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EDI, EHR, and esMD

Makes sense out of the new world of electronic claims submission alphabet soup.

For coders, billers, and other healthcare business professionals, a crash course on electronic data interchange (EDI) is necessary due to HIPAA requirements that cover all entities involved in transmitting electronic healthcare information (e.g., health plans, healthcare clearinghouses, and certain healthcare providers). The rules pertain to certain healthcare administrative transactions, such as claims, remittances, eligibility, and claims status requests/responses, when sent electronically.
Resource: HIPAA terms and definitions.

Content and Format Matter for Data Transfer

There are two distinct issues relevant to electronically transferred claims data: data content and the file format used to transmit data from one system to another. If the systems can’t recognize and store the information in a meaningful way, they can’t work properly. This is where the standardized HIPAA code set (data content) and ANSI X12 (file format) come in.
The HIPAA Transactions and Code Sets final rule, published August 17, 2000, identifies CPT®, ICD-9-CM, and HCPCS Level II as the approved code sets for claims submissions. ICD-10-CM and ICD-10-PCS were added as approved code sets under the HIPAA Administrative Simplification: Modifications to Medical Data Code Set Standards to Adopt ICD-10-CM and ICD-10-PCS final rule.
The movement towards electronic claims submission began with the Administrative Simplification Compliance Act (ASCA) of 2001, which required the use of electronic claims for providers to receive Medicare reimbursement after October 16, 2003. Following that, a uniform format was developed to ensure the meaningfulness of data to an enormous number of provider and payer systems.
Resource: ASCA
There have been several iterations in these standard formats to accommodate changing code set requirements. For example, modifications to the HIPAA Electronic Transaction Standards final rule, published January 16, 2009, replaced the current versions of standards with Accredited Standards Committee X12 Version 5010 (ASC 5010).
The HIPAA Electronic Transaction Standards final rule also addresses the National Council for Prescription Drug Programs (NCPDP) Version D.0, adopting a new standard for Medicaid subrogation for pharmacy claims, known as NCPDP 3.0. Previously, no standard existed to allow state Medicaid agencies to recoup funds for payments made for pharmacy services to Medicaid recipients when a third-party payer had primary financial responsibility.
Within Version 5010 for Medicare, the file formats listed below are mandated per HIPAA for claims submission, remittance advice, claims status reporting, and patient/provider eligibility. These file formats have replaced the CMS 1500 form and UB 04 forms for Medicare initial claims submissions, unless the provider is eligible for a waiver.
There are four kinds of HIPAA claims or encounters: 837P, 837I, 837D, and NCPDP.

  • 837-I (inpatient claims)
  • 837-P (professional claims)
  • 837-I COB (inpatient coordination of benefits)
  • 837-P COB (professional coordination of benefits)
  • 837 – D (dental claims)

Remittance Advice

  • 835

Claim Status Inquiry/Response

  • 276/277

Eligibility Inquiry/Response

  • 270/271

Source: “Coordination of Benefits Agreement (COBA) Companion Guide for Health Insurance Portability and Accountability Act (HIPAA) 837 Institutional and Professional Medicare Coordination of Benefits Version 5010 (COB)/Crossover Claim Transactions
If you are scratching your head, wondering how this applies to your practice, carefully consider the following two issues when working with your vendors to complete systems upgrades in advance of the (now delayed) ICD-10-CM start date.
1. Provider Taxonomies
Under HIPAA 5010, restrictions have been removed for using provider taxonomies. The provider’s taxonomy code may be reported at any level without restriction for both 837 institutional and professional claims.
Both the current ASC X12 837 institutional and professional Technical Report Type 3 (TR3s) require the National Uniform Claim Committee’s (NUCC) Healthcare Provider Taxonomy Codes (HPTC) set to be used to identify provider specialty information on a healthcare claim; however, they do not mandate the reporting of provider specialty information. Neither do they mandate HPTC to be on every claim, or for every provider to be identified by specialty. Per MLN Matters® MM8211, this information is “Required when the payer’s adjudication is known to be impacted by the provider taxonomy code.” Individual Medicare carriers may use this information for identifying subspecialties in the future, and this information may be useful in appealing denied claims where treatments across providers was medically necessary as performed by the sub specialist, such as in cardiology. The two-character system of identifying a cardiologist using 06, which maps to 201RC0000X, will not provide this level of granularity:

