Administrative Simplification: Adoption of Standards for Health Care Attachments Transactions and Electronic Signatures, and Modification to Referral Certification and Authorization Transaction Standard, 78438-78468 [2022-27437]
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78438
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Office of the Secretary
45 CFR Parts 160 and 162
[CMS–0053–P]
RIN 0938–AT38
Administrative Simplification:
Adoption of Standards for Health Care
Attachments Transactions and
Electronic Signatures, and
Modification to Referral Certification
and Authorization Transaction
Standard
Office of the Secretary,
Department of Health and Human
Services (HHS).
ACTION: Proposed rule.
AGENCY:
This rule would implement
requirements of the Administrative
Simplification subtitle of the Health
Insurance Portability and
Accountability Act of 1996 (HIPAA) and
the Patient Protection and Affordable
Care Act, as amended by the Health
Care and Education Reconciliation Act
of 2010, enacted on March 30, 2010—
collectively, the Affordable Care Act.
Specifically, this proposed rule would
adopt standards for ‘‘health care
attachments’’ transactions, which would
support both health care claims and
prior authorization transactions, and a
standard for electronic signatures to be
used in conjunction with health care
attachments transactions. To better
support the use of the proposed
standards for attachments transactions
with prior authorization transactions,
this rule also proposes to adopt a
modification to the standard for the
referral certification and authorization
transaction (X12 278) to move from
Version 5010 to Version 6020.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than 5 p.m. on March 21, 2023.
ADDRESSES: In commenting, please refer
to file code CMS–0053–P. Because of
staff and resource limitations, we cannot
accept comments by facsimile (FAX)
transmission.
You may submit comments in one of
three ways (please choose only one of
the ways listed):
1. Electronically. You may submit
electronic comments on this regulation
to https://www.regulations.gov. Follow
the ‘‘Submit a comment’’ instructions.
2. By regular mail. You may mail
written comments to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
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SUMMARY:
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Health and Human Services, Attention:
CMS–0053–P, P.O. Box 8013, Baltimore,
MD 21244–1850.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By express or overnight mail. You
may send written comments to the
following address ONLY: Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services, Attention: CMS–0053–P, Mail
Stop C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Daniel Kalwa, (410) 786–1352. Geanelle
G. Herring, (410) 786–4466. Christopher
Wilson, (410) 786–3178.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following
website as soon as possible after they
have been received: https://
www.regulations.gov. Follow the search
instructions on that website to view
public comments. CMS will not post on
Regulations.gov public comments that
make threats to individuals or
institutions or suggest that the
individual will take actions to harm the
individual. CMS continues to encourage
individuals not to submit duplicative
comments. We will post acceptable
comments from multiple unique
commenters even if the content is
identical or nearly identical to other
comments.
I. Executive Summary
A. Purpose
This rule proposes to adopt a set of
standards for the electronic exchange of
clinical and administrative data to
support prior authorizations and health
care claims adjudication. In determining
the necessity of a health care service as
part of making a coverage decision,
health plans often require additional
information that cannot adequately be
conveyed in the specified fields or data
elements of the adopted prior
authorization request or health care
claims transaction. If adopted as
proposed, this proposed rule would
support electronic transmissions of this
type of information, which should have
the effect of decreasing the use of time
and resource-consuming manual
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processes such as mail or fax often used
today to transmit this information. This
would facilitate prior authorization
decisions and claims processing, reduce
burden on providers and plans, and
result in more timely delivery of patient
health care services.
a. Need for the Regulatory Action
This rule would adopt a set of
standards for the electronic exchange of
clinical and administrative data to
support prior authorizations and claims
adjudication. Despite widespread
deployment of electronic health records
(EHRs), and industry experience with
Health Insurance Portability and
Accountability Act of 1996 (HIPAA)
standards that continues to advance
since HIPAA’s advent, transmitting
health care attachments is still primarily
a manual process and, at this time, there
are no adopted HIPAA standards,
implementation guides, or operating
rules for health care attachments or
electronic signatures. If adopted, this
proposed rule would support electronic
transmissions of this type of information
rather than the use of manual processes
such as mail and fax that still
predominate in the health care industry.
We believe that the health care
industry has long anticipated the
adoption of a set of HIPAA standards for
the electronic exchange of clinical and
administrative data to support
electronic health care transactions, such
as prior authorization of services and
claims adjudication, and the standards
we are proposing to adopt are an
important step in reducing provider
burden.
B. Summary of the Major Provisions
This rule would implement
requirements of the Administrative
Simplification subtitle of HIPAA and
the Patient Protection and Affordable
Care Act, as amended by the Health
Care and Education Reconciliation Act
of 2010, enacted on March 30, 2010—
collectively, the Affordable Care Act.
Specifically, this proposed rule would
adopt standards for ‘‘health care
attachments’’ transactions, which would
support health care claims and prior
authorization transactions, and a
standard for electronic signatures to be
used in conjunction with health care
attachments transactions. This rule also
proposes modifying the referral
certification and authorization
transaction standard to move from the
X12 278, Version 5010, to the X12 278,
Version 6020.
C. Summary of Costs and Benefits
Based on industry research by the
Council for Affordable Quality
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Healthcare (CAQH), the 2019 CAQH
report indicates that a fully electronic
system for prior authorization with
health care attachments could result in
as much as $454 million in annual
savings to the health care industry.
Similar savings can be expected for the
industry by switching to health care
attachments for claims. The 2019 CAQH
report further estimates that the
industry could expect as much as $374
million in savings per year with the full
adoption of health care attachments for
claims. This results in total anticipated
industry savings of $828 million per
year for prior authorization and claims.
II. Background
A. Legislative Authority for
Administrative Simplification
This background discussion presents
a history of statutory provisions and
regulations that are relevant for the
purposes of this proposed rule.
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1. Standards Adoption and Modification
Under the Administrative
Simplification Provisions of the Health
Insurance Portability and
Accountability Act of 1996 (HIPAA)
Congress addressed the need for a
consistent framework for electronic
transactions and other administrative
simplification issues in the Health
Insurance Portability and
Accountability Act of 1996 (HIPAA)
(Pub. L. 104–191, enacted on August 21,
1996). Through subtitle F of title II of
HIPAA, Congress added to title XI of the
Social Security Act (the Act) a new Part
C, titled ‘‘Administrative
Simplification,’’ which required the
Secretary of the Department of Health
and Human Services (the Secretary) to
adopt standards for certain transactions
to enable health information to be
exchanged more efficiently and to
achieve greater uniformity in the
transmission of health information. For
purposes of this and later discussion in
this proposed rule, we sometimes refer
to this statute as the ‘‘original’’ HIPAA
provisions.
Section 1172(a) of the Act indicates
that any standard adopted under HIPAA
shall apply, in whole or in part, to the
following persons, referred to as
‘‘covered entities’’: (1) a health plan; (2)
a health care clearinghouse; and (3) a
health care provider who transmits any
health information in electronic form in
connection with a [HIPAA transaction].
Generally, section 1172 of the Act
indicates that any standard adopted
under HIPAA is to be developed,
adopted, or modified by a standard
setting organization (SSO). In adopting
a standard, the Secretary must rely upon
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recommendations of the National
Committee on Vital and Health
Statistics (NCVHS), in consultation with
the organizations referred to in section
1172(c)(3)(B) of the Act, and appropriate
federal and state agencies and private
organizations.
Section 1172(b) of the Act indicates
that a standard adopted under HIPAA
must be consistent with the objective of
reducing the administrative costs of
providing and paying for health care.
The transaction standards adopted
under HIPAA enable financial and
administrative electronic data
interchange (EDI) using a common
structure, as opposed to the many
varied, often proprietary, transaction
formats on which industry had
previously relied and that, due to lack
of uniformity, engendered
administrative burden. Section
1173(g)(1) of the Act, which was added
by section 1104(b) of the Affordable
Care Act, further addresses the goal of
uniformity by requiring the Secretary to
adopt a single set of operating rules for
each transaction during the
implementation of the electronic
standards. These operating rules are
required to be consensus-based and
reflect the business rules that affect
health plans and health care providers
and the manner in which they operate.
Section 1173(a) of the Act indicates
that the Secretary must adopt standards
for financial and administrative
transactions, and data elements for
those transactions, to enable health
information to be exchanged
electronically. The original HIPAA
provisions require the Secretary to
adopt standards for the following
transactions: health claims or equivalent
encounter information; health claims
attachments; enrollment and
disenrollment in a health plan;
eligibility for a health plan; health care
payment and remittance advice; health
plan premium payments; first report of
injury; health claim status; and referral
certification and authorization. The
Affordable Care Act added the
requirement that the Secretary adopt a
standard for electronic funds transfers.
Additionally, section 1173(a)(1)(B) of
the Act requires the Secretary to adopt
standards for any other financial and
administrative transactions the
Secretary determines appropriate.
Section 1173(c) through (f) of the Act
indicates the Secretary must adopt
standards for code sets for appropriate
data elements for each listed health care
transaction; security standards for
health care information; standards for
electronic signatures in coordination
with the Secretary of Commerce,
compliance with which will be deemed
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to satisfy both state and federal statutory
requirements for written signatures for
the listed transactions; and standards for
the transmission of appropriate standard
data elements needed for the
coordination of benefits, sequential
processing of claims, and other data
elements for individuals who have more
than one health plan.
Section 1174 of the Act requires the
Secretary to review the adopted
standards and adopt modifications to
them, which include additions to the
standards, as appropriate, but not more
frequently than once every 12 months.
Section 1174(b)(2)(B)(ii) of the Act
requires that modifications must be
completed in a manner that minimizes
disruption and cost of compliance.
Section 1175 of the Act prohibits
health plans from refusing to conduct a
transaction as a standard transaction.1 It
also prohibits health plans from
delaying the transaction, or adversely
affecting or attempting to adversely
affect, a person or the transaction itself
on the ground that the transaction is in
standard format. It establishes a
timetable for covered entities to comply
with any standard, implementation
specification, or modification as
follows: for an initial standard or
implementation specification, no later
than 24 months (or 36 months for small
health plans) following its adoption; for
modifications, as the Secretary
determines appropriate, but no earlier
than 180 days after the modification is
adopted.
Sections 1176 and 1177 of the Act
establish civil money penalties (CMPs)
and criminal penalties to which covered
entities may be subject for violations of
HIPAA Administrative Simplification
rules. HHS administers the CMPs under
section 1176 of the Act and the U.S.
Department of Justice administers the
criminal penalties under section 1177 of
the Act. Section 1176(b) of the Act sets
out limitations on the Secretary’s
authority and provides the Secretary
certain discretion with respect to
imposing CMPs. For example, this
section provides that no CMPs may be
imposed with respect to an act if a
penalty has been imposed under section
1177 of the Act with respect to such act.
This section also generally precludes
the Secretary from imposing a CMP for
a violation corrected during the 30-day
period beginning when an individual
knew or, by exercising reasonable
diligence, would have known that the
failure to comply occurred.
The original HIPAA provisions are
discussed in greater detail in the August
17, 2000 final rule titled ‘‘Health
1 Defined
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Insurance Reform: Standards for
Electronic Transactions’’ final rule (65
FR 50312, hereinafter referred to as the
Transactions and Code Sets final rule),
and the December 28, 2000, final rule
titled ‘‘Standards for Privacy of
Individually Identifiable Health
Information’’ (65 FR 82462). We refer
the reader to those documents for
further information.
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2. Amendments to HIPAA
Administrative Simplification by the
Affordable Care Act
Section 1104(c)(3) of the Affordable
Care Act reiterated the original HIPAA
requirement to adopt a health claims
attachment standard, and directed the
Secretary to promulgate a final rule to
establish a transaction standard and a
single set of associated operating rules.
Section 1104(c)(3) of the Affordable
Care Act requires that the adopted
standard be ‘‘consistent with the X12
Version 5010 transaction standards’’
and indicates that the Secretary must
adopt the standard and operating rules
by January 1, 2014, to be effective no
later than January 1, 2016, and that the
Secretary may adopt the standard and
operating rules on an interim final basis.
This provision makes no allowance for
an extended time for small health plans
to achieve compliance.
B. Prior Rulemaking
In the Transactions and Code Sets
final rule, we implemented some of the
HIPAA Administrative Simplification
requirements by adopting standards for
electronic health care transactions
developed by SSOs, and medical code
sets to be used in those transactions. We
adopted X12 Version 4010 standards for
administrative transactions, and the
National Council for Prescription Drug
Programs (NCPDP) Telecommunication
Version 5.1 standard for retail pharmacy
transactions, which were specified at 45
CFR part 162, subparts K through R.
Since then, we have adopted a
number of modifications to the HIPAA
standards, most recently in a January 16,
2009 final rule (74 FR 3296) titled
‘‘Health Insurance Reform;
Modifications to the Health Insurance
Portability and Accountability Act
(HIPAA) Electronic Transaction
Standards’’ (hereinafter referred to as
the Modifications final rule). That rule,
among other things, adopted updated
versions of the standards, X12 Version
5010, and the NCPDP
Telecommunication Standard
Implementation Guide Version D.0 and
equivalent Batch Standard
Implementation Guide, Version 1,
Release 2. We also adopted the NCPDP
Implementation Guide for Batch
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Standard Version 3.0 standard for the
Medicaid pharmacy subrogation
transaction. Covered entities were
required to comply with the Version
5010, Version D.0, and Version 3.0
standards on January 1, 2012, though
with respect to the latter, small health
plans were required to comply on
January 1, 2013.
In the September 23, 2005 Federal
Register (70 FR 55990), in a rule titled
‘‘HIPAA Administrative Simplification:
Standards for Electronic Health Care
Claims Attachments; Proposed Rule,’’
we proposed to adopt certain standards
with respect to health care attachments.
In that rule, rather than a standard with
generalized applicability, we proposed
to adopt health care claims attachment
standards with respect to specific
service areas that included ambulance
services, clinical reports, emergency
department, laboratory results,
medications, and rehabilitation services.
Due, however, to comments we received
on our proposals, including comments
related to the standards’ lack of
technical maturity and stakeholders’
lack of readiness to implement
electronic capture of clinical data, we
did not finalize that rule. As a result,
and despite the subsequent widespread
deployment of electronic health records
(EHRs) and greater industry experience
with the HIPAA standards, transmitting
health care attachments is still primarily
a manual process and, at this time there
are no adopted HIPAA standards,
implementation guides, or operating
rules for health care attachments or
electronic signatures. Other specific
details of prior rulemaking are
discussed as appropriate in the context
of the proposals in section II. of this
proposed rule.
C. Standards and Code Sets
Organizations
In this section, we discuss
information about the organizations
responsible for developing and
maintaining the transaction standards
and code sets that we are either
proposing or discussing in this
proposed rule. Information about each
organization’s balloting process—the
process by which they vet and approve
the products they develop and changes
thereto—is available on their respective
websites, links to which are provided in
this section of this rule.
As we have discussed, the law
requires any standard adopted under
HIPAA to be developed, adopted, or
modified by an SSO. Section 1171 of the
Act provides that an SSO is an
organization accredited by the American
National Standards Institute (ANSI) that
develops standards for information
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transactions, data elements, or any
standard that is necessary to, or will
facilitate the implementation of,
Administrative Simplification. Per
section 1172(c)(3) of the Act, a HIPAA
SSO must develop, adopt, and modify
standards in consultation with certain
organizations—the National Uniform
Billing Committee (NUBC), the National
Uniform Claim Committee (NUCC), the
Workgroup for Electronic Data
Interchange (WEDI), and the American
Dental Association (ADA). The two
SSOs applicable to this proposed rule
are the Accredited Standards Committee
X12 (X12) and Health Level Seven
International (HL7). Both SSOs maintain
websites where the proposed
implementation specifications may be
obtained. One other organization, which
is a health research institution and not
an SSO, maintains a code set that is
important to this rulemaking—the
Regenstrief Institute, maintains a code
set named Logical Observation
Identifiers Names and Codes (LOINC).
1. X12 (https://www.x12.org/)
X12 develops and maintains
standards for the electronic exchange of
business-to-business transactions. An
ANSI-accredited organization, X12
membership is open to all individuals
and organizations. An X12
subcommittee known as Subcommittee
N: Insurance (X12N) develops and
maintains electronic standards specific
to the insurance industry, including
health care insurance. The
subcommittee, which is comprised of
volunteers, develops standards for
electronic health care transactions for
common administrative activities
including: claims, remittance advice,
claims status, enrollment, eligibility,
authorizations and referrals, and
electronic health care claims
attachments. The X12N subcommittee is
responsible for obtaining consensus on
the standards from the entire
organization, and produces draft
documents that are made available for
public review and comment, which the
subcommittee addresses as necessary
before voting on any proposal. Proposals
must then be reviewed and ratified by
a majority of the voting members of the
X12N subcommittee and the executive
committee of X12 itself.
2. Health Level Seven (HL7)
(www.HL7.org)
HL7 is an ANSI-accredited SSO that
develops and maintains standards for
the exchange, integration, sharing, and
retrieval of electronic health
information that supports clinical
practice and the management, delivery
and evaluation of health services. Its
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domain is principally clinical data and
its specific emphasis is on the
interoperability between health care
information systems. HL7, whose
membership is open to all individuals
and organizations, focuses its interface
requirements on the entire health care
organization rather than on a particular
subset of the health care industry.
HL7 conducts a three-step process to
establish standards. First, a technical
committee develops standards through a
voting process. All HL7 members are
eligible to vote on standards, regardless
of whether they are members of the
committee that developed the standard.
Non-members may also vote on a given
ballot for a standard, though they must
pay an administrative fee (that does not
exceed the cost associated with an
individual HL7 membership) associated
with handling and processing. Second,
HL7 technical committees vote on
‘‘recommendations,’’ which require a
two-thirds majority for approval. Third,
any recommended standards are
submitted to the entire HL7 body for
approval and, if approved, are
submitted to ANSI for certification.
3. Regenstrief Institute (LOINC.org)
Regenstrief Institute (Regenstrief) is a
health research institution that develops
and maintains a proprietary code set,
Logical Observation Identifiers Names
and Codes (LOINC). LOINC is the code
system, terminology, and vocabulary for
identifying individual clinical results
and other clinical information.
Regenstrief worked closely with the HL7
Payer/Provider Information Exchange
Workgroup, formerly known as the
Attachments Work Group, to develop a
set of LOINC codes to uniquely indicate
the type and content of attachment
information in electronic transmissions.
Regenstrief maintains LOINC through its
LOINC Committee, which is comprised
of volunteer representatives from
academia, industry, and government
who serve as subject matter experts in
their domains of expertise. That
committee establishes overall naming
conventions and policies for the
development process.
D. Industry Standards, Code Sets, and
Implementation Guides
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1. Electronic Data Interchange (EDI) and
Transaction Standards
HIPAA transactions involve the
electronic transmission of information
between two parties to carry out health
care-related financial or administrative
activities, such as health insurance
claims submissions and prior
authorization requests, and HHSadopted standards for those transactions
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represent uniform requirements for EDI
of those transmissions.
The benefit of HIPAA standards is
that they use a common interchange
structure, eliminating covered entities’
need to have information technology
(IT) systems that accommodate multiple
proprietary, and potentially continually
changing, data formats. By enabling
covered entities to exchange medical,
billing, and other information to process
transactions in a more expedient and
cost-effective manner by reducing
handling and processing time and
eliminating the risk of lost paper
documents, HIPAA standards can
reduce administrative burdens, lower
operating costs, and improve overall
data quality.
HIPAA transaction standards specify:
(1) data interchange structures (message
transmission formats); and (2) data
content (all the data elements and code
sets inherent to a transaction, and not
related to the format of the transaction).
Implementation specifications detail the
nature, location, and content format of
each piece of information transmitted in
a transaction. Standardization of
transactions also involves: specification
of the data elements that are exchanged;
uniform definitions of those specific
data elements in each type of electronic
transaction; identification of the specific
codes or values that are valid for each
data element; and specification of the
business actions each party must take to
ensure the exchange of administrative
transactions occurs smoothly and
reliably, regardless of the technology
employed.
a. Implementation Guides—X12
As discussed previously, X12
develops and maintains standards for
the electronic exchange of business-tobusiness transactions. The X12N
subcommittee (X12N) publishes
transmission standards that apply to
many lines of business, not just health
care. For example, the X12N 820
message format for premium payment
may be used for automobile and
casualty insurance, not just health
insurance. X12 implementation
specifications, referred to by the
industry as ‘‘implementation guides’’
and written collaboratively by X12N
workgroups, make these general
standards functional for industryspecific uses. The specifications are
based on X12 standards but contain
detailed instructions for using the
standard to meet a specific business
need. X12’s implementation
specifications for HIPAA transaction
standards adopted by the Secretary are
known as ‘‘Technical Reports Type 3’’
(TR3); an example is the X12 standard
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adopted as the HIPAA standard for the
health plan premium payments
transaction, the ASC X12 Standards for
Electronic Data Interchange Technical
Report Type 3—Payroll Deducted and
Other Group Premium Payment for
Insurance Products (820), February
2007, ASC X12N/005010X218).
Each X12N implementation guide has
a unique version identification number
(for example, 004010, 004050, or
005010), where the highest version
number represents the most recent
version. HHS adopted updated versions
of the X12 standards in the
Modifications final rule (74 FR 3296).
We are proposing to adopt a Version
6020 standard for one of the HIPAA
transactions, the rationale for which we
discuss in section II. of this proposed
rule.
b. Implementation Guides—HL7
HL7’s Payer/Provider Information
Exchange Workgroup develops
standards for electronic health care
attachments. The workgroup, which
includes industry experts representing
health care providers, health plans, and
health technology vendors, is also
responsible for creating and maintaining
the implementation guides, which are
sets of instructions and associated code
tables that describe, list, or itemize the
content, format, and code to be sent, and
specify how such information is to be
conveyed in an electronic health care
attachment.
An HL7 standard that we are
proposing to adopt in this proposed rule
is the Clinical Document Architecture
(CDA), which is an XML-based (a
computer programming language)
markup standard that specifies the
encoding, structure, and semantics of
clinical documents for purposes of
transmitting attachment information.
XML-coded files have the same
characteristics and information as hard
copy documents, so regardless of how
data are sent within a transaction, they
can be read and processed by both
people and machines. Some health care
attachments may not be conducive to
XML formatting, such as medical
imaging, video, or audio files. An
important CDA feature is that it allows
the entire body of an electronic
document to be replaced by an image,
for example, a scanned copy of a page
or pages from a medical record.
Although a header still supports
automated document management, the
clinical content can be conveyed by
image or text document.
HL7 also produces the Consolidated
CDA (C–CDA), an implementation guide
that provides specifications for
formatting document templates,
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depending on whether they are
structured or unstructured, enabling the
CDA to create numerous specific
document types (templates). The HL7
C–CDA implementation guide
document templates are designed to be
electronic versions of the most common
types of paper document attachment
information. Attachment information
not included in a template may be
created by using instructions included
in the proposed unstructured document
implementation guide; supported
unstructured formats include
MSWORD, PDF, Plain Text, RTF Text,
HTML Text, GIF Image, TIF Image, JPEG
Image, and PNG Image.
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2. Code Sets
Transaction data content
standardization involves identifying the
specific codes or values for each data
element. Health care EDI requires many
types of code sets, including large
medical data code sets and classification
systems for medical diagnoses,
procedures, and drugs, and smaller code
sets to identify categories, such as type
of facility, currency, or units, or a
specific state within the United States.
The American Medical Association’s
(AMA) Current Procedural Terminology
(CPT–4), which identifies physician
procedures, is an example of a health
care code set. Federal agencies (the
National Center for Health Statistics, the
Centers for Medicare & Medicaid
Services (CMS), and the U.S. Food and
Drug Administration) and some private
organizations (the AMA and the
American Dental Association) have
developed and maintain standards for
large medical data code sets. These code
sets are mandated for use in some
federal and state programs, such as
Medicare and Medicaid, and SSOs
require or permit them for use in their
standards. As we explain in section II.
of this proposed rule, the X12 and HL7
standards we are proposing to adopt
specify the use of the LOINC for HIPAA
Attachments code set.
3. Implementation Guides as HIPAA
Standards
Section 1172(d) of the Act directs the
Secretary to establish specifications for
implementing each of the adopted
standards. As we explained previously,
SSOs have developed various
‘‘Implementation Guides’’ by which to
implement the same standards for
different business purposes. We are
proposing an approach we have taken
with previous HIPAA rules that adopted
a specific ‘‘Implementation Guide’’ as
both the ‘‘standard’’ and the
‘‘implementation specifications’’ for
each health care transaction.
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In pursuing this approach, we were
mindful that section 1104(c)(3) of the
Affordable Care Act requires that the
Secretary promulgate a final rule to
establish a transaction standard and a
single set of operating rules for health
care attachments that is ‘‘consistent
with the X12 Version 5010 transaction
standards.’’ We interpret this
requirement to mean that the proposed
health care attachment implementation
specifications must be compatible with
X12 standards generally, meaning any
standard we adopt for attachment
information can be electronically
transmitted by an X12 transmission
standard in the same transaction. In this
rule, we are proposing to adopt Version
6020 of the X12 standards. The
Affordable Care Act was enacted in
2010, at which time we had recently
adopted Version 5010 of the X12
standards. A decade later, and with X12
continuing to publish newer versions of
its standards, we interpret the
Affordable Care Act’s mandate as
referencing the then-current standards
(the X12 Version 5010), but the
Affordable Care Act did not specifically
require a static standard in perpetuity,
as that would be incongruent with the
HIPAA standards paradigm.
In section II. of this proposed rule, we
are proposing to adopt transaction
standards that can be used together in
a single electronic transmission. HL7
has noted that an extensive architecture
already exists for information exchange
based on the HIPAA transactions and
code sets, which architecture is
currently being used by the same
stakeholders who would use the health
care attachments transactions, so
adoption of this architecture using X12
standards could have the least impact
on covered entities.2
Independent of that concept, we are
also aware that there are other types of
standards being developed and piloted
by SSOs. We solicit comment on this
discussion and any alternative
implementation specifications that may
be considered consistent with X12
Version 5010.
E. NCVHS Recommendations to the
Secretary
The NCVHS (https://ncvhs.hhs.gov/)
is a statutory advisory committee
responsible for providing HHS with
recommendations on health information
policy and standards. It does so by,
among other things, convening regular
2 Transcript of NCVHS Subcommittee on
Standards Hearing on Electronic Attachments
Standards and Operating Rules, February 27, 2013:
https://ncvhs.hhs.gov/transcripts-minutes/
transcript-of-the-february-27-2013-ncvhssubcommittee-on-standards-hearing/.
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forums for interaction with industry
groups on key issues related to
population health, standards, privacy
and confidentiality, and data access and
use. Pursuant to HIPAA, the NCVHS
advises HHS on the adoption of
standards, implementation
specifications, code sets, identifiers, and
operating rules for HIPAA transactions.
The NCVHS has held a number of
hearings, and made several sets of
recommendations to the Secretary (see
https://ncvhs.hhs.gov/reports/
recommendation-letters/) on claims
attachments standards; we briefly
summarize them here. The NCVHS
Standards Subcommittee held a
November 17, 2011 hearing on health
claims attachments to gather
information regarding updated industry
practices, priorities, issues, and
challenges. Participant testimony
addressed the development status of
standards and implementation
specifications. Some organizations
testified regarding their interest in
serving as attachments operating rules
authoring entities. By letter to HHS
dated March 2, 2012, the Subcommittee
told HHS it was premature to make
formal recommendations regarding the
adoption of any standard,
implementation specification, or
operating rule associated with health
care attachments. On May 5, 2012, the
NCVHS recommended that the Council
for Affordable Quality Healthcare
Committee (CAQH), a non-profit entity
whose mission is to improve the
efficiency, accuracy and effectiveness of
industry-driven business transactions,
be designated as the operating rules
authoring entity.
CAQH established the Committee on
Operating Rules for Information
Exchange (CAQH CORE), an industrywide collaboration committed to the
development and adoption of health
care operating rules for administrative
transactions. CAQH CORE facilitates the
adoption of health care operating rules
that support standards, improve
interoperability, and align
administrative and clinical activities
with market needs.
The Subcommittee held a second
hearing on attachments on February 27,
2013, where it identified a trend toward
convergence of administrative and
clinical information. In a June 21, 2013
letter, the NCVHS recommended that,
by January 1, 2016 (the date by which
the Affordable Care Act required claims
attachment standards to be effective),
HHS adopt a number of initial
attachments-related transaction
standards, but advised HHS to take a
comprehensive and incremental
approach to considering attachment
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standards in order to promote
innovation and flexibility. The NCVHS
noted an industry consensus that
adoption of standards should not be
limited to ‘‘claim attachments,’’ but,
rather, should be more inclusive of any
kind of attachment with administrative
or clinical information, and it
recommended that attachments-related
transaction standards should be applied
to claims, eligibility, prior
authorization, referrals, care
management, post-payment audits, and
any other administrative processes for
which supplemental information is
needed. Among other recommendations,
the NCVHS advised HHS that
attachment standards should support
structured and unstructured data, and
both solicited and unsolicited
transmissions. It further advised that
attachments standards should be
defined for two types of transactions: (1)
Query (the electronic solicitation of an
attachment); and (2) Response (the
electronic transmission of an
attachment).
The NCVHS held another hearing on
health care attachments on February 15,
2016, and on July 5, 2016 sent the
Secretary a letter titled
‘‘Recommendations for the Electronic
Health Care Attachment Standard.’’ This
letter consolidated its previous
recommendations on attachments and
advised that updated versions of the
available standards were ready for
industry use and there was unanimous
testimony that the health care industry
was eager to see them adopted.
Considering both the length of time that
had elapsed since the previous
proposed rule was published and the
subsequent technology advances, the
NCVHS recommended that HHS publish
an expedited proposed rule adopting the
recommended standards.
Finally, and most recently, on March
30, 2022, the NCVHS sent to the
Secretary a letter titled
‘‘Recommendations to Modernize
Aspects of HIPAA and Other HIT
Standards to Improve Patient Care and
Achieve Burden Reduction.’’ This letter
continued to stress previous
recommendations that urged the
Secretary to adopt a standard for
electronic attachments as soon as
possible. The recommendation letter
also states the following:
We recognize that there is ongoing debate
and no definitive industry consensus about
the role of attachments (i.e., documents) as
opposed to data (i.e., a string of data elements
not structured within a document). While the
vision with APIs [(Application Programming
Interfaces)] based on FHIR® [(Fast Healthcare
Interoperability Resources)] seems to be
driving toward more of a data-driven
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transaction, we see more than sufficient
industry demand for a document-based
attachment standard, and we do not foresee
any imminent demise of the utility of digital
documents. We suggest short-term
publication of an attachment rule, with
consideration for emerging standards based
on recent input from industry and other
advisory group discussions. This could add
immediate value for industry and could
support future actions as HIPAA’s procedural
requirements may be updated to allow for
non-document type digital attachment data.3
Based on the NCVHS’s previous
recommendations to the Secretary, and
particularly in consideration of its most
recent March 30, 2022 recommendation,
we propose here a document-based
attachments standard. We acknowledge
that there is a growing base of evidence
that may, in the future, support our
proposing attachment standards relying
on other technologies such as FHIR®,
and we will continue to monitor and
evaluate emerging technologies for their
readiness to potentially propose in
future rulemaking.
F. Other Industry Recommendations
1. Consensus-Based Organization
Support
Industry consensus-based
organizations have demonstrated the
maturity of the NCVHS-recommended
standards to support health care
business needs and described the
opportunities inherent in the adoption
of health care attachments standards to
integrate administrative and clinical
data, such as in automating and
streamlining workflows that, today, are
primarily manual processes and sources
of significant administrative burden.
WEDI (https://www.wedi.org/) is a
public-private coalition formed by HHS
in 1991 to serve as an advisory body on
the use of health IT aimed at health care
information exchange. WEDI, which
section 1172(c)(3) of the Act identifies
as an entity required to be consulted
with respect to standards adoption,
published a November 2017 white
paper, in concert with X12 and HL7.4
That white paper, described by WEDI as
‘‘a single resource document for
implementers to use to help them get
started in their implementation
planning for the request and receipt of
3 ‘‘Recommendations to Modernize Aspects of
HIPAA and Other HIT Standards to Improve Patient
Care and Achieve Burden Reduction,’’ available at
https://ncvhs.hhs.gov/wp-content/uploads/2022/04/
Recommendation-Letter-HIT-StandardsModernization-to-Improve-Patient-Care-March-302022.pdf (March 2022)
4 ‘‘Guidance on Implementation of Standard
Electronic Attachments for Healthcare
Transactions,’’ available at https://www.wedi.org/
2017/11/17/guidance-on-implementation-ofstandard-electronic-attachments-for-healthcaretransactions/ (November 2017).
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electronic attachments,’’ details the
business and operational processes of
exchanging additional information
(attachments) using the HL7 standards
for clinical information and the X12
transaction sets for requesting and
transmitting the additional information.
Its contents, which we have taken into
account in this proposed rule, include
all of the following:
• An overview of attachments.
• A discussion of resources needed to
have a successful implementation of
attachments standards.
• A review of current processes for
requesting and responding to the need
for attachment information.
• Examples of implementation
approaches in the industry.
• A review of Electronic Attachment
Business flows for Claims, Prior
Authorizations and Notification.
• Business use cases and examples.
• Guidance on how to embed
additional information within the
applicable X12N transaction.
In May 2019, CAQH CORE issued a
document titled ‘‘Report on
Attachments: A Bridge to a Fully
Automated Future to Share Medical
Documentation,’’ 5 where it reported
evidence from its 2018 environmental
scan indicating a high degree of
industry readiness and interest in the
attachments standard. The report noted
that ‘‘the healthcare industry continues
to wait for an electronic attachments
standard that can simplify the exchange
of necessary medical information and
supplemental documentation’’ and that
‘‘health plans, providers and vendors
lack the direction needed to support
broad use of automation in the
attachment workflow, or for industry to
coalesce around the use of even a small
number of electronic solutions,’’ leading
to largely manual, and often paperbased, processes, and ultimately
underscoring the need to standardize
electronic attachment exchange
methods.
Shortly after, in July 2019, CAQH
CORE released another report titled
‘‘Moving Forward: Building Momentum
for End-to-End Automation of the Prior
Authorization Process.’’ 6 There, CAQH
CORE reported how, for even the HHSadopted prior authorization transaction
standards, health care industry uptake
5 ‘‘CAQH CORE Report on Attachments: A Bridge
to a Fully Automated Future to Share Medical
Documentation,’’ available at https://www.caqh.org/
sites/default/files/core/core-attachmentsenvironmental-scan-report.pdf (April 23, 2021).
6 ‘‘Moving Forward: Building Momentum for Endto-End Automation of the Prior Authorization
Process,’’ available at https://www.caqh.org/sites/
default/files/core/white-paper/CAQH-COREAutomating-Prior-Authorization.pdf (April 23,
2021).
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lagged that of other transaction
standards, and remained largely paperbased, due in large measure to a lack of
infrastructure supporting electronic
transmission of attachments that
frequently serve as necessary supporting
documentation in the prior
authorization transaction.
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2. Other Recent Public Comment
Support
On June 11, 2019, CMS published a
request for information (RFI) in the
Federal Register titled ‘‘Reducing
Administrative Burden To Put Patients
Over Paperwork’’ (84 FR 27070).
Particularly with respect to prior
authorization, that RFI solicited public
comment on ideas for regulatory,
subregulatory, policy, practice, and
procedural changes to reduce
unnecessary administrative burdens for
clinicians, providers, patients, and their
families, with an aim to improve quality
of care, lower costs, improve program
integrity, and make the health care
system more effective, simple, and
accessible. To be clear, the RFI did not
relate to, and was not for the purpose of,
soliciting comments on HHS’s efforts
pertaining to HIPAA Administrative
Simplification, but, nevertheless, many
commenters, including organizations
representing physician provider groups,
insurance payers, health technology
vendors, health care financial managers,
and HIT standard advisory bodies,
called for the release of an electronic
attachments proposed rule to be
accelerated, as well as guidance on
other standards such as electronic
signature protocols to achieve these
goals. These commenters indicated that
a HIPAA attachments transaction
standard regulation could help reduce
administrative burden in many clinical
and administrative situations where
documents need to be shared, and
relieve providers of current
burdensome, largely paper-based,
processes.
In preparation for its August 25, 2020
Standards Committee Meeting, the
NCVHS invited the public to provide
feedback on the CAQH CORE operating
rules for prior authorization
transactions.7 Commenters expressed
their support for an attachments
transaction standard regulation. In
addition, commenters provided input
on current standards development
efforts underway to address prior
authorization challenges, including
recommendations for the Secretary to
7 https://ncvhs.hhs.gov/wp-content/uploads/
2020/10/Public-Comments-CAQH-CORE-OperatingRules-for-Federal-Adoption-August-2020r.pdf
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explore or allow the use of other
standards or alternative approaches.
We solicit comments on other
standards or alternative approaches in
development, for example the use of
FHIR Clinical Data Exchange (CDex) as
discussed in an NCVHS
recommendation letter,8 including how
they may be considered ‘‘consistent
with the X12 Version 5010 transaction
standards.’’
III. Provisions of the Proposed Rule
A. Overview
This rule proposes to adopt new
standards and modify a currently
adopted standard which we believe
would meet a health care business need
to integrate administrative and clinical
data. These proposed actions would
facilitate streamlined prior
authorization processes that would help
minimize clinical response times,
reduce potential barriers to the
transition to value-based payments, and
significantly reduce administrative
burden on provider and health plan
organizations.9 Consistent with NCVHS
recommendations and collaborative
industry organizations and stakeholders’
input, we believe these industry
consensus-based standards are
sufficiently mature for adoption and
that covered entities are ready to
implement them.
Nearly every health plan has various
requirements for health care providers
to sometimes submit additional
information beyond that contained in a
HIPAA transaction. These requirements
may be communicated to providers via
contracts, manuals, or online databases
of payment rules. This additional
information may enable a health plan to
make an administrative decision
regarding whether a particular service is
’’covered,’’ or about the medical
necessity of a service a provider has
rendered or intends to render, or for
other purposes. The information a
health plan requires may, for example,
include medical documentation to
support health care claims payment,
referral authorizations, enrollee
eligibility inquiries, coordination of
benefits, workers’ compensation claims,
8 https://ncvhs.hhs.gov/wp-content/uploads/
2022/04/Recommendation-Letter-HIT-StandardsModernization-to-Improve-Patient-Care-March-302022.pdf.
9 CAQH CORE Report on Attachments: ‘‘A Bridge
to a Fully Automated Future to Share Medical
Documentation’’, CAQH CORE, May 9, 2019:
https://www.caqh.org/about/press-release/caqhcore-study-reveals-five-opportunities-increaseelectronic-exchange-medical.
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post-payment claims auditing, and
provider dispute resolution.10
A health care provider may transmit
attachment information either in
response to a health plan’s specific
request for the information (solicited),
or, in certain situations, in the absence
of a specific request (unsolicited). A
‘‘solicited’’ attachment transmission
occurs where a health care provider
transmits an attachment pursuant to a
health plan’s specific electronic request
for attachment information. Conversely,
a health care provider’s transmitting to
a health plan electronic attachment in
the absence of a health plan’s specific
electronic request is known as an
‘‘unsolicited’’ transmission, and usually
occurs pursuant to pre-established
requirements for attachment
information set forth in trading partner
agreements or other guidance that
specifies when additional information
must be submitted to support certain
diagnoses, items, services, or
medications.
Although providers may transmit this
additional information electronically via
an attachment to a transaction, currently
providers frequently transmit via
manual processes that often involve
paper mail, fax, and phone because
there are no adopted HIPAA standards
for health care attachments.
We are proposing standards herein to
address these issues; in doing so, we
need to define the term ‘‘attachment
information.’’
B. Proposed Definition of Attachment
Information
We propose to define ‘‘attachment
information’’ at § 162.103 as
documentation that enables the health
plan to make a decision about health
care that is not included in either of the
following:
• A health care claims or equivalent
encounter information transaction, as
described in § 162.1101.
• A referral certification and
authorization transaction, as described
in § 162.1301(a) and the portion of
§ 162.1301(c) that pertains to
authorization.
We use the term ‘‘attachment
information’’ in our proposed definition
of the health care attachments
transaction at § 162.2001 to specify the
information transmitted by a health care
provider or requested by a health plan.
We are proposing to separately define
‘‘attachment information’’ to prevent the
transaction definition at § 162.2001 from
becoming too unwieldy.
10 Letter from NCVHS to the Secretary of HHS,
March 2, 2012: https://ncvhs.hhs.gov/wp-content/
uploads/2014/05/120302lt1.pdf.
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The NCVHS recommended defining
attachments as ‘‘any supplemental
documentation needed about a
patient(s) to support a specific health
care-related event (such as a claim, prior
authorization, or referral) using a
standardized format,’’ and we have
incorporated key aspects of their
recommendation into our proposed
definition of attachment information.11
We have attempted to ensure that our
proposed definition is broad and general
enough to include all possible patientrelated information that could be
generated with respect to health care
services, and have done this in several
ways.
Documentation: First, we believe the
word ‘‘documentation,’’ which the
NCVHS recommended and that we
include in our proposed definition, is
adequately broad to indicate the wide
scope of information the definition
should cover.
Supplemental: Second, the NCVHS
recommended the definition specify
that the documentation be
‘‘supplemental.’’ In and of themselves,
the health care claims and prior
authorizations transactions, which the
proposed health care attachments
transactions would support, do not
provide the documentation that would
be furnished by a health care
attachments transaction. To express that
the documentation would be
supplemental, our proposed definition
indicates that we are referring to
documentation ‘‘that is not included’’ in
a health care claims transaction or prior
authorization transaction, and we
include specific references to the
regulatory provisions defining the
health care claims and prior
authorization transactions. Should we
propose to adopt health care
attachments transaction standards to
support additional transactions, we
would likely propose to broaden our
definition of attachment information to
include regulatory references to them.
