Healthcare EDI needs leadership - electronic data interchange standards formulation - Electronic Data Interchange - Column

Healthcare Financial Management, Oct, 1993 by James J. Moynihan

When the history of healthcare reform is written, 1993 will be remembered as milestone in the way healthcare providers and payers process medical claims. Conversion to the UB92 format will be complete this fall, and the ANSI ASC X12 Health Care Claim (837) standard will be adopted. This standard will be supported by all fiscal intermediaries and carriers by the end of 1993.

Equally as important, the major clearinghouses and hundreds of TPAs, PPOs, and HMOs also will be adopting the standard. Many commercial payers will be receiving medical claims electronically for the first time. Smaller payers are beginning to understand the benefits of EDI because an all-payer standard is finally available. This movement of healthcare insurance into the corporate mainstream of EDI is a major shift that will affect thousands of organizations.

Where did the EDI movement begin, and where did the call for an all-payer EDI standard for claims originate? The request for an X12 claim standard was submitted in April 1989 by William Lachenauer, then head of the information systems department at Community Medical Center, Scranton, Pa. Lachenauer was a member of a healthcare standards group designated HL7 that was developing standards to link application programs found within hospitals. HL7 members recognized that their efforts to eliminate the inefficiencies of paper records should extend to medical claims processing, but interorganizational data exchanges were the province of ANSI ASC X12. Consequently, HL7 submitted a work proposal to X12 calling for a national claims standard. Thus, in 1989, Community Medical Center began a process that in 1993 will change the way government agencies, large insurance companies, and thousands of providers exchange information.

What lessons have been learned?

Participation in the standard setting process is open to all organizations. Any organization with a better idea of how to exchange information may make suggestions.

The standard setting process provides what Teddy Roosevelt once called a "bully platform." Do HFMA members, for example, want to improve the process of attachments? If so, they should create a standard that meets payer and provider needs for efficient claims processing. Better yet, they should make the electronic standard for sending specific information to the payer, such as the operative report, the same as the standard that would be used to send the same information to a local physician.

The most critical issue facing EDI is not one of technology; it is one of leadership. The technology exists to slash administrative costs and eliminate the inefficiencies of information recorded on paper, but standards are needed to exchange information electronically. Data highways alone are not enough; the standard vehicles to move data along them are still required. Community Medical Center exercised leadership in 1989 to initiate the development of an EDI claim standard. Who will provide the leadership of tomorrow?

Where will leadership be needed?

Standards are now completed, or at least well under way, for most of the electronic exchanges between payers and providers. Work must now begin on standards for electronic data exchanges between physicians and providers. Some of these exchanges will involve clinical information, such as laboratory data and discharge summaries. Other information requiring exchange will be financial in nature.

As hospitals study how best to work together with physicians in accountable health plans or physician-hospital organizations, many specific questions will need to be answered. How many requests for face sheet data does the average hospital process each month? What would the impact be on customer service if patient demographic data could be transferred to physicians electronically? If discharge data could be transferred to home medical equipment dealers, visiting nurse associations, and nursing homes, how much could discharge planners' workloads be reduced? Could the hospital admissions process be improved by the receipt of data from any of these trading partners?

At a recent Medical Group Management Association (MGMA) seminar on EDI, healthcare managers in attendance indicated that they wanted an EDI standard for scheduling and confirming outpatient appointments. They wanted another standard that would allow for electronic transfer of credentialing information. There was a consensus that physicians would be more interested in EDI if clinical applications were added to claims-related transactions. EDI would make better sense for physicians if it could help control costs and assist them in better fulfilling their mission of providing care.

The exchange of both clinical and financial data between hospitals and physicians is already underway--and growing--on paper. More and more information is being exchanged by facsimile, and physicians are coping by inserting rapidly deteriorating facsimile paper into manilla folders. There is a better way to exchange information.

The same software and technology that connect payers and providers for claims can be used to exchange both financial and clinical data between physicians and hospitals. EDI standards can help link physicians and hospitals through the exchange of portions of computerized patient records. While most want ultimately to be able to capture all the data in a computerized patient record, it is difficult to chart a course from the present to that future. Concentrating an EDI effort on a small subset of clinical data between physicians and hospitals could provide short-term benefits without the need for a prohibitively expensive hardware and software investment.