The Double Standard for Healthcare Data

Healthcare providers collect an extensive amount of data regarding their patient’s medical history. Most providers understand the importance of maintaining accurate and complete health records. Collectively, this data tells a story of the medical history of the patient and can provide insight into new conditions or symptoms that might develop in the future. If you can combine the data from many patients into a database and examine it, new trends can be identified that can lead to new treatments, more efficient healthcare delivery, and better outcomes.

Provider organizations understand the value of this data. They would not think of discarding the medical record after a patient encounter or transferring the only existing copy of this data to a third party for processing, paying for a copy of the data if it was ever needed in the future or losing the data entirely if the third party goes out of business.

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Preparing for the Transition to Value-Based Payments

One thing I have learned over my 30 years in healthcare IT is that our industry will fight against change with its last breath, regardless of the logic or benefits of any new process that might be under consideration. ICD10 is the most recent example. It is simply a technical change in how one data element in healthcare patient information is recorded and processed.

Despite how it may impact the industry financially due to implementation costs and delays, it is a significant improvement in the quality of clinical data collected and a necessary step in the evolution of healthcare IT systems. The clinical and financial decisions that depend on the accuracy of diagnoses will benefit from the ability to establish new relationships regarding the effectiveness and cost benefits of different treatments plans. Once this new code set is established, new insights will be gained through this data that would not have been possible with the more general ICD9 codes.

Value-Based Payments

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Last Minute ICD10 Testing Opportunities

CMS has finished the third and final round of end-to-end testing for claims containing ICD10 codes.  The tests results included an 87% acceptance rate of the claims submitted.  Only 1.8% of the claims were rejected because of the new codes, 2.6% were rejected because of invalid ICD9 codes.  These rejection rates are about normal for the current production claims processing environment.

The minor problems discovered by CMS in their system after round two of tests in April appear to be corrected.  On the surface it would appear that the industry, or at least CMS, is ready to process these claims, however, these statistics are deceiving.


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Embracing Disruption for Growth

As we approach the October deadline for ICD10, you can sense the tension in the industry as the unknown consequences of using this code set move closer to the present as each day passes, or as Snoopy would begin the story, it was a dark and stormy night.

Even the most prepared organizations can only guess what the impact of switching to ICD10 will have on their transaction processing, cash flow, and procedures.  Every organization is linked to others and the disruption caused by this will be felt by everyone.  It can’t be avoided, only mitigated through planning, preparation, and then making adjustments quickly.

Charles M. Schulz, Snoopy
Charles M. Schulz, Snoopy

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The Potential of Data Analytics in Healthcare

Earlier this week, I attended a symposium on healthcare data analytics held by Health Data Management in Chicago.  This was the fourth year of the convention and the first year that I attended.  I have attended many healthcare conventions over the last 30 years, mostly related to financial transactions, data and topics related to revenue cycle management.  This meeting was unique in that it related data to all types of healthcare management and showed how numbers could be used to predict the future as well as analyze the past.

Forward thinking organizations were already using analytics to do some pretty amazing things.  One facility had developed tools to predict future readmission rates of their own patients, another had predictive analytics for projecting future short term emergency department demand so that they could staff for these fluctuations in advance.  This tool used internal data collected by the healthcare organization and external data like traffic, weather and social media.

Vendors had tools that could not only model historical data and test hypotheses, but could measure and identify trends from data unseen by users.  New algorithms used in other industries can be applied to healthcare data to allow computers to assist users to explore their own information.  Think of when Netflix shows you “other films you may like” or when Amazon suggests similar products.  This technology can be used in healthcare to suggest things you may be looking for, but may not have thought of yet.

Bubble Graph
Potential of Analytics

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Stagnation in HIPAA Adoption Rates

A few weeks ago I wrote a short blog about the recently released statistics on the adoption rate of HIPAA transactions compiled by CAQH for the calendar year of 2013. This report is called the 2014 CAQH index and is available through the CAQH web site ( or directly through this link:

This study is actually the second year in a row where they collected this data so in addition to providing adoption rates for 2013, the data for 2012 is available as well along with a measurement of change in the adoption rate of these transactions over a year.