Needed: Third, the NCVHS
recommended that the definition
specify the supplemental
documentation should be ‘‘needed’’ by
a health plan to enable it to decide
whether to pay a claim or authorize the
provision of health care; our proposed
definition accounts for this with the
language ‘‘enables the health plan to
make a decision about health care.’’
11 NCVHS Letter to the Secretary of HHS on
Recommendations for the Electronic Health Care
Attachment Standard, July 5, 2016: https://
ncvhs.hhs.gov/wp-content/uploads/2018/03/2016Ltr-Attachments-July-1-Final-Chair-CLEAN-forSubmission-Publication.pdf.
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C. Proposed Code Set, Transaction
Definitions, and Standards
We are proposing to adopt certain
industry consensus standards that,
when used together, provide the
functionality necessary for the
transmission of electronic health care
attachment information.12 In this
section, we describe proposed new
requirements for: (1) a code set to be
used for health care attachments
transactions; (2) X12 standards for
requesting and transmitting attachment
information and HL7 standards for
clinical information content; and (3)
electronic signatures standards.
1. Code Set (LOINC for HIPAA
Attachments)
Health plans and health care
providers must have a clear and
unambiguous way to specify attachment
information—for example, a discharge
summary, surgical operation note, or
cardiovascular disease consult note—to
be transmitted or requested in a health
care attachments transaction.
The LOINC code set was developed
for the following three principal
purposes:
• To identify the specific kind of
information that a health plan
electronically requests of a health care
provider and a health care provider
electronically transmits to a health plan;
for example, a discharge summary or a
diagnostic imaging report.
• To specify certain optional modifier
variables for attachment information,
such as, for example, a time period for
which the attachment information is
requested.
• For structured attachment
information, to identify specific HL7
Implementation Guide: LOINC
Document Ontology document
templates.
This rule proposes numerous
implementation specifications
containing specific instructions for how
to utilize the LOINC for HIPAA
Attachments with respect to those three
purposes. Where an implementation
specification requires the use of LOINC,
it instructs users to utilize the codes
valid at the time a transaction is
initiated, similar to how other
nonmedical data codes sets in HIPAA
implementation specifications are
12 For additional information about the business
and operational processes involved in the exchange
of these standards, we refer readers to the
aforementioned November 2017 WEDI whitepaper
and the HL7 CDA® R2 Attachment Implementation
Guide: Exchange of C–CDA Based Documents,
Release 1 Release 1 (Universal Realm) for more
technical information. Both are available at: https://
www.hl7.org/implement/standards/product_
brief.cfm?product_id=464.
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treated. Regenstrief’s website maintains
online tools to help users search the
LOINC database for specific LOINC
codes or map local terms to LOINC
codes (https://loinc.org/attachments).
To improve ease of use, Regenstrief
released and enhanced the search
functionality to the SearchLoinc tool
(https://loinc.org/search-app/). In
addition, Regenstrief offers the LOINC
Attachments Knowledge Base (https://
loinc.org/attachments) to help users
better find and utilize LOINC codes and
resources such as mapping. Regenstrief
maintains a twice-yearly release cycle,
and covered entities would be expected
to utilize the LOINC for Attachments
codes, as specified by the relevant
implementation specification. In our
discussion of each implementation
specification, we describe in more detail
how each uses LOINC.
2. Electronic Health Care Attachments
Transactions
In this section, we propose to adopt
standards for requesting and
transmitting attachment information (as
we have proposed to define that term in
§ 162.103). We are proposing to adopt
X12 standards with respect to the
transmission of attachment information
and HL7 standards with respect to the
clinical content of attachments.
Specifically, as detailed in the sections
that follow, we are proposing to adopt
three X12N Technical Report Type 3
(TR3) implementation specifications for
requesting and transmitting attachment
information, and three HL7
implementation guides for the clinical
information embedded in those
transactions. While CAQH CORE has
developed operating rules for
attachments, the NCVHS has yet to
evaluate them and make a
recommendation to the Secretary.
Should the NCVHS recommend that the
Secretary adopt those operating rules,
we will consider adopting them.
a. Scope of Health Care Attachments
Transactions
Section 1173(a) of the Act requires the
Secretary to adopt standards for ‘‘Health
claims attachments,’’ and section
1104(c)(3) of the Affordable Care Act
reiterated that requirement, directing
the Secretary to promulgate a final rule
to adopt a transaction standard and a
single set of associated operating rules.
The attachments standards we are
proposing satisfy the requirement to
adopt a standard to support health care
claims, but they also support prior
authorization transactions. Hereafter we
refer to ‘‘health care attachments’’ to
refer to attachments for claims as well
as prior authorization transactions
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instead of ‘‘health claims attachments,’’
which only includes the former.
Historically, the referral certification
and authorization transaction has had
among the lowest implementation rates
of all the HIPAA transactions, likely
attributable to the fact that we have not
yet adopted standards for attachments.
In a 2016 report, the CAQH CORE
Index 13 noted that the uptake rate for
such transactions being conducted fully
electronically was only 18 percent, even
5 years after the adoption of Version
5010 of the X12 278 standard. The
report also indicated that more than 50
percent of prior authorization
transactions were conducted through
proprietary web portals and automated
phone calls as a means to conform to
business processes due to the lack of an
adopted health care attachments
standard. Four years later, the 2020
CAQH Index reported only limited
progress, with the uptake rate having
increased to only 21 percent. As we
have discussed, health plans frequently
require attachment information before
approving requests for prior
authorization for health care services.
Although section 1173(a)(1)(A) of the
Act does not specifically require the
Secretary to adopt attachments
standards with respect to prior
authorization transactions, section
1173(a)(1)(B) of the Act requires the
Secretary to adopt standards for other
appropriate financial and administrative
transactions, consistent with the goals of
improving the operation of the health
care system and reducing administrative
costs.
However, we are not proposing to
adopt attachments standards for all
health care transaction business needs.
Not only would it be challenging to
identify standard specifications and
appropriate codes for the full array of
different health care attachment types
used today, but we also believe it is
important that covered entities should
consider gaining experience with a
limited number of standard electronic
attachment types so that technical and
business issues can be identified to
inform potential future rulemaking for
other electronic attachments standards.
We request comment on alternative
standards and approaches that can
address the challenges described
previously.
13 CAQH CORE ‘‘2016 CAQH INDEX® A Report
of Healthcare Industry Adoption of Electronic
Business Transactions and Cost Savings’’ https://
www.caqh.org/sites/default/files/explorations/
index/2016-caqh-index-report.pdf?token=qV_
hI4H5.
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b. Proposed Definition of the Health
Care Attachments Transaction
We are proposing to add a new
Subpart T to 45 CFR part 162—Health
Care Attachments. In Subpart T, in new
§ 162.2001, we are proposing to specify
the electronic health care attachments
transaction; specifically, we are
proposing that any of three different
types of transmissions would constitute
a health care attachments transaction.
For each type of transmission, we
specify the entity type from which the
transaction is being transmitted and to
which it is being sent, the type of
information being transmitted, and the
purpose for the transaction. We note
that the overarching purpose for all
three types of transactions—to enable a
health plan to make a decision about
health care—is incorporated into the
definition of attachment information,
while for the two transmission types in
§ 162.2001(a), and as discussed later in
this section, we further specify the
purpose.
We are proposing the following three
types of transmissions:
• In § 162.2001(a)(1) and (a)(2), a
health care attachments transaction is
either of two different types of
transmissions, both of which are sent
from a health care provider to a health
plan and where the type of information
being transmitted in both is attachment
information.
• In § 162.2001(b), a health care
attachments transaction is one type of
transmission that is sent from a health
plan to a health care provider, and
where the type of information being
transmitted is a request for attachment
information.
The purpose for the transmission
described in § 162.2001(a)(1) is to
support a referral certification and
authorization transaction, as described
in § 162.1301(a), while the purpose for
the transmission described in
§ 162.2001(a)(2) is to support a health
care claims or equivalent encounter
information transaction, as described in
162.1101. We are also proposing to
make a conforming change to the
definition of ‘‘transaction’’ in § 160.103,
by replacing ‘‘(10) Health claims
attachments’’ with ‘‘(10) Health care
attachments.’’
3. Proposed Adoption of Electronic
Health Care Attachments Transaction
Standards
As noted earlier, the NCVHS has held
a number of hearings and made several
sets of recommendations to the
Secretary on attachments standards.14
14 https://ncvhs.hhs.gov/reports/
recommendation-letters/.
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By letter dated July 5, 2016, the NCVHS
consolidated its earlier
recommendations on attachments and
advised that updated versions of the
available standards were ready for
industry use, noting that one of the most
significant findings from its February
16, 2016 hearing was the general
consensus across testifiers about the
need for HHS to adopt the NCVHSrecommended standards.15 The NCVHS
noted that it considered a number of
criteria and factors in evaluating
standards, particularly whether
candidates would meet the goals of
administrative simplification. Among
other recommendations, the NCVHS
advised that attachments standards for
queries, and both solicited and
unsolicited responses, should support
structured and unstructured data. The
NCVHS concluded that its
recommended standards meet the
industry’s business needs, improve
administrative efficiency and reduce
administrative burden, are flexible and
agile to meet future technology
developments and health system
changes, and are mature, adoptable, and
enforceable.
The NCVHS noted that its
recommended standards represented a
collaboration between X12 and HL7,
with X12 providing for existing
provider/payer EDI, and HL7 providing
for the CDA. Specifically, the NCVHS
recommended that HHS adopt the
following standards for attachmentrelated transactions:
• For requesting attachments, the
following standards:
++ For claim-related attachment
requests, the ASC X12N 277 Health Care
Claim Request for Additional
Information.
++ For non-claim-related attachment
requests, the ASC X12N 278 Health Care
Service Review—Request for Review
and Response—Response.
• For attachment message content
and format in the transmission of
attachment information, the following
standards:
++ The HL7 CDA R2—Consolidated
CDA Templates for Clinical Notes R2.1.
++ The HL7 Attachment Supplement
Specification Request and Response
Implementation Guide R1.
++ The Attachment Type Value Set:
Logical Observation Identifier Names
and Codes (LOINC) developed and
maintained by the Regenstrief Institute,
Inc.
15 See ‘‘Recommendations for the Electronic
Health Care Attachment Standard,’’ https://
ncvhs.hhs.gov/wp-content/uploads/2018/03/2016Ltr-Attachments-July-1-Final-Chair-CLEAN-forSubmission-Publication.pdf.
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++ The HL7 Implementation Guide
for CDA Release 2: Additional CDA R2
Templates—Clinical Documents for
Payers—Set 1.
• For the routing/envelope of
attachment information, the following
standards:
++ The ASC X12N 275 Additional
Information to Support a Health Care
Claim or Encounter.
++ The ASC X12N 275 Additional
Information to Support a Health Care
Services Review.
The health care attachments standards
we are proposing are those
recommended by the NCVHS, and
discussed in its July 5, 2016 letter to the
Secretary. Also, as previously discussed,
section 1104(c)(3) of the Affordable Care
Act requires that the adopted
attachments standard be ‘‘consistent
with the X12 Version 5010 transaction
standards,’’ which we interpret as
requiring that the proposed health care
attachment implementation
specifications be compatible with X12
standards generally, meaning any
standard we adopt for attachment
information can be electronically
transmitted by an X12 transmission
standard in the same transaction.
While the NCVHS did not recommend
specific versions of the X12N
attachments standards, we are
proposing to adopt the X12N Versions
6020 for both the X12N 277 standard,
that is, the X12N 277—Health Care
Claim Request for Additional
Information (006020X313), as well as for
the X12N 278—Health Care Services
Request for Review and Response
Version (006020X315) standard for the
referral certification and authorization
transaction. We are proposing to adopt
Version 6020 of these standards because
they better harmonize with the X12N
275—Additional Information to Support
a Health Care Claim or Encounter
Version (006020X314) and the X12N
275—Additional Information to Support
a Health Care Services Review Version
(006020X316) standards we are
proposing to adopt for a provider to
transmit attachment information.
Although it may be possible to use
different versions of the standards for
health plan requests for, and provider
transmissions of, attachment
information, X12 recommended to the
NCVHS that all parties to those
transactions use Version 6020 of the
standards as they are most compatible
with each other.16
a. Proposed Adoption of X12N
Standards for Health Care Attachments
Transactions
16 Transcript of NCVHS Subcommittee on
Standards Hearing on Electronic Attachments
Standards and Operating Rules, February 27, 2013:
https://ncvhs.hhs.gov/transcripts-minutes/
transcript-of-the-february-27-2013-ncvhssubcommittee-on-standards-hearing/.
17 Workgroup for Electronic Data Interchange
(WEDI), ‘‘Guidance on Implementation of Standard
Electronic Attachments for Healthcare
Transactions’’ https://www.wedi.org/2017/11/17/
guidance-on-implementation-of-standardelectronic-attachments-for-healthcare-transactions/.
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(1) Proposed Adoption of Standards for
Request From a Health Plan to a Health
Care Provider for Attachment
Information
(a) X12N 277—Health Care Claim
Request for Additional Information
(006020X313)
At § 162.2002(e)(1), we propose to
adopt the X12N 277—Health Care Claim
Request for Additional Information
(006020X313) as the standard a health
plan must use to electronically request
attachment information from a health
care provider to support a health care
claim. We also propose to incorporate
the same by reference in § 162.920.
The X12N 277 contains two
noteworthy fields, which we discuss
sequentially. The first is the health plan
assigned claim control number, which
allows for document reassociation. A
health plan assigns a claim control
number to associate its request with a
provider’s electronic health care claim.
The health care provider then uses the
health plan assigned claim control
number in the X12 275 standard in the
health care attachments transaction,
discussed later in this proposed rule,
that it transmits to the health plan,
enabling the health plan to associate the
attachment information with the
previously submitted health care claim.
The other noteworthy X12N 277 field
is for LOINC for HIPAA Attachments.
The X12N 277 standard requires the use
of the appropriate LOINC for HIPAA
Attachments data element to identify
the specific attachment information the
health plan is requesting. The
previously referenced 2017 WEDI
whitepaper illustrates how the LOINC
code is used in an X12 277 standard in
the following hypothetical scenario: A
provider performs a particular surgery
for which there is no HCPCS code and
sends the health plan a health care
claim using a Not Otherwise Classified
(NOC) procedure code. The health plan
requires additional information about
the procedure to adjudicate the claim,
and sends the health care provider an
X12N 277 Health Care Claim Request for
Additional Information request using
the appropriate LOINC for HIPAA
Attachments code to specify the surgical
operative note it needs.17
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(b) X12N 278—Health Care Services
Request for Review and Response
(006020X315)
At § 162.2002(e)(2), we propose to
adopt the X12N 278—Health Care
Services Request for Review and
Response (006020X315) as the standard
a health plan must use to electronically
request attachment information from a
health care provider to support a prior
authorization transaction. We also
propose to incorporate the same by
reference in § 162.920. The X12 278
standard is unique in that it is also used
for a health care provider’s request for
prior authorization, as reflected at
§ 162.1302(b)(2)(ii). We are proposing to
adopt Version 6020 of that standard,
which would represent a modification
to the currently adopted Version 5010 of
the X12N 278. As we discussed
previously, the NCVHS indicated that
the updated version, that is, Version
6020, of the X12 278 is more compatible
with the Version 6020 X12N 275
standard we are proposing for a health
care provider’s transmission of an
attachment information transaction to a
health plan in support of a prior
authorization request. Version 6020 of
the X12 278 also contains the same two
noteworthy fields as the X12N 277, that
is, the health plan assigned claim
control number and the field for LOINC
for HIPAA Attachments. In section II.D.
of this proposed rule we discuss our
proposed modification to update the
current HIPAA standard, Version 5010
of the X12 278, to Version 6020.
(2) Proposed Adoption of Standards for
Response From a Health Care Provider
to a Health Plan for Attachment
Information
(a) X12 275—Additional Information to
Support a Health Care Claim or
Encounter (006020X314)
We propose to adopt, at § 162.2002(d),
the X12N 275—Additional Information
to Support a Health Care Claim or
Encounter (006020X314) as the standard
a provider must use to electronically
transmit attachment information to a
health plan to support a health care
claims or equivalent encounter
information transaction. We also
propose to incorporate the same by
reference in § 162.920.
The X12N 275—Additional
Information to Support a Health Care
Claim or Encounter standard may be
used with respect to both solicited and
unsolicited attachment information.
Using the previous example of a surgery
for which there is not a HCPCS code, in
the case where a health plan has
solicited attachment information, the
provider would reply to the X12N 277
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request from the plan using the X12N
275 to convey the operative note as the
attachment information. In the
unsolicited scenario, the provider could
concurrently transmit the X12N 275—
Additional Information to Support a
Health Care Claim or Encounter and a
claim using the X12N 837 to enable the
health plan to make a decision about the
claim at the time of initial claim
processing.
We note that the X12N 275—
Additional Information to Support a
Health Care Claim or Encounter claims
attachment standard, as well as the
X12N 275—Additional Information to
Support a Health Care Services Review
prior authorization standard (discussed
in this section of this proposed rule), do
not themselves contain claim or prior
authorization attachment information.
Rather, the standards serve as the
electronic envelope for attachment
information that is embedded in an HL7
standard. We describe in detail the
specific HL7 standards for embedding
attachment information in this section
of the proposed rule, but the critical
concept is that the health care
attachment information is transported
by the X12N 275 standard.
(b) X12N 275—Additional Information
To Support a Health Care Services
Review (006020X316)
We propose, at § 162.2002(c), to adopt
the X12N 275—Additional Information
to Support a Health Care Services
Review (006020X316) as the standard a
provider must use to electronically
transmit attachment information to a
health plan to support a health care
provider’s request for the review of
health care to obtain an authorization
for the health care; in other words, a
prior authorization request. We also
propose to incorporate the same by
reference in § 162.920.
As we described in greater detail in
our proposal to adopt the X12 275—
Additional Information to Support a
Health Care Claim or Encounter, this
standard also can be sent in a solicited
or unsolicited manner. Using our
example of a surgery for which there is
no HCPCS code, for solicited attachment
information the provider would reply to
the X12N 278 request from the health
plan using the X12N 275 standard that
conveys the operative note. In the
unsolicited scenario, the provider could
concurrently transmit the X12N 275
Additional Information to Support a
Health Care Services Review and a prior
authorization request using the X12N
278 to enable the health plan to make
a decision about the prior authorization
without additional requests for
information.
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B. Proposed Adoption of HL7
Implementation Guides for Health Care
Attachment Information
The HL7 CDA standard is the only
currently available SSO-created,
NCVHS-recommended standard in the
United States with published
implementation specifications designed
to support the HIPAA transactions.
Other standards for the exchange of
clinical information are being developed
and piloted but, due in part to its
readiness, we believe the HL7 CDA is
the most appropriate standard for
adoption at this time.
We are proposing to adopt the
following three HL7 implementation
guides as HIPAA standards for the
attachment information included in
health care attachments transactions:
• HL7 Implementation Guide for CDA
Release 2: Consolidated CDA
Templates for Clinical Notes (US
Realm) Draft Standard for Trial Use
Release 2.1, Volume 1—Introductory
Material, June 2019 with Errata
(hereafter Volume One or C–CDA
Volume One or C–CDA 2.1)
• HL7 Implementation Guide for CDA
Release 2: Consolidated CDA
Templates for Clinical Notes (US
Realm) Draft Standard for Trial Use
Release 2.1, Volume 2—Templates
and Supporting Material, June 2019
with Errata (hereafter Volume Two or
C–CDA Volume Two or C–CDA 2.1)
• HL7 CDA R2 Attachment
Implementation Guide: Exchange of
C–CDA Based Documents, Release 1,
March 2017 (hereafter the Attachment
Implementation Guide)
Generally, the Attachment
Implementation Guide specifies how to
combine HL7 and X12 standards to
transmit health care attachments
transactions. For example, it contains
instructions with respect to how to
construct electronic health care
attachments transactions, including how
to attach and send the attachment
information using the proposed X12N
health care attachments standards. It
also contains instructions for health
plans to utilize the necessary LOINC
codes for health plans to request health
care attachments from a health care
provider, and for providers to identify
health care attachments document
templates when transmitting them to a
health plan. For the transmissions
described in proposed § 162.2001, that
is, transmissions of attachment
information from a health care provider
to a health plan for the specified
purposes, and requests for attachment
information from a health plan to a
health care provider, we would require
the use of the Attachment
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Implementation Guide at § 162.2002(a).
We propose to incorporate this HL7
standard by reference in § 162.920 in a
new paragraph (e) where we provide
information about the availability of the
HL7 standards we are proposing.
We are also proposing that for the
transmissions of attachment information
from a health care provider to a health
plan for the specified purposes, as
described in proposed § 162.2001(a), we
would require the use of Volume One
and Volume Two, and would include
these requirements at § 162.2002(b)(1)
and (b)(2), respectively. Collectively,
these standards are instructions for the
use of specific sections of the CDA, a
larger set of clinical information
standards developed by HL7, that
provide specifications for users to create
the HL7 document templates for the
clinical information that would be used
in the proposed health care attachments
transactions.
Attachment information comes in two
variants, ‘‘structured’’ and
‘‘unstructured,’’ and the proposed HL7
standards support both. A structured
document is one that has a high degree
of organization that is able to be
interpreted by a computer, includes a
header that contains metadata about the
clinical information found in the body
of the document, and a structured body.
The clinical information contained in
the document is subdivided into
systematic sections and entries that can
be identified and sorted by a computer
using descriptive codes. HL7 Volume
One and Volume Two instruct readers
how to assemble the segments into a
standardized set of document sections
known as a document ‘‘template,’’
which is essentially a set of C–CDA
components identified by a LOINC
code, and include templates for the
most common paper documents that
serve as attachment information. An
HL7 structured template is in a format
that can be easily displayed in a humanreadable format, while also enabling a
computer to make an automated
decision about a claim or a prior
authorization request. Volume One and
Volume Two also contain instructions
for creating an unstructured document
template for attachment information for
which HL7 has not created a structured
template. Unstructured documents still
utilize an HL7 standard header that
includes meta-data about the clinical
information found in the document
body, but the body does not contain tags
that systematically identify the
attachment information within.
Examples of unstructured documents
include medical imaging files, audio,
video, and legacy attachment
information such as scanned paper
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documents. Unstructured content may
also include attachment information
that is not collected in a health care
environment, but that a health plan may
require for payment decisions, such as
delivery receipts, home inspection
reports, or patient-created diabetic logs.
The Attachment Implementation
Guide also specifies how to construct a
health care attachments transaction
when Volume One or Volume Two do
not provide a document template for
particular attachment information. The
Attachment Implementation Guide
contains three criteria that any
document template to be used as a
health care attachment must meet if it
is not already specified in one of the
proposed implementation guides: (1) the
template must be developed and
published through the HL7 standards
process; (2) the new template must be
designated by HL7 as being compatible
with a C–CDA 2.1 implementation
specification and for use in the United
States; and (3) a LOINC code for the
template must be created by Regenstrief
via its code creation process as
previously described. This means that
once a C–CDA 2.1 implementation
guide-compatible document template
has been created by HL7 and is assigned
a LOINC code, which happens upon
request of the HL7 Payer/Provider
Information Exchange Workgroup once
HL7 creates a new template, it may be
used as attachment information in a
health care attachments transaction. We
invite comment on the proposed
adoption of the HL7 standards—Volume
One, Volume Two, and the Attachment
Implementation Guide.
C. Electronic Signatures
Section 1173(e)(1) of the Act provides
that the Secretary, in coordination with
the Secretary of Commerce, must adopt
standards specifying procedures for the
electronic transmission and
authentication of signatures for HIPAA
transactions. Pursuant to that
requirement, we proposed to adopt
standards for electronic signatures in
the August 12, 1998 proposed rule (63
FR 43242) titled ‘‘Security and
Electronic Signature Standards.’’ That
proposal, never finalized with respect to
electronic signatures, would not have
required the use of electronic signatures
with any specific transaction. Rather,
the proposed rule recognized that
electronic signatures would require
certain implementation features,
including message integrity,
nonrepudiation, and user
authentication, and proposed that the
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standard for electronic signatures would
be digital signatures—electronic stamps
that contain information about both the
user creating the signature and the
document being signed—as the only
technically mature means available that
could provide for nonrepudiation in an
open network environment. In
comments on the proposed rule,
industry overwhelmingly indicated that
then-available technology was
insufficient to enable the proposed
provisions to be implemented. As such,
in the February 20, 2003 final rule (68
FR 8334) titled, ‘‘Health Insurance
Reform: Security Standards’’ (hereafter,
February 2003 Security rule), we elected
not to finalize the proposal, instead
indicating that a final rule on electronic
signature standards would be published
at a later date. In the September 23,
2005 proposed rule titled HIPAA
Administrative Simplification:
Standards for Electronic Health Care
Claims Attachments (70 FR 55990), we
recognized that an electronic signature
consensus standard still did not exist
and that no federal standard governed
the use of electronic signatures for
private sector health care services. We
sought industry input on how signatures
should be handled when an attachment
is requested and transmitted
electronically.
Signatures play a vital role with
respect to the documentation of health
care, as a signature is often the only
indicator available to health plans and
health care providers that attachment
information has been reviewed and
approved by the service provider or
other clinician with appropriate
authority to supervise care. Health care
entities recognize numerous legal and
compliance best practices for clinician
attestation of medical record
documentation consistent with
applicable federal and state laws and
regulations, accreditation standards,
payer requirements, documentation
requirements for clinical services
offered, and technology
functionalities.18
Health care best practices, such as
those of the National Committee for
Quality Assurance (NCQA), generally
direct that all entries in the medical
record contain the author’s
identification.19 A health care
18 Electronic Signature, Attestation, and
Authorship, AHIMA: https://bok.ahima.org/
PdfView?oid=107152.
19 ‘‘Guidelines for Medical Record
Documentation’’, NCQA: https://www.ncqa.org/wpcontent/uploads/2018/07/20180110_Guidelines_
Medical_Record_Documentation.pdf.
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providers’ signature (whether wet—in
ink on paper documents—or electronic)
on medical record documentation
generally serves as the attestation that
the appropriate provider representative
has reviewed and approved the
documentation. Health plans commonly
require written and signed
documentation as evidence of medical
necessity for certain types of services.
For example, in order for a laboratory to
submit a claim for reimbursement of a
laboratory test, a health plan may first
require a physician visit and a signed
physician order. When the laboratory
later bills a health plan for the test, the
plan may ask for evidence that it was
ordered by an authorized health care
provider; if the laboratory is unable to
produce a signed order, it may not be
reimbursed.
1. Proposed Definition of Electronic
Signature
An electronic signature can be any of
a number of types of marks or data that
indicate a signatory’s intent to sign.
Examples of electronic signatures
include an online check box indicating
acceptance, a name entered by the
signer in an online form, a signing
device at a commercial checkout line on
which a customer writes his or her
signature, and an image of a signature
that was written by hand and then
scanned into an electronic image format.
We are proposing to define the term
‘‘electronic signature’’ as broadly as
possible to ensure that it meets health
care providers’ and health plans’ needs
now and can also encompass future
electronic signature technologies.
However, we propose to narrowly
specify the scope of the required use of
electronic signatures, such that their
required use would be limited to just
attachment information transmitted
electronically in electronic health care
attachments transactions. Accordingly,
the electronic signature standard we are
proposing at § 162.2002(f) would pertain
only to electronic signatures for
attachment information transmitted by a
health care provider in an electronic
health care attachments transaction.
At § 162.103, we propose to define
electronic signature as follows:
Electronic signature means an electronic
sound, symbol, or process, attached to
or logically associated with attachment
information and executed by a person
with the intent to sign the attachment
information.
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2. Proposed Electronic Signature
Standard
Electronic signatures vary in
reliability and value based on the type
of technology used, and any HIPAA
electronic signature standard has to
meet the needs of both health plans and
health care providers that produce and
use attachment information. Any
standard that we adopt needs to support
all of the current business functions and
uses for signatures in the health plan
payment decision process while
providing assurance that attachment
information is accurate and unaltered.
The 1998 proposed rule that we
mentioned previously, ‘‘Security and
Electronic Signature Standards,’’
enumerated three implementation
features necessary to achieve these
goals: user authentication, message
integrity, and non-repudiation (63 FR
43257). These core features, developed
in conjunction with the Department of
Commerce’s National Institute of
Standards and Technology and the
health care industry, remain relevant to
electronic signatures today. We discuss
each in the following sections.
Authentication is the ability of a
health plan to identify and verify the
identity of the provider who signed a
document, and is a vital signature
characteristic because such verification
serves to validate the attachment
information. Just as a health plan might
compare a physical signature to a
signature card to authenticate a health
care provider’s identity, an electronic
signature must provide a method of
authentication. Some forms of electronic
signatures do not allow for
authentication; for example, a typed
signature line in a word processing
document that indicates it was signed
by a physician does not have any
unique traits that would permit
authentication by a health plan.
Because some electronic signatures
can be readily manipulated, there must
also be a mechanism to ensure that
signed attachment information remains
unaltered since the time it was affixed;
this feature is called message integrity.
To maintain message integrity, there
must be a way to electronically validate
that the attachment information signed
by the health care provider and sent to
the health plan are identical. Without
such a mechanism it would be possible,
for example, to alter the amount or type
of the medical item (such as,
medication, durable medical equipment,
a medical service, etc.) ordered by a
physician after he or she had completed
and signed the order.
Finally, an electronic signature
standard must embody a feature known
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as nonrepudiation, which provides
strong assurance of identity such that it
is difficult for a signatory to later claim
that the electronic representation is not
valid or that he or she did not sign the
document.20 Nonrepudiation is a
necessary feature of an electronic
signature for health care attachments
transactions because health plans will
use attachment information to make
administrative decisions about payment
for health care services and may deny
payment to a health care provider based
on the information in electronically
signed attachments.
An electronic signature standard must
manifest each of these three features to
suffice for attachment information in
electronic health care attachments
transactions. For example, were a
signing system to incorporate
authentication and nonrepudiation but
lack a mechanism to ensure message
integrity, a health plan could not be
confident that the attachment
information had not been altered since
being signed. Or, were a signing system
to incorporate nonrepudiation and
message integrity but lack a mechanism
for authentication, the health plan
receiving the attachment information
would be assured that the content had
not been altered and that someone had
signed, but it could never be certain of
the actual signatory. In the previously
discussed 1998 and 2005 proposed
rules, HHS identified digital signature
technology as the only electronic
signature approach offering the features
of authentication, message integrity, and
nonrepudiation. We continue to believe
that digital signature technology is the
only electronic signature technology
that supports all three features.
We considered proposing, as an
electronic signature standard, the
specifications for electronic signatures
that are included in the HL7
implementation guides we are
proposing here for electronic health care
attachments transactions. But we
decided not to pursue that route because
the specifications included in those
guides do not support authentication,
message integrity, and nonrepudiation.
However, HL7 has also developed an
implementation guide called the HL7
Implementation Guide for CDA Release
2: Digital Signatures and Delegation of
Rights, Release 1 (hereafter Digital
Signatures Guide), with supplemental
specifications that add support for
authentication, message integrity, and
nonrepudiation to their other published
20 Office of National Coordinator for Health
Information Technology (ONC). Identity
Management, December 6, 2017: https://
www.healthit.gov/sites/default/files/
identitymanagementguidev5.13.pdf.
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implementation guides. The Digital
Signatures Guide promotes these three
features by utilizing digital signature
technology to implement identity
management using digital certificates,
encryption requirements to support
message integrity, and multiple signed
elements to support nonrepudiation. As
we previously noted, a digital signature
is an electronic stamp that contains
information about both the user creating
the signature and the document that is
being signed. Digital signatures are
created using digital certificates to
create a secure computer code that can
be used later to authenticate the signer.
At the same time, the certificate is used
to create another computer code,
usually referred to as a hash, which can
be used by a computer to verify that the
document has not been changed since it
was originally signed; this is a
mechanism to ensure the integrity of the
signed document. In both cases, the
codes are encrypted so the receiver
knows that the codes themselves have
also not been altered, enabling the
receiver to be confident that the
signature was applied by the
authenticated individual.
We note that the Digital Signatures
Guide does not include requirements for
when a document must be signed and
by whom. As previously discussed,
requirements with respect to who may
deliver health care and how it must be
documented via signature vary greatly
and are developed by health plans and
outlined in their provider compliance
manuals, trading partner agreements,
and other contractual requirements
between health plans and health care
providers. We do not seek to regulate
clinical best practices for
documentation or interfere with health
plans’ business needs. Therefore, we are
not proposing to specify when an
electronic signature must be required,
but, instead, we defer to the industry to
continue to establish those expectations.
We would also limit the scope of the
required use of electronic signatures to
just health care attachments
transactions. Accordingly, we are
proposing to require that, where a
health care provider uses an electronic
signature in a health care attachments
transaction, the signature must conform
to the implementation specifications in
the Digital Signatures Guide.
Specifically, we propose to adopt, at
§ 162.2002(f), the HL7 Implementation
Guide for CDA Release 2: Digital
Signatures and Delegation of Rights,
Release 1 for electronic signatures for
attachment information transmitted by a
health care provider in an electronic
health care attachments transactions
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specified in § 162.2001(a). We also
propose to incorporate the same by
reference in § 162.920.
We solicit comments on the proposed
definition of electronic signature and
the proposed HL7 Implementation
Guide as the attachment information
electronic signatures standard.
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D. Proposed Modification to a HIPAA
Standard
1. Modifications to Standards
Section 1174 of the Act requires the
Secretary to review the adopted
standards and adopt modifications to
them as appropriate, but not more than
once every 12 months. Modifications
must be completed in a manner that
minimizes disruption and cost of
compliance. Per section 1175 of the Act,
if the Secretary adopts a modification to
a HIPAA standard or implementation
specification, the compliance date for
the modification may not be earlier than
the 180th day following the date of the
adoption of the modification. The
Secretary must consider the time
needed to comply due to the nature and
extent of the modification when
determining compliance dates, and may
extend the time for compliance for small
health plans if the Secretary deems it
appropriate.
Section 162.910 sets out the standards
maintenance process and defines the
role of SSOs and Designated Standard
Maintenance Organizations (DSMOs).
An SSO is an organization accredited by
the ANSI that develops and maintains
standards for information transactions
or data elements. The two SSOs
applicable to this proposed rule are the
Accredited Standards Committee X12
(X12) and Health Level Seven (HL7). On
August 17, 2000, the Secretary
designated six organizations (see Health
Insurance Reform: Announcement of
Designated Standard Maintenance
Organizations Notice (65 FR 50373)) to
maintain the health care transaction
standards adopted by the Secretary, and
to process requests for modifying an
adopted standard or for adopting a new
standard. The six organizations include
X12, HL7, and NCPDP, along with the
National Uniform Billing Committee
(NUBC), the National Uniform Claim
Committee (NUCC), and the Dental
Content Committee (DCC) of the
American Dental Association.
Section 162.910 also sets forth the
procedures for the maintenance of
existing standards and the adoption of
modifications to existing standards and
new standards. Under § 162.910(c), the
Secretary considers recommendations
for proposed modifications to existing
standards or proposed new standards,
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only if the recommendations are
developed through a process that
provides for all of the following:
• Open public access.
• Coordination with other DSMOs.
• An appeal process for the requestor
of the proposal or the DSMO that
participated in the review and analysis
if either were dissatisfied with the
decision on the request.
• An expedited process to address
HIPAA content needs identified within
the industry.
• Submission of the recommendation
to the NCVHS.
Any entity may submit change
requests with a documented business
case to support the recommendation to
the DSMO, which receives and
processes those change requests. The
DSMO reviews the request and notifies
the SSO of the recommendation for
approval or rejection. Should the
changes be recommended for approval,
the DSMO also notifies the NCVHS and
suggests that a recommendation for
adoption be made to the Secretary of
HHS. Information pertaining to the
designation of a DSMO and its
responsibilities can be found in the
Transactions Rule and the Notice,
which were both published on August
17, 2000 (65 FR 50365 and 50373).
The modification we are proposing in
this rule was developed through a
process that conforms with § 162.910. In
February 2016, the NCVHS held
hearings to review the Version 6020
X12N 278 implementation
specifications as a standard for health
care attachments transactions, which
X12 recommended be adopted by HHS.
Testimony from that hearing indicated
the need for HHS to adopt the 6020
version of the X12N 278, which X12
testified resolves technical issues with
Version 5010 of the X12N 278.21 In its
2016 letter to the Secretary, the NCVHS
recommended the adoption of the X12N
278 for health care attachments
transactions, but did not recommend a
specific version. Rather, the NCVHS
recommended that the Secretary
consider adopting the version expected
to be in effect at the time the
transactions standards are mandated.22
Version 6020 of the X12N 278 is the
most current version of the referral
certification and authorization
transaction standard.
2. Modification to Referral Certification
and Authorization Transaction Standard
As just discussed, the NCVHS
recommended that HHS adopt the
referral certification and authorization
transaction standard (ASC X12N 278)
for non-claims-related attachment
requests and responses. Although the
NCVHS did not recommend a specific
version of the standard, we are
proposing to adopt Version 6020 of the
X12N 278 because Version 6020 better
harmonizes with the Additional
Information to Support a Health Care
Services Review Version—X12N 275–
(006020X316) standard we are
proposing to adopt for providers
transmitting attachment information. As
we also discussed, while it may be
possible to use different versions of the
standards for health plan requests for,
and provider transmissions of,
attachment information, X12 advised
against it, recommending to the
NCVHS 23 that all parties to those
transactions use Version 6020 of the
standards as they are most compatible
with each other.
Adopting Version 6020 of the X12N
278 for referral certification and
authorization transactions standard to
replace Version 5010 of the X12N 278
would be a modification to a standard
under HIPAA, similar to the previous
modifications we adopted when we
moved from Version 4010 to Version
5010 for the X12 standards. Version
6020 of the X12N 278 includes several
changes, some of which are
maintenance changes, and some of
which represent more significant
improvements over Version 5010. The
two most significant changes each
represent technical improvements and
structural changes to the standard:
• One important change will better
support referral certification and
authorization transactions for dental
services. Currently, health care
providers are able to accurately report
tooth status utilizing Version 5010 of
the X12N 837 for health care claims, but
Version 5010 of the X12N 278 cannot
support reporting tooth status in health
care referral certification and
authorization transactions. Version 6020
of the X12N 278 expands support for
reporting the status of individual teeth,
which enables a health care provider to
specifically indicate a missing tooth,
extracted tooth, tooth to be extracted, or
impacted tooth in a health care referral
21 https://ncvhs.hhs.gov/transcripts-minutes/
transcript-of-the-february-16-2016-ncvhssubcommittee-on-standards/.
22 https://ncvhs.hhs.gov/wp-content/uploads/
2018/03/2016-Ltr-Attachments-July-1-Final-ChairCLEAN-for-Submission-Publication.pdf.
23 Transcript of NCVHS Subcommittee on
Standards Hearing on Electronic Attachments
Standards and Operating Rules, February 27, 2013:
https://ncvhs.hhs.gov/transcripts-minutes/
transcript-of-the-february-27-2013-ncvhssubcommittee-on-standards-hearing/.
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certification and authorization
transaction. We expect this
improvement in the X12N 278 to
minimize or eliminate administrative
delays attributable to providers having
to convey relevant individual tooth
information outside of the standard
transactions process.
• Version 6020 revises and expands
the drug authorization segment, which
includes fields necessary to, for
example, identify a drug, specify
quantity of drug requested, specify drug
dosage requested, and accommodate
related procedure codes. Because
Version 5010 does not enable entities to
supply this additional information,
health plans and providers must utilize
cumbersome alternative methods to
communicate drug information.
Therefore, we also expect this
improvement to minimize or eliminate
administrative delays attributable to
providers having to convey relevant
drug information outside of the standard
transactions process.
The referral certification and
authorization transaction under
§ 162.1301 includes two transmission
types from health care providers to
health plans: prior authorization
requests and referral certification
requests. The X12N 278 standard is
required for both types of transmission.
As discussed, we are proposing that
health care attachments transactions
would apply to prior authorization
transactions; we are not proposing that
they apply to referral certification
transactions. Although it would be
technically feasible for us to propose to
adopt Version 6020 only for prior
authorization transmissions specified in
§ 162.1301(a) and retain Version 5010
for referral certification transmissions
specified in § 162.1301(b), we are
instead proposing Version 6020 for both
transmission types because it includes
improvements over Version 5010 that
better support both transmission types,
and we believe it would be more
burdensome for covered entities to have
to maintain both X12N 278 versions.
E. Proposed Compliance Dates
We are proposing to adopt new
standards and a modification to a
standard in this proposed rule. Section
1104(c)(3) of the Affordable Care Act,
which requires the Secretary to adopt a
transaction standard for health claims
attachments, prescribes a 2-year
compliance date for all covered entities
and makes no special provision for
small health plans, unlike the original
HIPAA. In this rule, we are proposing
that the same health care attachments
standards would apply to both claims
and prior authorization attachments
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transmissions. As the transmission
standard for each type of attachment
transaction transmission would be the
same, we believe the compliance date
for both types should also be the same.
In addition, because we are proposing to
treat the two attachments process
together as one transaction in new
Subpart T, adopting the same
compliance timeframe for all covered
entities would avoid the complications
a bifurcated compliance timeframe—one
for claims processes and another for
prior authorization processes—would
raise.
