Plan now for processing changes - Patient Accounts Management - Column

Healthcare Financial Management, Feb, 1992 by Dan Rode

Last month I mentioned several changes soon to be experienced in claims processing and other areas of healthcare electronic processing. Because "Patient Accounts Management" usually is directed towards healthcare financial managers, this month's column discusses coordination between financial managers and their organizations' computer and data resource staffs.

As the healthcare industry begin to follow established information transformation and transmission protocols and standards of other industries, individual healthcare providers, payers, and sponsors(a) MUST examine their capacities to handle coming changes. Organizations that fail to prepare and plan for such change will soon find themselves locked in systems confusion and at a competitive disadvantage.

EDI and functional organization

Adoption of electronic data interchange (EDI) means that an organization must be able to collect and store its data so that it can send transmissions to other business partners (payers, providers, or sponsors). While EDI allows a user to translate its data to any other computer or partner, it cannot do so unless the data are available. Moreover, a user cannot receive data from an EDI transmission if it does not have capacity to store it and then use it.

As a result, users, or potential users, of EDI, must examine how and where data are stored in their databases and how they are transferred within the organization.

Such a simple task is complicated when a single organization has several data bases and multiple and varied operating systems.

Movement of data and establishment of data elements to enable an organization to use EDI can take considerable user and data processing resources. Use of these resources will likely conflict with other needs within an organization. Some organizations may turn to programs such as HL-7, others will manufacture internal solutions. Either way, time and expense must be expended now if an organization wants to take advantage of the industry's move to EDI.

An organization also must examine how it will interface with EDI transmissions. To receive full benefit from EDI, an organization must investigate all EDI translation software available to avoid being sold on using straight COBOL or proprietary translation software.

Under ANSI ASC X12 standards,(b) a translator can handle any X12 transmission standard. As a result, once such a translator is installed, any of the X12 standards can be used to send data to other partners using a standard translator. Use of COBOL programs and proprietary translators requires a user to reprogram for any changes occurring in transmission sets. Because sets change on a regular basis in the healthcare industry, an organization must consider the value of purchasing an EDI translator. Because few data processing managers in healthcare organizations have been exposed to EDI and the ASC X12 standards, such staff must be trained to prepare for change. Organizations using a network, shared system, or other package process, should urge their vendors to become involved in current X12N(c) activities to ensure the organization's access to future EDI advantages. Vendor involvement has been growing but is not yet up to adequate levels. (Provider involvement is also low.)

Only recently have healthcare data processing periodicals begun to report on ASC X12 activities. As a result, few data processing professionals in healthcare organizations are aware of all the progress unless they have been directly involved or have participated in one of the current Health Care Financing Administration or payer projects.

EDI and EFT

The new standard for electronic remittance and payment transfer ANSI'S 835 standard along with other electronic funds transfer (EFT) capabilities in the banking, finance, and purchasing industries also raise readiness questions for healthcare partners. Most organizations have had little experience in EFT, even though it has been around for many years. Not all EFT is the same. Some EFT arrangements through automated clearing houses could slow cash flow rather than accelerate it. Healthcare organizations must ensure that their banking and finance institutions are conversant with such transmissions so that all partners can derive the full benefit of EDI and EFT.

Exploration of EFT should be a joint effort between data processing and finance. It will bear fruit if begun early. If healthcare facilities are to take advantage of the EDI and EFT solutions used in other industries, they must join computer hardware and software vendors, and banking and finance groups to ensure a smooth transition beneficial to all parties. Participation in such joint ventures will be impossible without adequate preparation on EDI, EFT, and other components of electronic transmission.

Other changes in data transmission

ASC X12 triennial meetings reveal that players in the healthcare arena are far behind those in other industries. Aside from using EDI and EFT, many industries are involved in other aspects of electronic transmission. The healthcare industry is catching up. Coalitions such as Healthcare EDI Corporation are being formed to group-purchase line transmission time and obtain education in this new environment.