Here are the adoption rates for the two years for the three most common standardized healthcare electronic transactions:

Claim Submission 2012 90.2% 2013 91.8% Change +1.46%
Eligibility 2012 64.7% 2013 65.3% Change +0.6%
Remittance Advice 2013 42.7% 2013 46.4% Change +3.7%

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CMS Report Card on ICD10 End-to-End Testing

Medicare held a conference call yesterday (2/26/15) regarding the status of testing between Medicare provider systems, clearinghouses, and the CMS adjudication systems that will be used for processing claims with ICD10 codes in October.

Medicare has been ready for ICD10 for several years. Each quarter, they have updated their systems to prepare for the transition. Early this year, they ran their first live test that involved the processing of test claims submitted by volunteers through the entire adjudication process, including providing remittances.


This is referred to by CMS as “end-to-end” testing. This process allows the providers to test their processes including coding with ICD10, the validity of their claim files, and the payments and adjustments returned for the services. It also allows CMS to fine tune their systems to make sure they are ready in October.

There were 661 participating submitters that represented about 1400 NPIs. The tests were performed from 1/26 – 2/3. 14,929 claims were processed and about 81% were accepted. 6% had errors related to ICD9 or ICD10 codes, 13% had other errors not related to ICD10. Of these claims, 56% were professional, 38% institutional and the others suppliers, like DME. Continue reading

Preserving Your HIPAA Transaction Files

A few days ago I had a call from a current customer.  They needed help with a project to find claim data that met a certain criteria for additional action.  In this case, a major commercial payer had paid claims late over an extended period of time to healthcare providers all over the country.  This particular hospital had learned at a conference that they could collect the substantial interest on these claims by simply creating a list of the claims that qualified and submitting this list and supporting documentation to the payer.  They had contacted a consultant that was going to assist them with this process.  All they needed was a way to identify these claims and create this list.


One of our products (835Direct) is capable of loading electronic remittances (835s) into a database and mining the data back out in a variety of formats.  It could have been used to examine the remittance data from this payer and produce a spreadsheet of all claims where the difference in the bill date and the payment date was greater than x. However, the software they use to obtain their remittances imported the remittances into a proprietary product for printing EOBs, posting to AR and such, but did not provide the capability of producing this list.  Furthermore, this vendor does not forward the 835 remittances they receive on behalf of the customer on to the customer.  After they are imported, they are archived by the vendor and the customer must pay service fees to obtain their own information in the original 835 format.  This customer is exploring this option, but even if it is worth the expense, it will take additional time to obtain this information. Continue reading

Calculating the Potential Savings of Automating Administrative Transactions


The cost of processing administrative transactions associated with health insurance claims is part of doing business as a healthcare provider and a health plan.  During the last fifteen years, HIPAA has established standards for conducting many of these transactions electronically.  The Affordable Care Act introduced Operating Rules that are making these transactions mandatory for health plans when providers request them.  In 2013, the claim status transactions (276/277) and the eligibility transaction (270/271) became mandatory standards.  In 2014, the 835 electronic remittance and the EFT became available to any provider requesting them from a health plan.  In addition, the ACA requires that these payment transactions occur within three days of each other and that standardized codes are used for certain types of adjustments and remarks. Continue reading

Implementing the ERA and EFT Operating Rules

In earlier articles, we talked about the upcoming implementation of the ACA-mandated EFT and ERA Operating rules that will require payers to make available to providers ANSI 835 electronic remittances and EFT procedures for payment processing.  We talked about the benefits of implementing these processes into your revenue cycle workflow to address the problems associated with paper remittances and checks.

Now that this deadline is approaching, providers should be developing a strategy for implementing these processes with payers who currently conduct these transactions on paper.  This begins with getting a list all health plans you do business with and importing this data into a spreadsheet.  Record which ones use paper or electronic remittances and which ones use EFT or checks.  Your goal should be to get everyone switched to the electronic alternative for each transaction. Continue reading