When the Secretary adopts a
modification to a HIPAA standard,
section 1175(b)(2) of the Act requires
that the compliance date may not be
earlier than the 180th day following the
date of adoption. The Secretary must
consider the time needed to comply due
to the nature and extent of the
modification when determining a
compliance date, and may extend the
time for small health plans to achieve
compliance if the Secretary deems it
appropriate. The adoption date of a
standard or a modification is the
effective date of the final rule in which
the adoption or modification is
established. The effective date is the
date the rule amends the Code of
Federal Regulations (CFR), which is
typically 60 days after the date of
publication in the Federal Register.
1. Proposed Compliance Date for Health
Care Attachments and Electronic
Signatures Standards
We are proposing to adopt the
following seven standards for health
care attachments transactions and
electronic signatures:
• HL7 CDAR2: Attachment
Implementation Guide: Exchange of C–
CDA Based Documents, Release 1—
March 2017.
• HL7 Implementation Guide for CDA
Release 2: Consolidated CDA Templates
for Clinical Notes (US Realm) Draft
Standard for Trial Use Release 2.1,
Volume 1—Introductory Material, June
2019 with Errata.
• HL7 Implementation Guide for CDA
Release 2: Consolidated CDA Templates
for Clinical Notes (US Realm) Draft
Standard for Trial Use Release 2.1,
Volume 2—Templates and Supporting
Material, June 2019 with Errata.
• X12N 275 Additional Information
to Support a Health Care Services
Review (06020X316).
• X12N 275 Additional Information
to Support a Health Care Claim or
Encounter (06020X314).
• X12N 277—Health Care Claim
Request for Additional Information
(006020X313).
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• HL7 Implementation Guide for CDA
Release 2: Digital Signatures and
Delegation of Rights, Release 1.
In accordance with section 1104(c)(3)
of the Affordable Care Act, which sets
a 2-year compliance date, and which
makes no provision for an extended
time for small health plans to achieve
compliance, we are proposing that the
compliance date for these standards
would be 24 months after the effective
date of the final rule for all covered
entities. We would specify these
compliance dates in § 162.2002.
2. Proposed Compliance Date for
Modification
Section 1175(b)(2) of the Act requires
the Secretary to determine an
appropriate compliance date for the
implementation of modified standards,
such as the modification of the X12N
278 standard from Version 5010 to
Version 6020, by taking into account the
time needed to comply due to the nature
and extent of the modification. The Act
also requires that the compliance date
be no earlier than the last day of the
180-day period beginning on the date
the modification is adopted (the
effective date of the final rule in which
the modification is adopted). As
discussed previously, we are proposing
Version 6020 of the X12N 278 as the
standard for referral certification and
authorization transactions to be used by
a health plan in conjunction with
Version 6020 of the X12N 275, which a
health care provider would use to
electronically transmit attachment
information to a health plan in support
of a prior authorization request. As the
X12N 278 will feature in the new health
care attachments transaction, we believe
it is important to align the compliance
dates for the proposed modification to
the X12N 278 standard and the health
care attachments standards.
Accordingly, we are proposing that
covered entities would need to comply
with Version 6020 of the standard 24
months after the effective date of the
final rule. We would reflect this
compliance date in § 162.1302 by: (1)
revising paragraph (c) to specify only
the standard identified in paragraph
(b)(2)(i); and (2) adding new paragraph
(d) to require covered entities to use, in
paragraph (d)(1), Version 5010 X12N
278 for 24 months after the effective
date of the final rule, and in paragraph
(d)(2), Version 6020 X12N 278 on and
after 24 months after the effective date
of the final rule. We solicit comments
on this proposed approach.
F. Proposed Incorporation by Reference
This proposed rule proposes to
incorporate by reference: (1) X12 275—
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Additional Information to Support a
Health Care Claim or Encounter
(006020X314); (2) X12N 275—
Additional Information to Support a
Health Care Services Review
(006020X316); (3) X12N 277—Health
Care Claim Request for Additional
Information (006020X313); and (4)
X12N 278—Health Care Services
Request for Review and Response
Version (006020X315) standard for the
referral certification and authorization
transaction implementation guides.
The X12 275—Additional Information
to Support a Health Care Claim or
Encounter implementation guide
provides instructions to assist those
who send additional supporting
information or who receive additional
supporting information to a health care
claim or encounter. The implementation
guide for X12N 275—Additional
Information to Support a Health Care
Services Review implementation guide
contains the data elements used to
communicate individual patient
information requests and patient
information (either solicited or
unsolicited) between separate health
care entities in a variety of settings to be
consistent with confidentiality and use
requirements. Instructions to collect
patient information consisting of
demographic, clinical and other
supporting data are provided.
The X12N 277—Health Care Claim
Request for Additional Information
implementation guide contains the
format and establishes the data contents
of the Health Care Information Status
Notification Transaction Set for use
within the context of an Electronic Data
Interchange (EDI) environment. This
transaction set can be used by a health
care payer or authorized agent to notify
a provider, recipient, or authorized
agent regarding the status of a health
care claim or encounter or to request
additional information from the
provider regarding a health care claim
or encounter, health care services
review, or transactions related to the
provisions of health care.
X12N 278—Health Care Services
Request for Review and Response
Version implementation guide contains
the format. It establishes the data
contents of the Health Care Services
Review Information transaction set used
within the context of an Electronic Data
Interchange (EDI) environment. This
transaction set can be used to transmit
health care service information, such as
subscriber, patient, demographic,
diagnosis, or treatment data for the
purpose of request for review,
certification, notification, or reporting
the outcome of a health care services
review. Expected users of this
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transaction set are payors, plan
sponsors, providers, utilization
management, and other entities
involved in health care services review.
This proposed rule proposes to
incorporate by reference: (1) HL7 CDA
R2 Attachment Implementation Guide:
Exchange of C–CDA Based Documents,
Release 1, March 2017; (2) HL7
Implementation Guide for CDA Release
2: Consolidated CDA Templates for
Clinical Notes (US Realm) Draft
Standard for Trial Use Release 2.1,
Volume 1—Introductory Material, June
2019 with Errata; and (3) HL7
Implementation Guide for CDA Release
2: Consolidated CDA Templates for
Clinical Notes (US Realm) Draft
Standard for Trial Use Release 2.1,
Volume 2—Templates and Supporting
Material, June 2019 with Errata.
The HL7 CDA R2 Attachment
Implementation Guide: Exchange of C–
CDA Based Documents, Release 1,
March 2017, defines the requirements
for sending and receiving standardsbased electronic attachments. It does so
by applying additional constraints onto
standards in common use for clinical
documentation and by specifying
requirements for sending and receiving
systems for attachment requests and
response messages. It defines the set of
attachment documents as those that
contain the minimum standard
metadata to support basic document
management functions, including
identification of patients and providers,
the type of document, date of creation,
encounter information, and a globally
unique document identifier.
HL7 Implementation Guide for CDA
Release 2: Consolidated CDA Templates
for Clinical Notes (US Realm) Draft
Standard for Trial Use Release 2.1,
Volume 1—Introductory Material, June
2019 with Errata and HL7
Implementation Guide for CDA Release
2: Consolidated CDA Templates for
Clinical Notes (US Realm) Draft
Standard for Trial Use Release 2.1,
Volume 2—Templates and Supporting
Material, June 2019 with Errata
implementation guides contain a library
of CDA templates, incorporating and
harmonizing previous efforts from HL7.
It represents the harmonization of the
HL7 Health Story guides, HITSP C32,
related components of IHE Patient Care
Coordination (IHE PCC), and Continuity
of Care (CCD). This R2.1 guide was
developed and produced by the HL7
Structured Documents Workgroup. It
updates the C–CDA R2 (2014) guide to
support ‘‘on-the-wire’’ compatibility
with R1.1 systems C–CDA Release 2.1
implementation guide, in conjunction
with the HL7 CDA Release 2 (CDA R2)
standard, is to be used for implementing
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the following CDA documents and
header constraints for clinical notes.
The materials we propose to
incorporate by reference are available to
interested parties and can be inspected
at the CMS Information Resource
Center, 7500 Security Boulevard,
Baltimore, MD 21244–1850. The X12
implementation guides are available at
GLASS, sso.x12.org. The HL7
implementation guides are also
available through the internet at
www.HL7.org. A fee is charged for all
implementation guides. Charging for
such publications is consistent with the
policies of other publishers of
standards. If we wish to adopt any
changes in this edition of the Code, we
would submit the revised document to
notice and comment rulemaking.
IV. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995, we are required to provide 60day notice in the Federal Register and
solicit public comment before a
collection of information requirement is
submitted to the Office of Management
and Budget (OMB) for review and
approval. In order to fairly evaluate
whether an information collection
should be approved by OMB, section
3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that we
solicit comment on the following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our estimate of the
information collection burden.
• The quality, utility, and clarity of
the information to be collected.
• Recommendations to minimize the
information collection burden on the
affected public, including automated
collection techniques.
The burden associated with the
information collection requirements
contained in § 162.1302 of this
document are subject to the PRA;
however, this one-time burden was
previously approved and accounted for
in the information collection request
under OMB control number 0938–0866
and titled ‘‘CMS–R–218: HIPAA
Standards for Coding Electronic
Transactions.’’ This information
collection request will be revised and
reinstated to incorporate any proposed
additional transaction standards and
proposed modifications to transaction
standards not currently captured in the
PRA package associated with OMB
approval number 0938–0866.
In addition, the collection
requirements associated with this
demonstration do not impose
information collection and record
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keeping requirements, because they
meet the ‘‘information’’ definition
exception under 5 CFR 1320.3(h)(4)
which states: ‘‘Information’’ does not
generally include items in the following
categories: (4) Facts or opinions
submitted in response to general
solicitations of comments from the
public, published in the Federal
Register or other publications,
regardless of the form or format thereof,
provided that no person is required to
supply specific information pertaining
to the commenter, other than that
necessary for self-identification, as a
condition of the agency’s full
consideration of the comment.
If you comment on this information
collection, that is, reporting,
recordkeeping or third-party disclosure
requirements, please submit your
comments electronically as specified in
the ADDRESSES section of this proposed
rule. Comments must be received on/by
February 21, 2023.
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V. Regulatory Impact Analysis
A. Statement of Need
This rule proposes to adopt and
modify standards, pursuant to HIPAA
Administrative Simplification statutory
provisions, for the electronic
transmission of health care attachments,
inclusive of attachments standards for
both health care claims and prior
authorizations. The health care industry
has made it clear via NCVHS testimony,
WEDI presentations, CAQH reports and
direct inquiry that there is a clear need
for government action with regard to
attachments standards in order to bring
consistency and reliable
communications among the partners
involved in health care transactions that
require attachments. As a result of the
absence of a federal attachments
standard, health plans, providers and
vendors lack the direction needed to
support broad use of automation in the
attachment workflow or for industry to
coalesce around the use of even a small
number of electronic solutions. In
addition, lack of an attachments
standards has deterred industry
stakeholders from investing in system
implementations to automate the
attachments workflow, requiring a large
manual administrative burden for the
exchange of medical documentation.
Industry SSOs and stakeholder alliances
report this automation would yield
substantial labor cost savings and
administrative burden reduction. We
believe standardizing electronic
attachments transmissions would
facilitate prior authorization decisions
and claims processing, which would
result in a decreased burden on
providers and health plans, and quicker
delivery of services to patients.
B. Overall Impact
We have examined the impacts of this
rule as required by Executive Order
12866 on Regulatory Planning and
Review (September 30, 1993), Executive
Order 13563 on Improving Regulation
and Regulatory Review (January 18,
2011), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96–
354), section 1102(b) of the Social
Security Act, section 202 of the
Unfunded Mandates Reform Act of 1995
(March 22, 1995; Pub. L. 104–4),
Executive Order 13132 on Federalism
(August 4, 1999), and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health, and safety
effects, distributive impacts, and
equity). Section 3(f) of Executive Order
12866 defines a significant regulatory
action as an action that is likely to result
in a rule: (1) having an annual effect on
the economy of $100 million or more in
any 1 year, or adversely and materially
affecting a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
state, local or tribal governments or
communities (also referred to as
economically significant); (2) creating a
serious inconsistency or otherwise
interfering with an action taken or
planned by another agency; (3)
materially altering the budgetary
impacts of entitlement grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or (4)
raising novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
set forth in the Executive Order.
A regulatory impact analysis (RIA)
must be prepared for major rules with
economically significant effects ($100
million or more in any 1 year). Based on
our estimates, OMB’s Office of
Information and Regulatory Affairs has
determined this rulemaking is
‘‘economically significant’’ as measured
by the $100 million threshold. We
believe that covered entities have
already largely invested in the
hardware, software, and connectivity
necessary to conduct the new and
modified standards proposed. We
anticipate that the adoption of these
changes would result in costs that
would be outweighed by the benefits.
Accordingly, we have prepared a
Regulatory Impact Analysis that to the
best of our ability presents the costs and
benefits of the proposed rulemaking.
C. Regulatory Flexibility Analysis
Executive Order 13272 requires that
HHS thoroughly review rules to assess
and take appropriate account of their
potential impact on small businesses,
small governmental jurisdictions, and
small organizations (as mandated by the
Regulatory Flexibility Act (RFA)). The
RFA requires agencies to analyze
options for regulatory relief of small
entities, if a rule has a significant impact
on a substantial number of small
entities. If a proposed rule may have a
significant economic impact on a
substantial number of small entities,
then the proposed rule must discuss
steps taken, including alternatives
considered, to minimize the burden on
small entities. The RFA does not define
the terms significant economic impact
or substantial number. The Small
Business Administration (SBA) advises
that this absence of statutory specificity
allows what is significant or substantial
to vary, depending on the problem that
is to be addressed in rulemaking, the
rule’s requirements, and the preliminary
assessment of the rule’s impact.
Nevertheless, HHS typically considers a
significant impact to be three to five
percent or more of the affected entities’
costs or revenues.
The RFA generally defines a small
entity as (1) a proprietary firm meeting
the SBA size standards, (2) a not-forprofit organization that is not dominant
in its field, or (3) a small government
jurisdiction with a population of less
than 50,000. The North American
Industry Classification System (NAICS)
is used in the U.S., Canada, and Mexico
to classify businesses by industry.24
While there is no distinction between
small and large businesses among the
NAICS categories, the SBA develops
size standards for each NAICS category.
The most recently available update to
the NAICS went into effect for the 2017
reference year, and the most recent SBA
small business size regulations and
Small Business Size Standards by
NAICS Industry tables appear at 13 CFR
121.201. We have determined that the
covered entities and their vendors
affected by this proposed rule likely fall
primarily in the categories listed in
Table 1.
24 https://www.sba.gov/content/small-businesssize-standards.
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TABLE 1—SBA SIZE STANDARDS FOR APPLICABLE NAICS INDUSTRY CODES
SBA standard
($ in million)
NAICS code
NAICS description
446110 .......
522320 .......
524114 .......
541511 .......
62111 .........
621210 .......
621491 .......
6221 ...........
Pharmacies and drug stores ...................................................................................................................................
Financial transaction processing, reserve, and clearinghouse activities ................................................................
Direct health and medical insurance carriers .........................................................................................................
Custom computer programming services ...............................................................................................................
Offices of physicians ...............................................................................................................................................
Offices of dentists ....................................................................................................................................................
Health plans ............................................................................................................................................................
Hospitals ..................................................................................................................................................................
Most hospitals and most other
providers and suppliers are small
entities, either by nonprofit status or by
having revenues of less than $8.0
million to $41.5 million in any 1 year.
Accordingly, it is our normal practice to
treat all health care providers as small
entities. For providers, the changes
proposed by this rule may involve
software upgrades for practice
management and EHR systems. Thus,
we expect that the vast majority of
physicians and other health care
provider practices will need to make
relatively small changes in their systems
and in their processes, but may incur
additional service fees from their system
vendors for additional functionality.
Some of the smallest provider entities
may elect to continue their current
manual processes. We include
pharmacies in this analysis, and
consider most of them to be small
businesses. While we believe few health
plans meet the small business size
standard, many health plans are nonprofit organizations and would be
considered small businesses; but we are
unable to identify data to help us
distinguish the number of these entities
and therefore solicit industry feedback
to complete this analysis for the final
rule. We address clearinghouses, but we
do not believe that there are a
significant number of clearinghouses
that would be considered small entities
because of the level of consolidation in
the marketplace. Because these
proposals include initial standards for
the exchange of both administrative and
clinical documentation, we also address
provider practice management system
(PMS) and EHR vendors in our
discussion, but are unable to identify
data that would help identify the
proportion of firms in these markets that
meet the small business size standards.
State Medicaid agencies are excluded
from this analysis because states are not
considered small entities in any RFA.
Table 8 in the impact analysis
presents the estimated implementation
costs of these proposals on all entities
we anticipate would be affected by the
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rule. The data in that table are used in
this analysis to provide cost
information.
30.0
41.5
41.5
30.0
12.0
8.0
35.0
41.5
entities in these segments, given the
recent trends toward consolidation
among and between provider types and
toward increasing integration of HIT
1. Number of Small Entities
systems across collaborating
We used the latest available (2017)
organizations. However, this
Census business data records and other
overestimation may compensate for
information to determine the number of other types of affected health care
affected entities, as summarized in
providers potentially not reflected in
Table 2.
these particular NAICS categories. We
note that the number of 5,544 hospital
TABLE 2—NUMBER OF AFFECTED
establishments reflected in the 2017
Census business data roughly compares
ENTITIES
with more recent 2021 data from the
Number of entity American Hospital Association 25
Type of entity
firms or
indicating a total of 6,090 U.S. hospitals,
establishments
of which approximately 25 percent are
Hospitals ...........................
5,544 for-profit. However, we do not have
Physicians .........................
171,722 more detail, including data on the size
Dentists .............................
125,329 of the hospitals in this 25 percent, in
Pharmacies .......................
19.234 order to determine whether any should
Private Health Plans .........
772 be excluded from the count of small
Government Health Plans
3 entities.
Clearinghouses .................
162
The Census business data records
Vendors ............................
1,000 indicate that in 2017 there were a total
of 19,234 pharmacy firms, and we
Totals .........................
323,766
estimate that most of these qualify as
small entities. Available data do not
Based on the latest available (2017)
permit us to clearly distinguish small
Census business data records, we
pharmacy firms from firms that are parts
estimate that 321,639 health care
of larger parent organizations, but we
provider entities may be considered
use employee size as a proxy for the
small entities either because of their
firm size subject to the SBA size
nonprofit status or because of their
standard. For purposes of this analysis,
revenues, as detailed in Table 3.
we assume the firms with more than 500
Approximately two percent (5,544) of
these are hospitals, 57 percent (171,722) employees (190) represent chain
pharmacies and those with fewer than
are physician practices, and 41 percent
500 employees (19,044) represent
(125,329) are dental practices. To count
independently-owned open- or closedhospitals, we are using data at the level
door pharmacies. The 19,044 firms with
of establishments, and to count
fewer than 500 employees represented
physicians and dentists we are using
20,901 establishments and accounted
data at the level of firms, as we did in
for total annual receipts of $70.9 billion
the August 22, 2008 proposed rule titled
and average annual receipts of $3.7
‘‘Health Insurance Reform;
million—revenue that is well below the
Modifications to the Health Insurance
SBA standard of $30 million. By
Portability and Accountability Act
contrast, the 190 firms with 500 or more
(HIPAA) Electronic Transaction
employees represented 27,123
Standards’’ (73 FR 497742, 49758). We
establishments and accounted for over
believe health information technology
$211 billion in annual receipts, and
(HIT) systems are still more likely to
thus, average annual receipts of $1.1
differ at the level of the enterprise rather
than at the level of the firm in hospitals.
25 Fast Facts on U.S. Hospitals, 2021; accessed 5/
We believe that this way of counting
24/2021 at: https://www.aha.org/statistics/fastmay overstate the number of affected
facts-us-hospitals.
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billion. Therefore, we assume 19,044
pharmacy firms qualify as small entities
for this analysis.
For 2017, the Census Bureau counts
745 entities designated as Direct Health
and Medical Insurance Carriers and 27
as Health Maintenance Organization
(HMO) Medical Centers. We assume that
these 772 firms represent health plans
that would be subject to these proposals.
Of the 745 Carriers, those with fewer
than 500 employees (564) accounted for
$35 billion in total and over $62 million
in average annual receipts, exceeding
the SBA size standard of $41.5 million.
Comparable data on the eight smaller
HMO Medical Centers is not available
due to small cell size suppression.
Although health plan firms may not
qualify as small entities under the SBA
receipts size standard, they may under
non-profit status. However, we are not
aware of data that would help us
understand the relationship between
health plan firm and ownership tax
status to quantify the number of such
firms. Therefore, we are not including
an analysis of the impact on small
health plans.
Clearinghouses provide transaction
processing and data translation services
to both providers and health plans that
would be critical to implementing this
proposed rule. The applicable NAICS
category includes many types of
financial transaction processing firms
other than those affected by this rule, so
the Census business data cannot be used
to identify small entities of interest. In
previous rulemaking, we have identified
a largely consolidated market (74 FR
3312). More recently, in 2020, the
national clearinghouse association,
Cooperative Exchange, indicated its 23
member companies represent over 90
percent of the clearinghouse industry
and provide services to over 750,000
provider organizations, through more
than 7,000 payer connections and 1,000
HIT vendors.26 While we do not have
data on the size of these firms, or on the
other firms constituting the remaining
less than 10 percent of the market, we
continue to believe the firms in this
segment are either quite large or are
affiliated with other very large firms,
and do not include them in this small
entity analysis. In the January 2009
Modification final rule, we identified
the number of 162 clearinghouse
entities (74 FR 3318). We are not aware
of whether there has been further
consolidation in this industry since
2009, so we continue to estimate that
162 clearinghouses serve the health care
market in subsequent analyses.
Other vendors affected by this rule
include provider PMS and EHR
technology system vendors. Counting
the affected entities in these two
segments is complicated, in part
because they are increasingly integrated.
A health care provider entity’s PMS and
EHR systems may be bundled in one
product offering, semi-integrated
affiliated systems, or entirely
independent systems offered by separate
vendors.27 We have not identified
publicly available data on the number,
size, or market share of these specific
industry stakeholders. NAICS industry
category 541511, Custom Computer
Programming Services, seems to be the
closest category. In 2017, the category
included over 62,000 firms with 99
percent of these having less than 500
employees and 1 percent having 500 or
more employees. However, this total
seems out of proportion to other
potential indicators of market size,
leading us to believe it significantly
overstates the affected entities of
interest to the proposed rule. For
instance, the aforementioned
Cooperative Exchange description of
member firm scope cited connections
with 1,000 HIT vendors; 2019 market
research estimates indicate there are
over 500 vendors offering some type of
EHR product; 28 the 21st Century Cures
Act: Interoperability, Information
Blocking, and the ONC Health IT
Certification Program final rule (85 FR
25642) estimated the number of certified
HIT developers with health IT products
capable of recording electronic health
information certified in the 2015 Edition
of health IT certification criteria to be
458; and the Electronic Health Record
Association, a trade association of EHR
companies addressing national efforts to
create interoperable EHRs in hospital
and ambulatory care settings, lists 29
companies as members.29 A web search
for NAICS codes associated with a
sampling of these EHR Association
member companies yielded many
different NAICS codes (including some
with 541511), possibly reflecting widely
varying scopes of other products and
services offered by firms in this market
segment. Without more definitive data
on the firms specific to the health care
provider PMS and EHR business
markets, we estimate that the number of
affected firms is around 1,000, with the
bulk of market share served by a
relatively small number of large entities
and the remainder of market share
served by many smaller entities.
However, we are unable to determine
how many of these smaller entities may
meet small business size standards and
are not subsidiaries of larger firms, so
we do not include them in this small
entity analysis.
2. Costs to Small Entities
To determine the impact on the health
care providers considered small entities
for this analysis (identified in the
previous section), we used the 2017
Census business data to collect revenue
estimates and compared these to the
high and low estimates for the range of
costs calculated for each industry
segment later in this analysis, as
summarized in Table 8. We calculated
the percentage of revenues represented
by the high and low estimates, and none
exceeded the 3 to 5 percent of revenue
threshold, as summarized in Table 3.
Thus, for purposes of the RFA analysis,
we can conclude there is not a
significant impact on small entities.
TABLE 3—ANALYSIS OF IMPLEMENTATION BURDEN ON SMALL COVERED ENTITIES
Small entities
(#)
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Entity type
Pharmacies ..........................................................................................
Vendors ................................................................................................
Clearinghouses ....................................................................................
Health plans .........................................................................................
26 From testimony submitted for the 8/25/2020
NCVHS Subcommittee on Standards Hearing on
Proposed CAQH CORE Operating Rules;: https://
ncvhs.hhs.gov/wp-content/uploads/2020/08/
Comments-CAQH%20CORE%20Proposed
%20Operating%20Rules%20for%20Federal
%20Adoption%20508.pdf.
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19,044
NA
NA
NA
27 The true cost of switching EHRs. May 30, 2018.
Mary Pratt. Medical Economics Journal, June 10,
2018 edition, Volume 96, Issue 10. https://
www.medicaleconomics.com/view/true-costswitching-ehrs.
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Implementation
cost range
($ in millions)
Revenue
($ in billions)
282
NA
NA
NA
0–0
NA
NA
NA
Cost/revenue
range
(%)
NA
NA
NA
NA
28 Who are the largest EHR vendors. Jeff Green.
EHR in Practice. October 18, 2019 https://
www.ehrinpractice.com/largest-ehr-vendors.html.
29 https://www.ehra.org/membership/ehramembers.
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TABLE 3—ANALYSIS OF IMPLEMENTATION BURDEN ON SMALL COVERED ENTITIES—Continued
Small entities
(#)
Entity type
Cost/revenue
range
(%)
Programmers .......................................................................................
Physicians ............................................................................................
Dentists ................................................................................................
Hospitals ..............................................................................................
NA
171,722
125,329
5,544
NA
485
126
994
NA
218–345
149–299
466–932
NA
0.04–0.09
0.12–0.24
0.05–0.09
Subtotal .........................................................................................
321,639
1,887
833–1,666
0.04–0.09
3. Alternatives Considered
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Implementation
cost range
($ in millions)
Revenue
($ in billions)
This rule proposes to adopt standards
for ‘‘health care attachments,’’ which
support both health care claims, as
required by section 1173(a) of the Act,
and prior authorization transactions, as
recommended to the Secretary by
NCVHS. It is our understanding that the
standards recommended to the
Secretary by NCVHS, and that we are
proposing to adopt in this rule, are the
only standards applicable to health care
attachments that are ready for full
implementation across the industry.
Therefore, we considered the following
regulatory alternatives: (1) not adopt
standards for health care attachments,
allowing for the industry’s continued
use of multiple processes, (2) wait to
adopt standards for health care
attachments until alternate standards,
such as FHIR standards, are ready for
full implementation and recommended
to the Secretary by the industry, and (3)
adopt a different version of the X12
implementation specifications than
Version 6020, the version proposed to
adopt in this rule. We chose to proceed
with the proposals in this rule after
identifying significant shortcomings
with each of these alternatives.
We chose to propose to adopt
attachments standards rather than allow
for continued use of multiple standards
because of the well-documented costs
and administrative burdens associated
with the many manual or partially
electronic processes currently in use.
These burdens were recently detailed in
the 2020 CAQH Index. In response to
CAQH surveys, industry stakeholders
reported that the lack of federal
standards and mandates has been a
principal barrier to adoption of fully
electronic standardized health care
transactions.30 Based on these survey
responses, should we not adopt
standards for health care attachments,
most attachment transactions and many
prior authorization transactions would
continue to be conducted through fully
manual processes. Not adopting
30 Last accessed 5/28/2021 at: https://
www.caqh.org/explorations/caqh-index-report.
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standards for attachment transactions
would also mean forgoing the
opportunity to reduce the unnecessary
back-and-forth between providers and
health plans, accelerate claims
adjudication and patient service
approval timeframes, and reduce
provider resources spent on manual
follow-up activities. To the extent that
future payer policies continue to trend
toward increased levels of prior
authorization or health care attachments
requirements, these burdens could also
increase.
Similarly, we chose not to hold off on
proposing the adoption of attachment
standards until alternate standards, such
as FHIR standards, are available and
recommended by the industry because
we believe that adoption and
implementation of the specifications in
this proposed rule can immediately
reduce the costs and burdens associated
with the lack of national standards.
While we are aware of HL7’s efforts to
create alternative implementation
specifications to support health care
attachments transactions, we note that
at the time of writing this proposed rule,
these FHIR implementation
specifications have not been finalized
nor have they been tested. We also note
that the HL7 CDA standard we are
proposing to adopt in this proposed rule
is the only currently available SSOcreated, NCVHS-recommended standard
with published implementation
specifications designed to support both
claims and prior authorization
attachment transactions. We believe that
the industry’s readiness for
improvements to the manual or partially
electronic process currently in place, as
outlined the CAQH stakeholder surveys
and supported by NCVHS’s
recommendation to adopt the
specifications proposed in this rule,
support proposing the adoption of
attachments standards at this time.
However, we invite comment on our
understanding of the readiness of
possible implementation specifications
for health care attachments that support
both claim and prior authorization
transactions and whether the industry
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supports postponement of an adopted
standard as it did for the previously
mentioned proposed rule in the 2005
Federal Register (70 FR 55990), titled
‘‘HIPAA Administrative Simplification:
Standards for Electronic Health Care
Claims Attachments; Proposed Rule.’’
Finally, we chose to propose adoption
of Version 6020 of the X12
implementation specifications, rather
than an alternate version, such as
Version 5010, because Version 5010
does not fully support attachments
transactions. Version 6020 resolves
technical issues and limitations in
Version 5010 to enable attachments
transactions that support both health
care claims and prior authorization
transactions. We also invite comment on
any alternative implementation
specifications that were not considered
but meet the criteria outlined in this
proposed rule.
4. Conclusion
As referenced earlier in this section,
we use a baseline threshold of 3 to 5
percent of revenues to determine if a
rule would have a significant economic
impact on affected small entities. The
small health care entities do not come
close to this threshold. Therefore, the
Secretary has certified that this
proposed rule would not have a
significant economic impact on a
substantial number of small entities.
However, because of the relative
uncertainty in the data, the lack of
consistent industry data, and our
general assumptions, we invite public
comments on the analysis and request
any additional data that would help us
determine more accurately the impact
on all categories of entities affected by
the proposed rule.
In addition, section 1102(b) of the Act
requires us to prepare a Regulatory
Impact Analysis if a rule would have a
significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 603 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a metropolitan statistical area and has
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fewer than 100 beds. This proposed rule
would not have a significant effect on
the operations of a substantial number
of small rural hospitals because these
entities would rely on contracted health
information technology (HIT) vendors
for the majority of implementation
investment and efforts such hospitals
elect to implement. We note that health
care providers may choose not to
conduct transactions electronically.
Therefore, they would be required to
use these standards only for transactions
that they conduct electronically and
would be expected to do so only when
the benefits clearly outweigh the costs
involved. Therefore, the Secretary has
certified that this proposed rule would
not have a significant impact on the
operations of a substantial number of
small rural hospitals.
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates would
require spending more in any one year
than threshold amounts in 1995 dollars,
updated annually for inflation. In 2022,
this threshold is approximately $165
million. This proposed rule would
impose mandates that would result in
the expenditure by state, local, and
tribal governments, in the aggregate, or
by the private sector, of more than $165
million in any one year. The impact
analysis in this proposed rule addresses
those impacts both qualitatively and
quantitatively. In general, each state
Medicaid Agency and other government
entity that is considered a covered
entity would be required to ensure that
its contracted claim processors update
software and conduct testing and
training to implement the adoption of
the new standards and modified
versions of a previously adopted
standard. However, we have no reason
to believe that ongoing contractual
payment arrangements for these services
would necessarily increase as a result of
the proposed changes. UMRA does not
address the total cost of a rule. Rather,
it focuses on certain categories of cost,
mainly federal mandate costs resulting
from imposing enforceable duties on
state, local, or tribal governments, or on
the private sector; or increasing the
stringency of conditions in, or
decreasing the funding of, state, local, or
tribal governments under entitlement
programs.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on state and local
governments, preempts state law, or
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otherwise has federalism implications.
This proposed rule would have a
substantial direct effect on state or local
governments, could preempt state law,
or otherwise have a federalism
implication because state Medicaid
agencies or their contractors would be
implementing new standards and a
modified version of an existing standard
for which there would be expenses for
implementation and wide-scale testing.
D. Anticipated Effects
The objective of this regulatory
impact analysis is to summarize the
costs and benefits of the following
proposals:
• Adopting new standards for the
exchange of health care attachment
information consisting of—
++ A code set to be used for health
care attachments transactions;
++ Proposed X12 standards for
requesting and transmitting attachment
information and HL7 standards for
clinical information content; and
++ Proposed electronic signatures
standards.
• Modifying the existing standard for
referral certification and authorization
by updating from Version 5010 to
Version 6020.
This portion of the analysis is
informed by a review of an earlier
environmental scan produced for us in
2016 by the MITRE Corporation,
industry testimony to the NCVHS,
whitepapers from the Workgroup for
Electronic Data Interchange (WEDI), and
survey results produced by industry
consensus-based organizations, and
updated web-based research on specific
topics.
Consistent with statutory and
regulatory requirements, any
recommendations for the adoption of
HIPAA standard updates are the
outcome of an extensive consensusdriven process that is open to all
interested stakeholders. The standards
development process involves direct
participatory input from representatives
of the industry stakeholders required to
utilize the transactions.
For purposes of this analysis, we use
the segmentation of health care industry
stakeholders laid out in the 2009
Modifications final rule with some
additional detail on vendors supporting
the integration of the administrative and
clinical data. As discussed in this
proposed rule, providers and payers
continue to use manual processing for
health care attachments, therefore, these
stakeholders are relevant for purposes of
this RIA because there is no adopted
health care attachments standard. As
noted in the 2017 WEDI white paper,
most payers send hard copy letters to
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Fmt 4701
Sfmt 4702
request additional information to
support a claim or prior authorization
submitted by the provider.31 These
segments consist of the following:
• Providers
++ Hospitals
++ Physicians
++ Dentists
++ Pharmacies
• Health Plans
++ Private Health Plans and Issuers
++ Government Health Plans:
Medicare, Medicaid, and Veterans
Administration
• Clearinghouses
• Vendors
++ PMS Vendors
++ EHR Vendors
In analyzing the effects of this
proposed rule, we referenced the 2019
and 2020 CAQH Index Reports issued
on January 21, 2020 and February 3,
2021, respectively.32 The 2020 CAQH
Index 33 tracks adoption of HIPAAmandated and other electronic
administrative transactions and
measures progress reducing the costs
and burden associated with
administrative transactions exchanged
across the medical and dental
industries. The CAQH Index includes
estimates of the number of annual
transactions by submission mode
(phone, fax, mail, or email), electronic
(HIPAA standard) or partially electronic
(web portals or interactive voice
response), as well as estimates of the
associated labor cost and staff time. The
reported costs and savings account only
for the labor time required to conduct
transactions, not the time and cost
associated with gathering information or
costs associated with the use of
clearinghouses or third-party vendors.
For two types of transactions directly
addressed by this proposed rule,
attachments, and prior authorization,
the 2020 CAQH Index estimates the
annual industry national savings
opportunity of full automation adoption
of these transactions at $377 million and
$417 million, respectively. These
savings would accrue to both health
plan payers and providers, with the vast
majority of estimated savings accruing
to providers. With respect to the
category of providers, the report does
not provide a breakdown of the type of
providers that contributed to the survey
31 Guidance on Implementation of Standard
Electronic Attachments for Healthcare Transactions
November 2017 Workgroup for Electronic Data
Interchange. https://www.wedi.org/2017/11/17/
guidance-on-implementation-of-standardelectronic-attachments-for-healthcare-transactions/.
32 https://www.caqh.org/sites/default/files/
explorations/index/report/2019-caqh-index.pdf.
33 https://www.caqh.org/explorations/caqh-indexreport.
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results, but does distinguish between
medical and dental providers, and does
acknowledge partnering with both
physician and hospital member
organizations. Thus, we believe the
medical provider savings reported
include hospital-related responses.
In contrast to the data on labor cost
savings, we are not aware of any reports
or other industry estimates on the level
of additional investments needed to
fully implement these electronic
processes for requesting and submitting
attachment information, or the
proportion of such costs that might be
passed on to provider or health plan
firms. By reviewing testimony
submitted to the NCVHS and
conducting web searches, such as for
plan, clearinghouse, and vendor
electronic data interchange (EDI)
instructions and services, we
understand some stakeholder segments
have already largely built or acquired
the capacity to implement these
proposals (albeit possibly in
inconsistent and proprietary ways in the
absence of federal standards and
operating rules). Similarly, based on
NCVHS testimony, others (particularly
health care providers and their vendors)
have partially implemented the
standards.34 Thus, we conclude that
implementation and readiness to fully
implement the proposed standards vary
among and within covered entity
industry segments.
We also believe it is likely that firms
directly involved in deploying
additional capacity, in particular in
upgrading PMS or EHR functionality,
would not voluntarily share proprietary
and competitive, market-sensitive data
on the level of additional investment
needed or on the effects on customer
fees. Therefore, as further explained in
the discussion of cost calculations, we
estimate the incremental costs involved
not through projected cost build-up, but
rather as a function of the level of
impact of implementing the previous
HIPAA-standard modifications. We seek
comment on this approach and on the
appropriateness of the aggregate level
estimates; data reflecting estimated
changes to firm-specific costs and
customer-specific fees would preferably
be presented in a manner that facilitates
aggregation.
We do not have good information on
the extent of adoption of the proposed
electronic standards for attachment
information among industry
34 NCVHS Letter to the Secretary of HHS on
Recommendations for the Electronic Health Care
Attachment Standard, July 5, 2016, https://
ncvhs.hhs.gov/wp-content/uploads/2018/03/2016Ltr-Attachments-July-1-Final-Chair-CLEAN-forSubmission-Publication.pdf.
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stakeholders because HHS has not
adopted an electronic transaction
standard for health care attachments.
However, we believe there is good
reason to expect the proposed regulatory
requirements, combined with the
administrative cost savings
opportunities identified by CAQH,
would incentivize broad adoption of
these attachment standards and lead to
a significant uptake of the prior
authorization standard. The remainder
of this section provides details
supporting the cost-benefit analysis for
our proposals.
1. Affected Entities
As with previous standard updates,
all HIPAA covered entities would be
affected by this proposed rule. Covered
entities include all health plans, all
health care clearinghouses, and health
care providers that transmit health
information in electronic form in
connection with a transaction for which
the Secretary has adopted a standard.
Therefore, they would be required to
use these standards only for transactions
that they conduct electronically. See the
Transactions and Code Sets rule for a
discussion of affected entities (65 FR
50361).
In general, covered entities (or their
vendors) would incur a number of onetime costs to implement the new and
modified transactions in this proposed
rule unless they have already
implemented an adopted HIPAA
standard, such as for prior authorization
transactions. These costs would include
analysis of business flow changes,
software procurement or customized
software development, integration of
new software into existing provider/
vendor systems, staff training, and
collection of new data, testing, and
transition processes. For some entities,
new vendors may be needed for the
creation and validation of the clinical
documentation to be embedded in the
attachment transactions. Systems
implementation costs would account for
most of the costs, with system testing
alone likely accounting for a majority of
costs for all covered entities. Ongoing
operational costs would be expected to
initially grow, as the implementation of
electronic processes run in parallel with
ongoing manual and partially automated
processes, but to decline as higher
proportions of transactions are
automated. These HIT-related costs
would be offset by significant
reductions in labor costs for what are
today largely manual processes to
locate, collect, package, and mail
clinical records needed to support
requests for additional documentation
to support claims and prior
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78459
authorization requests. Other offsetting
cost savings are expected from lower
postage and other mailing costs,
reductions in reprocessing volume due
to higher clean claim acceptance rates,
and delay in receiving payment.35 36
It is likely that there are significant
differences in readiness among payer
and provider claims and prior
authorization HIT systems, and we do
not know the extent of incremental costs
associated with HIT development,
enablement (upgrade or licensing fees
paid by users), or workflow adjustment
and training to facilitate compliance
with the standards proposed in this
rule. So, though we are aware that the
net benefits would likely vary among
stakeholders, we lack the data to
estimate these differential effects. An
important consideration reflected in
various industry testimonies submitted
to the NCVHS is that some stakeholders,
particularly smaller providers, would
continue to have the option to leverage
existing clearinghouses to provide these
information exchange services based on
negotiated rates. This is a standard
practice today, where clearinghouses
already manage 90 percent of the
conversion of paper-to-electronic
formats, as well as reformatting of noncompliant to compliant electronic claim
transactions for the industry. Given the
high costs of manual and partially
electronic means for exchanging
required information, we believe the
impact of this rule would be significant
net savings to the industry. However,
the level and timing of uptake (as
opposed to the retention of manual
processes and clearinghouse
intermediation) by provider entities are
uncertain. We reflect this uncertainty
with both the phasing in of and the
estimation of minimum and maximums
for costs and benefits. We solicit
comments on this approach and our
assumptions throughout this analysis.
2. Explanation of Cost Calculations
Based on consultation with industry
workgroups, such as WEDI, we
determined that the health care
attachment standards in this proposed
rule are already in common use by
entities engaged in other lines of
business, such as the workers’
compensation and liability insurance
35 NCVHS Letter to the Secretary of HHS on
Recommendations for the Electronic Health Care
Attachment Standard, July 5, 2016, https://
ncvhs.hhs.gov/wp-content/uploads/2018/03/2016Ltr-Attachments-July-1-Final-Chair-CLEAN-forSubmission-Publication.pdf.
36 In a regulatory impact analysis that, in
accordance with OMB Circular A–4, takes a societywide perspective, changes in timing of payments
represent a transfer, rather than a net societal cost
savings.
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fields, that exchange medical records.
