Illinois Hospital Association

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August 8, 2005/Revised August 29, 2005

HIPAA Transaction and Code Set Updates

National Provider Identifier (NPI) Implementation and Coordination
The NPI assignment and implementation process is going to be critically important to all providers as some health plans may opt to implement sooner than others.  While both Medicare and Medicaid will not reject any claims without an NPI until May, 2007; health plans were given the opportunity to implement sooner if they opt to which could create major disruptions in coordinated claims and hospital cash flow.

Additionally, Medicare will stop issuing UPINs (Unique Physician Identification Numbers) in May 2007.  Medicare also has stated that they will move to using the NPI in place of the Medicare Provider Identification Number on all of their initiatives – which has caused some concern on Medicare Cost Report and other reporting requirements.  For information on the NPI, please visit the CMS web site at https://nppes.cms.hhs.gov/NPPES/Welcome.do.

Medicare Cut-Off Date for Non-Compliant HIPAA Claims Transactions
As many of you are aware, Medicare will reject any non-HIPAA compliant claims as of October 1, 2005. Up until now, Medicare has accepted old formats but will no longer accept and make payment on the old formats as of the beginning of federal fiscal year 2006.

While hospital and physician providers are generally compliant in their claims transactions, Medicare has stated that nationally the largest non-compliant source of transactions is from laboratories – of which 1.5% are not in the compliant format.

Upcoming Proposed Regulations on Transaction Attachments
The long-awaited attachments to the claims transactions are to be issued in proposed regulatory format soon. The proposed regulations will have a comment period and review period. Following the review period, final regulations will be issued and there will be a 26 month implementation time period.

Proposed Flags on Secondary Diagnostic Codes to Distinguish Conditions Present Upon Admission
There is growing support by many health plans and consumer organizations for a flag to be placed on each secondary diagnosis code to identify whether the condition occurred prior to or during the hospital stay. The "present on admission" code is currently used in California and New York and has been helpful in distinguishing conditions and infections that occurred during the patient’s stay or prior to the hospitalization.

This past March, MEDPAC (federally appointed advisory committee to Medicare and Congress on Medicare) urged Medicare to adopt the "present on admission" code for inclusion in Medicare’s "Pay for Performance" system and claims adjudication processing. While Medicare has not formally announced their intentions, clearly this code is being considered by Medicare and other health plans.

IHA is serving on a work group of the federal National Committee on Health Statistics (NCHS) and AHIMA (American Health Information Management Association) to identify the issues that need to be addressed in developing and implementing a national standard.

Hospitals may want to start considering this issue as they implement any electronic medical or health record as this is certain to be included in the future. There is space reserved on the electronic 837 claim and the paper UB-04 form for this "present on admission" field.

IHA will continue to keep you updated on these and other HIPAA related developments.

Staff Contact: Pat Merryweather: (630) 276-5590