, leaving the door open for Apple, IBM, Microsoft and others to capitalize on PARC’s innovations.

This is a good reminder for me that being right is not enough.  These folks were ahead of the curve by a long shot and, they were on target about how and what technologies would develop and become useful.  (Image for a moment having email a regular part of your day in 1970).  The thing is that a lot of areas had to catch up before they could capitalize on it.

About 10 years ago, I remember speaking to a vertical market analyst who told me that most of the time, companies when pursuing vertical markets over-estimate short term results and under-estimate long term results.  That rings true here as well.  Having a clear vision of what the future holds may mean that you have to keep pressing for a very long time before you will really see the fruits of your labor pay off.  Just because you are not seeing the results over night, it doesn’t mean your vision is wrong.

Paper Medical Records Are Here to Stay

Seems Permanent . . .

About 14 years ago, I got involved with automating medical claims. For those not familiar with the process, as it turns out doctors still lick stamps and send paper medical bills (or claims) to health insurance companies for payment. Sure they can submit electronic bills as EDI, but many don’t. There are a couple big reasons (and a million small ones) that lots of paper claims are still out there:

– Loose Standards (837 the EDI format is implemented in lots of different ways)

– Addressing / Delivery (imagine a doctor needing a separate phone line for every payer – while it is not quite this bad, it certainly isn’t like dropping an envelope in a mailbox (or sending an email for that matter) and knowing it will get to an address despite the fact that you have never talked to them)

So while the above could be overcome, it is easier in lots of cases to just keep doing what you are doing. When it comes down to it, there is a utility to paper that is hard to beat in the short term. This is a common theme to PaperInbox, but in this case I want to discuss how it applies to Medical Records.

Whether it is industry news or even mainstream news covering the new healthcare bill, people talk a lot about the EMR or Electronic Medical Records. EMRs are slated to give us all kinds of great efficiencies from better care due from access to patient history at point of care to huge administrative savings that come from eliminating clerical work. These are pretty great things and somewhat inevitable in the long term. In the short term, I think something quite different will take place. Continue reading “Paper Medical Records Are Here to Stay”

2 Areas Not To Outsource

Part 1 Here

In my last post, I submitted that today’s outsourcing is not all that different from basic economic specialization.  We can see that due to advances in technology – particularly communications – the pool of places, talent and resources to draw from is now essentially global and nearing limitless.  Often times my customers ask me questions and I have to point out that the question they have asked is not a matter of “can” something be done, but instead “should” it.  That is where these options with outsourcing have left us.

So what areas should a successful corporation focus on?  Obviously those that offer the biggest return in cost savings.  Now those who have done business with me over the years know me to be perhaps obsessive when it comes to focusing on hard dollar ROI and having very little tolerance for the soft dollar pay-backs that are often used to justify technology sales.  That being said, one has to consider all the COSTS including harder to estimate impacts on other areas of the organization.   Continue reading “2 Areas Not To Outsource”

What To Outsource

PART 1: Background

For years now, companies in corporate America have been turning to outsourcing to help improve margins and make their organizations more competitive.  The thing is that the successful stories – the ones that truly deliver on the promise – are the ones we hear the least about.  Conversely, the biggest disasters are told many times becoming modern versions of the warnings to mariners of sea monsters or the edge of the earth over time.

Why hide it?

Well as it turns out, large companies in America have lots of competition looking to tighten the belt just as much as they are.  When a company outsources successfully a particular part of the operation, the only people they would want to tell about it might be shareholders or potential shareholders.  Then again, if it is successful enough, the better numbers should speak for themselves better than any details of their process ever could.  As such they would be only giving their competition a roadmap to re-level the playing field.  In addition, outsourcing can have negative connotations with some customers regardless of the positive overall effect on the product or service they are purchasing.  Better to keep the best stuff under a hat overall in most cases.

As it turns out, there are huge amounts of information available on successful cases of outsourcing things as varied as IT Services, Call Center work, Tech Support, Data Entry, Manufacturing or any number of others.  The problem is that this information is usually generated courtesy of the company providing the outsourcing services.  Predictably they are going to give “case studies” that proffer stories that might as well include cutlery jumping over celestial bodies (ibid Neal Stephenson).

So how is the busy COO or President to know what is best to pursue and what things should be avoided?  My approach to almost all problems in life is to reduce them to their primary and build back up from there.  I’ll try to be brief since most readers understand the background, but the point needs to be made.  Outsourcing is a modern way of expressing a very old concept: economic specialization.  Without economic specialization, the modern world could not exist.  If each of us had to grow our own food, build our own shelter, weave our own clothes, provide our own healthcare, etc. we would have little time left to concentrate on designing efficient engines, packing more transistors on a wafer of silicone or making a beautiful sculpture.  Today’s modern communication and transportation have simply allowed us to take advantage of varied conditions in further away places.  The answer to WHY outsource lies in the very same roots as any economic specialization.

NEXT POST: The 2 Areas Not to Outsource

Weighing Tech Benefits

Heavy Features
Bigger might just mean more expensive

There are reasons I enjoy my work in a technology related field.  One of the most fun is the whole idea of better, faster, cheaper that I get to see new examples of every day.  If you think back a bit, in 1980 if you bought a VCR it was about $500 (in 1980 dollars), the size of a refrigerator, had no remote, no auto-tracking, no stereo audio output and broke if you rewound tapes too much.  Just before they stopped selling VCRs a couple years ago, you could go into a Walmart and buy one with a remote, produced a clear picture automatically, stereo output, was only maybe 4 times larger than the tapes themselves and cost $39 in 2006 dollars!  It was better in every imaginable way and way cheaper to boot.

Continue reading “Weighing Tech Benefits”