Thus, there is clear evidence that the
standards are fit for their intended
purpose and have been successfully
implemented in closely related business
processes.
Although the attachments standards
we are proposing to adopt are initial
standards, as described in section 1175
of the Act, health plans surveyed by
CAQH in 2020 reported electronic
transaction submission levels of 22
percent for attachments and 21 percent
for prior authorizations. Therefore,
while the specification for attachments
requests by the health plan (X12 277)
and the subsequent response from the
provider (X12 276) have not previously
been adopted under HIPAA
Administrative Simplification, some
payer and provider systems are already
exchanging HIPAA electronic prior
authorization transactions using the
adopted standards. Moreover, the HL–7
C–CDA has been widely adopted
pursuant to the ONC 2014 and 2015
Editions of Health Information
Technology Certification Criteria
specifying content exchange standards
and implementation specifications for
exchanging electronic health
information. According to the latest
available posted data, as of 2017, nearly
4 in 5 (80 percent) office-based
physicians had adopted a certified
EHR.37
Similarly, while the standards we are
proposing to adopt for electronic
signatures are also initial standards, we
believe they have already been widely
implemented by the industry. For
example, in 2010 the Drug Enforcement
Agency (DEA) finalized a rule requiring
similar standards for electronic
prescribing of controlled substances.38
The proposed electronic signature
standard utilizes the same technology to
expand electronic signature capabilities
to all clinical documentation, rather
than just electronic prescriptions.
Therefore, we believe the
implementation of the proposed
electronic signature standard would not
represent a significant incremental cost
to providers.
Given much of the industry has
already implemented some or all of the
implementation specifications we are
proposing to adopt in this proposed
rule, or versions of the implementation
37 ONC Health IT Dashboard. Office-based
Physician Electronic Health Record Adoption:
https://dashboard.healthit.gov/quickstats/pages/
physician-ehr-adoption-trends.php.
38 Electronic Prescribing of Controlled
Substances. Drug Enforcement Administration,
Department of Justice, Office of Diversion Control
website. https://www.deadiversion.usdoj.gov/
ecomm/e_rx/.
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specifications we are proposing to adopt
in this proposed rule, we believe the
level of effort involved in implementing
the entire set of proposed
implementation specifications herein is
more akin to implementing standards
modifications than to implementing
transactions standards for the first time.
Therefore, we anchor our cost estimates
on the final cost estimates, updated for
inflation,39 in the Modifications final
rule, and then make certain adjustments
to address unique aspects of certain
industry segments. While the systems
required for implementing the
specifications proposed for adoption in
this proposed rule have been
continuously updated since the
publication of the Modifications final
rule, the technologies within the
proposed implementation specifications
in this proposed rule are of the same
type as those considered in the
Modification rule and will be integrated
into systems that continue to utilize the
similar business models.
The cost estimates in the
Modifications final rule were based on
an estimate of the total costs to
implement the initial HIPAA
transaction standards (Version 4010/
4010A) and informed by industry
interviews.40 To determine the costs for
each provider sub-segment (that is,
hospitals, physicians, and dentists), we
established an estimate for what the
total approximate Version 4010/4010A
costs were for an individual entity
within that sub-segment (based on the
interviews and other data available
through research) and then applied an
estimated range of 20 to 40 percent of
those costs to come up with estimated
minimum and maximum costs for
Version 5010. The range was accepted
as a realistic proxy by all providers and
plans who participated in the
interviews. Through the course of the
interviews, we identified more granular
cost categories and reviewed these with
the participants to help analyze and
validate overall cost estimates by entity.
The estimated cost for each individual
entity within a segment was then
multiplied by the number of entities to
establish the estimated costs for entire
segment.
39 Cost estimate ranges from the January 2009
Modifications final rule were adjusted for inflation
using the Bureau of Labor Statistics Consumer Price
Index Inflation Calculator, to reflect amounts for
January 2020 and round up to the nearest whole
number to match benefits estimates from the CAQH
2020 Index. https://www.bls.gov/data/inflation_
calculator.htm.
40 Version 5010 Regulatory Impact Analysis—
Supplement. September 2008. https://
www.cms.gov/files/document/
5010regulatoryimpactanalysissupplementpdf.
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With respect to the level and timing
of the uptake of these standards, we
assume that some portion of providers
and their vendors may take longer to
move from manual to fully automated
transactions. For purposes of this
analysis, we generally estimate that
most stakeholders would incur costs
over a 4-year period at the rate of 50
percent in the first implementation year,
30 percent in the second
implementation year, and 10 percent
each in the third and fourth years.
We note that, although many
comments to the Modifications rule
suggested we underestimated the costs,
no substantive data or additional
information was provided to counter
our analysis at that time. We’re not
aware of more recent public research
relating to costs of implementing
modifications to HIPAA transaction
standards. We invite public comments
on our understanding and request any
additional data that would help us
determine more accurately the costs of
implementing modifications to HIPAA
transaction standards.
3. Explanation of Benefits Calculations
To determine the benefits for each
segment of the industry, we primarily
relied upon the 2020 CAQH Index.
Based on survey responses, CAQH
estimates that spending on labor time
conducting attachment transactions
accounts for about $590 million of
spending on administrative transactions
across the medical industry, with health
care providers incurring about 88
percent of this spending at an average
cost of $5.10 for each manually
processed attachment. In moving from
manual to electronic attachments
transactions, CAQH estimates the health
care industry could save $4.09 on
average per transaction and an
additional $377 million annually. These
estimated savings would be split
between health care providers ($328
million) and health plans ($49 million)
and would be generated by the
avoidance of 8 minutes in
administrative labor time per
attachment on average, as medical
providers reported taking an average of
11 minutes to submit an attachment
manually versus 3 minutes
electronically. Comparable data on
spending and savings opportunities on
attachment transactions for dental
providers were not available, although
the survey reports that only 16 percent
of dental attachment transactions in
2020 were fully electronic.
The 2019 CAQH Index reported that
the use of the electronic standard for
prior authorizations has remained very
low due to barriers such as provider
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awareness, vendor support, and
inconsistent use of data content allowed
in the standard, and the lack of an
attachment standard to support the
exchange of medical documentation.
The 2020 CAQH Index reports that fully
electronic prior authorization continues
to have the lowest adoption rate of the
medical transactions surveyed, although
utilization between 2019 and 2020
increased by 8 percentage points to 21
percent. Since this rule proposes to
adopt federal attachment standards,
including those to address data content,
we believe the proposed changes in this
rule would substantially address these
barriers and promote widespread
adoption of electronic prior
authorization processes. As described in
section I.F. of this proposed rule,
numerous organizations representing
physician provider groups, insurance
payers, health technology vendors,
health care financial managers, and HIT
standard advisory bodies have
submitted recommendations to the
Secretary strongly supporting this view.
CAQH reports that prior authorization
is the most costly and time-consuming
administrative transaction for providers,
and administrative spending increased
to $767 million as the cost to conduct
prior authorizations rose for both plans
and providers from the previous year.
Based on survey responses, the 2020
CAQH Index estimates that, on average,
providers spent about 20 minutes and
$10.26 per transaction to conduct a
prior authorization manually, and about
13 minutes and $7.07 via a partially
electronic web portal in 2020. These
costs compare with an average cost of
$3.64 per fully electronic transaction.
CAQH estimates that, based on 2020
survey data, switching to fully
electronic transactions could yield an
additional $417 million in annual
administrative cost savings. Those
savings would be split between health
care providers ($322 million or 77
percent) and health plans ($95 million
or 23 percent). Comparable data were
not reported on prior authorization
transactions for dental providers,
suggesting this transaction is not
generally utilized by this segment.
We utilize the CAQH national annual
savings estimates as the basis for our
benefits estimates. The CAQH national
annual savings estimates are calculated
based on potential savings moving from
the reported state of 21 percent
electronic processing for prior
authorization transactions and 22
percent electronic processing for
attachments to fully electronic
processing. The total potential industry
cost savings opportunity is an amount
that declines as industry adoption
increases. Although there was an
apparent increase in electronic
processing of prior authorization and
health care attachments transactions
from 2019 to 2020, we do not trend the
benefits estimates forward because
previously reported estimates of
electronic processing adoption have
tended to remain stable over a longer
period of time. The CAQH estimation
methodology only includes labor time
savings, which it assesses to be the most
significant component of savings, by far.
We do not include estimates of other
sources of savings, such as through
elimination of mailing costs, so our
benefit estimates may have a tendency
toward understating actual industry
savings.41 Because we believe that some
portion of providers and their vendors
may take longer to move from manual
to fully automated transactions, we also
assume a phased-in realization of the
level of annual benefits projected by
CAQH. For purposes of this analysis, we
generally estimate that most
stakeholders would realize the benefits
in labor savings over a 3-year period at
the rate of 50 percent in the first
78461
operational year, 75 percent in the
second operational year, and 100
percent in and after the third year after
the compliance date.
4. Hospitals
As previously discussed, to determine
the costs for each health care provider
sub-segment, we started with the
minimum and maximum cost estimates
in the Modifications final rule for each
type of entity. For hospitals, those
estimates were within a range of $1,423
million to $2,848 million, adjusted for
inflation (74 FR 3316). We further
assume that these costs would be
incurred by hospital HIT developers,
which would both absorb some portion
of the costs as a cost of doing business
incorporated in the current level of HIT
service and maintenance agreements
and also pass some portion of the costs
on to the hospital in the form of higher
fees for enabling new functionality. This
seems reasonable given our
understanding that HIT vendors
generally plan on, and finance, a certain
level of ongoing system development
through ongoing maintenance
agreements, typically with annual
increases, but also must keep these at a
level that remains competitive in their
niche market.42 In other words, not all
possible systems upgrades would be
factored into current fees. We do not
have any information on how this
allocation would be made and expect
there would be many variations in
practice, but for purposes of this
analysis, we assume a 60/40 split
between costs borne by the vendor and
costs passed on to the hospital. As
summarized in Table 4, this results in
the hospital share of costs in the range
of $569 million to $1,139 million, with
the remainder in the range of $854
million to $1,709 million borne by
hospital HIT vendors.
TABLE 4—ATTACHMENTS COSTS BORNE BY PROVIDERS VERSUS VENDORS
[$ in millions]
Proposed rule
cost range
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Entity type
Provider share
(40%)
Vendor share
(60%)
Physicians ..................................................................................................................
Dentists ......................................................................................................................
Hospitals ....................................................................................................................
665–1,329
456–913
1,423–2,848
266–532
182–365
569–1,139
399–797
274–548
854–1,709
Subtotals .............................................................................................................
2,544–5,090
1,017–2,036
1,527–3,054
41 On the other hand, CAQH developed estimates
from the experience of entities that voluntarily
automated, and extrapolation from such voluntary
experience to the regulatory context may generate
a tendency toward overestimation of savings, on a
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per-unit basis and/or in the aggregate. We welcome
comments that would facilitate refinement of
estimates.
42 The true cost of switching EHRs. May 30, 2018.
Mary Pratt. Medical Economics Journal, June 10,
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FR 3317). We assume a comparable
level of effort to implement the
proposed attachments standards. We
further assume that these costs would be
incurred by physician practice PMS and
EHR vendors, who would both absorb
some portion of the costs as a cost of
doing business incorporated in the
current level of HIT service and
maintenance agreements and also pass
some portion of the costs on to the
practices in the form of higher fees for
enabling new functionality. We again
assume a 60/40 split between costs
borne by the vendor and costs passed on
to the customer. As summarized in
Table 4, this results in a physician share
of costs in the range of $266 million to
$532 million, with the remainder in the
range of $399 million to $797 million to
be borne by physician PMS and EHR
vendors. We further assume that some
physician entities and their vendors
may take more time to implement the
standards while continuing to use
manual processes in the meantime.
Therefore, we estimate physician costs
would be incurred over a 4-year period
at the rate of 50 percent in the first
implementation year, 30 percent in the
TABLE 5—ATTACHMENTS BENEFITS BY second implementation year, and 10
percent each in the third and fourth
ENTITY
years, as summarized in Table 8.
[$ in millions]
To determine the benefits for
physicians, we again referred to the
Estimated
estimates of savings for medical
annual
providers reported by CAQH and
Entity type
savings
calculated the remaining 80 percent of
range
(25%)
these savings. CAQH estimated the total
annual savings opportunity for medical
Pharmacies ...............................
0–0
providers for fully automating
Vendors ....................................
0–0
attachments and prior authorization
Clearinghouses .........................
0–0
Private Health Plans .................
108–144 transactions to be $328 million and
Government Health Plans ........
179–238 $322 million, respectively, or $650
Physicians .................................
390–520 million in total. So, we estimate the
Dentists .....................................
86–115 physician share to be 80 percent of $650
Hospitals ...................................
98–130 million, or $520 million. To reflect the
uncertainty around the ultimate level of
Total ......................................
860–1,147 uptake of these standards, we estimate
a range of 25 percent below this point
With respect to timing of costs and
estimate, or between $390 million to
benefits, we assume hospitals would
$520 million in annual savings, as
have both the capital and business
summarized in Table 5. We further
interest to move promptly to achieve the estimate that these benefits in labor
return on investment; would incur all
savings would phase in over a 3-year
costs during the 2-year implementation
period at the rate of 50 percent in the
period; and would realize the full level
first operational year, 75 percent in the
of annual savings in and after the first
second operational year, and 100
operational year following the proposed percent in and after the third year after
compliance date, as summarized in
the compliance date, as summarized in
Tables 8 and 9.
Table 9.
5. Physicians
6. Dentists
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To determine the benefits for
hospitals, we refer to the estimates of
savings for medical providers reported
by CAQH, and assume that hospitals
would achieve 20 percent of these
savings. We assume a rough 80/20 split
between physicians and hospitals
because we believe the vast majority of
transactions needed to support claims
and prior authorizations would come
from clinician practices since plans and
hospitals generally have other processes
for utilization management of more
expensive inpatient admissions and
outpatient procedures. CAQH estimated
the total annual savings opportunity for
medical providers for fully automating
attachments and prior authorization
transactions to be $328 million and
$322 million, respectively. So, we
estimate the hospital share to be 20
percent of $650 million or $130 million.
To reflect the uncertainty around the
ultimate level of uptake of these
standards, we estimate a range of 25
percent below this point estimate
between $98 million to $130 million in
annual savings, as summarized in Table
5.
We followed a similar methodology
for estimating physician costs and
benefits. For physicians, the
Modifications final rule cost estimates
were within a range of $665 million to
$1,329 million, adjusted for inflation (74
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For dentists, we follow the same
methodology for costs as we do for
physicians. The Modifications final rule
cost estimates for dentists were within
a range of $456 million to $913 million,
adjusted for inflation (74 FR 3317). We
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assume a comparable level of effort to
implement the proposed attachments
standards. We further assume that these
costs would be incurred by dental
practice PMS and EHR vendors, who
would both absorb some portion of the
costs as a cost of doing business
incorporated in the current level of HIT
service and maintenance agreements
and also pass some portion of the costs
on to the dental practices in the form of
higher fees for enabling new
functionality. We again assume a 60/40
split between costs borne by the vendor
and costs passed on the customer. As
summarized in Table 4, this results in
the dentist share of costs in the range of
$182 million to $365 million, with the
remainder in the range of $274 million
to $548 million borne by dental practice
PMS and EHR vendors. As with
physicians, we further assume that some
dental practices and their vendors may
take more time to implement the
standards, while continuing to use
manual processes in the meantime.
Therefore, we estimate dentists’ costs
would be incurred over a 4-year period
at the rate of 50 percent in the first
implementation year, 30 percent in the
second implementation year, and 10
percent each in the third and fourth
years, as summarized in Table 8.
Given that the 2020 CAQH Index did
not report on the potential savings
opportunity for dental providers for full
automation of attachments transactions,
we take a different approach to benefits
estimation. Comments included in
testimony submitted to the NCVHS in
2016 on the Attachment Standard 43
(2016 NCVHS Hearing) indicated that
dentists supported the proposal to make
the X12N 275 transaction the standard
vehicle for transporting attachment
content to dental claims, but made no
mention of the prior authorization
transaction. These comments also
indicated that many dental PMS vendor
technologies may lack the capability to
generate HL7 documents, requiring
dentists to either upgrade existing
systems or find alternative methods,
such as using a clearinghouse or payer
portals. Thus, we conclude that some
dentists and their PMS vendors would
incur costs associated with submitting
attachment information to support
claims, and others may maintain current
manual or clearinghouse-mediated
processes. Therefore, we assume that
the savings opportunity for full
automation of claims attachments for
43 NCVHS Subcommittee on Standards. Agenda
of the February 16, 2016 NCVHS Subcommittee on
Standards Hearing https://ncvhs.hhs.gov/meetings/
agenda-of-the-february-16-2016-ncvhssubcommittee-on-standards-hearing/.
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dentists would be a portion of the
savings opportunity for medical
providers. Since the total number of
dental entities (125,329) is about 70
percent of the number of other provider
entities (177,266, or 5,544 hospital
establishments and 171,722 physician
firms), we estimate their savings
opportunity would be no greater than 70
percent of the annual $328 million
medical provider savings opportunity
for attachments estimated by CAQH. In
addition, we assume that, given the
relatively smaller size of dental
practices, a greater proportion of
dentists than physicians may choose to
retain manual processes. So, as
summarized in Table 5, we estimate that
the annual dentist savings opportunity
is 50 percent of 70 percent of the
medical provider opportunity, or $115
million (328 × 0.70 × 0.50). To reflect
the uncertainty around the ultimate
level of uptake of these standards, we
estimate a range of 25 percent below
this point estimate, or between $86
million to $115 million in annual
savings. As with the physician
estimates, we further estimate that these
benefits in labor savings would phase in
over a 3-year period at the rate of 50
percent in the first operational year, 75
percent in the second operational year,
and 100 percent in and after the third
year after the compliance date, as
summarized in Table 9.
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7. PMS and EHR Vendors
In testimony to the 2016 NCVHS
Hearing, WEDI noted that the
functionality that would be new to
providers in implementing the
attachment standards would consist of
automating EHR systems to exchange
data with the PMS and digital
signatures. Consistent with this
assessment, the 2016 MITRE
environmental scan found that many
EHR vendors had the capability of
sending X12N 275 and X12N 278 EDI
transactions, but that substantial work
remained to routinely and reliably
extract structured clinical data for C–
CDA attachments. Since that time there
has been both growth and consolidation
in these industry segments. A health
care provider entity’s PMS and EHR
systems may be bundled in one product
offering, semi-integrated affiliated
systems, or entirely independent
systems offered by separate vendors.44
So, readiness would vary widely for
44 The true cost of switching EHRs. May 30, 2018.
Mary Pratt. Medical Economics Journal, June 10,
2018 edition, Volume 96, Issue 10. https://
www.medicaleconomics.com/view/true-costswitching-ehrs.
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provider entities based on their HIT
contractors.
Because vendors of certified
electronic health record technology are
already familiar with CDA for meeting
requirements under the ONC Health IT
Certification Program, we believe all
EHR vendors have some ability to
extract data for C–CDA templates,
although all may not have fully
implemented or provided this
functionality as part of core product
offerings. A review of some of the
largest EHR vendor websites in May
2021, provided informal evidence
suggesting that about 80 percent of
vendors had this functionality in place,
that another 17 percent had at least
partial functionality, and that only 3
percent might still have no C–CDA
functionality. The many other smaller
EHR vendors are also likely in varying
stages of readiness. Thus, we assume
that additional implementation costs
may be needed to reliably extract C–
CDA documentation and to either
integrate this content into internal EDI
processes or exchange the
documentation with another PMS.
Similarly, we assume PMS vendors
contracted with clients that have a
certified EHR have already largely
developed the ability to create the X12N
275 and X12N 278, even if this
functionality has not been enabled for
all customers, and that the majority of
the additional cost would be associated
with receiving and managing the C–
CDA payload. Because of this preexisting functionality, we are again
persuaded that implementing these
proposals is more akin to a standards
upgrade than implementing a new
standard for the first time. Based on
2020 CAQH Index results that report 22
percent of medical and 16 percent of
dental attachment exchanges occurring
electronically, we are aware that some
provider vendors have already
successfully implemented the
transmission of electronic attachments.
Without data on the extent of the gaps,
or on the difference in readiness
between EHR and PMS vendors, we
assume similar costs across both types
of vendors and treat them together. We
also assume that other significant
components of implementation costs
would consist of trading partner testing
and user training.
As the result of the estimates already
described for hospitals, physicians, and
dentists and the split with their HIT
vendors in Table 4, we estimate that
PMS and EHR vendor costs would add
up across all customer segments to a
range of $1,527 to 3,054 million. And
since we assume some vendors and/or
their customers may take more time to
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78463
implement the standards, we estimate
vendors’ costs would be incurred over a
4-year period at the rate of 50 percent
in the first implementation year, 30
percent in the second implementation
year, and 10 percent each in the third
and fourth years, as summarized in
Table 8.
We have not identified any evidence
that suggests there would be savings for
this segment as the result of the changes
in this proposed rule and do not include
any estimates of benefits for this
segment.
8. Clearinghouses
From remarks recorded at the 2016
NCVHS Hearing,45 we understand that
by 2016 many entities in the
clearinghouse industry had already fully
implemented the standards proposed in
this rule and were exchanging the
transactions and clinical payloads with
government and commercial health care
entities, as well as with entities in other
lines of business. Fundamental to the
clearinghouse business role is the ability
to normalize disparate data formats,
including both structured and
unstructured clinical data, and unwrap
and convert the data into standard or
proprietary formats based on the varying
capabilities and needs of payer and
provider clients. We assume that, by
2022, this ability has generally become
the business norm throughout the
clearinghouse industry. As a result, we
assume that clearinghouses would not
have significant new technology
development costs as the result of our
proposals, but would have significant
new trading partner testing costs.
To estimate clearinghouse
implementation costs, we considered a
commenter, described in the
Modifications final rule (74 FR 3318),
that identified as a large clearinghouse
and reported that projected costs would
be at least $3.5 million, $4.3 adjusted for
inflation, and would be affected
specifically by the amount of testing
that would be required with trading
partners—both providers and health
plans. On the basis of this data point, as
summarized in Table 6, we estimate that
23 large clearinghouse entities would
incur $4.3 million in implementation
costs, and that the remainder of 139
smaller clearinghouses would incur $1.8
million, for a segment total of $349
million. To reflect the uncertainty
around these projections, we estimate a
range of 25 percent below and above
this point estimate of between $262
45 Transcript of the February 16, 2016 NCVHS
Subcommittee on Standards https://ncvhs.hhs.gov/
transcripts-minutes/transcript-of-the-february-162016-ncvhs-subcommittee-on-standards/.
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clearinghouses as the result of the
changes in this proposed rule and have
not estimated any benefits for this
segment.
first implementation year, 30 percent in
the second implementation year, and 10
percent each in the third and fourth
years, as summarized in Table 8.
We have not identified any evidence
that suggests there would be savings for
million to $436 million in total costs.
And since we assume some customers
may take more time to implement the
standards, we estimate clearinghouse
costs would be incurred over a 4-year
period at the rate of 50 percent in the
TABLE 6—CLEARINGHOUSE COSTS
Firm size
Large
Small
Total
Firms (#) ......................................................................................................................................
Cost per Firm ($ million) ..............................................................................................................
Total Segment Cost ($ million) ....................................................................................................
Cost Range ± 25% ($ million) .....................................................................................................
23
4.3
99
........................
139
1.8
250
........................
162
........................
349
262–436
9. Private Health Plans and Issuers
Based on our informal web searches
in May 2021, for plan websites that
include EDI instructions for providers
on submitting X12N 275 and X12N 278
transactions, and the general absence of
comments describing significant
implementation burden in testimony
submitted to the 2016 NCVHS Hearing,
we believe health plans (or their
clearinghouses) have generally already
implemented the technology for these
proposed changes. We believe health
plans (or their clearinghouses) have
already implemented both the X12N
transactions and have processes for
collecting at least unstructured medical
record data currently used for auditing,
risk coding validation, and other quality
and utilization management processes.
CAQH reports that 22 percent of
medical and 16 percent of dental
attachment exchanges were occurring
electronically in 2020. In addition, we
are aware that all health plans routinely
collect medical record documentation
from providers in a variety of ways,
including through web portals and
direct access to EHRs.46 These facts
suggest to us that health plans have
either already automated these
processes or have workarounds to
manage the receipt of this information.
Thus, we believe the additional effort
associated with implementing our
proposals may be limited to mapping
existing backend processes to the new
transaction processing front-end
systems. Alternatively, the smaller the
health plan, the more likely that entity
may rely upon a clearinghouse for
administrative and clinical data
exchange and the more likely the status
quo would continue.
In testimony to the 2016 NCVHS
Hearing, WEDI noted that the
functionality that would be new to
payers in implementing the attachment
standards would be the HL7 CDA,
LOINC codes, and other transport
models requiring different skill sets than
EDI. Although payers routinely collect
medical record documentation today,
this does not necessarily mean that the
ingestion, interpretation, and integration
of clinical data is fully automated.
However, we do not see evidence in
testimony or public comments that
plans anticipate a significant
implementation effort related to
additional technology development to
handle the HL7 CDA and LOINC codes
required by federal adoption of
attachment standards. It is possible,
given payer involvement with the rapid
evolution of clinical data exchange
standards, that health plans may not be
incentivized to significantly enhance
their current state of C–CDA handling,
and may instead continue to rely on
current state processes, including the
use of clearinghouses for intermediation
where necessary.47 For these reasons,
we do not believe health plans would
bear as significant a level of investment
for system development for these
proposals as they did for the
requirements of the Modifications final
rule. However, they would likely incur
implementation costs for trading partner
testing if they exchange these
transactions directly with providers in
lieu of via clearinghouses.
In light of these considerations, we
assume that the costs of implementation
for health plans may be somewhat
analogous to those for clearinghouses,
but generally with fewer connections to
test, since many transactions would be
expected to continue to be exchanged
through existing clearinghouse
connections. Therefore, as summarized
in Table 7, we estimate that private
health plans would incur 50 percent of
clearinghouse costs, and we increase
that estimated range of $262 million to
$436 million to reflect 4.8 times as
many health plan entities (772/162 =
4.8). Thus, we estimate private health
plans would incur implementation
costs, driven mostly by trading partner
testing, of $838 million (349 × 0.50 ×
4.8). To reflect the uncertainty around
these projections, we estimate a range of
25 percent below and above this point
estimate of between $629 million to
$1,048 million.
lotter on DSK11XQN23PROD with PROPOSALS5
TABLE 7—PRIVATE HEALTH PLAN COSTS
Entity type
Clearinghouses
Private plans
Firms (#) ......................................................................................................................................................
Difference in # of Firms ...............................................................................................................................
Total cost from Table 6 ($ in millions) .........................................................................................................
Plan cost (50% of above × multiple of firms) ($ in millions) .......................................................................
Cost Range ± 25% ($ in millions) ...............................................................................................................
162
..............................
349
..............................
..............................
772
4.8
..............................
838
629–1,048
46 For example, see: Payer Access to EHRs: What
Providers Need to Know. Journal of AHIMA.
October 9, 2019 https://journal.ahima.org/page/
payer-access-to-ehrs-what-providers-need-to-know.
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47 A Path Toward Further Clinical and
Administrative Data Integration. Final Report Of
The Health Information Technology Advisory
Committee’s Intersection of Clinical And
Administrative Data Task Force To The National
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Coordinator For Health Information Technology.
November 17, 2020 https://www.healthit.gov/sites/
default/files/page/2020-11/2020-11-17_ICAD_TF_
FINAL_Report_HITAC.pdf.
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Given that we assume some portion of
providers and their vendors may take
longer to move from manual to fully
automated transactions, we assume
health plan testing costs would extend
beyond the 2-year implementation
period. So, for purposes of this analysis,
we estimate that private health plans
would incur costs over a 4-year period
at the rate of 50 percent in the first
implementation year, 30 percent in the
second implementation year, and 10
percent each in the third and fourth
years.
In estimating the benefits of the
proposed rule for private health plans,
we again referred to the estimates of
savings reported by CAQH, but this time
to those reported for plans. CAQH
estimated the 2020 national annual plan
savings opportunities for attachments
and prior authorizations at $49 million
and $95 million, respectively, for a total
of $144 million annually. To reflect the
uncertainty around the ultimate level of
uptake of these standards, we estimate
a range of 25 percent below this point
estimate between $108 million to $144
million in annual savings. We further
assume plans would realize the benefits
in labor savings over a 3-year period at
the rate of 50 percent in the first
operational year, 75 percent in the
second operational year, and 100
percent in and after the third year after
the compliance date, as summarized in
Table 9.
10. Government Health Plans
Similar to private health plans, we
believe Medicare, Medicaid, and the
Veteran’s Administration systems have
largely implemented the ability to
receive and manage these transactions
through their HIT processing vendors
and contracted managed care plans,
especially with respect to claims
attachments, and would incur costs in
rough magnitude to the impacts
estimated in the Modifications final rule
for testing and training. We assume
these costs would again largely be borne
by the contracted vendors under
existing contractual terms and
agreements. Accordingly, to calculate
government health plan costs, we used
the same range of costs estimated in the
Modifications final rule of $384 million
to $734 million (74 FR 3318), adjusted
for inflation. As we do with providers
and private health plans, we further
assume that costs would be incurred
over a 4-year period. As summarized in
Table 8, we estimate costs would be
incurred at the rate of 50 percent in the
first implementation year, 30 percent in
the second implementation year, and 10
percent each in the third and fourth
years.
To calculate government health plan
benefits, we started with the point
estimate of $238 million savings due to
the use of better standards in the
Modifications final rule (74 FR 3318).
To reflect the uncertainty around the
ultimate level of uptake of these
standards, we estimate a range of 25
percent below this point estimate or
between $179 million to $238 million in
annual savings. As with other industry
segments, and as summarized in Table
9, we further assume government health
plans would realize the benefits in these
savings over a 3-year period at the rate
of 50 percent in the first operational
year, 75 percent in the second
operational year, and 100 percent in and
after the third year after the compliance
date.
11. Pharmacies
We believe pharmacies would
generally not be impacted by the
changes in this proposed rule.
Comments from NCPDP submitted to
the 2016 NCVHS Hearing indicated: that
pharmacies use the X12N 837 to bill
medications and supplies covered under
the Medicare Part B program and for
professional pharmacy services covered
under a medical plan; the type of claims
submitted by pharmacy providers using
78465
the X12N 837 rarely requires an
attachment; the electronic prior
authorization (ePA) transactions
approved as part of the NCPDP SCRIPT
standard in 2013 address the
documentation needs around prior
authorization attachments; and that
while the ePA transactions do
accommodate attachments, NCPDP was
not aware of any organization using a
HL7 C–CDA attachment for pharmacy
prior authorizations. In addition,
contextual comments submitted by
NCPDP to the NCVHS in 2020 in
response to a Request for Comments on
CAQH CORE Operating Rules 48
indicated there is very little use in the
pharmacy industry of the X12N 278
transaction. As a result, we assume
pharmacies would be affected by these
proposals only rarely to support the
billing of retail pharmacy supplies and
professional services claims. Based on
an NCPDP whitepaper, we further
understand that a pharmacy needing to
send attachment information to support
an X12N 837 claim would generally be
expected to employ existing batch
processes to send attachment
information to the same clearinghouse
that converts their NCPDP billing
transactions to X12 837 Professional
Claims for formatting and transmittal in
the X12N 275.49 Therefore, we assume
the proposed changes to information
exchanges between clearinghouses and
health plans would continue to be
managed by clearinghouses that serve
this particular market. As a result, we
conclude that pharmacies would
generally not be affected by this
proposed rule, and we estimate no costs
and benefits for this segment.
12. Summary of Costs and Benefits for
This Proposed Rule
Tables 8 and 9 are the compilation of
the estimated costs and benefits for all
of the standards proposed in this
proposed rule.
TABLE 8—ESTIMATED MINIMUM AND MAXIMUM COSTS FOR IMPLEMENTATION OF ATTACHMENT STANDARDS—2025
THROUGH 2034
[$ in millions]
lotter on DSK11XQN23PROD with PROPOSALS5
Industry
2025
2026
2028
2029
2030
2031
2032
2033
2034
............
............
26.6
53.2
18.2
36.5
0.0
0.0
............
............
26.6
53.2
18.2
36.5
0.0
0.0
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
Hospitals minimum ....................................................
Hospital maximum .....................................................
Physicians minimum .................................................
Physicians maximum ................................................
Dentists minimum ......................................................
Dentists maximum .....................................................
Pharmacies minimum ................................................
Pharmacies maximum ...............................................
284.5
569.5
133.0
266
91
182.5
0.0
0.0
48 NCVHS Subcommittee on Standards,
Comments Received in Response to Request for
Comment (Federal Register Notice 85 FR 37666]
(on CAQH CORE Operating Rules) August 20, 2020
https://ncvhs.hhs.gov/wp-content/uploads/2020/08/
CommentsCAQH%20CORE%20Proposed%20Operating
%20Rules%20for%20Federal%20Adoption
%20508.pdf.
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284.5
569.5
79.8
159.6
54.6
109.5
0.0
0.0
2027
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Total
569
1,1395.0
266.0
532.0
182.0
365.0
0.0
0.0
49 NCPDP White Paper on Pharmacy Professional
Service Billing https://www.ncpdp.org/NCPDP/
media/pdf/WhitePaper/Billing-Guidance-forPharmacists-Professional-and-Patient-CareServices-White-Paper.pdf?ext=.pdf.
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TABLE 8—ESTIMATED MINIMUM AND MAXIMUM COSTS FOR IMPLEMENTATION OF ATTACHMENT STANDARDS—2025
THROUGH 2034—Continued
[$ in millions]
Industry
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Total
Private Health Plans minimum ..................................
Private Health Plans maximum .................................
Government Health Plans minimum .........................
Government Health Plans maximum ........................
Clearinghouses minimum ..........................................
Clearinghouses maximum .........................................
Vendors minimum .....................................................
Vendors maximum ....................................................
314.5
524
192.0
367
131
218
763.5
1,527
188.7
314.4
115.2
220.2
78.6
130.8
458.1
916.2
62.9
104.8
38.4
73.4
26.2
43.6
152.7
305.4
62.9
104.8
38.4
73.4
26.2
43.6
152.7
305.4
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
629.0
1,048.0
384.0
734.0
262.0
436.0
1,527.0
3,054.0
Total Minimums ..................................................
Total Maximums .................................................
1,910
3,654
1,260
2,420.2
325
616.9
235
616.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
3,819.0
7,308.0
TABLE 9—ESTIMATED MINIMUM AND MAXIMUM BENEFITS FOR IMPLEMENTATION OF ATTACHMENT STANDARDS—2025
THROUGH 2034
[$ in millions]
Industry
2025
2027
2028
2029
2030
2031
2032
2033
2034
Total
Hospitals minimum ............................................................
Hospital maximum .............................................................
Physicians minimum .........................................................
Physicians maximum ........................................................
Dentists minimum ..............................................................
Dentists maximum .............................................................
Pharmacies minimum ........................................................
Pharmacies maximum .......................................................
Private Health Plans minimum ..........................................
Private Health Plans maximum .........................................
Government Health Plans minimum .................................
Government Health Plans maximum ................................
Clearinghouse minimum ...................................................
Clearinghouse maximum ..................................................
Vendors minimum .............................................................
Vendors maximum ............................................................
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
97.5
130.0
195.0
260.0
43
57.5
0.0
0.0
54.0
72.0
89.3
119.0
0.0
0.0
0.0
0.0
97.5
130.0
292.5
390.0
64.6
86.3
0.0
0.0
81.0
108.0
133.9
178.5
0.0
0.0
0.0
0.0
97.5
130.0
390.0
520.0
86.1
115.0
0.0
0.0
108.0
144.0
178.5
238.0
0.0
0.0
0.0
0.0
97.5
130.0
390.0
520.0
86.1
115.0
0.0
0.0
108.0
144.0
178.5
238.0
0.0
0.0
0.0
0.0
97.5
130.0
390.0
520.0
86.1
115.0
0.0
0.0
108.0
144.0
178.5
238.0
0.0
0.0
0.0
0.0
97.5
130.0
390.0
520.0
86.1
115.0
0.0
0.0
108.0
144.0
178.5
238.0
0.0
0.0
0.0
0.0
97.5
130.0
390.0
520.0
86.1
115.0
0.0
0.0
108.0
144.0
178.5
238.0
0.0
0.0
0.0
0.0
97.5
130.0
390.0
520.0
86.1
115.0
0.0
0.0
108.0
144.0
178.5
238.0
0.0
0.0
0.0
0.0
780.0
1,040.0
2,827.5
3,770.0
624.2
833.8
0.0
0.0
783.0
1,044.0
1,294.2
1,725.5
0.0
0.0
0.0
0.0
Total Minimums ..........................................................
Total Maximums .........................................................
0.0
0.0
0.0
0.0
478.8
638.5
669.5
892.8
860.1
1,147.0
860.1
1,147.0
860.1
1,147.0
860.1
1,147.0
860.1
1,147.0
860.1
1,147.0
6,308.9
8,413.3
E. Regulatory Review Costs Estimate
lotter on DSK11XQN23PROD with PROPOSALS5
2026
One of the costs of compliance with
a proposed rule is the necessity for
affected entities to review the rule in
order to understand what it requires and
what changes the entity would have to
make to come into compliance. We
assume that 323,766 affected entities
(listed in Table 2) would incur some of
these costs, as they are the entities that
would have to implement the proposed
changes. The particular staff involved in
such a review would vary from entity to
entity, but would generally consist of
lawyers responsible for compliance
activities (at all 323,766 entities) and
individuals familiar with the technical
X12N and HL7 standards at the level of
a computer and information systems
manager at private and government
health plans, clearinghouses, and PMS
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and EHR vendors (a total of 1,937
entities). Using the Occupational
Employment and Wages for May 2020
from the Bureau of Labor Statistics for
lawyers (Code 23–1011) and computer
and information system managers (Code
11–3021), we estimate that the national
average labor costs of reviewing this
rule are $100 and $109 per hour,
respectively, including overhead and
fringe benefits. We estimate that it
would take approximately 2 hours for
each staff person involved to review this
proposed rule and its relevant sections
and that, on average, one lawyer and
two computer and information managerlevel staff persons would engage in this
review. For each entity that reviews the
rule, the estimated costs are therefore
$200 for lawyers, or $64.8 million (2
hours each × 1 staff × $100 × 323,766)
for all affected entities. For each plan,
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Fmt 4701
Sfmt 4702
clearinghouse, and PMS or EHR vendor,
the estimated costs are therefore $436
for information system managers, or
$0.8 million (2 hours each × 2 staff ×
$109 × 1,937) in total. Therefore, we
estimate that the total cost of reviewing
this rule is $65.6 million ($64.8 + 0.8
million).
F. Accounting Statement
Whenever a rule is considered a
significant rule under Executive Order
12866, we are required to develop an
Accounting Statement. This statement
must state that we have prepared an
accounting statement showing the
classification of the expenditures
associated with the provisions of this
proposed rule. Monetary annualized
benefits and non-budgetary costs are
presented using 3 percent and 7 percent
discount rates.
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78467
TABLE 10—ACCOUNTING STATEMENT—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM
FY 2025 TO FY 2034
[$ in millions]
Category
Primary estimate
Minimum
estimate
Maximum
estimate
574 .................
606 .................
765 .................
809 .................
Source
Benefits
Annualized monetized benefits:
7% Discount ..............................................
3% Discount ..............................................
Qualitative (un-quantified benefits) ..................
670 ...................................................................
708 ...................................................................
Increased productivity due to decrease in
manual processing; reduced delays in patient care.
RIA.
RIA.
Providers and health plans would benefit from efficiencies in resource use stemming from changes implemented by plans, clearinghouses, and
vendors.
Costs
Annualized monetized costs:
7% Discount ..............................................
3% Discount ..............................................
Qualitative (un-quantified costs) .......................
700 ...................................................................
615 ...................................................................
None.
474 .................
416 .................
926 .................
814 .................
RIA.
RIA.
Providers, health plans, and government plans would pay for IT staff and other contractors, as well as clearinghouses and vendors for changes
in the forms of new and ongoing fees.
Transfers
Annualized monetized transfers: ‘‘on budget’’
Annualized monetized transfers: ‘‘off budget’’
None .................................................................
None .................................................................
VI. Response to Comments
PART 160—GENERAL
ADMINISTRATIVE REQUIREMENTS
Because of the large number of public
comments, we normally receive on
Federal Register documents, we are not
able to acknowledge or respond to them
individually. We will consider all
comments we receive by the date and
time specified in the DATES section of
this preamble, and, when we proceed
with a subsequent document, we will
respond to the comments in the
preamble to that document.
Administrative practice and
procedure, Computer technology,
Health care, Health facilities, Health
insurance, Health records, Hospitals,
Medicaid, Medicare, Penalties,
Reporting and recordkeeping
requirements.
[Amended]
PART 162—ADMINISTRATIVE
REQUIREMENTS
3. The authority citation for part 162
continues to read as follows:
■
Authority: 42 U.S.C. 1320d—1320d–9 and
secs. 1104 and 10109 of Pub. L. 111–148, 124
Stat. 146–154 and 915–917.
45 CFR Part 162
lotter on DSK11XQN23PROD with PROPOSALS5
§ 160.103
2. In § 160.103, paragraph (10) of the
definition of ‘‘Transaction’’ is amended
by removing the word ‘‘claims’’ and
adding in its place the word ‘‘care’’.
45 CFR Part 160
Administrative practice and
procedures, electronic transactions,
health facilities, health insurance,
hospitals, incorporation by reference,
Medicaid, Medicare, Reporting and
recordkeeping requirements.