207RC0000X Allopathic & Osteopathic Physicians Internal Medicine Cardiovascular Disease
207RC0001X Allopathic & Osteopathic Physicians Internal Medicine Clinical Cardiac Electrophysiology

Medicare, in general, does not currently use HPTCs to adjudicate its claims; however, Medicare systems will validate any HPTC that a provider supplies against the NUCC HPTC code set. If the code on the claim is not valid or current, the claim will deny. The 10-digit taxonomy code associated with the provider’s National Provider Identifier (NPI) number is referenced in the claims adjudication system. If the taxonomy associated with the provider NPI is not set up in the provider file, the claim will fail. To date, two-digit specialty indicator codes are still in use.
2. Electronic Submission of Medical Documentation (esMD)
On September 15, 2011, the Centers for Medicare & Medicaid Services (CMS) implemented the Electronic Submission of Medical Documentation (esMD) system, which enables providers to send medical documentation to review contractors, electronically. The system is Exchange compatible, based on standards developed by the Office of the National Coordinator for Health Information Technology (ONC).
Using esMD is not mandatory for providers. Review contractors are prohibited from targeting providers for medical review because they use esMD. Transactions are safe and secure because the esMD system uses ONC’s Exchange gateway standards.
As of September 2011, providers are able to respond to these requests for medical documentation electronically using esMD via Medicare’s esMD gateway. Since September 2011, CMS enhanced the esMD gateway to support several new use cases, for example:

  • September 2012: CMS implemented a prior authorization (PA) process via the esMD gateway for power mobility devices (PMDs) for fee for service Medicare beneficiaries who reside in seven states with high populations of error prone providers (Cali., Ill., Mich., N.Y., N.C., Fla., and Texas). Phase 2 will allow for expansion to additional carriers.
  • January 2013: CMS expanded their esMD gateway to allow durable medical equipment suppliers and providers to send electronic PA Requests to Medicare review contractors.
  • June 2013: CMS enabled automated Prior Authorization Review Results Responses from Medicare review contractors to health information handlers via the esMD gateway.

There are also future enhancements planned for the esMD system that will allow:

  • Providers to submit first level appeal requests: CMS plans to expand the esMD system to enable providers to submit first level appeal requests electronically, starting in 2014. Review contractors participating in the initial release for this functionality are volunteers.
  • Providers to submit recovery auditor discussion requests: Currently, providers who want to request a discussion of the results of a recovery auditor review must do so via mail or fax. CMS plans to expand the esMD system to allow providers to submit discussion requests, in .pdf format, to recovery auditors starting in 2014.

Medicare’s esMD system provides an alternative mechanism for submitting medical documentation, PMD PA requests, and PMD result code responses to review contractors.
Click here for list of review contractors accepting esMD transactions, as well as receiving PMD PA requests and sending PMD PA review results.
Click here for a list of contractors who can handle esMD transactions.
Click here to find the latest CMS white paper on esMD progress at: .
A final note: Regional carriers are in different stages of implementing the electronic tools described in this article. If you have any question about your carrier’s progress, check with both the local carrier and your claims clearinghouse.
Nancy Reading, RN, BS, CPC, CPC-P, CPC- I, comes equipped with a Registered Nurse license, a Bachelor of Science in Biology/Chemistry and 25 years of coding experience. She has worked gamut from a large university practice with over 1000 providers to Medicaid. As a past employee of AAPC, Reading had a hand in just about everything. She is a member of the Salt Lake South Valley, Utah, local chapter.

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Renee Dustman, BS, AAPC MACRA Proficient, is managing editor - content & editorial at AAPC. She holds a Bachelor of Science degree in Media Communications - Journalism. Renee has more than 30 years' experience in journalistic reporting, print production, graphic design, and content management. Follow her on Twitter @dustman_aapc.

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