4. Section 162.103 is amended by
adding the definitions of ‘‘Attachment
information’’ and ‘‘Electronic signature’’
to read as follows:
■
§ 162.103
For the reasons set forth in this
preamble, the Department of Health and
Human Services proposed to amend 45
CFR subchapter C to read as follows:
21:42 Dec 20, 2022
Authority: 42 U.S.C. 1302(a), 42 U.S.C.
1320d–1320d–8, sec. 264 of Pub. L. 104 191,
110 Stat. 2033–2034 (42 U.S.C. 1320d–2
(note)), 5 U.S.C. 552; secs. 13400 and 13424,
Pub. L. 111–5, 123 Stat. 258–279, and sec.
1104 of Pub. L. 111–148, 124 Stat. 146–154.
■
List of Subjects
VerDate Sep<11>2014
1. The authority citation for part 160
continues to read as follows:
■
Jkt 259001
Definitions.
*
*
*
*
*
Attachment information means
documentation that enables the health
plan to make a decision about health
PO 00000
Frm 00031
Fmt 4701
Sfmt 4702
None ..............
None ..............
None..
None.
care that is not included in either of the
following:
(1) A health care claims or equivalent
encounter information transaction, as
described in § 162.1101.
(2) A referral certification and
authorization transaction, as described
in § 162.1301(a) and the portion of
§ 162.1301(c) that pertains to
authorization.
*
*
*
*
*
Electronic signature means an
electronic sound, symbol, or process,
attached to or logically associated with
attachment information and executed by
a person with the intent to sign the
attachment information.
*
*
*
*
*
■ 5. Section 162.920 is amended by:
■ a. Revising the introductory text and
paragraph (a) introductory text; and
■ b. Adding paragraphs (a)(19) through
(22) and (e).
The revisions and additions read as
follows:
§ 162.920 Availability of implementation
specifications and operating rules.
Certain material is incorporated by
reference into this part with the
approval of the Director of the Federal
Register under 5 U.S.C. 552(a) and 1
CFR part 51. To enforce any edition
other than that specified in this section,
the Department of Health and Human
Services must publish a document in
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lotter on DSK11XQN23PROD with PROPOSALS5
the Federal Register and the material
must be available to the public. All
approved incorporation by reference
(IBR) material is available for inspection
at the Centers for Medicaid & Medicare
Services (CMS) and the National
Archives and Records Administration
(NARA). Contact CMS at: 7500 Security
Boulevard, Baltimore, Maryland 21244;
administrativesimplification@
cms.hhs.gov; (410) 786–6597. For
information on the availability of this
material at NARA, visit
www.archives.gov/federal-register/cfr/
ibr-locations.html or email
fr.inspection@nara.gov. The material
may be obtained from the following
source(s):
(a) ASC X12, 7600 Leesburg Pike,
Suite 430, Falls Church, VA 22043;
Telephone (703) 970–4480; FAX (703)
970–4488; https://www.X12.org.
(19) The X12N 275—Additional
Information to Support a Health Care
Claim or Encounter (006020X314),
September 2014; IBR approved for
§ 162.2002(d).
(20) The X12N 275—Additional
Information to Support a Health Care
Services Review (006020X316), August
2021; IBR approved for § 162.2002(c).
(21) The X12N 277—Health Care
Claim Request for Additional
Information (006020X313), September
2014; IBR approved for § 162.2002(e).
(22) The X12N 278—Health Care
Services Request for Review and
Response (006020X315), September
2014; IBR approved for § 162.1302(e).
*
*
*
*
*
(e) Health Level Seven International
(HL–7), 3300 Washtenaw Avenue, Suite
227, Ann Arbor, MI 48104; Telephone
(734) 677–7777; FAX (734) 677–6622;
www.hl7.org.
(1) HL7 CDA R2 Attachment
Implementation Guide: Exchange of C–
CDA Based Documents, Release 1—
March 2017; IBR approved for
§ 162.2002(a).
(2) HL7 Implementation Guide for
CDA Release 2: Consolidated CDA
Templates for Clinical Notes (US Realm)
Draft Standard for Trial Use Release 2.1,
Volume 1—Introductory Material, June
2019 with Errata; IBR approved for
§ 162.2002(b).
(3) HL7 Implementation Guide for
CDA Release 2: Consolidated CDA
VerDate Sep<11>2014
21:42 Dec 20, 2022
Jkt 259001
Templates for Clinical Notes (US Realm)
Draft Standard for Trial Use Release 2.1,
Volume 2—Templates and Supporting
Material, June 2019 with Errata; IBR
approved for § 162.2002(b).
■ 6. Section 162.1302 is amended—
■ a. In paragraph (c), by removing the
phrase ‘‘standards identified in
paragraph (b)(2)’’ and adding in its place
the phrase ‘‘standard identified in
paragraph (b)(2)(i)’’; and
■ b. By adding paragraph (e).
The addition reads as follows:
§ 162.1302 Standards for referral
certification and prior authorization
transaction.
*
*
*
*
*
(e) For the period from January 1,
2012—
(1) Through [24 months from effective
date of the final rule], the standard
identified in paragraph (b)(2)(ii) of this
section;
(2) On and after [24 months from the
effective date of the final rule], the
X12N 278—Health Care Services
Request for Review and Response
(006020X315) (incorporated by
reference, see § 162.920).
■ 7. Add subpart T, consisting of
§§ 162.2001 and 162.2002 to read as
follows:
Subpart T—Health Care Attachments
Sec.
162.2001 Health care attachments
transaction.
162.2002 Standards for health care
attachments transaction.
Subpart T—Health Care Attachments
§ 162.2001 Health care attachments
transaction.
A health care attachments transaction
is the transmission of any of the
following:
(a) Attachment information from a
health care provider to a health plan for
any of the following purposes:
(1) In support of a referral certification
and authorization transaction, as
described in § 162.1301(a).
(2) In support of a health care claims
or equivalent encounter transaction, as
described in § 162.1101.
(b) A request from a health plan to a
health care provider for attachment
information.
PO 00000
Frm 00032
Fmt 4701
Sfmt 9990
§ 162.2002 Standards for health care
attachments transaction.
The Secretary adopts the following
standards for the period on and after [24
months from effective date of the final
rule]:
(a) For transmissions described in
§ 162.2001, HL7 CDA R2: Attachment
Implementation Guide: Exchange of C–
CDA Based Documents, Release 1—
March 2017 (incorporated by reference,
see § 162.920).
(b) For transmissions described in
§ 162.2001(a) —
(1) HL7 Implementation Guide for
CDA Release 2: Consolidated CDA
Templates for Clinical Notes (US Realm)
Draft Standard for Trial Use Release 2.1,
Volume 1—Introductory Material, June
2019 with Errata (incorporated by
reference, see § 162.920)
(2) HL7 Implementation Guide for
CDA Release 2: Consolidated CDA
Templates for Clinical Notes (US Realm)
Draft Standard for Trial Use Release 2.1,
Volume 2 — Templates and Supporting
Material, June 2019 with Errata
(incorporated by reference, see
§ 162.920).
(c) For transmissions described in
§ 162.2001(a)(1), the X12N 275
Additional Information to Support a
Health Care Services Review
(06020X316).
(d) For transmissions described in
§ 162.2001(a)(2), the X12N 275
Additional Information to Support a
Health Care Claim or Encounter
(06020X314).
(e) For transmissions described in the
following:
(1) Section 162.2001(b) that pertain to
§ 162.2001(a)(2) transmissions, the
X12N 277—Health Care Claim Request
for Additional Information
(006020X313) (incorporated by
reference, see § 162.920).
(2) Section 162.2001(b) that pertain to
§ 162.2001(a)(1) transmissions, the
standard specified in 45 CFR 1302(e)(2).
Dated: December 14, 2022.
Xavier Becerra,
Secretary, Department of Health and Human
Services.
[FR Doc. 2022–27437 Filed 12–15–22; 4:15 pm]
BILLING CODE 4150–28–P
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[Federal Register Volume 87, Number 244 (Wednesday, December 21, 2022)]
[Proposed Rules]
[Pages 78438-78468]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27437]
[[Page 78437]]
Vol. 87
Wednesday,
No. 244
December 21, 2022
Part V
Department of Health and Human Services
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Office of the Secretary
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45 CFR Parts 160 and 162
Administrative Simplification: Adoption of Standards for Health Care
Attachments Transactions and Electronic Signatures, and Modification to
Referral Certification and Authorization Transaction Standard; Proposed
Rule
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 /
Proposed Rules
[[Page 78438]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of the Secretary
45 CFR Parts 160 and 162
[CMS-0053-P]
RIN 0938-AT38
Administrative Simplification: Adoption of Standards for Health
Care Attachments Transactions and Electronic Signatures, and
Modification to Referral Certification and Authorization Transaction
Standard
AGENCY: Office of the Secretary, Department of Health and Human
Services (HHS).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This rule would implement requirements of the Administrative
Simplification subtitle of the Health Insurance Portability and
Accountability Act of 1996 (HIPAA) and the Patient Protection and
Affordable Care Act, as amended by the Health Care and Education
Reconciliation Act of 2010, enacted on March 30, 2010--collectively,
the Affordable Care Act. Specifically, this proposed rule would adopt
standards for ``health care attachments'' transactions, which would
support both health care claims and prior authorization transactions,
and a standard for electronic signatures to be used in conjunction with
health care attachments transactions. To better support the use of the
proposed standards for attachments transactions with prior
authorization transactions, this rule also proposes to adopt a
modification to the standard for the referral certification and
authorization transaction (X12 278) to move from Version 5010 to
Version 6020.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on March 21, 2023.
ADDRESSES: In commenting, please refer to file code CMS-0053-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of three ways (please choose only
one of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-0053-P, P.O. Box 8013,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-0053-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Daniel Kalwa, (410) 786-1352. Geanelle
G. Herring, (410) 786-4466. Christopher Wilson, (410) 786-3178.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that website to
view public comments. CMS will not post on Regulations.gov public
comments that make threats to individuals or institutions or suggest
that the individual will take actions to harm the individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
I. Executive Summary
A. Purpose
This rule proposes to adopt a set of standards for the electronic
exchange of clinical and administrative data to support prior
authorizations and health care claims adjudication. In determining the
necessity of a health care service as part of making a coverage
decision, health plans often require additional information that cannot
adequately be conveyed in the specified fields or data elements of the
adopted prior authorization request or health care claims transaction.
If adopted as proposed, this proposed rule would support electronic
transmissions of this type of information, which should have the effect
of decreasing the use of time and resource-consuming manual processes
such as mail or fax often used today to transmit this information. This
would facilitate prior authorization decisions and claims processing,
reduce burden on providers and plans, and result in more timely
delivery of patient health care services.
a. Need for the Regulatory Action
This rule would adopt a set of standards for the electronic
exchange of clinical and administrative data to support prior
authorizations and claims adjudication. Despite widespread deployment
of electronic health records (EHRs), and industry experience with
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
standards that continues to advance since HIPAA's advent, transmitting
health care attachments is still primarily a manual process and, at
this time, there are no adopted HIPAA standards, implementation guides,
or operating rules for health care attachments or electronic
signatures. If adopted, this proposed rule would support electronic
transmissions of this type of information rather than the use of manual
processes such as mail and fax that still predominate in the health
care industry.
We believe that the health care industry has long anticipated the
adoption of a set of HIPAA standards for the electronic exchange of
clinical and administrative data to support electronic health care
transactions, such as prior authorization of services and claims
adjudication, and the standards we are proposing to adopt are an
important step in reducing provider burden.
B. Summary of the Major Provisions
This rule would implement requirements of the Administrative
Simplification subtitle of HIPAA and the Patient Protection and
Affordable Care Act, as amended by the Health Care and Education
Reconciliation Act of 2010, enacted on March 30, 2010--collectively,
the Affordable Care Act. Specifically, this proposed rule would adopt
standards for ``health care attachments'' transactions, which would
support health care claims and prior authorization transactions, and a
standard for electronic signatures to be used in conjunction with
health care attachments transactions. This rule also proposes modifying
the referral certification and authorization transaction standard to
move from the X12 278, Version 5010, to the X12 278, Version 6020.
C. Summary of Costs and Benefits
Based on industry research by the Council for Affordable Quality
[[Page 78439]]
Healthcare (CAQH), the 2019 CAQH report indicates that a fully
electronic system for prior authorization with health care attachments
could result in as much as $454 million in annual savings to the health
care industry. Similar savings can be expected for the industry by
switching to health care attachments for claims. The 2019 CAQH report
further estimates that the industry could expect as much as $374
million in savings per year with the full adoption of health care
attachments for claims. This results in total anticipated industry
savings of $828 million per year for prior authorization and claims.
II. Background
A. Legislative Authority for Administrative Simplification
This background discussion presents a history of statutory
provisions and regulations that are relevant for the purposes of this
proposed rule.
1. Standards Adoption and Modification Under the Administrative
Simplification Provisions of the Health Insurance Portability and
Accountability Act of 1996 (HIPAA)
Congress addressed the need for a consistent framework for
electronic transactions and other administrative simplification issues
in the Health Insurance Portability and Accountability Act of 1996
(HIPAA) (Pub. L. 104-191, enacted on August 21, 1996). Through subtitle
F of title II of HIPAA, Congress added to title XI of the Social
Security Act (the Act) a new Part C, titled ``Administrative
Simplification,'' which required the Secretary of the Department of
Health and Human Services (the Secretary) to adopt standards for
certain transactions to enable health information to be exchanged more
efficiently and to achieve greater uniformity in the transmission of
health information. For purposes of this and later discussion in this
proposed rule, we sometimes refer to this statute as the ``original''
HIPAA provisions.
Section 1172(a) of the Act indicates that any standard adopted
under HIPAA shall apply, in whole or in part, to the following persons,
referred to as ``covered entities'': (1) a health plan; (2) a health
care clearinghouse; and (3) a health care provider who transmits any
health information in electronic form in connection with a [HIPAA
transaction]. Generally, section 1172 of the Act indicates that any
standard adopted under HIPAA is to be developed, adopted, or modified
by a standard setting organization (SSO). In adopting a standard, the
Secretary must rely upon recommendations of the National Committee on
Vital and Health Statistics (NCVHS), in consultation with the
organizations referred to in section 1172(c)(3)(B) of the Act, and
appropriate federal and state agencies and private organizations.
Section 1172(b) of the Act indicates that a standard adopted under
HIPAA must be consistent with the objective of reducing the
administrative costs of providing and paying for health care. The
transaction standards adopted under HIPAA enable financial and
administrative electronic data interchange (EDI) using a common
structure, as opposed to the many varied, often proprietary,
transaction formats on which industry had previously relied and that,
due to lack of uniformity, engendered administrative burden. Section
1173(g)(1) of the Act, which was added by section 1104(b) of the
Affordable Care Act, further addresses the goal of uniformity by
requiring the Secretary to adopt a single set of operating rules for
each transaction during the implementation of the electronic standards.
These operating rules are required to be consensus-based and reflect
the business rules that affect health plans and health care providers
and the manner in which they operate.
Section 1173(a) of the Act indicates that the Secretary must adopt
standards for financial and administrative transactions, and data
elements for those transactions, to enable health information to be
exchanged electronically. The original HIPAA provisions require the
Secretary to adopt standards for the following transactions: health
claims or equivalent encounter information; health claims attachments;
enrollment and disenrollment in a health plan; eligibility for a health
plan; health care payment and remittance advice; health plan premium
payments; first report of injury; health claim status; and referral
certification and authorization. The Affordable Care Act added the
requirement that the Secretary adopt a standard for electronic funds
transfers. Additionally, section 1173(a)(1)(B) of the Act requires the
Secretary to adopt standards for any other financial and administrative
transactions the Secretary determines appropriate.
Section 1173(c) through (f) of the Act indicates the Secretary must
adopt standards for code sets for appropriate data elements for each
listed health care transaction; security standards for health care
information; standards for electronic signatures in coordination with
the Secretary of Commerce, compliance with which will be deemed to
satisfy both state and federal statutory requirements for written
signatures for the listed transactions; and standards for the
transmission of appropriate standard data elements needed for the
coordination of benefits, sequential processing of claims, and other
data elements for individuals who have more than one health plan.
Section 1174 of the Act requires the Secretary to review the
adopted standards and adopt modifications to them, which include
additions to the standards, as appropriate, but not more frequently
than once every 12 months. Section 1174(b)(2)(B)(ii) of the Act
requires that modifications must be completed in a manner that
minimizes disruption and cost of compliance.
Section 1175 of the Act prohibits health plans from refusing to
conduct a transaction as a standard transaction.\1\ It also prohibits
health plans from delaying the transaction, or adversely affecting or
attempting to adversely affect, a person or the transaction itself on
the ground that the transaction is in standard format. It establishes a
timetable for covered entities to comply with any standard,
implementation specification, or modification as follows: for an
initial standard or implementation specification, no later than 24
months (or 36 months for small health plans) following its adoption;
for modifications, as the Secretary determines appropriate, but no
earlier than 180 days after the modification is adopted.
---------------------------------------------------------------------------
\1\ Defined at 45 CFR 162.103.
---------------------------------------------------------------------------
Sections 1176 and 1177 of the Act establish civil money penalties
(CMPs) and criminal penalties to which covered entities may be subject
for violations of HIPAA Administrative Simplification rules. HHS
administers the CMPs under section 1176 of the Act and the U.S.
Department of Justice administers the criminal penalties under section
1177 of the Act. Section 1176(b) of the Act sets out limitations on the
Secretary's authority and provides the Secretary certain discretion
with respect to imposing CMPs. For example, this section provides that
no CMPs may be imposed with respect to an act if a penalty has been
imposed under section 1177 of the Act with respect to such act. This
section also generally precludes the Secretary from imposing a CMP for
a violation corrected during the 30-day period beginning when an
individual knew or, by exercising reasonable diligence, would have
known that the failure to comply occurred.
The original HIPAA provisions are discussed in greater detail in
the August 17, 2000 final rule titled ``Health
[[Page 78440]]
Insurance Reform: Standards for Electronic Transactions'' final rule
(65 FR 50312, hereinafter referred to as the Transactions and Code Sets
final rule), and the December 28, 2000, final rule titled ``Standards
for Privacy of Individually Identifiable Health Information'' (65 FR
82462). We refer the reader to those documents for further information.
2. Amendments to HIPAA Administrative Simplification by the Affordable
Care Act
Section 1104(c)(3) of the Affordable Care Act reiterated the
original HIPAA requirement to adopt a health claims attachment
standard, and directed the Secretary to promulgate a final rule to
establish a transaction standard and a single set of associated
operating rules. Section 1104(c)(3) of the Affordable Care Act requires
that the adopted standard be ``consistent with the X12 Version 5010
transaction standards'' and indicates that the Secretary must adopt the
standard and operating rules by January 1, 2014, to be effective no
later than January 1, 2016, and that the Secretary may adopt the
standard and operating rules on an interim final basis. This provision
makes no allowance for an extended time for small health plans to
achieve compliance.
B. Prior Rulemaking
In the Transactions and Code Sets final rule, we implemented some
of the HIPAA Administrative Simplification requirements by adopting
standards for electronic health care transactions developed by SSOs,
and medical code sets to be used in those transactions. We adopted X12
Version 4010 standards for administrative transactions, and the
National Council for Prescription Drug Programs (NCPDP)
Telecommunication Version 5.1 standard for retail pharmacy
transactions, which were specified at 45 CFR part 162, subparts K
through R.
Since then, we have adopted a number of modifications to the HIPAA
standards, most recently in a January 16, 2009 final rule (74 FR 3296)
titled ``Health Insurance Reform; Modifications to the Health Insurance
Portability and Accountability Act (HIPAA) Electronic Transaction
Standards'' (hereinafter referred to as the Modifications final rule).
That rule, among other things, adopted updated versions of the
standards, X12 Version 5010, and the NCPDP Telecommunication Standard
Implementation Guide Version D.0 and equivalent Batch Standard
Implementation Guide, Version 1, Release 2. We also adopted the NCPDP
Implementation Guide for Batch Standard Version 3.0 standard for the
Medicaid pharmacy subrogation transaction. Covered entities were
required to comply with the Version 5010, Version D.0, and Version 3.0
standards on January 1, 2012, though with respect to the latter, small
health plans were required to comply on January 1, 2013.
In the September 23, 2005 Federal Register (70 FR 55990), in a rule
titled ``HIPAA Administrative Simplification: Standards for Electronic
Health Care Claims Attachments; Proposed Rule,'' we proposed to adopt
certain standards with respect to health care attachments. In that
rule, rather than a standard with generalized applicability, we
proposed to adopt health care claims attachment standards with respect
to specific service areas that included ambulance services, clinical
reports, emergency department, laboratory results, medications, and
rehabilitation services. Due, however, to comments we received on our
proposals, including comments related to the standards' lack of
technical maturity and stakeholders' lack of readiness to implement
electronic capture of clinical data, we did not finalize that rule. As
a result, and despite the subsequent widespread deployment of
electronic health records (EHRs) and greater industry experience with
the HIPAA standards, transmitting health care attachments is still
primarily a manual process and, at this time there are no adopted HIPAA
standards, implementation guides, or operating rules for health care
attachments or electronic signatures. Other specific details of prior
rulemaking are discussed as appropriate in the context of the proposals
in section II. of this proposed rule.
C. Standards and Code Sets Organizations
In this section, we discuss information about the organizations
responsible for developing and maintaining the transaction standards
and code sets that we are either proposing or discussing in this
proposed rule. Information about each organization's balloting
process--the process by which they vet and approve the products they
develop and changes thereto--is available on their respective websites,
links to which are provided in this section of this rule.
As we have discussed, the law requires any standard adopted under
HIPAA to be developed, adopted, or modified by an SSO. Section 1171 of
the Act provides that an SSO is an organization accredited by the
American National Standards Institute (ANSI) that develops standards
for information transactions, data elements, or any standard that is
necessary to, or will facilitate the implementation of, Administrative
Simplification. Per section 1172(c)(3) of the Act, a HIPAA SSO must
develop, adopt, and modify standards in consultation with certain
organizations--the National Uniform Billing Committee (NUBC), the
National Uniform Claim Committee (NUCC), the Workgroup for Electronic
Data Interchange (WEDI), and the American Dental Association (ADA). The
two SSOs applicable to this proposed rule are the Accredited Standards
Committee X12 (X12) and Health Level Seven International (HL7). Both
SSOs maintain websites where the proposed implementation specifications
may be obtained. One other organization, which is a health research
institution and not an SSO, maintains a code set that is important to
this rulemaking--the Regenstrief Institute, maintains a code set named
Logical Observation Identifiers Names and Codes (LOINC).
1. X12 (https://www.x12.org/)
X12 develops and maintains standards for the electronic exchange of
business-to-business transactions. An ANSI-accredited organization, X12
membership is open to all individuals and organizations. An X12
subcommittee known as Subcommittee N: Insurance (X12N) develops and
maintains electronic standards specific to the insurance industry,
including health care insurance. The subcommittee, which is comprised
of volunteers, develops standards for electronic health care
transactions for common administrative activities including: claims,
remittance advice, claims status, enrollment, eligibility,
authorizations and referrals, and electronic health care claims
attachments. The X12N subcommittee is responsible for obtaining
consensus on the standards from the entire organization, and produces
draft documents that are made available for public review and comment,
which the subcommittee addresses as necessary before voting on any
proposal. Proposals must then be reviewed and ratified by a majority of
the voting members of the X12N subcommittee and the executive committee
of X12 itself.
2. Health Level Seven (HL7) (www.HL7.org)
HL7 is an ANSI-accredited SSO that develops and maintains standards
for the exchange, integration, sharing, and retrieval of electronic
health information that supports clinical practice and the management,
delivery and evaluation of health services. Its
[[Page 78441]]
domain is principally clinical data and its specific emphasis is on the
interoperability between health care information systems. HL7, whose
membership is open to all individuals and organizations, focuses its
interface requirements on the entire health care organization rather
than on a particular subset of the health care industry.
HL7 conducts a three-step process to establish standards. First, a
technical committee develops standards through a voting process. All
HL7 members are eligible to vote on standards, regardless of whether
they are members of the committee that developed the standard. Non-
members may also vote on a given ballot for a standard, though they
must pay an administrative fee (that does not exceed the cost
associated with an individual HL7 membership) associated with handling
and processing. Second, HL7 technical committees vote on
``recommendations,'' which require a two-thirds majority for approval.
Third, any recommended standards are submitted to the entire HL7 body
for approval and, if approved, are submitted to ANSI for certification.
3. Regenstrief Institute (LOINC.org)
Regenstrief Institute (Regenstrief) is a health research
institution that develops and maintains a proprietary code set, Logical
Observation Identifiers Names and Codes (LOINC). LOINC is the code
system, terminology, and vocabulary for identifying individual clinical
results and other clinical information. Regenstrief worked closely with
the HL7 Payer/Provider Information Exchange Workgroup, formerly known
as the Attachments Work Group, to develop a set of LOINC codes to
uniquely indicate the type and content of attachment information in
electronic transmissions. Regenstrief maintains LOINC through its LOINC
Committee, which is comprised of volunteer representatives from
academia, industry, and government who serve as subject matter experts
in their domains of expertise. That committee establishes overall
naming conventions and policies for the development process.
D. Industry Standards, Code Sets, and Implementation Guides
1. Electronic Data Interchange (EDI) and Transaction Standards
HIPAA transactions involve the electronic transmission of
information between two parties to carry out health care-related
financial or administrative activities, such as health insurance claims
submissions and prior authorization requests, and HHS-adopted standards
for those transactions represent uniform requirements for EDI of those
transmissions.
The benefit of HIPAA standards is that they use a common
interchange structure, eliminating covered entities' need to have
information technology (IT) systems that accommodate multiple
proprietary, and potentially continually changing, data formats. By
enabling covered entities to exchange medical, billing, and other
information to process transactions in a more expedient and cost-
effective manner by reducing handling and processing time and
eliminating the risk of lost paper documents, HIPAA standards can
reduce administrative burdens, lower operating costs, and improve
overall data quality.
HIPAA transaction standards specify: (1) data interchange
structures (message transmission formats); and (2) data content (all
the data elements and code sets inherent to a transaction, and not
related to the format of the transaction). Implementation
specifications detail the nature, location, and content format of each
piece of information transmitted in a transaction. Standardization of
transactions also involves: specification of the data elements that are
exchanged; uniform definitions of those specific data elements in each
type of electronic transaction; identification of the specific codes or
values that are valid for each data element; and specification of the
business actions each party must take to ensure the exchange of
administrative transactions occurs smoothly and reliably, regardless of
the technology employed.
a. Implementation Guides--X12
As discussed previously, X12 develops and maintains standards for
the electronic exchange of business-to-business transactions. The X12N
subcommittee (X12N) publishes transmission standards that apply to many
lines of business, not just health care. For example, the X12N 820
message format for premium payment may be used for automobile and
casualty insurance, not just health insurance. X12 implementation
specifications, referred to by the industry as ``implementation
guides'' and written collaboratively by X12N workgroups, make these
general standards functional for industry-specific uses. The
specifications are based on X12 standards but contain detailed
instructions for using the standard to meet a specific business need.
X12's implementation specifications for HIPAA transaction standards
adopted by the Secretary are known as ``Technical Reports Type 3''
(TR3); an example is the X12 standard adopted as the HIPAA standard for
the health plan premium payments transaction, the ASC X12 Standards for
Electronic Data Interchange Technical Report Type 3--Payroll Deducted
and Other Group Premium Payment for Insurance Products (820), February
2007, ASC X12N/005010X218).
Each X12N implementation guide has a unique version identification
number (for example, 004010, 004050, or 005010), where the highest
version number represents the most recent version. HHS adopted updated
versions of the X12 standards in the Modifications final rule (74 FR
3296). We are proposing to adopt a Version 6020 standard for one of the
HIPAA transactions, the rationale for which we discuss in section II.
of this proposed rule.
b. Implementation Guides--HL7
HL7's Payer/Provider Information Exchange Workgroup develops
standards for electronic health care attachments. The workgroup, which
includes industry experts representing health care providers, health
plans, and health technology vendors, is also responsible for creating
and maintaining the implementation guides, which are sets of
instructions and associated code tables that describe, list, or itemize
the content, format, and code to be sent, and specify how such
information is to be conveyed in an electronic health care attachment.
An HL7 standard that we are proposing to adopt in this proposed
rule is the Clinical Document Architecture (CDA), which is an XML-based
(a computer programming language) markup standard that specifies the
encoding, structure, and semantics of clinical documents for purposes
of transmitting attachment information. XML-coded files have the same
characteristics and information as hard copy documents, so regardless
of how data are sent within a transaction, they can be read and
processed by both people and machines. Some health care attachments may
not be conducive to XML formatting, such as medical imaging, video, or
audio files. An important CDA feature is that it allows the entire body
of an electronic document to be replaced by an image, for example, a
scanned copy of a page or pages from a medical record. Although a
header still supports automated document management, the clinical
content can be conveyed by image or text document.
HL7 also produces the Consolidated CDA (C-CDA), an implementation
guide that provides specifications for formatting document templates,
[[Page 78442]]
depending on whether they are structured or unstructured, enabling the
CDA to create numerous specific document types (templates). The HL7 C-
CDA implementation guide document templates are designed to be
electronic versions of the most common types of paper document
attachment information. Attachment information not included in a
template may be created by using instructions included in the proposed
unstructured document implementation guide; supported unstructured
formats include MSWORD, PDF, Plain Text, RTF Text, HTML Text, GIF
Image, TIF Image, JPEG Image, and PNG Image.
2. Code Sets
Transaction data content standardization involves identifying the
specific codes or values for each data element. Health care EDI
requires many types of code sets, including large medical data code
sets and classification systems for medical diagnoses, procedures, and
drugs, and smaller code sets to identify categories, such as type of
facility, currency, or units, or a specific state within the United
States. The American Medical Association's (AMA) Current Procedural
Terminology (CPT-4), which identifies physician procedures, is an
example of a health care code set. Federal agencies (the National
Center for Health Statistics, the Centers for Medicare & Medicaid
Services (CMS), and the U.S. Food and Drug Administration) and some
private organizations (the AMA and the American Dental Association)
have developed and maintain standards for large medical data code sets.
These code sets are mandated for use in some federal and state
programs, such as Medicare and Medicaid, and SSOs require or permit
them for use in their standards. As we explain in section II. of this
proposed rule, the X12 and HL7 standards we are proposing to adopt
specify the use of the LOINC for HIPAA Attachments code set.
3. Implementation Guides as HIPAA Standards
Section 1172(d) of the Act directs the Secretary to establish
specifications for implementing each of the adopted standards. As we
explained previously, SSOs have developed various ``Implementation
Guides'' by which to implement the same standards for different
business purposes. We are proposing an approach we have taken with
previous HIPAA rules that adopted a specific ``Implementation Guide''
as both the ``standard'' and the ``implementation specifications'' for
each health care transaction.
In pursuing this approach, we were mindful that section 1104(c)(3)
of the Affordable Care Act requires that the Secretary promulgate a
final rule to establish a transaction standard and a single set of
operating rules for health care attachments that is ``consistent with
the X12 Version 5010 transaction standards.'' We interpret this
requirement to mean that the proposed health care attachment
implementation specifications must be compatible with X12 standards
generally, meaning any standard we adopt for attachment information can
be electronically transmitted by an X12 transmission standard in the
same transaction. In this rule, we are proposing to adopt Version 6020
of the X12 standards. The Affordable Care Act was enacted in 2010, at
which time we had recently adopted Version 5010 of the X12 standards. A
decade later, and with X12 continuing to publish newer versions of its
standards, we interpret the Affordable Care Act's mandate as
referencing the then-current standards (the X12 Version 5010), but the
Affordable Care Act did not specifically require a static standard in
perpetuity, as that would be incongruent with the HIPAA standards
paradigm.
In section II. of this proposed rule, we are proposing to adopt
transaction standards that can be used together in a single electronic
transmission. HL7 has noted that an extensive architecture already
exists for information exchange based on the HIPAA transactions and
code sets, which architecture is currently being used by the same
stakeholders who would use the health care attachments transactions, so
adoption of this architecture using X12 standards could have the least
impact on covered entities.\2\
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\2\ Transcript of NCVHS Subcommittee on Standards Hearing on
Electronic Attachments Standards and Operating Rules, February 27,
2013: https://ncvhs.hhs.gov/transcripts-minutes/transcript-of-the-february-27-2013-ncvhs-subcommittee-on-standards-hearing/.
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Independent of that concept, we are also aware that there are other
types of standards being developed and piloted by SSOs. We solicit
comment on this discussion and any alternative implementation
specifications that may be considered consistent with X12 Version 5010.
E. NCVHS Recommendations to the Secretary
The NCVHS (https://ncvhs.hhs.gov/) is a statutory advisory
committee responsible for providing HHS with recommendations on health
information policy and standards. It does so by, among other things,
convening regular forums for interaction with industry groups on key
issues related to population health, standards, privacy and
confidentiality, and data access and use. Pursuant to HIPAA, the NCVHS
advises HHS on the adoption of standards, implementation
specifications, code sets, identifiers, and operating rules for HIPAA
transactions.
The NCVHS has held a number of hearings, and made several sets of
recommendations to the Secretary (see https://ncvhs.hhs.gov/reports/recommendation-letters/) on claims attachments standards; we briefly
summarize them here. The NCVHS Standards Subcommittee held a November
17, 2011 hearing on health claims attachments to gather information
regarding updated industry practices, priorities, issues, and
challenges. Participant testimony addressed the development status of
standards and implementation specifications. Some organizations
testified regarding their interest in serving as attachments operating
rules authoring entities. By letter to HHS dated March 2, 2012, the
Subcommittee told HHS it was premature to make formal recommendations
regarding the adoption of any standard, implementation specification,
or operating rule associated with health care attachments. On May 5,
2012, the NCVHS recommended that the Council for Affordable Quality
Healthcare Committee (CAQH), a non-profit entity whose mission is to
improve the efficiency, accuracy and effectiveness of industry-driven
business transactions, be designated as the operating rules authoring
entity.
CAQH established the Committee on Operating Rules for Information
Exchange (CAQH CORE), an industry-wide collaboration committed to the
development and adoption of health care operating rules for
administrative transactions. CAQH CORE facilitates the adoption of
health care operating rules that support standards, improve
interoperability, and align administrative and clinical activities with
market needs.
The Subcommittee held a second hearing on attachments on February
27, 2013, where it identified a trend toward convergence of
administrative and clinical information. In a June 21, 2013 letter, the
NCVHS recommended that, by January 1, 2016 (the date by which the
Affordable Care Act required claims attachment standards to be
effective), HHS adopt a number of initial attachments-related
transaction standards, but advised HHS to take a comprehensive and
incremental approach to considering attachment
[[Page 78443]]
standards in order to promote innovation and flexibility. The NCVHS
noted an industry consensus that adoption of standards should not be
limited to ``claim attachments,'' but, rather, should be more inclusive
of any kind of attachment with administrative or clinical information,
and it recommended that attachments-related transaction standards
should be applied to claims, eligibility, prior authorization,
referrals, care management, post-payment audits, and any other
administrative processes for which supplemental information is needed.
Among other recommendations, the NCVHS advised HHS that attachment
standards should support structured and unstructured data, and both
solicited and unsolicited transmissions. It further advised that
attachments standards should be defined for two types of transactions:
(1) Query (the electronic solicitation of an attachment); and (2)
Response (the electronic transmission of an attachment).
The NCVHS held another hearing on health care attachments on
February 15, 2016, and on July 5, 2016 sent the Secretary a letter
titled ``Recommendations for the Electronic Health Care Attachment
Standard.'' This letter consolidated its previous recommendations on
attachments and advised that updated versions of the available
standards were ready for industry use and there was unanimous testimony
that the health care industry was eager to see them adopted.
Considering both the length of time that had elapsed since the previous
proposed rule was published and the subsequent technology advances, the
NCVHS recommended that HHS publish an expedited proposed rule adopting
the recommended standards.
Finally, and most recently, on March 30, 2022, the NCVHS sent to
the Secretary a letter titled ``Recommendations to Modernize Aspects of
HIPAA and Other HIT Standards to Improve Patient Care and Achieve
Burden Reduction.'' This letter continued to stress previous
recommendations that urged the Secretary to adopt a standard for
electronic attachments as soon as possible. The recommendation letter
also states the following:
We recognize that there is ongoing debate and no definitive
industry consensus about the role of attachments (i.e., documents)
as opposed to data (i.e., a string of data elements not structured
within a document). While the vision with APIs [(Application
Programming Interfaces)] based on FHIR[supreg] [(Fast Healthcare
Interoperability Resources)] seems to be driving toward more of a
data-driven transaction, we see more than sufficient industry demand
for a document-based attachment standard, and we do not foresee any
imminent demise of the utility of digital documents. We suggest
short-term publication of an attachment rule, with consideration for
emerging standards based on recent input from industry and other
advisory group discussions. This could add immediate value for
industry and could support future actions as HIPAA's procedural
requirements may be updated to allow for non-document type digital
attachment data.\3\
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\3\ ``Recommendations to Modernize Aspects of HIPAA and Other
HIT Standards to Improve Patient Care and Achieve Burden
Reduction,'' available at https://ncvhs.hhs.gov/wp-content/uploads/2022/04/Recommendation-Letter-HIT-Standards-Modernization-to-Improve-Patient-Care-March-30-2022.pdf (March 2022)
Based on the NCVHS's previous recommendations to the Secretary, and
particularly in consideration of its most recent March 30, 2022
recommendation, we propose here a document-based attachments standard.
We acknowledge that there is a growing base of evidence that may, in
the future, support our proposing attachment standards relying on other
technologies such as FHIR[supreg], and we will continue to monitor and
evaluate emerging technologies for their readiness to potentially
propose in future rulemaking.
F. Other Industry Recommendations
1. Consensus-Based Organization Support
Industry consensus-based organizations have demonstrated the
maturity of the NCVHS-recommended standards to support health care
business needs and described the opportunities inherent in the adoption
of health care attachments standards to integrate administrative and
clinical data, such as in automating and streamlining workflows that,
today, are primarily manual processes and sources of significant
administrative burden.
WEDI (https://www.wedi.org/) is a public-private coalition formed
by HHS in 1991 to serve as an advisory body on the use of health IT
aimed at health care information exchange. WEDI, which section
1172(c)(3) of the Act identifies as an entity required to be consulted
with respect to standards adoption, published a November 2017 white
paper, in concert with X12 and HL7.\4\ That white paper, described by
WEDI as ``a single resource document for implementers to use to help
them get started in their implementation planning for the request and
receipt of electronic attachments,'' details the business and
operational processes of exchanging additional information
(attachments) using the HL7 standards for clinical information and the
X12 transaction sets for requesting and transmitting the additional
information. Its contents, which we have taken into account in this
proposed rule, include all of the following:
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\4\ ``Guidance on Implementation of Standard Electronic
Attachments for Healthcare Transactions,'' available at https://www.wedi.org/2017/11/17/guidance-on-implementation-of-standard-electronic-attachments-for-healthcare-transactions/ (November 2017).
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An overview of attachments.
A discussion of resources needed to have a successful
implementation of attachments standards.
A review of current processes for requesting and
responding to the need for attachment information.
Examples of implementation approaches in the industry.
A review of Electronic Attachment Business flows for
Claims, Prior Authorizations and Notification.
Business use cases and examples.
Guidance on how to embed additional information within the
applicable X12N transaction.
In May 2019, CAQH CORE issued a document titled ``Report on
Attachments: A Bridge to a Fully Automated Future to Share Medical
Documentation,'' \5\ where it reported evidence from its 2018
environmental scan indicating a high degree of industry readiness and
interest in the attachments standard. The report noted that ``the
healthcare industry continues to wait for an electronic attachments
standard that can simplify the exchange of necessary medical
information and supplemental documentation'' and that ``health plans,
providers and vendors lack the direction needed to support broad use of
automation in the attachment workflow, or for industry to coalesce
around the use of even a small number of electronic solutions,''
leading to largely manual, and often paper-based, processes, and
ultimately underscoring the need to standardize electronic attachment
exchange methods.
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\5\ ``CAQH CORE Report on Attachments: A Bridge to a Fully
Automated Future to Share Medical Documentation,'' available at
https://www.caqh.org/sites/default/files/core/core-attachments-environmental-scan-report.pdf (April 23, 2021).
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Shortly after, in July 2019, CAQH CORE released another report
titled ``Moving Forward: Building Momentum for End-to-End Automation of
the Prior Authorization Process.'' \6\ There, CAQH CORE reported how,
for even the HHS-adopted prior authorization transaction standards,
health care industry uptake
[[Page 78444]]
lagged that of other transaction standards, and remained largely paper-
based, due in large measure to a lack of infrastructure supporting
electronic transmission of attachments that frequently serve as
necessary supporting documentation in the prior authorization
transaction.
---------------------------------------------------------------------------
\6\ ``Moving Forward: Building Momentum for End-to-End
Automation of the Prior Authorization Process,'' available at
https://www.caqh.org/sites/default/files/core/white-paper/CAQH-CORE-Automating-Prior-Authorization.pdf (April 23, 2021).
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2. Other Recent Public Comment Support
On June 11, 2019, CMS published a request for information (RFI) in
the Federal Register titled ``Reducing Administrative Burden To Put
Patients Over Paperwork'' (84 FR 27070). Particularly with respect to
prior authorization, that RFI solicited public comment on ideas for
regulatory, subregulatory, policy, practice, and procedural changes to
reduce unnecessary administrative burdens for clinicians, providers,
patients, and their families, with an aim to improve quality of care,
lower costs, improve program integrity, and make the health care system
more effective, simple, and accessible. To be clear, the RFI did not
relate to, and was not for the purpose of, soliciting comments on HHS's
efforts pertaining to HIPAA Administrative Simplification, but,
nevertheless, many commenters, including organizations representing
physician provider groups, insurance payers, health technology vendors,
health care financial managers, and HIT standard advisory bodies,
called for the release of an electronic attachments proposed rule to be
accelerated, as well as guidance on other standards such as electronic
signature protocols to achieve these goals. These commenters indicated
that a HIPAA attachments transaction standard regulation could help
reduce administrative burden in many clinical and administrative
situations where documents need to be shared, and relieve providers of
current burdensome, largely paper-based, processes.
In preparation for its August 25, 2020 Standards Committee Meeting,
the NCVHS invited the public to provide feedback on the CAQH CORE
operating rules for prior authorization transactions.\7\ Commenters
expressed their support for an attachments transaction standard
regulation. In addition, commenters provided input on current standards
development efforts underway to address prior authorization challenges,
including recommendations for the Secretary to explore or allow the use
of other standards or alternative approaches.
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\7\ https://ncvhs.hhs.gov/wp-content/uploads/2020/10/Public-Comments-CAQH-CORE-Operating-Rules-for-Federal-Adoption-August-2020r.pdf
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We solicit comments on other standards or alternative approaches in
development, for example the use of FHIR Clinical Data Exchange (CDex)
as discussed in an NCVHS recommendation letter,\8\ including how they
may be considered ``consistent with the X12 Version 5010 transaction
standards.''
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\8\ https://ncvhs.hhs.gov/wp-content/uploads/2022/04/Recommendation-Letter-HIT-Standards-Modernization-to-Improve-Patient-Care-March-30-2022.pdf.
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III. Provisions of the Proposed Rule
A. Overview
This rule proposes to adopt new standards and modify a currently
adopted standard which we believe would meet a health care business
need to integrate administrative and clinical data. These proposed
actions would facilitate streamlined prior authorization processes that
would help minimize clinical response times, reduce potential barriers
to the transition to value-based payments, and significantly reduce
administrative burden on provider and health plan organizations.\9\
Consistent with NCVHS recommendations and collaborative industry
organizations and stakeholders' input, we believe these industry
consensus-based standards are sufficiently mature for adoption and that
covered entities are ready to implement them.
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\9\ CAQH CORE Report on Attachments: ``A Bridge to a Fully
Automated Future to Share Medical Documentation'', CAQH CORE, May 9,
2019: https://www.caqh.org/about/press-release/caqh-core-study-reveals-five-opportunities-increase-electronic-exchange-medical.
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Nearly every health plan has various requirements for health care
providers to sometimes submit additional information beyond that
contained in a HIPAA transaction. These requirements may be
communicated to providers via contracts, manuals, or online databases
of payment rules. This additional information may enable a health plan
to make an administrative decision regarding whether a particular
service is ''covered,'' or about the medical necessity of a service a
provider has rendered or intends to render, or for other purposes. The
information a health plan requires may, for example, include medical
documentation to support health care claims payment, referral
authorizations, enrollee eligibility inquiries, coordination of
benefits, workers' compensation claims, post-payment claims auditing,
and provider dispute resolution.\10\
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\10\ Letter from NCVHS to the Secretary of HHS, March 2, 2012:
https://ncvhs.hhs.gov/wp-content/uploads/2014/05/120302lt1.pdf.
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A health care provider may transmit attachment information either
in response to a health plan's specific request for the information
(solicited), or, in certain situations, in the absence of a specific
request (unsolicited). A ``solicited'' attachment transmission occurs
where a health care provider transmits an attachment pursuant to a
health plan's specific electronic request for attachment information.
Conversely, a health care provider's transmitting to a health plan
electronic attachment in the absence of a health plan's specific
electronic request is known as an ``unsolicited'' transmission, and
usually occurs pursuant to pre-established requirements for attachment
information set forth in trading partner agreements or other guidance
that specifies when additional information must be submitted to support
certain diagnoses, items, services, or medications.
Although providers may transmit this additional information
electronically via an attachment to a transaction, currently providers
frequently transmit via manual processes that often involve paper mail,
fax, and phone because there are no adopted HIPAA standards for health
care attachments.
We are proposing standards herein to address these issues; in doing
so, we need to define the term ``attachment information.''
B. Proposed Definition of Attachment Information
We propose to define ``attachment information'' at Sec. 162.103 as
documentation that enables the health plan to make a decision about
health care that is not included in either of the following:
A health care claims or equivalent encounter information
transaction, as described in Sec. 162.1101.
A referral certification and authorization transaction, as
described in Sec. 162.1301(a) and the portion of Sec. 162.1301(c)
that pertains to authorization.
We use the term ``attachment information'' in our proposed
definition of the health care attachments transaction at Sec. 162.2001
to specify the information transmitted by a health care provider or
requested by a health plan. We are proposing to separately define
``attachment information'' to prevent the transaction definition at
Sec. 162.2001 from becoming too unwieldy.
[[Page 78445]]
The NCVHS recommended defining attachments as ``any supplemental
documentation needed about a patient(s) to support a specific health
care-related event (such as a claim, prior authorization, or referral)
using a standardized format,'' and we have incorporated key aspects of
their recommendation into our proposed definition of attachment
information.\11\ We have attempted to ensure that our proposed
definition is broad and general enough to include all possible patient-
related information that could be generated with respect to health care
services, and have done this in several ways.
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\11\ NCVHS Letter to the Secretary of HHS on Recommendations for
the Electronic Health Care Attachment Standard, July 5, 2016:
https://ncvhs.hhs.gov/wp-content/uploads/2018/03/2016-Ltr-Attachments-July-1-Final-Chair-CLEAN-for-Submission-Publication.pdf.
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Documentation: First, we believe the word ``documentation,'' which
the NCVHS recommended and that we include in our proposed definition,
is adequately broad to indicate the wide scope of information the
definition should cover.
Supplemental: Second, the NCVHS recommended the definition specify
that the documentation be ``supplemental.'' In and of themselves, the
health care claims and prior authorizations transactions, which the
proposed health care attachments transactions would support, do not
provide the documentation that would be furnished by a health care
attachments transaction. To express that the documentation would be
supplemental, our proposed definition indicates that we are referring
to documentation ``that is not included'' in a health care claims
transaction or prior authorization transaction, and we include specific
references to the regulatory provisions defining the health care claims
and prior authorization transactions. Should we propose to adopt health
care attachments transaction standards to support additional
transactions, we would likely propose to broaden our definition of
attachment information to include regulatory references to them.
Needed: Third, the NCVHS recommended that the definition specify
the supplemental documentation should be ``needed'' by a health plan to
enable it to decide whether to pay a claim or authorize the provision
of health care; our proposed definition accounts for this with the
language ``enables the health plan to make a decision about health
care.''
C. Proposed Code Set, Transaction Definitions, and Standards
We are proposing to adopt certain industry consensus standards
that, when used together, provide the functionality necessary for the
transmission of electronic health care attachment information.\12\ In
this section, we describe proposed new requirements for: (1) a code set
to be used for health care attachments transactions; (2) X12 standards
for requesting and transmitting attachment information and HL7
standards for clinical information content; and (3) electronic
signatures standards.
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\12\ For additional information about the business and
operational processes involved in the exchange of these standards,
we refer readers to the aforementioned November 2017 WEDI whitepaper
and the HL7 CDA[supreg] R2 Attachment Implementation Guide: Exchange
of C-CDA Based Documents, Release 1 Release 1 (Universal Realm) for
more technical information. Both are available at: https://www.hl7.org/implement/standards/product_brief.cfm?product_id=464.
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1. Code Set (LOINC for HIPAA Attachments)
Health plans and health care providers must have a clear and
unambiguous way to specify attachment information--for example, a
discharge summary, surgical operation note, or cardiovascular disease
consult note--to be transmitted or requested in a health care
attachments transaction.
The LOINC code set was developed for the following three principal
purposes:
To identify the specific kind of information that a health
plan electronically requests of a health care provider and a health
care provider electronically transmits to a health plan; for example, a
discharge summary or a diagnostic imaging report.
To specify certain optional modifier variables for
attachment information, such as, for example, a time period for which
the attachment information is requested.
For structured attachment information, to identify
specific HL7 Implementation Guide: LOINC Document Ontology document
templates.
This rule proposes numerous implementation specifications
containing specific instructions for how to utilize the LOINC for HIPAA
Attachments with respect to those three purposes. Where an
implementation specification requires the use of LOINC, it instructs
users to utilize the codes valid at the time a transaction is
initiated, similar to how other nonmedical data codes sets in HIPAA
implementation specifications are treated. Regenstrief's website
maintains online tools to help users search the LOINC database for
specific LOINC codes or map local terms to LOINC codes (https://loinc.org/attachments). To improve ease of use, Regenstrief released
and enhanced the search functionality to the SearchLoinc tool (https://loinc.org/search-app/). In addition, Regenstrief offers the LOINC
Attachments Knowledge Base (https://loinc.org/attachments) to help
users better find and utilize LOINC codes and resources such as
mapping. Regenstrief maintains a twice-yearly release cycle, and
covered entities would be expected to utilize the LOINC for Attachments
codes, as specified by the relevant implementation specification. In
our discussion of each implementation specification, we describe in
more detail how each uses LOINC.
2. Electronic Health Care Attachments Transactions
In this section, we propose to adopt standards for requesting and
transmitting attachment information (as we have proposed to define that
term in Sec. 162.103). We are proposing to adopt X12 standards with
respect to the transmission of attachment information and HL7 standards
with respect to the clinical content of attachments. Specifically, as
detailed in the sections that follow, we are proposing to adopt three
X12N Technical Report Type 3 (TR3) implementation specifications for
requesting and transmitting attachment information, and three HL7
implementation guides for the clinical information embedded in those
transactions. While CAQH CORE has developed operating rules for
attachments, the NCVHS has yet to evaluate them and make a
recommendation to the Secretary. Should the NCVHS recommend that the
Secretary adopt those operating rules, we will consider adopting them.
a. Scope of Health Care Attachments Transactions
Section 1173(a) of the Act requires the Secretary to adopt
standards for ``Health claims attachments,'' and section 1104(c)(3) of
the Affordable Care Act reiterated that requirement, directing the
Secretary to promulgate a final rule to adopt a transaction standard
and a single set of associated operating rules. The attachments
standards we are proposing satisfy the requirement to adopt a standard
to support health care claims, but they also support prior
authorization transactions. Hereafter we refer to ``health care
attachments'' to refer to attachments for claims as well as prior
authorization transactions
[[Page 78446]]
instead of ``health claims attachments,'' which only includes the
former.
Historically, the referral certification and authorization
transaction has had among the lowest implementation rates of all the
HIPAA transactions, likely attributable to the fact that we have not
yet adopted standards for attachments. In a 2016 report, the CAQH CORE
Index \13\ noted that the uptake rate for such transactions being
conducted fully electronically was only 18 percent, even 5 years after
the adoption of Version 5010 of the X12 278 standard. The report also
indicated that more than 50 percent of prior authorization transactions
were conducted through proprietary web portals and automated phone
calls as a means to conform to business processes due to the lack of an
adopted health care attachments standard. Four years later, the 2020
CAQH Index reported only limited progress, with the uptake rate having
increased to only 21 percent. As we have discussed, health plans
frequently require attachment information before approving requests for
prior authorization for health care services. Although section
1173(a)(1)(A) of the Act does not specifically require the Secretary to
adopt attachments standards with respect to prior authorization
transactions, section 1173(a)(1)(B) of the Act requires the Secretary
to adopt standards for other appropriate financial and administrative
transactions, consistent with the goals of improving the operation of
the health care system and reducing administrative costs.
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\13\ CAQH CORE ``2016 CAQH INDEX[supreg] A Report of Healthcare
Industry Adoption of Electronic Business Transactions and Cost
Savings'' https://www.caqh.org/sites/default/files/explorations/index/2016-caqh-index-report.pdf?token=qV_hI4H5.
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However, we are not proposing to adopt attachments standards for
all health care transaction business needs. Not only would it be
challenging to identify standard specifications and appropriate codes
for the full array of different health care attachment types used
today, but we also believe it is important that covered entities should
consider gaining experience with a limited number of standard
electronic attachment types so that technical and business issues can
be identified to inform potential future rulemaking for other
electronic attachments standards.
We request comment on alternative standards and approaches that can
address the challenges described previously.
b. Proposed Definition of the Health Care Attachments Transaction
We are proposing to add a new Subpart T to 45 CFR part 162--Health
Care Attachments. In Subpart T, in new Sec. 162.2001, we are proposing
to specify the electronic health care attachments transaction;
specifically, we are proposing that any of three different types of
transmissions would constitute a health care attachments transaction.
For each type of transmission, we specify the entity type from which
the transaction is being transmitted and to which it is being sent, the
type of information being transmitted, and the purpose for the
transaction. We note that the overarching purpose for all three types
of transactions--to enable a health plan to make a decision about
health care--is incorporated into the definition of attachment
information, while for the two transmission types in Sec. 162.2001(a),
and as discussed later in this section, we further specify the purpose.
We are proposing the following three types of transmissions:
In Sec. 162.2001(a)(1) and (a)(2), a health care
attachments transaction is either of two different types of
transmissions, both of which are sent from a health care provider to a
health plan and where the type of information being transmitted in both
is attachment information.
In Sec. 162.2001(b), a health care attachments
transaction is one type of transmission that is sent from a health plan
to a health care provider, and where the type of information being
transmitted is a request for attachment information.
The purpose for the transmission described in Sec. 162.2001(a)(1)
is to support a referral certification and authorization transaction,
as described in Sec. 162.1301(a), while the purpose for the
transmission described in Sec. 162.2001(a)(2) is to support a health
care claims or equivalent encounter information transaction, as
described in 162.1101. We are also proposing to make a conforming
change to the definition of ``transaction'' in Sec. 160.103, by
replacing ``(10) Health claims attachments'' with ``(10) Health care
attachments.''
3. Proposed Adoption of Electronic Health Care Attachments Transaction
Standards
As noted earlier, the NCVHS has held a number of hearings and made
several sets of recommendations to the Secretary on attachments
standards.\14\ By letter dated July 5, 2016, the NCVHS consolidated its
earlier recommendations on attachments and advised that updated
versions of the available standards were ready for industry use, noting
that one of the most significant findings from its February 16, 2016
hearing was the general consensus across testifiers about the need for
HHS to adopt the NCVHS-recommended standards.\15\ The NCVHS noted that
it considered a number of criteria and factors in evaluating standards,
particularly whether candidates would meet the goals of administrative
simplification. Among other recommendations, the NCVHS advised that
attachments standards for queries, and both solicited and unsolicited
responses, should support structured and unstructured data. The NCVHS
concluded that its recommended standards meet the industry's business
needs, improve administrative efficiency and reduce administrative
burden, are flexible and agile to meet future technology developments
and health system changes, and are mature, adoptable, and enforceable.
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\14\ https://ncvhs.hhs.gov/reports/recommendation-letters/.
\15\ See ``Recommendations for the Electronic Health Care
Attachment Standard,'' https://ncvhs.hhs.gov/wp-content/uploads/2018/03/2016-Ltr-Attachments-July-1-Final-Chair-CLEAN-for-Submission-Publication.pdf.
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The NCVHS noted that its recommended standards represented a
collaboration between X12 and HL7, with X12 providing for existing
provider/payer EDI, and HL7 providing for the CDA. Specifically, the
NCVHS recommended that HHS adopt the following standards for
attachment-related transactions:
For requesting attachments, the following standards:
++ For claim-related attachment requests, the ASC X12N 277 Health
Care Claim Request for Additional Information.
++ For non-claim-related attachment requests, the ASC X12N 278
Health Care Service Review--Request for Review and Response--Response.
For attachment message content and format in the
transmission of attachment information, the following standards:
++ The HL7 CDA R2--Consolidated CDA Templates for Clinical Notes
R2.1.
++ The HL7 Attachment Supplement Specification Request and Response
Implementation Guide R1.
++ The Attachment Type Value Set: Logical Observation Identifier
Names and Codes (LOINC) developed and maintained by the Regenstrief
Institute, Inc.
[[Page 78447]]
++ The HL7 Implementation Guide for CDA Release 2: Additional CDA
R2 Templates--Clinical Documents for Payers--Set 1.
For the routing/envelope of attachment information, the
following standards:
++ The ASC X12N 275 Additional Information to Support a Health Care
Claim or Encounter.
++ The ASC X12N 275 Additional Information to Support a Health Care
Services Review.
The health care attachments standards we are proposing are those
recommended by the NCVHS, and discussed in its July 5, 2016 letter to
the Secretary. Also, as previously discussed, section 1104(c)(3) of the
Affordable Care Act requires that the adopted attachments standard be
``consistent with the X12 Version 5010 transaction standards,'' which
we interpret as requiring that the proposed health care attachment
implementation specifications be compatible with X12 standards
generally, meaning any standard we adopt for attachment information can
be electronically transmitted by an X12 transmission standard in the
same transaction.
While the NCVHS did not recommend specific versions of the X12N
attachments standards, we are proposing to adopt the X12N Versions 6020
for both the X12N 277 standard, that is, the X12N 277--Health Care
Claim Request for Additional Information (006020X313), as well as for
the X12N 278--Health Care Services Request for Review and Response
Version (006020X315) standard for the referral certification and
authorization transaction. We are proposing to adopt Version 6020 of
these standards because they better harmonize with the X12N 275--
Additional Information to Support a Health Care Claim or Encounter
Version (006020X314) and the X12N 275--Additional Information to
Support a Health Care Services Review Version (006020X316) standards we
are proposing to adopt for a provider to transmit attachment
information.
Although it may be possible to use different versions of the
standards for health plan requests for, and provider transmissions of,
attachment information, X12 recommended to the NCVHS that all parties
to those transactions use Version 6020 of the standards as they are
most compatible with each other.\16\
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\16\ Transcript of NCVHS Subcommittee on Standards Hearing on
Electronic Attachments Standards and Operating Rules, February 27,
2013: https://ncvhs.hhs.gov/transcripts-minutes/transcript-of-the-february-27-2013-ncvhs-subcommittee-on-standards-hearing/.
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a. Proposed Adoption of X12N Standards for Health Care Attachments
Transactions
(1) Proposed Adoption of Standards for Request From a Health Plan to a
Health Care Provider for Attachment Information
(a) X12N 277--Health Care Claim Request for Additional Information
(006020X313)
At Sec. 162.2002(e)(1), we propose to adopt the X12N 277--Health
Care Claim Request for Additional Information (006020X313) as the
standard a health plan must use to electronically request attachment
information from a health care provider to support a health care claim.
We also propose to incorporate the same by reference in Sec. 162.920.
The X12N 277 contains two noteworthy fields, which we discuss
sequentially. The first is the health plan assigned claim control
number, which allows for document reassociation. A health plan assigns
a claim control number to associate its request with a provider's
electronic health care claim. The health care provider then uses the
health plan assigned claim control number in the X12 275 standard in
the health care attachments transaction, discussed later in this
proposed rule, that it transmits to the health plan, enabling the
health plan to associate the attachment information with the previously
submitted health care claim.
The other noteworthy X12N 277 field is for LOINC for HIPAA
Attachments. The X12N 277 standard requires the use of the appropriate
LOINC for HIPAA Attachments data element to identify the specific
attachment information the health plan is requesting. The previously
referenced 2017 WEDI whitepaper illustrates how the LOINC code is used
in an X12 277 standard in the following hypothetical scenario: A
provider performs a particular surgery for which there is no HCPCS code
and sends the health plan a health care claim using a Not Otherwise
Classified (NOC) procedure code. The health plan requires additional
information about the procedure to adjudicate the claim, and sends the
health care provider an X12N 277 Health Care Claim Request for
Additional Information request using the appropriate LOINC for HIPAA
Attachments code to specify the surgical operative note it needs.\17\
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\17\ Workgroup for Electronic Data Interchange (WEDI),
``Guidance on Implementation of Standard Electronic Attachments for
Healthcare Transactions'' https://www.wedi.org/2017/11/17/guidance-on-implementation-of-standard-electronic-attachments-for-healthcare-transactions/.
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(b) X12N 278--Health Care Services Request for Review and Response
(006020X315)
At Sec. 162.2002(e)(2), we propose to adopt the X12N 278--Health
Care Services Request for Review and Response (006020X315) as the
standard a health plan must use to electronically request attachment
information from a health care provider to support a prior
authorization transaction. We also propose to incorporate the same by
reference in Sec. 162.920. The X12 278 standard is unique in that it
is also used for a health care provider's request for prior
authorization, as reflected at Sec. 162.1302(b)(2)(ii). We are
proposing to adopt Version 6020 of that standard, which would represent
a modification to the currently adopted Version 5010 of the X12N 278.
As we discussed previously, the NCVHS indicated that the updated
version, that is, Version 6020, of the X12 278 is more compatible with
the Version 6020 X12N 275 standard we are proposing for a health care
provider's transmission of an attachment information transaction to a
health plan in support of a prior authorization request. Version 6020
of the X12 278 also contains the same two noteworthy fields as the X12N
277, that is, the health plan assigned claim control number and the
field for LOINC for HIPAA Attachments. In section II.D. of this
proposed rule we discuss our proposed modification to update the
current HIPAA standard, Version 5010 of the X12 278, to Version 6020.
(2) Proposed Adoption of Standards for Response From a Health Care
Provider to a Health Plan for Attachment Information
(a) X12 275--Additional Information to Support a Health Care Claim or
Encounter (006020X314)
We propose to adopt, at Sec. 162.2002(d), the X12N 275--Additional
Information to Support a Health Care Claim or Encounter (006020X314) as
the standard a provider must use to electronically transmit attachment
information to a health plan to support a health care claims or
equivalent encounter information transaction. We also propose to
incorporate the same by reference in Sec. 162.920.
The X12N 275--Additional Information to Support a Health Care Claim
or Encounter standard may be used with respect to both solicited and
unsolicited attachment information. Using the previous example of a
surgery for which there is not a HCPCS code, in the case where a health
plan has solicited attachment information, the provider would reply to
the X12N 277
[[Page 78448]]
request from the plan using the X12N 275 to convey the operative note
as the attachment information. In the unsolicited scenario, the
provider could concurrently transmit the X12N 275--Additional
Information to Support a Health Care Claim or Encounter and a claim
using the X12N 837 to enable the health plan to make a decision about
the claim at the time of initial claim processing.
We note that the X12N 275--Additional Information to Support a
Health Care Claim or Encounter claims attachment standard, as well as
the X12N 275--Additional Information to Support a Health Care Services
Review prior authorization standard (discussed in this section of this
proposed rule), do not themselves contain claim or prior authorization
attachment information. Rather, the standards serve as the electronic
envelope for attachment information that is embedded in an HL7
standard. We describe in detail the specific HL7 standards for
embedding attachment information in this section of the proposed rule,
but the critical concept is that the health care attachment information
is transported by the X12N 275 standard.
(b) X12N 275--Additional Information To Support a Health Care Services
Review (006020X316)
We propose, at Sec. 162.2002(c), to adopt the X12N 275--Additional
Information to Support a Health Care Services Review (006020X316) as
the standard a provider must use to electronically transmit attachment
information to a health plan to support a health care provider's
request for the review of health care to obtain an authorization for
the health care; in other words, a prior authorization request. We also
propose to incorporate the same by reference in Sec. 162.920.
As we described in greater detail in our proposal to adopt the X12
275--Additional Information to Support a Health Care Claim or
Encounter, this standard also can be sent in a solicited or unsolicited
manner. Using our example of a surgery for which there is no HCPCS
code, for solicited attachment information the provider would reply to
the X12N 278 request from the health plan using the X12N 275 standard
that conveys the operative note. In the unsolicited scenario, the
provider could concurrently transmit the X12N 275 Additional
Information to Support a Health Care Services Review and a prior
authorization request using the X12N 278 to enable the health plan to
make a decision about the prior authorization without additional
requests for information.
B. Proposed Adoption of HL7 Implementation Guides for Health Care
Attachment Information
The HL7 CDA standard is the only currently available SSO-created,
NCVHS-recommended standard in the United States with published
implementation specifications designed to support the HIPAA
transactions. Other standards for the exchange of clinical information
are being developed and piloted but, due in part to its readiness, we
believe the HL7 CDA is the most appropriate standard for adoption at
this time.
We are proposing to adopt the following three HL7 implementation
guides as HIPAA standards for the attachment information included in
health care attachments transactions:
HL7 Implementation Guide for CDA Release 2: Consolidated CDA
Templates for Clinical Notes (US Realm) Draft Standard for Trial Use
Release 2.1, Volume 1--Introductory Material, June 2019 with Errata
(hereafter Volume One or C-CDA Volume One or C-CDA 2.1)
HL7 Implementation Guide for CDA Release 2: Consolidated CDA
Templates for Clinical Notes (US Realm) Draft Standard for Trial Use
Release 2.1, Volume 2--Templates and Supporting Material, June 2019
with Errata (hereafter Volume Two or C-CDA Volume Two or C-CDA 2.1)
HL7 CDA R2 Attachment Implementation Guide: Exchange of C-CDA
Based Documents, Release 1, March 2017 (hereafter the Attachment
Implementation Guide)
Generally, the Attachment Implementation Guide specifies how to
combine HL7 and X12 standards to transmit health care attachments
transactions. For example, it contains instructions with respect to how
to construct electronic health care attachments transactions, including
how to attach and send the attachment information using the proposed
X12N health care attachments standards. It also contains instructions
for health plans to utilize the necessary LOINC codes for health plans
to request health care attachments from a health care provider, and for
providers to identify health care attachments document templates when
transmitting them to a health plan. For the transmissions described in
proposed Sec. 162.2001, that is, transmissions of attachment
information from a health care provider to a health plan for the
specified purposes, and requests for attachment information from a
health plan to a health care provider, we would require the use of the
Attachment Implementation Guide at Sec. 162.2002(a). We propose to
incorporate this HL7 standard by reference in Sec. 162.920 in a new
paragraph (e) where we provide information about the availability of
the HL7 standards we are proposing.
We are also proposing that for the transmissions of attachment
information from a health care provider to a health plan for the
specified purposes, as described in proposed Sec. 162.2001(a), we
would require the use of Volume One and Volume Two, and would include
these requirements at Sec. 162.2002(b)(1) and (b)(2), respectively.
Collectively, these standards are instructions for the use of specific
sections of the CDA, a larger set of clinical information standards
developed by HL7, that provide specifications for users to create the
HL7 document templates for the clinical information that would be used
in the proposed health care attachments transactions.
Attachment information comes in two variants, ``structured'' and
``unstructured,'' and the proposed HL7 standards support both. A
structured document is one that has a high degree of organization that
is able to be interpreted by a computer, includes a header that
contains metadata about the clinical information found in the body of
the document, and a structured body. The clinical information contained
in the document is subdivided into systematic sections and entries that
can be identified and sorted by a computer using descriptive codes. HL7
Volume One and Volume Two instruct readers how to assemble the segments
into a standardized set of document sections known as a document
``template,'' which is essentially a set of C-CDA components identified
by a LOINC code, and include templates for the most common paper
documents that serve as attachment information. An HL7 structured
template is in a format that can be easily displayed in a human-
readable format, while also enabling a computer to make an automated
decision about a claim or a prior authorization request. Volume One and
Volume Two also contain instructions for creating an unstructured
document template for attachment information for which HL7 has not
created a structured template. Unstructured documents still utilize an
HL7 standard header that includes meta-data about the clinical
information found in the document body, but the body does not contain
tags that systematically identify the attachment information within.
Examples of unstructured documents include medical imaging files,
audio, video, and legacy attachment information such as scanned paper
[[Page 78449]]
documents. Unstructured content may also include attachment information
that is not collected in a health care environment, but that a health
plan may require for payment decisions, such as delivery receipts, home
inspection reports, or patient-created diabetic logs.
The Attachment Implementation Guide also specifies how to construct
a health care attachments transaction when Volume One or Volume Two do
not provide a document template for particular attachment information.
The Attachment Implementation Guide contains three criteria that any
document template to be used as a health care attachment must meet if
it is not already specified in one of the proposed implementation
guides: (1) the template must be developed and published through the
HL7 standards process; (2) the new template must be designated by HL7
as being compatible with a C-CDA 2.1 implementation specification and
for use in the United States; and (3) a LOINC code for the template
must be created by Regenstrief via its code creation process as
previously described. This means that once a C-CDA 2.1 implementation
guide-compatible document template has been created by HL7 and is
assigned a LOINC code, which happens upon request of the HL7 Payer/
Provider Information Exchange Workgroup once HL7 creates a new
template, it may be used as attachment information in a health care
attachments transaction. We invite comment on the proposed adoption of
the HL7 standards--Volume One, Volume Two, and the Attachment
Implementation Guide.
C. Electronic Signatures
Section 1173(e)(1) of the Act provides that the Secretary, in
coordination with the Secretary of Commerce, must adopt standards
specifying procedures for the electronic transmission and
authentication of signatures for HIPAA transactions. Pursuant to that
requirement, we proposed to adopt standards for electronic signatures
in the August 12, 1998 proposed rule (63 FR 43242) titled ``Security
and Electronic Signature Standards.'' That proposal, never finalized
with respect to electronic signatures, would not have required the use
of electronic signatures with any specific transaction. Rather, the
proposed rule recognized that electronic signatures would require
certain implementation features, including message integrity,
nonrepudiation, and user authentication, and proposed that the standard
for electronic signatures would be digital signatures--electronic
stamps that contain information about both the user creating the
signature and the document being signed--as the only technically mature
means available that could provide for nonrepudiation in an open
network environment. In comments on the proposed rule, industry
overwhelmingly indicated that then-available technology was
insufficient to enable the proposed provisions to be implemented. As
such, in the February 20, 2003 final rule (68 FR 8334) titled, ``Health
Insurance Reform: Security Standards'' (hereafter, February 2003
Security rule), we elected not to finalize the proposal, instead
indicating that a final rule on electronic signature standards would be
published at a later date. In the September 23, 2005 proposed rule
titled HIPAA Administrative Simplification: Standards for Electronic
Health Care Claims Attachments (70 FR 55990), we recognized that an
electronic signature consensus standard still did not exist and that no
federal standard governed the use of electronic signatures for private
sector health care services. We sought industry input on how signatures
should be handled when an attachment is requested and transmitted
electronically.
Signatures play a vital role with respect to the documentation of
health care, as a signature is often the only indicator available to
health plans and health care providers that attachment information has
been reviewed and approved by the service provider or other clinician
with appropriate authority to supervise care. Health care entities
recognize numerous legal and compliance best practices for clinician
attestation of medical record documentation consistent with applicable
federal and state laws and regulations, accreditation standards, payer
requirements, documentation requirements for clinical services offered,
and technology functionalities.\18\
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\18\ Electronic Signature, Attestation, and Authorship, AHIMA:
https://bok.ahima.org/PdfView?oid=107152.
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Health care best practices, such as those of the National Committee
for Quality Assurance (NCQA), generally direct that all entries in the
medical record contain the author's identification.\19\ A health care
providers' signature (whether wet--in ink on paper documents--or
electronic) on medical record documentation generally serves as the
attestation that the appropriate provider representative has reviewed
and approved the documentation. Health plans commonly require written
and signed documentation as evidence of medical necessity for certain
types of services. For example, in order for a laboratory to submit a
claim for reimbursement of a laboratory test, a health plan may first
require a physician visit and a signed physician order. When the
laboratory later bills a health plan for the test, the plan may ask for
evidence that it was ordered by an authorized health care provider; if
the laboratory is unable to produce a signed order, it may not be
reimbursed.
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\19\ ``Guidelines for Medical Record Documentation'', NCQA:
https://www.ncqa.org/wp-content/uploads/2018/07/20180110_Guidelines_Medical_Record_Documentation.pdf.
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1. Proposed Definition of Electronic Signature
An electronic signature can be any of a number of types of marks or
data that indicate a signatory's intent to sign. Examples of electronic
signatures include an online check box indicating acceptance, a name
entered by the signer in an online form, a signing device at a
commercial checkout line on which a customer writes his or her
signature, and an image of a signature that was written by hand and
then scanned into an electronic image format.
We are proposing to define the term ``electronic signature'' as
broadly as possible to ensure that it meets health care providers' and
health plans' needs now and can also encompass future electronic
signature technologies. However, we propose to narrowly specify the
scope of the required use of electronic signatures, such that their
required use would be limited to just attachment information
transmitted electronically in electronic health care attachments
transactions. Accordingly, the electronic signature standard we are
proposing at Sec. 162.2002(f) would pertain only to electronic
signatures for attachment information transmitted by a health care
provider in an electronic health care attachments transaction.
At Sec. 162.103, we propose to define electronic signature as
follows: Electronic signature means an electronic sound, symbol, or
process, attached to or logically associated with attachment
information and executed by a person with the intent to sign the
attachment information.
[[Page 78450]]
2. Proposed Electronic Signature Standard
Electronic signatures vary in reliability and value based on the
type of technology used, and any HIPAA electronic signature standard
has to meet the needs of both health plans and health care providers
that produce and use attachment information. Any standard that we adopt
needs to support all of the current business functions and uses for
signatures in the health plan payment decision process while providing
assurance that attachment information is accurate and unaltered. The
1998 proposed rule that we mentioned previously, ``Security and
Electronic Signature Standards,'' enumerated three implementation
features necessary to achieve these goals: user authentication, message
integrity, and non-repudiation (63 FR 43257). These core features,
developed in conjunction with the Department of Commerce's National
Institute of Standards and Technology and the health care industry,
remain relevant to electronic signatures today. We discuss each in the
following sections.
Authentication is the ability of a health plan to identify and
verify the identity of the provider who signed a document, and is a
vital signature characteristic because such verification serves to
validate the attachment information. Just as a health plan might
compare a physical signature to a signature card to authenticate a
health care provider's identity, an electronic signature must provide a
method of authentication. Some forms of electronic signatures do not
allow for authentication; for example, a typed signature line in a word
processing document that indicates it was signed by a physician does
not have any unique traits that would permit authentication by a health
plan.
Because some electronic signatures can be readily manipulated,
there must also be a mechanism to ensure that signed attachment
information remains unaltered since the time it was affixed; this
feature is called message integrity. To maintain message integrity,
there must be a way to electronically validate that the attachment
information signed by the health care provider and sent to the health
plan are identical. Without such a mechanism it would be possible, for
example, to alter the amount or type of the medical item (such as,
medication, durable medical equipment, a medical service, etc.) ordered
by a physician after he or she had completed and signed the order.
Finally, an electronic signature standard must embody a feature
known as nonrepudiation, which provides strong assurance of identity
such that it is difficult for a signatory to later claim that the
electronic representation is not valid or that he or she did not sign
the document.\20\ Nonrepudiation is a necessary feature of an
electronic signature for health care attachments transactions because
health plans will use attachment information to make administrative
decisions about payment for health care services and may deny payment
to a health care provider based on the information in electronically
signed attachments.
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\20\ Office of National Coordinator for Health Information
Technology (ONC). Identity Management, December 6, 2017: https://www.healthit.gov/sites/default/files/identitymanagementguidev5.13.pdf.
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An electronic signature standard must manifest each of these three
features to suffice for attachment information in electronic health
care attachments transactions. For example, were a signing system to
incorporate authentication and nonrepudiation but lack a mechanism to
ensure message integrity, a health plan could not be confident that the
attachment information had not been altered since being signed. Or,
were a signing system to incorporate nonrepudiation and message
integrity but lack a mechanism for authentication, the health plan
receiving the attachment information would be assured that the content
had not been altered and that someone had signed, but it could never be
certain of the actual signatory. In the previously discussed 1998 and
2005 proposed rules, HHS identified digital signature technology as the
only electronic signature approach offering the features of
authentication, message integrity, and nonrepudiation. We continue to
believe that digital signature technology is the only electronic
signature technology that supports all three features.
We considered proposing, as an electronic signature standard, the
specifications for electronic signatures that are included in the HL7
implementation guides we are proposing here for electronic health care
attachments transactions. But we decided not to pursue that route
because the specifications included in those guides do not support
authentication, message integrity, and nonrepudiation.
However, HL7 has also developed an implementation guide called the
HL7 Implementation Guide for CDA Release 2: Digital Signatures and
Delegation of Rights, Release 1 (hereafter Digital Signatures Guide),
with supplemental specifications that add support for authentication,
message integrity, and nonrepudiation to their other published
implementation guides. The Digital Signatures Guide promotes these
three features by utilizing digital signature technology to implement
identity management using digital certificates, encryption requirements
to support message integrity, and multiple signed elements to support
nonrepudiation. As we previously noted, a digital signature is an
electronic stamp that contains information about both the user creating
the signature and the document that is being signed. Digital signatures
are created using digital certificates to create a secure computer code
that can be used later to authenticate the signer. At the same time,
the certificate is used to create another computer code, usually
referred to as a hash, which can be used by a computer to verify that
the document has not been changed since it was originally signed; this
is a mechanism to ensure the integrity of the signed document. In both
cases, the codes are encrypted so the receiver knows that the codes
themselves have also not been altered, enabling the receiver to be
confident that the signature was applied by the authenticated
individual.
We note that the Digital Signatures Guide does not include
requirements for when a document must be signed and by whom. As
previously discussed, requirements with respect to who may deliver
health care and how it must be documented via signature vary greatly
and are developed by health plans and outlined in their provider
compliance manuals, trading partner agreements, and other contractual
requirements between health plans and health care providers. We do not
seek to regulate clinical best practices for documentation or interfere
with health plans' business needs. Therefore, we are not proposing to
specify when an electronic signature must be required, but, instead, we
defer to the industry to continue to establish those expectations. We
would also limit the scope of the required use of electronic signatures
to just health care attachments transactions. Accordingly, we are
proposing to require that, where a health care provider uses an
electronic signature in a health care attachments transaction, the
signature must conform to the implementation specifications in the
Digital Signatures Guide. Specifically, we propose to adopt, at Sec.
162.2002(f), the HL7 Implementation Guide for CDA Release 2: Digital
Signatures and Delegation of Rights, Release 1 for electronic
signatures for attachment information transmitted by a health care
provider in an electronic health care attachments transactions
[[Page 78451]]
specified in Sec. 162.2001(a). We also propose to incorporate the same
by reference in Sec. 162.920.
We solicit comments on the proposed definition of electronic
signature and the proposed HL7 Implementation Guide as the attachment
information electronic signatures standard.
D. Proposed Modification to a HIPAA Standard
1. Modifications to Standards
Section 1174 of the Act requires the Secretary to review the
adopted standards and adopt modifications to them as appropriate, but
not more than once every 12 months. Modifications must be completed in
a manner that minimizes disruption and cost of compliance. Per section
1175 of the Act, if the Secretary adopts a modification to a HIPAA
standard or implementation specification, the compliance date for the
modification may not be earlier than the 180th day following the date
of the adoption of the modification. The Secretary must consider the
time needed to comply due to the nature and extent of the modification
when determining compliance dates, and may extend the time for
compliance for small health plans if the Secretary deems it
appropriate.
Section 162.910 sets out the standards maintenance process and
defines the role of SSOs and Designated Standard Maintenance
Organizations (DSMOs). An SSO is an organization accredited by the ANSI
that develops and maintains standards for information transactions or
data elements. The two SSOs applicable to this proposed rule are the
Accredited Standards Committee X12 (X12) and Health Level Seven (HL7).
On August 17, 2000, the Secretary designated six organizations (see
Health Insurance Reform: Announcement of Designated Standard
Maintenance Organizations Notice (65 FR 50373)) to maintain the health
care transaction standards adopted by the Secretary, and to process
requests for modifying an adopted standard or for adopting a new
standard. The six organizations include X12, HL7, and NCPDP, along with
the National Uniform Billing Committee (NUBC), the National Uniform
Claim Committee (NUCC), and the Dental Content Committee (DCC) of the
American Dental Association.
Section 162.910 also sets forth the procedures for the maintenance
of existing standards and the adoption of modifications to existing
standards and new standards. Under Sec. 162.910(c), the Secretary
considers recommendations for proposed modifications to existing
standards or proposed new standards, only if the recommendations are
developed through a process that provides for all of the following:
Open public access.
Coordination with other DSMOs.
An appeal process for the requestor of the proposal or the
DSMO that participated in the review and analysis if either were
dissatisfied with the decision on the request.
An expedited process to address HIPAA content needs
identified within the industry.
Submission of the recommendation to the NCVHS.
Any entity may submit change requests with a documented business
case to support the recommendation to the DSMO, which receives and
processes those change requests. The DSMO reviews the request and
notifies the SSO of the recommendation for approval or rejection.
Should the changes be recommended for approval, the DSMO also notifies
the NCVHS and suggests that a recommendation for adoption be made to
the Secretary of HHS. Information pertaining to the designation of a
DSMO and its responsibilities can be found in the Transactions Rule and
the Notice, which were both published on August 17, 2000 (65 FR 50365
and 50373).
The modification we are proposing in this rule was developed
through a process that conforms with Sec. 162.910. In February 2016,
the NCVHS held hearings to review the Version 6020 X12N 278
implementation specifications as a standard for health care attachments
transactions, which X12 recommended be adopted by HHS. Testimony from
that hearing indicated the need for HHS to adopt the 6020 version of
the X12N 278, which X12 testified resolves technical issues with
Version 5010 of the X12N 278.\21\ In its 2016 letter to the Secretary,
the NCVHS recommended the adoption of the X12N 278 for health care
attachments transactions, but did not recommend a specific version.
Rather, the NCVHS recommended that the Secretary consider adopting the
version expected to be in effect at the time the transactions standards
are mandated.\22\ Version 6020 of the X12N 278 is the most current
version of the referral certification and authorization transaction
standard.
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\21\ https://ncvhs.hhs.gov/transcripts-minutes/transcript-of-the-february-16-2016-ncvhs-subcommittee-on-standards/.
\22\ https://ncvhs.hhs.gov/wp-content/uploads/2018/03/2016-Ltr-Attachments-July-1-Final-Chair-CLEAN-for-Submission-Publication.pdf.
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2. Modification to Referral Certification and Authorization Transaction
Standard
As just discussed, the NCVHS recommended that HHS adopt the
referral certification and authorization transaction standard (ASC X12N
278) for non-claims-related attachment requests and responses. Although
the NCVHS did not recommend a specific version of the standard, we are
proposing to adopt Version 6020 of the X12N 278 because Version 6020
better harmonizes with the Additional Information to Support a Health
Care Services Review Version--X12N 275- (006020X316) standard we are
proposing to adopt for providers transmitting attachment information.
As we also discussed, while it may be possible to use different
versions of the standards for health plan requests for, and provider
transmissions of, attachment information, X12 advised against it,
recommending to the NCVHS \23\ that all parties to those transactions
use Version 6020 of the standards as they are most compatible with each
other.
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\23\ Transcript of NCVHS Subcommittee on Standards Hearing on
Electronic Attachments Standards and Operating Rules, February 27,
2013: https://ncvhs.hhs.gov/transcripts-minutes/transcript-of-the-february-27-2013-ncvhs-subcommittee-on-standards-hearing/.
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Adopting Version 6020 of the X12N 278 for referral certification
and authorization transactions standard to replace Version 5010 of the
X12N 278 would be a modification to a standard under HIPAA, similar to
the previous modifications we adopted when we moved from Version 4010
to Version 5010 for the X12 standards. Version 6020 of the X12N 278
includes several changes, some of which are maintenance changes, and
some of which represent more significant improvements over Version
5010. The two most significant changes each represent technical
improvements and structural changes to the standard:
One important change will better support referral
certification and authorization transactions for dental services.
Currently, health care providers are able to accurately report tooth
status utilizing Version 5010 of the X12N 837 for health care claims,
but Version 5010 of the X12N 278 cannot support reporting tooth status
in health care referral certification and authorization transactions.
Version 6020 of the X12N 278 expands support for reporting the status
of individual teeth, which enables a health care provider to
specifically indicate a missing tooth, extracted tooth, tooth to be
extracted, or impacted tooth in a health care referral
[[Page 78452]]
certification and authorization transaction. We expect this improvement
in the X12N 278 to minimize or eliminate administrative delays
attributable to providers having to convey relevant individual tooth
information outside of the standard transactions process.
Version 6020 revises and expands the drug authorization
segment, which includes fields necessary to, for example, identify a
drug, specify quantity of drug requested, specify drug dosage
requested, and accommodate related procedure codes. Because Version
5010 does not enable entities to supply this additional information,
health plans and providers must utilize cumbersome alternative methods
to communicate drug information. Therefore, we also expect this
improvement to minimize or eliminate administrative delays attributable
to providers having to convey relevant drug information outside of the
standard transactions process.
The referral certification and authorization transaction under
Sec. 162.1301 includes two transmission types from health care
providers to health plans: prior authorization requests and referral
certification requests. The X12N 278 standard is required for both
types of transmission. As discussed, we are proposing that health care
attachments transactions would apply to prior authorization
transactions; we are not proposing that they apply to referral
certification transactions. Although it would be technically feasible
for us to propose to adopt Version 6020 only for prior authorization
transmissions specified in Sec. 162.1301(a) and retain Version 5010
for referral certification transmissions specified in Sec.
162.1301(b), we are instead proposing Version 6020 for both
transmission types because it includes improvements over Version 5010
that better support both transmission types, and we believe it would be
more burdensome for covered entities to have to maintain both X12N 278
versions.
E. Proposed Compliance Dates
We are proposing to adopt new standards and a modification to a
standard in this proposed rule. Section 1104(c)(3) of the Affordable
Care Act, which requires the Secretary to adopt a transaction standard
for health claims attachments, prescribes a 2-year compliance date for
all covered entities and makes no special provision for small health
plans, unlike the original HIPAA. In this rule, we are proposing that
the same health care attachments standards would apply to both claims
and prior authorization attachments transmissions. As the transmission
standard for each type of attachment transaction transmission would be
the same, we believe the compliance date for both types should also be
the same. In addition, because we are proposing to treat the two
attachments process together as one transaction in new Subpart T,
adopting the same compliance timeframe for all covered entities would
avoid the complications a bifurcated compliance timeframe--one for
claims processes and another for prior authorization processes--would
raise.
When the Secretary adopts a modification to a HIPAA standard,
section 1175(b)(2) of the Act requires that the compliance date may not
be earlier than the 180th day following the date of adoption. The
Secretary must consider the time needed to comply due to the nature and
extent of the modification when determining a compliance date, and may
extend the time for small health plans to achieve compliance if the
Secretary deems it appropriate. The adoption date of a standard or a
modification is the effective date of the final rule in which the
adoption or modification is established. The effective date is the date
the rule amends the Code of Federal Regulations (CFR), which is
typically 60 days after the date of publication in the Federal
Register.
1. Proposed Compliance Date for Health Care Attachments and Electronic
Signatures Standards
We are proposing to adopt the following seven standards for health
care attachments transactions and electronic signatures:
HL7 CDAR2: Attachment Implementation Guide: Exchange of C-
CDA Based Documents, Release 1--March 2017.
HL7 Implementation Guide for CDA Release 2: Consolidated
CDA Templates for Clinical Notes (US Realm) Draft Standard for Trial
Use Release 2.1, Volume 1--Introductory Material, June 2019 with
Errata.
HL7 Implementation Guide for CDA Release 2: Consolidated
CDA Templates for Clinical Notes (US Realm) Draft Standard for Trial
Use Release 2.1, Volume 2--Templates and Supporting Material, June 2019
with Errata.
X12N 275 Additional Information to Support a Health Care
Services Review (06020X316).
X12N 275 Additional Information to Support a Health Care
Claim or Encounter (06020X314).
X12N 277--Health Care Claim Request for Additional
Information (006020X313).
HL7 Implementation Guide for CDA Release 2: Digital
Signatures and Delegation of Rights, Release 1.
In accordance with section 1104(c)(3) of the Affordable Care Act,
which sets a 2-year compliance date, and which makes no provision for
an extended time for small health plans to achieve compliance, we are
proposing that the compliance date for these standards would be 24
months after the effective date of the final rule for all covered
entities. We would specify these compliance dates in Sec. 162.2002.
2. Proposed Compliance Date for Modification
Section 1175(b)(2) of the Act requires the Secretary to determine
an appropriate compliance date for the implementation of modified
standards, such as the modification of the X12N 278 standard from
Version 5010 to Version 6020, by taking into account the time needed to
comply due to the nature and extent of the modification. The Act also
requires that the compliance date be no earlier than the last day of
the 180-day period beginning on the date the modification is adopted
(the effective date of the final rule in which the modification is
adopted). As discussed previously, we are proposing Version 6020 of the
X12N 278 as the standard for referral certification and authorization
transactions to be used by a health plan in conjunction with Version
6020 of the X12N 275, which a health care provider would use to
electronically transmit attachment information to a health plan in
support of a prior authorization request. As the X12N 278 will feature
in the new health care attachments transaction, we believe it is
important to align the compliance dates for the proposed modification
to the X12N 278 standard and the health care attachments standards.
Accordingly, we are proposing that covered entities would need to
comply with Version 6020 of the standard 24 months after the effective
date of the final rule. We would reflect this compliance date in Sec.
162.1302 by: (1) revising paragraph (c) to specify only the standard
identified in paragraph (b)(2)(i); and (2) adding new paragraph (d) to
require covered entities to use, in paragraph (d)(1), Version 5010 X12N
278 for 24 months after the effective date of the final rule, and in
paragraph (d)(2), Version 6020 X12N 278 on and after 24 months after
the effective date of the final rule. We solicit comments on this
proposed approach.
F. Proposed Incorporation by Reference
This proposed rule proposes to incorporate by reference: (1) X12
275--
[[Page 78453]]
Additional Information to Support a Health Care Claim or Encounter
(006020X314); (2) X12N 275--Additional Information to Support a Health
Care Services Review (006020X316); (3) X12N 277--Health Care Claim
Request for Additional Information (006020X313); and (4) X12N 278--
Health Care Services Request for Review and Response Version
(006020X315) standard for the referral certification and authorization
transaction implementation guides.
The X12 275--Additional Information to Support a Health Care Claim
or Encounter implementation guide provides instructions to assist those
who send additional supporting information or who receive additional
supporting information to a health care claim or encounter. The
implementation guide for X12N 275--Additional Information to Support a
Health Care Services Review implementation guide contains the data
elements used to communicate individual patient information requests
and patient information (either solicited or unsolicited) between
separate health care entities in a variety of settings to be consistent
with confidentiality and use requirements. Instructions to collect
patient information consisting of demographic, clinical and other
supporting data are provided.
The X12N 277--Health Care Claim Request for Additional Information
implementation guide contains the format and establishes the data
contents of the Health Care Information Status Notification Transaction
Set for use within the context of an Electronic Data Interchange (EDI)
environment. This transaction set can be used by a health care payer or
authorized agent to notify a provider, recipient, or authorized agent
regarding the status of a health care claim or encounter or to request
additional information from the provider regarding a health care claim
or encounter, health care services review, or transactions related to
the provisions of health care.
X12N 278--Health Care Services Request for Review and Response
Version implementation guide contains the format. It establishes the
data contents of the Health Care Services Review Information
transaction set used within the context of an Electronic Data
Interchange (EDI) environment. This transaction set can be used to
transmit health care service information, such as subscriber, patient,
demographic, diagnosis, or treatment data for the purpose of request
for review, certification, notification, or reporting the outcome of a
health care services review. Expected users of this transaction set are
payors, plan sponsors, providers, utilization management, and other
entities involved in health care services review.
This proposed rule proposes to incorporate by reference: (1) HL7
CDA R2 Attachment Implementation Guide: Exchange of C-CDA Based
Documents, Release 1, March 2017; (2) HL7 Implementation Guide for CDA
Release 2: Consolidated CDA Templates for Clinical Notes (US Realm)
Draft Standard for Trial Use Release 2.1, Volume 1--Introductory
Material, June 2019 with Errata; and (3) HL7 Implementation Guide for
CDA Release 2: Consolidated CDA Templates for Clinical Notes (US Realm)
Draft Standard for Trial Use Release 2.1, Volume 2--Templates and
Supporting Material, June 2019 with Errata.
The HL7 CDA R2 Attachment Implementation Guide: Exchange of C-CDA
Based Documents, Release 1, March 2017, defines the requirements for
sending and receiving standards-based electronic attachments. It does
so by applying additional constraints onto standards in common use for
clinical documentation and by specifying requirements for sending and
receiving systems for attachment requests and response messages. It
defines the set of attachment documents as those that contain the
minimum standard metadata to support basic document management
functions, including identification of patients and providers, the type
of document, date of creation, encounter information, and a globally
unique document identifier.
HL7 Implementation Guide for CDA Release 2: Consolidated CDA
Templates for Clinical Notes (US Realm) Draft Standard for Trial Use
Release 2.1, Volume 1--Introductory Material, June 2019 with Errata and
HL7 Implementation Guide for CDA Release 2: Consolidated CDA Templates
for Clinical Notes (US Realm) Draft Standard for Trial Use Release 2.1,
Volume 2--Templates and Supporting Material, June 2019 with Errata
implementation guides contain a library of CDA templates, incorporating
and harmonizing previous efforts from HL7. It represents the
harmonization of the HL7 Health Story guides, HITSP C32, related
components of IHE Patient Care Coordination (IHE PCC), and Continuity
of Care (CCD). This R2.1 guide was developed and produced by the HL7
Structured Documents Workgroup. It updates the C-CDA R2 (2014) guide to
support ``on-the-wire'' compatibility with R1.1 systems C-CDA Release
2.1 implementation guide, in conjunction with the HL7 CDA Release 2
(CDA R2) standard, is to be used for implementing the following CDA
documents and header constraints for clinical notes.
The materials we propose to incorporate by reference are available
to interested parties and can be inspected at the CMS Information
Resource Center, 7500 Security Boulevard, Baltimore, MD 21244-1850. The
X12 implementation guides are available at GLASS, sso.x12.org. The HL7
implementation guides are also available through the internet at
www.HL7.org. A fee is charged for all implementation guides. Charging
for such publications is consistent with the policies of other
publishers of standards. If we wish to adopt any changes in this
edition of the Code, we would submit the revised document to notice and
comment rulemaking.
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
The burden associated with the information collection requirements
contained in Sec. 162.1302 of this document are subject to the PRA;
however, this one-time burden was previously approved and accounted for
in the information collection request under OMB control number 0938-
0866 and titled ``CMS-R-218: HIPAA Standards for Coding Electronic
Transactions.'' This information collection request will be revised and
reinstated to incorporate any proposed additional transaction standards
and proposed modifications to transaction standards not currently
captured in the PRA package associated with OMB approval number 0938-
0866.
In addition, the collection requirements associated with this
demonstration do not impose information collection and record
[[Page 78454]]
keeping requirements, because they meet the ``information'' definition
exception under 5 CFR 1320.3(h)(4) which states: ``Information'' does
not generally include items in the following categories: (4) Facts or
opinions submitted in response to general solicitations of comments
from the public, published in the Federal Register or other
publications, regardless of the form or format thereof, provided that
no person is required to supply specific information pertaining to the
commenter, other than that necessary for self-identification, as a
condition of the agency's full consideration of the comment.
If you comment on this information collection, that is, reporting,
recordkeeping or third-party disclosure requirements, please submit
your comments electronically as specified in the ADDRESSES section of
this proposed rule. Comments must be received on/by February 21, 2023.
V. Regulatory Impact Analysis
A. Statement of Need
This rule proposes to adopt and modify standards, pursuant to HIPAA
Administrative Simplification statutory provisions, for the electronic
transmission of health care attachments, inclusive of attachments
standards for both health care claims and prior authorizations. The
health care industry has made it clear via NCVHS testimony, WEDI
presentations, CAQH reports and direct inquiry that there is a clear
need for government action with regard to attachments standards in
order to bring consistency and reliable communications among the
partners involved in health care transactions that require attachments.
As a result of the absence of a federal attachments standard, health
plans, providers and vendors lack the direction needed to support broad
use of automation in the attachment workflow or for industry to
coalesce around the use of even a small number of electronic solutions.
In addition, lack of an attachments standards has deterred industry
stakeholders from investing in system implementations to automate the
attachments workflow, requiring a large manual administrative burden
for the exchange of medical documentation. Industry SSOs and
stakeholder alliances report this automation would yield substantial
labor cost savings and administrative burden reduction. We believe
standardizing electronic attachments transmissions would facilitate
prior authorization decisions and claims processing, which would result
in a decreased burden on providers and health plans, and quicker
delivery of services to patients.
B. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999), and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health, and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a significant regulatory action
as an action that is likely to result in a rule: (1) having an annual
effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as economically significant); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year). Based on our estimates, OMB's Office of Information and
Regulatory Affairs has determined this rulemaking is ``economically
significant'' as measured by the $100 million threshold. We believe
that covered entities have already largely invested in the hardware,
software, and connectivity necessary to conduct the new and modified
standards proposed. We anticipate that the adoption of these changes
would result in costs that would be outweighed by the benefits.
Accordingly, we have prepared a Regulatory Impact Analysis that to the
best of our ability presents the costs and benefits of the proposed
rulemaking.
C. Regulatory Flexibility Analysis
Executive Order 13272 requires that HHS thoroughly review rules to
assess and take appropriate account of their potential impact on small
businesses, small governmental jurisdictions, and small organizations
(as mandated by the Regulatory Flexibility Act (RFA)). The RFA requires
agencies to analyze options for regulatory relief of small entities, if
a rule has a significant impact on a substantial number of small
entities. If a proposed rule may have a significant economic impact on
a substantial number of small entities, then the proposed rule must
discuss steps taken, including alternatives considered, to minimize the
burden on small entities. The RFA does not define the terms significant
economic impact or substantial number. The Small Business
Administration (SBA) advises that this absence of statutory specificity
allows what is significant or substantial to vary, depending on the
problem that is to be addressed in rulemaking, the rule's requirements,
and the preliminary assessment of the rule's impact. Nevertheless, HHS
typically considers a significant impact to be three to five percent or
more of the affected entities' costs or revenues.
The RFA generally defines a small entity as (1) a proprietary firm
meeting the SBA size standards, (2) a not-for-profit organization that
is not dominant in its field, or (3) a small government jurisdiction
with a population of less than 50,000. The North American Industry
Classification System (NAICS) is used in the U.S., Canada, and Mexico
to classify businesses by industry.\24\ While there is no distinction
between small and large businesses among the NAICS categories, the SBA
develops size standards for each NAICS category. The most recently
available update to the NAICS went into effect for the 2017 reference
year, and the most recent SBA small business size regulations and Small
Business Size Standards by NAICS Industry tables appear at 13 CFR
121.201. We have determined that the covered entities and their vendors
affected by this proposed rule likely fall primarily in the categories
listed in Table 1.
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\24\ https://www.sba.gov/content/small-business-size-standards.
[[Page 78455]]
Table 1--SBA Size Standards for Applicable NAICS Industry Codes
------------------------------------------------------------------------
SBA standard ($
NAICS code NAICS description in million)
------------------------------------------------------------------------
446110.................. Pharmacies and drug stores.. 30.0
522320.................. Financial transaction 41.5
processing, reserve, and
clearinghouse activities.
524114.................. Direct health and medical 41.5
insurance carriers.
541511.................. Custom computer programming 30.0
services.
62111................... Offices of physicians....... 12.0
621210.................. Offices of dentists......... 8.0
621491.................. Health plans................ 35.0
6221.................... Hospitals................... 41.5
------------------------------------------------------------------------
Most hospitals and most other providers and suppliers are small
entities, either by nonprofit status or by having revenues of less than
$8.0 million to $41.5 million in any 1 year. Accordingly, it is our
normal practice to treat all health care providers as small entities.
For providers, the changes proposed by this rule may involve software
upgrades for practice management and EHR systems. Thus, we expect that
the vast majority of physicians and other health care provider
practices will need to make relatively small changes in their systems
and in their processes, but may incur additional service fees from
their system vendors for additional functionality. Some of the smallest
provider entities may elect to continue their current manual processes.
We include pharmacies in this analysis, and consider most of them to be
small businesses. While we believe few health plans meet the small
business size standard, many health plans are non-profit organizations
and would be considered small businesses; but we are unable to identify
data to help us distinguish the number of these entities and therefore
solicit industry feedback to complete this analysis for the final rule.
We address clearinghouses, but we do not believe that there are a
significant number of clearinghouses that would be considered small
entities because of the level of consolidation in the marketplace.
Because these proposals include initial standards for the exchange of
both administrative and clinical documentation, we also address
provider practice management system (PMS) and EHR vendors in our
discussion, but are unable to identify data that would help identify
the proportion of firms in these markets that meet the small business
size standards. State Medicaid agencies are excluded from this analysis
because states are not considered small entities in any RFA.
Table 8 in the impact analysis presents the estimated
implementation costs of these proposals on all entities we anticipate
would be affected by the rule. The data in that table are used in this
analysis to provide cost information.
1. Number of Small Entities
We used the latest available (2017) Census business data records
and other information to determine the number of affected entities, as
summarized in Table 2.
Table 2--Number of Affected Entities
------------------------------------------------------------------------
Number of entity
Type of entity firms or
establishments
------------------------------------------------------------------------
Hospitals............................................. 5,544
Physicians............................................ 171,722
Dentists.............................................. 125,329
Pharmacies............................................ 19.234
Private Health Plans.................................. 772
Government Health Plans............................... 3
Clearinghouses........................................ 162
Vendors............................................... 1,000
-----------------
Totals............................................ 323,766
------------------------------------------------------------------------
Based on the latest available (2017) Census business data records,
we estimate that 321,639 health care provider entities may be
considered small entities either because of their nonprofit status or
because of their revenues, as detailed in Table 3. Approximately two
percent (5,544) of these are hospitals, 57 percent (171,722) are
physician practices, and 41 percent (125,329) are dental practices. To
count hospitals, we are using data at the level of establishments, and
to count physicians and dentists we are using data at the level of
firms, as we did in the August 22, 2008 proposed rule titled ``Health
Insurance Reform; Modifications to the Health Insurance Portability and
Accountability Act (HIPAA) Electronic Transaction Standards'' (73 FR
497742, 49758). We believe health information technology (HIT) systems
are still more likely to differ at the level of the enterprise rather
than at the level of the firm in hospitals. We believe that this way of
counting may overstate the number of affected entities in these
segments, given the recent trends toward consolidation among and
between provider types and toward increasing integration of HIT systems
across collaborating organizations. However, this overestimation may
compensate for other types of affected health care providers
potentially not reflected in these particular NAICS categories. We note
that the number of 5,544 hospital establishments reflected in the 2017
Census business data roughly compares with more recent 2021 data from
the American Hospital Association \25\ indicating a total of 6,090 U.S.
hospitals, of which approximately 25 percent are for-profit. However,
we do not have more detail, including data on the size of the hospitals
in this 25 percent, in order to determine whether any should be
excluded from the count of small entities.
---------------------------------------------------------------------------
\25\ Fast Facts on U.S. Hospitals, 2021; accessed 5/24/2021 at:
https://www.aha.org/statistics/fast-facts-us-hospitals.
---------------------------------------------------------------------------
The Census business data records indicate that in 2017 there were a
total of 19,234 pharmacy firms, and we estimate that most of these
qualify as small entities. Available data do not permit us to clearly
distinguish small pharmacy firms from firms that are parts of larger
parent organizations, but we use employee size as a proxy for the firm
size subject to the SBA size standard. For purposes of this analysis,
we assume the firms with more than 500 employees (190) represent chain
pharmacies and those with fewer than 500 employees (19,044) represent
independently-owned open- or closed-door pharmacies. The 19,044 firms
with fewer than 500 employees represented 20,901 establishments and
accounted for total annual receipts of $70.9 billion and average annual
receipts of $3.7 million--revenue that is well below the SBA standard
of $30 million. By contrast, the 190 firms with 500 or more employees
represented 27,123 establishments and accounted for over $211 billion
in annual receipts, and thus, average annual receipts of $1.1
[[Page 78456]]
billion. Therefore, we assume 19,044 pharmacy firms qualify as small
entities for this analysis.
For 2017, the Census Bureau counts 745 entities designated as
Direct Health and Medical Insurance Carriers and 27 as Health
Maintenance Organization (HMO) Medical Centers. We assume that these
772 firms represent health plans that would be subject to these
proposals. Of the 745 Carriers, those with fewer than 500 employees
(564) accounted for $35 billion in total and over $62 million in
average annual receipts, exceeding the SBA size standard of $41.5
million. Comparable data on the eight smaller HMO Medical Centers is
not available due to small cell size suppression. Although health plan
firms may not qualify as small entities under the SBA receipts size
standard, they may under non-profit status. However, we are not aware
of data that would help us understand the relationship between health
plan firm and ownership tax status to quantify the number of such
firms. Therefore, we are not including an analysis of the impact on
small health plans.
Clearinghouses provide transaction processing and data translation
services to both providers and health plans that would be critical to
implementing this proposed rule. The applicable NAICS category includes
many types of financial transaction processing firms other than those
affected by this rule, so the Census business data cannot be used to
identify small entities of interest. In previous rulemaking, we have
identified a largely consolidated market (74 FR 3312). More recently,
in 2020, the national clearinghouse association, Cooperative Exchange,
indicated its 23 member companies represent over 90 percent of the
clearinghouse industry and provide services to over 750,000 provider
organizations, through more than 7,000 payer connections and 1,000 HIT
vendors.\26\ While we do not have data on the size of these firms, or
on the other firms constituting the remaining less than 10 percent of
the market, we continue to believe the firms in this segment are either
quite large or are affiliated with other very large firms, and do not
include them in this small entity analysis. In the January 2009
Modification final rule, we identified the number of 162 clearinghouse
entities (74 FR 3318). We are not aware of whether there has been
further consolidation in this industry since 2009, so we continue to
estimate that 162 clearinghouses serve the health care market in
subsequent analyses.
---------------------------------------------------------------------------
\26\ From testimony submitted for the 8/25/2020 NCVHS
Subcommittee on Standards Hearing on Proposed CAQH CORE Operating
Rules;: https://ncvhs.hhs.gov/wp-content/uploads/2020/08/Comments-CAQH%20CORE%20Proposed%20Operating%20Rules%20for%20Federal%20Adoption%20508.pdf.
---------------------------------------------------------------------------
Other vendors affected by this rule include provider PMS and EHR
technology system vendors. Counting the affected entities in these two
segments is complicated, in part because they are increasingly
integrated. A health care provider entity's PMS and EHR systems may be
bundled in one product offering, semi-integrated affiliated systems, or
entirely independent systems offered by separate vendors.\27\ We have
not identified publicly available data on the number, size, or market
share of these specific industry stakeholders. NAICS industry category
541511, Custom Computer Programming Services, seems to be the closest
category. In 2017, the category included over 62,000 firms with 99
percent of these having less than 500 employees and 1 percent having
500 or more employees. However, this total seems out of proportion to
other potential indicators of market size, leading us to believe it
significantly overstates the affected entities of interest to the
proposed rule. For instance, the aforementioned Cooperative Exchange
description of member firm scope cited connections with 1,000 HIT
vendors; 2019 market research estimates indicate there are over 500
vendors offering some type of EHR product; \28\ the 21st Century Cures
Act: Interoperability, Information Blocking, and the ONC Health IT
Certification Program final rule (85 FR 25642) estimated the number of
certified HIT developers with health IT products capable of recording
electronic health information certified in the 2015 Edition of health
IT certification criteria to be 458; and the Electronic Health Record
Association, a trade association of EHR companies addressing national
efforts to create interoperable EHRs in hospital and ambulatory care
settings, lists 29 companies as members.\29\ A web search for NAICS
codes associated with a sampling of these EHR Association member
companies yielded many different NAICS codes (including some with
541511), possibly reflecting widely varying scopes of other products
and services offered by firms in this market segment. Without more
definitive data on the firms specific to the health care provider PMS
and EHR business markets, we estimate that the number of affected firms
is around 1,000, with the bulk of market share served by a relatively
small number of large entities and the remainder of market share served
by many smaller entities. However, we are unable to determine how many
of these smaller entities may meet small business size standards and
are not subsidiaries of larger firms, so we do not include them in this
small entity analysis.
---------------------------------------------------------------------------
\27\ The true cost of switching EHRs. May 30, 2018. Mary Pratt.
Medical Economics Journal, June 10, 2018 edition, Volume 96, Issue
10. https://www.medicaleconomics.com/view/true-cost-switching-ehrs.
\28\ Who are the largest EHR vendors. Jeff Green. EHR in
Practice. October 18, 2019 https://www.ehrinpractice.com/largest-ehr-vendors.html.
\29\ https://www.ehra.org/membership/ehra-members.
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2. Costs to Small Entities
To determine the impact on the health care providers considered
small entities for this analysis (identified in the previous section),
we used the 2017 Census business data to collect revenue estimates and
compared these to the high and low estimates for the range of costs
calculated for each industry segment later in this analysis, as
summarized in Table 8. We calculated the percentage of revenues
represented by the high and low estimates, and none exceeded the 3 to 5
percent of revenue threshold, as summarized in Table 3. Thus, for
purposes of the RFA analysis, we can conclude there is not a
significant impact on small entities.
Table 3--Analysis of Implementation Burden on Small Covered Entities
----------------------------------------------------------------------------------------------------------------
Implementation
Entity type Small entities Revenue ($ in cost range ($ in Cost/revenue
(#) billions) millions) range (%)
----------------------------------------------------------------------------------------------------------------
Pharmacies................................ 19,044 282 0-0 NA
Vendors................................... NA NA NA NA
Clearinghouses............................ NA NA NA NA
Health plans.............................. NA NA NA NA
[[Page 78457]]
Programmers............................... NA NA NA NA
Physicians................................ 171,722 485 218-345 0.04-0.09
Dentists.................................. 125,329 126 149-299 0.12-0.24
Hospitals................................. 5,544 994 466-932 0.05-0.09
---------------------------------------------------------------------
Subtotal.............................. 321,639 1,887 833-1,666 0.04-0.09
----------------------------------------------------------------------------------------------------------------
3. Alternatives Considered
This rule proposes to adopt standards for ``health care
attachments,'' which support both health care claims, as required by
section 1173(a) of the Act, and prior authorization transactions, as
recommended to the Secretary by NCVHS. It is our understanding that the
standards recommended to the Secretary by NCVHS, and that we are
proposing to adopt in this rule, are the only standards applicable to
health care attachments that are ready for full implementation across
the industry. Therefore, we considered the following regulatory
alternatives: (1) not adopt standards for health care attachments,
allowing for the industry's continued use of multiple processes, (2)
wait to adopt standards for health care attachments until alternate
standards, such as FHIR standards, are ready for full implementation
and recommended to the Secretary by the industry, and (3) adopt a
different version of the X12 implementation specifications than Version
6020, the version proposed to adopt in this rule. We chose to proceed
with the proposals in this rule after identifying significant
shortcomings with each of these alternatives.
We chose to propose to adopt attachments standards rather than
allow for continued use of multiple standards because of the well-
documented costs and administrative burdens associated with the many
manual or partially electronic processes currently in use. These
burdens were recently detailed in the 2020 CAQH Index. In response to
CAQH surveys, industry stakeholders reported that the lack of federal
standards and mandates has been a principal barrier to adoption of
fully electronic standardized health care transactions.\30\ Based on
these survey responses, should we not adopt standards for health care
attachments, most attachment transactions and many prior authorization
transactions would continue to be conducted through fully manual
processes. Not adopting standards for attachment transactions would
also mean forgoing the opportunity to reduce the unnecessary back-and-
forth between providers and health plans, accelerate claims
adjudication and patient service approval timeframes, and reduce
provider resources spent on manual follow-up activities. To the extent
that future payer policies continue to trend toward increased levels of
prior authorization or health care attachments requirements, these
burdens could also increase.
---------------------------------------------------------------------------
\30\ Last accessed 5/28/2021 at: https://www.caqh.org/explorations/caqh-index-report.
---------------------------------------------------------------------------
Similarly, we chose not to hold off on proposing the adoption of
attachment standards until alternate standards, such as FHIR standards,
are available and recommended by the industry because we believe that
adoption and implementation of the specifications in this proposed rule
can immediately reduce the costs and burdens associated with the lack
of national standards. While we are aware of HL7's efforts to create
alternative implementation specifications to support health care
attachments transactions, we note that at the time of writing this
proposed rule, these FHIR implementation specifications have not been
finalized nor have they been tested. We also note that the HL7 CDA
standard we are proposing to adopt in this proposed rule is the only
currently available SSO-created, NCVHS-recommended standard with
published implementation specifications designed to support both claims
and prior authorization attachment transactions. We believe that the
industry's readiness for improvements to the manual or partially
electronic process currently in place, as outlined the CAQH stakeholder
surveys and supported by NCVHS's recommendation to adopt the
specifications proposed in this rule, support proposing the adoption of
attachments standards at this time. However, we invite comment on our
understanding of the readiness of possible implementation
specifications for health care attachments that support both claim and
prior authorization transactions and whether the industry supports
postponement of an adopted standard as it did for the previously
mentioned proposed rule in the 2005 Federal Register (70 FR 55990),
titled ``HIPAA Administrative Simplification: Standards for Electronic
Health Care Claims Attachments; Proposed Rule.''
Finally, we chose to propose adoption of Version 6020 of the X12
implementation specifications, rather than an alternate version, such
as Version 5010, because Version 5010 does not fully support
attachments transactions. Version 6020 resolves technical issues and
limitations in Version 5010 to enable attachments transactions that
support both health care claims and prior authorization transactions.
We also invite comment on any alternative implementation specifications
that were not considered but meet the criteria outlined in this
proposed rule.
4. Conclusion
As referenced earlier in this section, we use a baseline threshold
of 3 to 5 percent of revenues to determine if a rule would have a
significant economic impact on affected small entities. The small
health care entities do not come close to this threshold. Therefore,
the Secretary has certified that this proposed rule would not have a
significant economic impact on a substantial number of small entities.
However, because of the relative uncertainty in the data, the lack of
consistent industry data, and our general assumptions, we invite public
comments on the analysis and request any additional data that would
help us determine more accurately the impact on all categories of
entities affected by the proposed rule.
In addition, section 1102(b) of the Act requires us to prepare a
Regulatory Impact Analysis if a rule would have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has
[[Page 78458]]
fewer than 100 beds. This proposed rule would not have a significant
effect on the operations of a substantial number of small rural
hospitals because these entities would rely on contracted health
information technology (HIT) vendors for the majority of implementation
investment and efforts such hospitals elect to implement. We note that
health care providers may choose not to conduct transactions
electronically. Therefore, they would be required to use these
standards only for transactions that they conduct electronically and
would be expected to do so only when the benefits clearly outweigh the
costs involved. Therefore, the Secretary has certified that this
proposed rule would not have a significant impact on the operations of
a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates would require spending more in any one
year than threshold amounts in 1995 dollars, updated annually for
inflation. In 2022, this threshold is approximately $165 million. This
proposed rule would impose mandates that would result in the
expenditure by state, local, and tribal governments, in the aggregate,
or by the private sector, of more than $165 million in any one year.
The impact analysis in this proposed rule addresses those impacts both
qualitatively and quantitatively. In general, each state Medicaid
Agency and other government entity that is considered a covered entity
would be required to ensure that its contracted claim processors update
software and conduct testing and training to implement the adoption of
the new standards and modified versions of a previously adopted
standard. However, we have no reason to believe that ongoing
contractual payment arrangements for these services would necessarily
increase as a result of the proposed changes. UMRA does not address the
total cost of a rule. Rather, it focuses on certain categories of cost,
mainly federal mandate costs resulting from imposing enforceable duties
on state, local, or tribal governments, or on the private sector; or
increasing the stringency of conditions in, or decreasing the funding
of, state, local, or tribal governments under entitlement programs.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has federalism
implications. This proposed rule would have a substantial direct effect
on state or local governments, could preempt state law, or otherwise
have a federalism implication because state Medicaid agencies or their
contractors would be implementing new standards and a modified version
of an existing standard for which there would be expenses for
implementation and wide-scale testing.
D. Anticipated Effects
The objective of this regulatory impact analysis is to summarize
the costs and benefits of the following proposals:
Adopting new standards for the exchange of health care
attachment information consisting of--
++ A code set to be used for health care attachments transactions;
++ Proposed X12 standards for requesting and transmitting
attachment information and HL7 standards for clinical information
content; and
++ Proposed electronic signatures standards.
Modifying the existing standard for referral certification
and authorization by updating from Version 5010 to Version 6020.
This portion of the analysis is informed by a review of an earlier
environmental scan produced for us in 2016 by the MITRE Corporation,
industry testimony to the NCVHS, whitepapers from the Workgroup for
Electronic Data Interchange (WEDI), and survey results produced by
industry consensus-based organizations, and updated web-based research
on specific topics.
Consistent with statutory and regulatory requirements, any
recommendations for the adoption of HIPAA standard updates are the
outcome of an extensive consensus-driven process that is open to all
interested stakeholders. The standards development process involves
direct participatory input from representatives of the industry
stakeholders required to utilize the transactions.
For purposes of this analysis, we use the segmentation of health
care industry stakeholders laid out in the 2009 Modifications final
rule with some additional detail on vendors supporting the integration
of the administrative and clinical data. As discussed in this proposed
rule, providers and payers continue to use manual processing for health
care attachments, therefore, these stakeholders are relevant for
purposes of this RIA because there is no adopted health care
attachments standard. As noted in the 2017 WEDI white paper, most
payers send hard copy letters to request additional information to
support a claim or prior authorization submitted by the provider.\31\
These segments consist of the following:
---------------------------------------------------------------------------
\31\ Guidance on Implementation of Standard Electronic
Attachments for Healthcare Transactions November 2017 Workgroup for
Electronic Data Interchange. https://www.wedi.org/2017/11/17/guidance-on-implementation-of-standard-electronic-attachments-for-healthcare-transactions/.
Providers
++ Hospitals
++ Physicians
++ Dentists
++ Pharmacies
Health Plans
++ Private Health Plans and Issuers
++ Government Health Plans: Medicare, Medicaid, and Veterans
Administration
Clearinghouses
Vendors
++ PMS Vendors
++ EHR Vendors
In analyzing the effects of this proposed rule, we referenced the
2019 and 2020 CAQH Index Reports issued on January 21, 2020 and
February 3, 2021, respectively.\32\ The 2020 CAQH Index \33\ tracks
adoption of HIPAA-mandated and other electronic administrative
transactions and measures progress reducing the costs and burden
associated with administrative transactions exchanged across the
medical and dental industries. The CAQH Index includes estimates of the
number of annual transactions by submission mode (phone, fax, mail, or
email), electronic (HIPAA standard) or partially electronic (web
portals or interactive voice response), as well as estimates of the
associated labor cost and staff time. The reported costs and savings
account only for the labor time required to conduct transactions, not
the time and cost associated with gathering information or costs
associated with the use of clearinghouses or third-party vendors.
---------------------------------------------------------------------------
\32\ https://www.caqh.org/sites/default/files/explorations/index/report/2019-caqh-index.pdf.
\33\ https://www.caqh.org/explorations/caqh-index-report.
---------------------------------------------------------------------------
For two types of transactions directly addressed by this proposed
rule, attachments, and prior authorization, the 2020 CAQH Index
estimates the annual industry national savings opportunity of full
automation adoption of these transactions at $377 million and $417
million, respectively. These savings would accrue to both health plan
payers and providers, with the vast majority of estimated savings
accruing to providers. With respect to the category of providers, the
report does not provide a breakdown of the type of providers that
contributed to the survey
[[Page 78459]]
results, but does distinguish between medical and dental providers, and
does acknowledge partnering with both physician and hospital member
organizations. Thus, we believe the medical provider savings reported
include hospital-related responses.
In contrast to the data on labor cost savings, we are not aware of
any reports or other industry estimates on the level of additional
investments needed to fully implement these electronic processes for
requesting and submitting attachment information, or the proportion of
such costs that might be passed on to provider or health plan firms. By
reviewing testimony submitted to the NCVHS and conducting web searches,
such as for plan, clearinghouse, and vendor electronic data interchange
(EDI) instructions and services, we understand some stakeholder
segments have already largely built or acquired the capacity to
implement these proposals (albeit possibly in inconsistent and
proprietary ways in the absence of federal standards and operating
rules). Similarly, based on NCVHS testimony, others (particularly
health care providers and their vendors) have partially implemented the
standards.\34\ Thus, we conclude that implementation and readiness to
fully implement the proposed standards vary among and within covered
entity industry segments.
---------------------------------------------------------------------------
\34\ NCVHS Letter to the Secretary of HHS on Recommendations for
the Electronic Health Care Attachment Standard, July 5, 2016,
https://ncvhs.hhs.gov/wp-content/uploads/2018/03/2016-Ltr-Attachments-July-1-Final-Chair-CLEAN-for-Submission-Publication.pdf.
---------------------------------------------------------------------------
We also believe it is likely that firms directly involved in
deploying additional capacity, in particular in upgrading PMS or EHR
functionality, would not voluntarily share proprietary and competitive,
market-sensitive data on the level of additional investment needed or
on the effects on customer fees. Therefore, as further explained in the
discussion of cost calculations, we estimate the incremental costs
involved not through projected cost build-up, but rather as a function
of the level of impact of implementing the previous HIPAA-standard
modifications. We seek comment on this approach and on the
appropriateness of the aggregate level estimates; data reflecting
estimated changes to firm-specific costs and customer-specific fees
would preferably be presented in a manner that facilitates aggregation.
We do not have good information on the extent of adoption of the
proposed electronic standards for attachment information among industry
stakeholders because HHS has not adopted an electronic transaction
standard for health care attachments. However, we believe there is good
reason to expect the proposed regulatory requirements, combined with
the administrative cost savings opportunities identified by CAQH, would
incentivize broad adoption of these attachment standards and lead to a
significant uptake of the prior authorization standard. The remainder
of this section provides details supporting the cost-benefit analysis
for our proposals.
1. Affected Entities
As with previous standard updates, all HIPAA covered entities would
be affected by this proposed rule. Covered entities include all health
plans, all health care clearinghouses, and health care providers that
transmit health information in electronic form in connection with a
transaction for which the Secretary has adopted a standard. Therefore,
they would be required to use these standards only for transactions
that they conduct electronically. See the Transactions and Code Sets
rule for a discussion of affected entities (65 FR 50361).
In general, covered entities (or their vendors) would incur a
number of one-time costs to implement the new and modified transactions
in this proposed rule unless they have already implemented an adopted
HIPAA standard, such as for prior authorization transactions. These
costs would include analysis of business flow changes, software
procurement or customized software development, integration of new
software into existing provider/vendor systems, staff training, and
collection of new data, testing, and transition processes. For some
entities, new vendors may be needed for the creation and validation of
the clinical documentation to be embedded in the attachment
transactions. Systems implementation costs would account for most of
the costs, with system testing alone likely accounting for a majority
of costs for all covered entities. Ongoing operational costs would be
expected to initially grow, as the implementation of electronic
processes run in parallel with ongoing manual and partially automated
processes, but to decline as higher proportions of transactions are
automated. These HIT-related costs would be offset by significant
reductions in labor costs for what are today largely manual processes
to locate, collect, package, and mail clinical records needed to
support requests for additional documentation to support claims and
prior authorization requests. Other offsetting cost savings are
expected from lower postage and other mailing costs, reductions in
reprocessing volume due to higher clean claim acceptance rates, and
delay in receiving payment.35 36
---------------------------------------------------------------------------
\35\ NCVHS Letter to the Secretary of HHS on Recommendations for
the Electronic Health Care Attachment Standard, July 5, 2016,
https://ncvhs.hhs.gov/wp-content/uploads/2018/03/2016-Ltr-Attachments-July-1-Final-Chair-CLEAN-for-Submission-Publication.pdf.
\36\ In a regulatory impact analysis that, in accordance with
OMB Circular A-4, takes a society-wide perspective, changes in
timing of payments represent a transfer, rather than a net societal
cost savings.
---------------------------------------------------------------------------
It is likely that there are significant differences in readiness
among payer and provider claims and prior authorization HIT systems,
and we do not know the extent of incremental costs associated with HIT
development, enablement (upgrade or licensing fees paid by users), or
workflow adjustment and training to facilitate compliance with the
standards proposed in this rule. So, though we are aware that the net
benefits would likely vary among stakeholders, we lack the data to
estimate these differential effects. An important consideration
reflected in various industry testimonies submitted to the NCVHS is
that some stakeholders, particularly smaller providers, would continue
to have the option to leverage existing clearinghouses to provide these
information exchange services based on negotiated rates. This is a
standard practice today, where clearinghouses already manage 90 percent
of the conversion of paper-to-electronic formats, as well as
reformatting of non-compliant to compliant electronic claim
transactions for the industry. Given the high costs of manual and
partially electronic means for exchanging required information, we
believe the impact of this rule would be significant net savings to the
industry. However, the level and timing of uptake (as opposed to the
retention of manual processes and clearinghouse intermediation) by
provider entities are uncertain. We reflect this uncertainty with both
the phasing in of and the estimation of minimum and maximums for costs
and benefits. We solicit comments on this approach and our assumptions
throughout this analysis.
2. Explanation of Cost Calculations
Based on consultation with industry workgroups, such as WEDI, we
determined that the health care attachment standards in this proposed
rule are already in common use by entities engaged in other lines of
business, such as the workers' compensation and liability insurance
[[Page 78460]]
fields, that exchange medical records. Thus, there is clear evidence
that the standards are fit for their intended purpose and have been
successfully implemented in closely related business processes.
Although the attachments standards we are proposing to adopt are
initial standards, as described in section 1175 of the Act, health
plans surveyed by CAQH in 2020 reported electronic transaction
submission levels of 22 percent for attachments and 21 percent for
prior authorizations. Therefore, while the specification for
attachments requests by the health plan (X12 277) and the subsequent
response from the provider (X12 276) have not previously been adopted
under HIPAA Administrative Simplification, some payer and provider
systems are already exchanging HIPAA electronic prior authorization
transactions using the adopted standards. Moreover, the HL-7 C-CDA has
been widely adopted pursuant to the ONC 2014 and 2015 Editions of
Health Information Technology Certification Criteria specifying content
exchange standards and implementation specifications for exchanging
electronic health information. According to the latest available posted
data, as of 2017, nearly 4 in 5 (80 percent) office-based physicians
had adopted a certified EHR.\37\
---------------------------------------------------------------------------
\37\ ONC Health IT Dashboard. Office-based Physician Electronic
Health Record Adoption: https://dashboard.healthit.gov/quickstats/pages/physician-ehr-adoption-trends.php.
---------------------------------------------------------------------------
Similarly, while the standards we are proposing to adopt for
electronic signatures are also initial standards, we believe they have
already been widely implemented by the industry. For example, in 2010
the Drug Enforcement Agency (DEA) finalized a rule requiring similar
standards for electronic prescribing of controlled substances.\38\ The
proposed electronic signature standard utilizes the same technology to
expand electronic signature capabilities to all clinical documentation,
rather than just electronic prescriptions. Therefore, we believe the
implementation of the proposed electronic signature standard would not
represent a significant incremental cost to providers.
---------------------------------------------------------------------------
\38\ Electronic Prescribing of Controlled Substances. Drug
Enforcement Administration, Department of Justice, Office of
Diversion Control website. https://www.deadiversion.usdoj.gov/ecomm/e_rx/.
---------------------------------------------------------------------------
Given much of the industry has already implemented some or all of
the implementation specifications we are proposing to adopt in this
proposed rule, or versions of the implementation specifications we are
proposing to adopt in this proposed rule, we believe the level of
effort involved in implementing the entire set of proposed
implementation specifications herein is more akin to implementing
standards modifications than to implementing transactions standards for
the first time. Therefore, we anchor our cost estimates on the final
cost estimates, updated for inflation,\39\ in the Modifications final
rule, and then make certain adjustments to address unique aspects of
certain industry segments. While the systems required for implementing
the specifications proposed for adoption in this proposed rule have
been continuously updated since the publication of the Modifications
final rule, the technologies within the proposed implementation
specifications in this proposed rule are of the same type as those
considered in the Modification rule and will be integrated into systems
that continue to utilize the similar business models.
---------------------------------------------------------------------------
\39\ Cost estimate ranges from the January 2009 Modifications
final rule were adjusted for inflation using the Bureau of Labor
Statistics Consumer Price Index Inflation Calculator, to reflect
amounts for January 2020 and round up to the nearest whole number to
match benefits estimates from the CAQH 2020 Index. https://www.bls.gov/data/inflation_calculator.htm.
---------------------------------------------------------------------------
The cost estimates in the Modifications final rule were based on an
estimate of the total costs to implement the initial HIPAA transaction
standards (Version 4010/4010A) and informed by industry interviews.\40\
To determine the costs for each provider sub-segment (that is,
hospitals, physicians, and dentists), we established an estimate for
what the total approximate Version 4010/4010A costs were for an
individual entity within that sub-segment (based on the interviews and
other data available through research) and then applied an estimated
range of 20 to 40 percent of those costs to come up with estimated
minimum and maximum costs for Version 5010. The range was accepted as a
realistic proxy by all providers and plans who participated in the
interviews. Through the course of the interviews, we identified more
granular cost categories and reviewed these with the participants to
help analyze and validate overall cost estimates by entity. The
estimated cost for each individual entity within a segment was then
multiplied by the number of entities to establish the estimated costs
for entire segment.
---------------------------------------------------------------------------
\40\ Version 5010 Regulatory Impact Analysis--Supplement.
September 2008. https://www.cms.gov/files/document/5010regulatoryimpactanalysissupplementpdf.
---------------------------------------------------------------------------
With respect to the level and timing of the uptake of these
standards, we assume that some portion of providers and their vendors
may take longer to move from manual to fully automated transactions.
For purposes of this analysis, we generally estimate that most
stakeholders would incur costs over a 4-year period at the rate of 50
percent in the first implementation year, 30 percent in the second
implementation year, and 10 percent each in the third and fourth years.
We note that, although many comments to the Modifications rule
suggested we underestimated the costs, no substantive data or
additional information was provided to counter our analysis at that
time. We're not aware of more recent public research relating to costs
of implementing modifications to HIPAA transaction standards. We invite
public comments on our understanding and request any additional data
that would help us determine more accurately the costs of implementing
modifications to HIPAA transaction standards.
3. Explanation of Benefits Calculations
To determine the benefits for each segment of the industry, we
primarily relied upon the 2020 CAQH Index. Based on survey responses,
CAQH estimates that spending on labor time conducting attachment
transactions accounts for about $590 million of spending on
administrative transactions across the medical industry, with health
care providers incurring about 88 percent of this spending at an
average cost of $5.10 for each manually processed attachment. In moving
from manual to electronic attachments transactions, CAQH estimates the
health care industry could save $4.09 on average per transaction and an
additional $377 million annually. These estimated savings would be
split between health care providers ($328 million) and health plans
($49 million) and would be generated by the avoidance of 8 minutes in
administrative labor time per attachment on average, as medical
providers reported taking an average of 11 minutes to submit an
attachment manually versus 3 minutes electronically. Comparable data on
spending and savings opportunities on attachment transactions for
dental providers were not available, although the survey reports that
only 16 percent of dental attachment transactions in 2020 were fully
electronic.
The 2019 CAQH Index reported that the use of the electronic
standard for prior authorizations has remained very low due to barriers
such as provider
[[Page 78461]]
awareness, vendor support, and inconsistent use of data content allowed
in the standard, and the lack of an attachment standard to support the
exchange of medical documentation. The 2020 CAQH Index reports that
fully electronic prior authorization continues to have the lowest
adoption rate of the medical transactions surveyed, although
utilization between 2019 and 2020 increased by 8 percentage points to
21 percent. Since this rule proposes to adopt federal attachment
standards, including those to address data content, we believe the
proposed changes in this rule would substantially address these
barriers and promote widespread adoption of electronic prior
authorization processes. As described in section I.F. of this proposed
rule, numerous organizations representing physician provider groups,
insurance payers, health technology vendors, health care financial
managers, and HIT standard advisory bodies have submitted
recommendations to the Secretary strongly supporting this view.
CAQH reports that prior authorization is the most costly and time-
consuming administrative transaction for providers, and administrative
spending increased to $767 million as the cost to conduct prior
authorizations rose for both plans and providers from the previous
year. Based on survey responses, the 2020 CAQH Index estimates that, on
average, providers spent about 20 minutes and $10.26 per transaction to
conduct a prior authorization manually, and about 13 minutes and $7.07
via a partially electronic web portal in 2020. These costs compare with
an average cost of $3.64 per fully electronic transaction. CAQH
estimates that, based on 2020 survey data, switching to fully
electronic transactions could yield an additional $417 million in
annual administrative cost savings. Those savings would be split
between health care providers ($322 million or 77 percent) and health
plans ($95 million or 23 percent). Comparable data were not reported on
prior authorization transactions for dental providers, suggesting this
transaction is not generally utilized by this segment.
We utilize the CAQH national annual savings estimates as the basis
for our benefits estimates. The CAQH national annual savings estimates
are calculated based on potential savings moving from the reported
state of 21 percent electronic processing for prior authorization
transactions and 22 percent electronic processing for attachments to
fully electronic processing. The total potential industry cost savings
opportunity is an amount that declines as industry adoption increases.
Although there was an apparent increase in electronic processing of
prior authorization and health care attachments transactions from 2019
to 2020, we do not trend the benefits estimates forward because
previously reported estimates of electronic processing adoption have
tended to remain stable over a longer period of time. The CAQH
estimation methodology only includes labor time savings, which it
assesses to be the most significant component of savings, by far. We do
not include estimates of other sources of savings, such as through
elimination of mailing costs, so our benefit estimates may have a
tendency toward understating actual industry savings.\41\ Because we
believe that some portion of providers and their vendors may take
longer to move from manual to fully automated transactions, we also
assume a phased-in realization of the level of annual benefits
projected by CAQH. For purposes of this analysis, we generally estimate
that most stakeholders would realize the benefits in labor savings over
a 3-year period at the rate of 50 percent in the first operational
year, 75 percent in the second operational year, and 100 percent in and
after the third year after the compliance date.
---------------------------------------------------------------------------
\41\ On the other hand, CAQH developed estimates from the
experience of entities that voluntarily automated, and extrapolation
from such voluntary experience to the regulatory context may
generate a tendency toward overestimation of savings, on a per-unit
basis and/or in the aggregate. We welcome comments that would
facilitate refinement of estimates.
---------------------------------------------------------------------------
4. Hospitals
As previously discussed, to determine the costs for each health
care provider sub-segment, we started with the minimum and maximum cost
estimates in the Modifications final rule for each type of entity. For
hospitals, those estimates were within a range of $1,423 million to
$2,848 million, adjusted for inflation (74 FR 3316). We further assume
that these costs would be incurred by hospital HIT developers, which
would both absorb some portion of the costs as a cost of doing business
incorporated in the current level of HIT service and maintenance
agreements and also pass some portion of the costs on to the hospital
in the form of higher fees for enabling new functionality. This seems
reasonable given our understanding that HIT vendors generally plan on,
and finance, a certain level of ongoing system development through
ongoing maintenance agreements, typically with annual increases, but
also must keep these at a level that remains competitive in their niche
market.\42\ In other words, not all possible systems upgrades would be
factored into current fees. We do not have any information on how this
allocation would be made and expect there would be many variations in
practice, but for purposes of this analysis, we assume a 60/40 split
between costs borne by the vendor and costs passed on to the hospital.
As summarized in Table 4, this results in the hospital share of costs
in the range of $569 million to $1,139 million, with the remainder in
the range of $854 million to $1,709 million borne by hospital HIT
vendors.
---------------------------------------------------------------------------
\42\ The true cost of switching EHRs. May 30, 2018. Mary Pratt.
Medical Economics Journal, June 10, 2018 edition, Volume 96, Issue
10. https://www.medicaleconomics.com/view/true-cost-switching-ehrs.
Table 4--Attachments Costs Borne by Providers Versus Vendors
[$ in millions]
----------------------------------------------------------------------------------------------------------------
Proposed rule Provider share Vendor share
Entity type cost range (40%) (60%)
----------------------------------------------------------------------------------------------------------------
Physicians............................................. 665-1,329 266-532 399-797
Dentists............................................... 456-913 182-365 274-548
Hospitals.............................................. 1,423-2,848 569-1,139 854-1,709
--------------------------------------------------------
Subtotals.......................................... 2,544-5,090 1,017-2,036 1,527-3,054
----------------------------------------------------------------------------------------------------------------
[[Page 78462]]
To determine the benefits for hospitals, we refer to the estimates
of savings for medical providers reported by CAQH, and assume that
hospitals would achieve 20 percent of these savings. We assume a rough
80/20 split between physicians and hospitals because we believe the
vast majority of transactions needed to support claims and prior
authorizations would come from clinician practices since plans and
hospitals generally have other processes for utilization management of
more expensive inpatient admissions and outpatient procedures. CAQH
estimated the total annual savings opportunity for medical providers
for fully automating attachments and prior authorization transactions
to be $328 million and $322 million, respectively. So, we estimate the
hospital share to be 20 percent of $650 million or $130 million. To
reflect the uncertainty around the ultimate level of uptake of these
standards, we estimate a range of 25 percent below this point estimate
between $98 million to $130 million in annual savings, as summarized in
Table 5.
Table 5--Attachments Benefits by Entity
[$ in millions]
------------------------------------------------------------------------
Estimated
annual
Entity type savings
range
(25%)
------------------------------------------------------------------------
Pharmacies................................................. 0-0
Vendors.................................................... 0-0
Clearinghouses............................................. 0-0
Private Health Plans....................................... 108-144
Government Health Plans.................................... 179-238
Physicians................................................. 390-520
Dentists................................................... 86-115
Hospitals.................................................. 98-130
------------
Total.................................................... 860-1,147
------------------------------------------------------------------------
With respect to timing of costs and benefits, we assume hospitals
would have both the capital and business interest to move promptly to
achieve the return on investment; would incur all costs during the 2-
year implementation period; and would realize the full level of annual
savings in and after the first operational year following the proposed
compliance date, as summarized in Tables 8 and 9.
5. Physicians
We followed a similar methodology for estimating physician costs
and benefits. For physicians, the Modifications final rule cost
estimates were within a range of $665 million to $1,329 million,
adjusted for inflation (74 FR 3317). We assume a comparable level of
effort to implement the proposed attachments standards. We further
assume that these costs would be incurred by physician practice PMS and
EHR vendors, who would both absorb some portion of the costs as a cost
of doing business incorporated in the current level of HIT service and
maintenance agreements and also pass some portion of the costs on to
the practices in the form of higher fees for enabling new
functionality. We again assume a 60/40 split between costs borne by the
vendor and costs passed on to the customer. As summarized in Table 4,
this results in a physician share of costs in the range of $266 million
to $532 million, with the remainder in the range of $399 million to
$797 million to be borne by physician PMS and EHR vendors. We further
assume that some physician entities and their vendors may take more
time to implement the standards while continuing to use manual
processes in the meantime. Therefore, we estimate physician costs would
be incurred over a 4-year period at the rate of 50 percent in the first
implementation year, 30 percent in the second implementation year, and
10 percent each in the third and fourth years, as summarized in Table
8.
To determine the benefits for physicians, we again referred to the
estimates of savings for medical providers reported by CAQH and
calculated the remaining 80 percent of these savings. CAQH estimated
the total annual savings opportunity for medical providers for fully
automating attachments and prior authorization transactions to be $328
million and $322 million, respectively, or $650 million in total. So,
we estimate the physician share to be 80 percent of $650 million, or
$520 million. To reflect the uncertainty around the ultimate level of
uptake of these standards, we estimate a range of 25 percent below this
point estimate, or between $390 million to $520 million in annual
savings, as summarized in Table 5. We further estimate that these
benefits in labor savings would phase in over a 3-year period at the
rate of 50 percent in the first operational year, 75 percent in the
second operational year, and 100 percent in and after the third year
after the compliance date, as summarized in Table 9.
6. Dentists
For dentists, we follow the same methodology for costs as we do for
physicians. The Modifications final rule cost estimates for dentists
were within a range of $456 million to $913 million, adjusted for
inflation (74 FR 3317). We assume a comparable level of effort to
implement the proposed attachments standards. We further assume that
these costs would be incurred by dental practice PMS and EHR vendors,
who would both absorb some portion of the costs as a cost of doing
business incorporated in the current level of HIT service and
maintenance agreements and also pass some portion of the costs on to
the dental practices in the form of higher fees for enabling new
functionality. We again assume a 60/40 split between costs borne by the
vendor and costs passed on the customer. As summarized in Table 4, this
results in the dentist share of costs in the range of $182 million to
$365 million, with the remainder in the range of $274 million to $548
million borne by dental practice PMS and EHR vendors. As with
physicians, we further assume that some dental practices and their
vendors may take more time to implement the standards, while continuing
to use manual processes in the meantime. Therefore, we estimate
dentists' costs would be incurred over a 4-year period at the rate of
50 percent in the first implementation year, 30 percent in the second
implementation year, and 10 percent each in the third and fourth years,
as summarized in Table 8.
Given that the 2020 CAQH Index did not report on the potential
savings opportunity for dental providers for full automation of
attachments transactions, we take a different approach to benefits
estimation. Comments included in testimony submitted to the NCVHS in
2016 on the Attachment Standard \43\ (2016 NCVHS Hearing) indicated
that dentists supported the proposal to make the X12N 275 transaction
the standard vehicle for transporting attachment content to dental
claims, but made no mention of the prior authorization transaction.
These comments also indicated that many dental PMS vendor technologies
may lack the capability to generate HL7 documents, requiring dentists
to either upgrade existing systems or find alternative methods, such as
using a clearinghouse or payer portals. Thus, we conclude that some
dentists and their PMS vendors would incur costs associated with
submitting attachment information to support claims, and others may
maintain current manual or clearinghouse-mediated processes. Therefore,
we assume that the savings opportunity for full automation of claims
attachments for
[[Page 78463]]
dentists would be a portion of the savings opportunity for medical
providers. Since the total number of dental entities (125,329) is about
70 percent of the number of other provider entities (177,266, or 5,544
hospital establishments and 171,722 physician firms), we estimate their
savings opportunity would be no greater than 70 percent of the annual
$328 million medical provider savings opportunity for attachments
estimated by CAQH. In addition, we assume that, given the relatively
smaller size of dental practices, a greater proportion of dentists than
physicians may choose to retain manual processes. So, as summarized in
Table 5, we estimate that the annual dentist savings opportunity is 50
percent of 70 percent of the medical provider opportunity, or $115
million (328 x 0.70 x 0.50). To reflect the uncertainty around the
ultimate level of uptake of these standards, we estimate a range of 25
percent below this point estimate, or between $86 million to $115
million in annual savings. As with the physician estimates, we further
estimate that these benefits in labor savings would phase in over a 3-
year period at the rate of 50 percent in the first operational year, 75
percent in the second operational year, and 100 percent in and after
the third year after the compliance date, as summarized in Table 9.
---------------------------------------------------------------------------
\43\ NCVHS Subcommittee on Standards. Agenda of the February 16,
2016 NCVHS Subcommittee on Standards Hearing https://ncvhs.hhs.gov/meetings/agenda-of-the-february-16-2016-ncvhs-subcommittee-on-standards-hearing/.
---------------------------------------------------------------------------
7. PMS and EHR Vendors
In testimony to the 2016 NCVHS Hearing, WEDI noted that the
functionality that would be new to providers in implementing the
attachment standards would consist of automating EHR systems to
exchange data with the PMS and digital signatures. Consistent with this
assessment, the 2016 MITRE environmental scan found that many EHR
vendors had the capability of sending X12N 275 and X12N 278 EDI
transactions, but that substantial work remained to routinely and
reliably extract structured clinical data for C-CDA attachments. Since
that time there has been both growth and consolidation in these
industry segments. A health care provider entity's PMS and EHR systems
may be bundled in one product offering, semi-integrated affiliated
systems, or entirely independent systems offered by separate
vendors.\44\ So, readiness would vary widely for provider entities
based on their HIT contractors.
---------------------------------------------------------------------------
\44\ The true cost of switching EHRs. May 30, 2018. Mary Pratt.
Medical Economics Journal, June 10, 2018 edition, Volume 96, Issue
10. https://www.medicaleconomics.com/view/true-cost-switching-ehrs.
---------------------------------------------------------------------------
Because vendors of certified electronic health record technology
are already familiar with CDA for meeting requirements under the ONC
Health IT Certification Program, we believe all EHR vendors have some
ability to extract data for C-CDA templates, although all may not have
fully implemented or provided this functionality as part of core
product offerings. A review of some of the largest EHR vendor websites
in May 2021, provided informal evidence suggesting that about 80
percent of vendors had this functionality in place, that another 17
percent had at least partial functionality, and that only 3 percent
might still have no C-CDA functionality. The many other smaller EHR
vendors are also likely in varying stages of readiness. Thus, we assume
that additional implementation costs may be needed to reliably extract
C-CDA documentation and to either integrate this content into internal
EDI processes or exchange the documentation with another PMS.
Similarly, we assume PMS vendors contracted with clients that have
a certified EHR have already largely developed the ability to create
the X12N 275 and X12N 278, even if this functionality has not been
enabled for all customers, and that the majority of the additional cost
would be associated with receiving and managing the C-CDA payload.
Because of this pre-existing functionality, we are again persuaded that
implementing these proposals is more akin to a standards upgrade than
implementing a new standard for the first time. Based on 2020 CAQH
Index results that report 22 percent of medical and 16 percent of
dental attachment exchanges occurring electronically, we are aware that
some provider vendors have already successfully implemented the
transmission of electronic attachments. Without data on the extent of
the gaps, or on the difference in readiness between EHR and PMS
vendors, we assume similar costs across both types of vendors and treat
them together. We also assume that other significant components of
implementation costs would consist of trading partner testing and user
training.
As the result of the estimates already described for hospitals,
physicians, and dentists and the split with their HIT vendors in Table
4, we estimate that PMS and EHR vendor costs would add up across all
customer segments to a range of $1,527 to 3,054 million. And since we
assume some vendors and/or their customers may take more time to
implement the standards, we estimate vendors' costs would be incurred
over a 4-year period at the rate of 50 percent in the first
implementation year, 30 percent in the second implementation year, and
10 percent each in the third and fourth years, as summarized in Table
8.
We have not identified any evidence that suggests there would be
savings for this segment as the result of the changes in this proposed
rule and do not include any estimates of benefits for this segment.
8. Clearinghouses
From remarks recorded at the 2016 NCVHS Hearing,\45\ we understand
that by 2016 many entities in the clearinghouse industry had already
fully implemented the standards proposed in this rule and were
exchanging the transactions and clinical payloads with government and
commercial health care entities, as well as with entities in other
lines of business. Fundamental to the clearinghouse business role is
the ability to normalize disparate data formats, including both
structured and unstructured clinical data, and unwrap and convert the
data into standard or proprietary formats based on the varying
capabilities and needs of payer and provider clients. We assume that,
by 2022, this ability has generally become the business norm throughout
the clearinghouse industry. As a result, we assume that clearinghouses
would not have significant new technology development costs as the
result of our proposals, but would have significant new trading partner
testing costs.
---------------------------------------------------------------------------
\45\ Transcript of the February 16, 2016 NCVHS Subcommittee on
Standards https://ncvhs.hhs.gov/transcripts-minutes/transcript-of-the-february-16-2016-ncvhs-subcommittee-on-standards/.
---------------------------------------------------------------------------
To estimate clearinghouse implementation costs, we considered a
commenter, described in the Modifications final rule (74 FR 3318), that
identified as a large clearinghouse and reported that projected costs
would be at least $3.5 million, $4.3 adjusted for inflation, and would
be affected specifically by the amount of testing that would be
required with trading partners--both providers and health plans. On the
basis of this data point, as summarized in Table 6, we estimate that 23
large clearinghouse entities would incur $4.3 million in implementation
costs, and that the remainder of 139 smaller clearinghouses would incur
$1.8 million, for a segment total of $349 million. To reflect the
uncertainty around these projections, we estimate a range of 25 percent
below and above this point estimate of between $262
[[Page 78464]]
million to $436 million in total costs. And since we assume some
customers may take more time to implement the standards, we estimate
clearinghouse costs would be incurred over a 4-year period at the rate
of 50 percent in the first implementation year, 30 percent in the
second implementation year, and 10 percent each in the third and fourth
years, as summarized in Table 8.
We have not identified any evidence that suggests there would be
savings for clearinghouses as the result of the changes in this
proposed rule and have not estimated any benefits for this segment.
Table 6--Clearinghouse Costs
----------------------------------------------------------------------------------------------------------------
Firm size Large Small Total
----------------------------------------------------------------------------------------------------------------
Firms (#)....................................................... 23 139 162
Cost per Firm ($ million)....................................... 4.3 1.8 ..............
Total Segment Cost ($ million).................................. 99 250 349
Cost Range 25% ($ million)......................... .............. .............. 262-436
----------------------------------------------------------------------------------------------------------------
9. Private Health Plans and Issuers
Based on our informal web searches in May 2021, for plan websites
that include EDI instructions for providers on submitting X12N 275 and
X12N 278 transactions, and the general absence of comments describing
significant implementation burden in testimony submitted to the 2016
NCVHS Hearing, we believe health plans (or their clearinghouses) have
generally already implemented the technology for these proposed
changes. We believe health plans (or their clearinghouses) have already
implemented both the X12N transactions and have processes for
collecting at least unstructured medical record data currently used for
auditing, risk coding validation, and other quality and utilization
management processes. CAQH reports that 22 percent of medical and 16
percent of dental attachment exchanges were occurring electronically in
2020. In addition, we are aware that all health plans routinely collect
medical record documentation from providers in a variety of ways,
including through web portals and direct access to EHRs.\46\ These
facts suggest to us that health plans have either already automated
these processes or have workarounds to manage the receipt of this
information. Thus, we believe the additional effort associated with
implementing our proposals may be limited to mapping existing backend
processes to the new transaction processing front-end systems.
Alternatively, the smaller the health plan, the more likely that entity
may rely upon a clearinghouse for administrative and clinical data
exchange and the more likely the status quo would continue.
---------------------------------------------------------------------------
\46\ For example, see: Payer Access to EHRs: What Providers Need
to Know. Journal of AHIMA. October 9, 2019 https://journal.ahima.org/page/payer-access-to-ehrs-what-providers-need-to-know.
---------------------------------------------------------------------------
In testimony to the 2016 NCVHS Hearing, WEDI noted that the
functionality that would be new to payers in implementing the
attachment standards would be the HL7 CDA, LOINC codes, and other
transport models requiring different skill sets than EDI. Although
payers routinely collect medical record documentation today, this does
not necessarily mean that the ingestion, interpretation, and
integration of clinical data is fully automated. However, we do not see
evidence in testimony or public comments that plans anticipate a
significant implementation effort related to additional technology
development to handle the HL7 CDA and LOINC codes required by federal
adoption of attachment standards. It is possible, given payer
involvement with the rapid evolution of clinical data exchange
standards, that health plans may not be incentivized to significantly
enhance their current state of C-CDA handling, and may instead continue
to rely on current state processes, including the use of clearinghouses
for intermediation where necessary.\47\ For these reasons, we do not
believe health plans would bear as significant a level of investment
for system development for these proposals as they did for the
requirements of the Modifications final rule. However, they would
likely incur implementation costs for trading partner testing if they
exchange these transactions directly with providers in lieu of via
clearinghouses.
---------------------------------------------------------------------------
\47\ A Path Toward Further Clinical and Administrative Data
Integration. Final Report Of The Health Information Technology
Advisory Committee's Intersection of Clinical And Administrative
Data Task Force To The National Coordinator For Health Information
Technology. November 17, 2020 https://www.healthit.gov/sites/default/files/page/2020-11/2020-11-17_ICAD_TF_FINAL_Report_HITAC.pdf.
---------------------------------------------------------------------------
In light of these considerations, we assume that the costs of
implementation for health plans may be somewhat analogous to those for
clearinghouses, but generally with fewer connections to test, since
many transactions would be expected to continue to be exchanged through
existing clearinghouse connections. Therefore, as summarized in Table
7, we estimate that private health plans would incur 50 percent of
clearinghouse costs, and we increase that estimated range of $262
million to $436 million to reflect 4.8 times as many health plan
entities (772/162 = 4.8). Thus, we estimate private health plans would
incur implementation costs, driven mostly by trading partner testing,
of $838 million (349 x 0.50 x 4.8). To reflect the uncertainty around
these projections, we estimate a range of 25 percent below and above
this point estimate of between $629 million to $1,048 million.
Table 7--Private Health Plan Costs
------------------------------------------------------------------------
Entity type Clearinghouses Private plans
------------------------------------------------------------------------
Firms (#)......................... 162 772
Difference in # of Firms.......... ................. 4.8
Total cost from Table 6 ($ in 349 .................
millions)........................
Plan cost (50% of above x multiple ................. 838
of firms) ($ in millions)........
Cost Range 25% ($ in ................. 629-1,048
millions)........................
------------------------------------------------------------------------
[[Page 78465]]
Given that we assume some portion of providers and their vendors
may take longer to move from manual to fully automated transactions, we
assume health plan testing costs would extend beyond the 2-year
implementation period. So, for purposes of this analysis, we estimate
that private health plans would incur costs over a 4-year period at the
rate of 50 percent in the first implementation year, 30 percent in the
second implementation year, and 10 percent each in the third and fourth
years.
In estimating the benefits of the proposed rule for private health
plans, we again referred to the estimates of savings reported by CAQH,
but this time to those reported for plans. CAQH estimated the 2020
national annual plan savings opportunities for attachments and prior
authorizations at $49 million and $95 million, respectively, for a
total of $144 million annually. To reflect the uncertainty around the
ultimate level of uptake of these standards, we estimate a range of 25
percent below this point estimate between $108 million to $144 million
in annual savings. We further assume plans would realize the benefits
in labor savings over a 3-year period at the rate of 50 percent in the
first operational year, 75 percent in the second operational year, and
100 percent in and after the third year after the compliance date, as
summarized in Table 9.
10. Government Health Plans
Similar to private health plans, we believe Medicare, Medicaid, and
the Veteran's Administration systems have largely implemented the
ability to receive and manage these transactions through their HIT
processing vendors and contracted managed care plans, especially with
respect to claims attachments, and would incur costs in rough magnitude
to the impacts estimated in the Modifications final rule for testing
and training. We assume these costs would again largely be borne by the
contracted vendors under existing contractual terms and agreements.
Accordingly, to calculate government health plan costs, we used the
same range of costs estimated in the Modifications final rule of $384
million to $734 million (74 FR 3318), adjusted for inflation. As we do
with providers and private health plans, we further assume that costs
would be incurred over a 4-year period. As summarized in Table 8, we
estimate costs would be incurred at the rate of 50 percent in the first
implementation year, 30 percent in the second implementation year, and
10 percent each in the third and fourth years.
To calculate government health plan benefits, we started with the
point estimate of $238 million savings due to the use of better
standards in the Modifications final rule (74 FR 3318). To reflect the
uncertainty around the ultimate level of uptake of these standards, we
estimate a range of 25 percent below this point estimate or between
$179 million to $238 million in annual savings. As with other industry
segments, and as summarized in Table 9, we further assume government
health plans would realize the benefits in these savings over a 3-year
period at the rate of 50 percent in the first operational year, 75
percent in the second operational year, and 100 percent in and after
the third year after the compliance date.
11. Pharmacies
We believe pharmacies would generally not be impacted by the
changes in this proposed rule. Comments from NCPDP submitted to the
2016 NCVHS Hearing indicated: that pharmacies use the X12N 837 to bill
medications and supplies covered under the Medicare Part B program and
for professional pharmacy services covered under a medical plan; the
type of claims submitted by pharmacy providers using the X12N 837
rarely requires an attachment; the electronic prior authorization (ePA)
transactions approved as part of the NCPDP SCRIPT standard in 2013
address the documentation needs around prior authorization attachments;
and that while the ePA transactions do accommodate attachments, NCPDP
was not aware of any organization using a HL7 C-CDA attachment for
pharmacy prior authorizations. In addition, contextual comments
submitted by NCPDP to the NCVHS in 2020 in response to a Request for
Comments on CAQH CORE Operating Rules \48\ indicated there is very
little use in the pharmacy industry of the X12N 278 transaction. As a
result, we assume pharmacies would be affected by these proposals only
rarely to support the billing of retail pharmacy supplies and
professional services claims. Based on an NCPDP whitepaper, we further
understand that a pharmacy needing to send attachment information to
support an X12N 837 claim would generally be expected to employ
existing batch processes to send attachment information to the same
clearinghouse that converts their NCPDP billing transactions to X12 837
Professional Claims for formatting and transmittal in the X12N 275.\49\
Therefore, we assume the proposed changes to information exchanges
between clearinghouses and health plans would continue to be managed by
clearinghouses that serve this particular market. As a result, we
conclude that pharmacies would generally not be affected by this
proposed rule, and we estimate no costs and benefits for this segment.
---------------------------------------------------------------------------
\48\ NCVHS Subcommittee on Standards, Comments Received in
Response to Request for Comment (Federal Register Notice 85 FR
37666] (on CAQH CORE Operating Rules) August 20, 2020 https://ncvhs.hhs.gov/wp-content/uploads/2020/08/Comments-CAQH%20CORE%20Proposed%20Operating%20Rules%20for%20Federal%20Adoption%20508.pdf.
\49\ NCPDP White Paper on Pharmacy Professional Service Billing
https://www.ncpdp.org/NCPDP/media/pdf/WhitePaper/Billing-Guidance-for-Pharmacists-Professional-and-Patient-Care-Services-White-Paper.pdf?ext=.pdf.
---------------------------------------------------------------------------
12. Summary of Costs and Benefits for This Proposed Rule
Tables 8 and 9 are the compilation of the estimated costs and
benefits for all of the standards proposed in this proposed rule.
Table 8--Estimated Minimum and Maximum Costs for Implementation of Attachment Standards--2025 Through 2034
[$ in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hospitals minimum................................ 284.5 284.5 ....... ....... ....... ....... ....... ....... ....... ....... 569
Hospital maximum................................. 569.5 569.5 ....... ....... ....... ....... ....... ....... ....... ....... 1,1395.0
Physicians minimum............................... 133.0 79.8 26.6 26.6 ....... ....... ....... ....... ....... ....... 266.0
Physicians maximum............................... 266 159.6 53.2 53.2 ....... ....... ....... ....... ....... ....... 532.0
Dentists minimum................................. 91 54.6 18.2 18.2 ....... ....... ....... ....... ....... ....... 182.0
Dentists maximum................................. 182.5 109.5 36.5 36.5 ....... ....... ....... ....... ....... ....... 365.0
Pharmacies minimum............................... 0.0 0.0 0.0 0.0 ....... ....... ....... ....... ....... ....... 0.0
Pharmacies maximum............................... 0.0 0.0 0.0 0.0 ....... ....... ....... ....... ....... ....... 0.0
[[Page 78466]]
Private Health Plans minimum..................... 314.5 188.7 62.9 62.9 ....... ....... ....... ....... ....... ....... 629.0
Private Health Plans maximum..................... 524 314.4 104.8 104.8 ....... ....... ....... ....... ....... ....... 1,048.0
Government Health Plans minimum.................. 192.0 115.2 38.4 38.4 ....... ....... ....... ....... ....... ....... 384.0
Government Health Plans maximum.................. 367 220.2 73.4 73.4 ....... ....... ....... ....... ....... ....... 734.0
Clearinghouses minimum........................... 131 78.6 26.2 26.2 ....... ....... ....... ....... ....... ....... 262.0
Clearinghouses maximum........................... 218 130.8 43.6 43.6 ....... ....... ....... ....... ....... ....... 436.0
Vendors minimum.................................. 763.5 458.1 152.7 152.7 ....... ....... ....... ....... ....... ....... 1,527.0
Vendors maximum.................................. 1,527 916.2 305.4 305.4 ....... ....... ....... ....... ....... ....... 3,054.0
------------------------------------------------------------------------------------------------------
Total Minimums............................... 1,910 1,260 325 235 0.0 0.0 0.0 0.0 0.0 0.0 3,819.0
Total Maximums............................... 3,654 2,420.2 616.9 616.9 0.0 0.0 0.0 0.0 0.0 0.0 7,308.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 9--Estimated Minimum and Maximum Benefits for Implementation of Attachment Standards--2025 Through 2034
[$ in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hospitals minimum.................................... 0.0 0.0 97.5 97.5 97.5 97.5 97.5 97.5 97.5 97.5 780.0
Hospital maximum..................................... 0.0 0.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 1,040.0
Physicians minimum................................... 0.0 0.0 195.0 292.5 390.0 390.0 390.0 390.0 390.0 390.0 2,827.5
Physicians maximum................................... 0.0 0.0 260.0 390.0 520.0 520.0 520.0 520.0 520.0 520.0 3,770.0
Dentists minimum..................................... 0.0 0.0 43 64.6 86.1 86.1 86.1 86.1 86.1 86.1 624.2
Dentists maximum..................................... 0.0 0.0 57.5 86.3 115.0 115.0 115.0 115.0 115.0 115.0 833.8
Pharmacies minimum................................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Pharmacies maximum................................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Private Health Plans minimum......................... 0.0 0.0 54.0 81.0 108.0 108.0 108.0 108.0 108.0 108.0 783.0
Private Health Plans maximum......................... 0.0 0.0 72.0 108.0 144.0 144.0 144.0 144.0 144.0 144.0 1,044.0
Government Health Plans minimum...................... 0.0 0.0 89.3 133.9 178.5 178.5 178.5 178.5 178.5 178.5 1,294.2
Government Health Plans maximum...................... 0.0 0.0 119.0 178.5 238.0 238.0 238.0 238.0 238.0 238.0 1,725.5
Clearinghouse minimum................................ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Clearinghouse maximum................................ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Vendors minimum...................................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Vendors maximum...................................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------------------------
Total Minimums................................... 0.0 0.0 478.8 669.5 860.1 860.1 860.1 860.1 860.1 860.1 6,308.9
Total Maximums................................... 0.0 0.0 638.5 892.8 1,147.0 1,147.0 1,147.0 1,147.0 1,147.0 1,147.0 8,413.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
E. Regulatory Review Costs Estimate
One of the costs of compliance with a proposed rule is the
necessity for affected entities to review the rule in order to
understand what it requires and what changes the entity would have to
make to come into compliance. We assume that 323,766 affected entities
(listed in Table 2) would incur some of these costs, as they are the
entities that would have to implement the proposed changes. The
particular staff involved in such a review would vary from entity to
entity, but would generally consist of lawyers responsible for
compliance activities (at all 323,766 entities) and individuals
familiar with the technical X12N and HL7 standards at the level of a
computer and information systems manager at private and government
health plans, clearinghouses, and PMS and EHR vendors (a total of 1,937
entities). Using the Occupational Employment and Wages for May 2020
from the Bureau of Labor Statistics for lawyers (Code 23-1011) and
computer and information system managers (Code 11-3021), we estimate
that the national average labor costs of reviewing this rule are $100
and $109 per hour, respectively, including overhead and fringe
benefits. We estimate that it would take approximately 2 hours for each
staff person involved to review this proposed rule and its relevant
sections and that, on average, one lawyer and two computer and
information manager-level staff persons would engage in this review.
For each entity that reviews the rule, the estimated costs are
therefore $200 for lawyers, or $64.8 million (2 hours each x 1 staff x
$100 x 323,766) for all affected entities. For each plan,
clearinghouse, and PMS or EHR vendor, the estimated costs are therefore
$436 for information system managers, or $0.8 million (2 hours each x 2
staff x $109 x 1,937) in total. Therefore, we estimate that the total
cost of reviewing this rule is $65.6 million ($64.8 + 0.8 million).
F. Accounting Statement
Whenever a rule is considered a significant rule under Executive
Order 12866, we are required to develop an Accounting Statement. This
statement must state that we have prepared an accounting statement
showing the classification of the expenditures associated with the
provisions of this proposed rule. Monetary annualized benefits and non-
budgetary costs are presented using 3 percent and 7 percent discount
rates.
[[Page 78467]]
Table 10--Accounting Statement--Accounting Statement: Classification of Estimated Expenditures, From FY 2025 to
FY 2034
[$ in millions]
----------------------------------------------------------------------------------------------------------------
Category Primary estimate Minimum estimate Maximum estimate Source
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Annualized monetized benefits:
7% Discount............... 670.............. 574................. 765................. RIA.
3% Discount............... 708.............. 606................. 809................. RIA.
Qualitative (un-quantified Increased
benefits). productivity due
to decrease in
manual
processing;
reduced delays
in patient care.
----------------------------------------------------------------------------------------------------------------
Providers and health plans would benefit from efficiencies in resource use stemming from changes implemented by
plans, clearinghouses, and vendors.
----------------------------------------------------------------------------------------------------------------
Costs
----------------------------------------------------------------------------------------------------------------
Annualized monetized costs:
7% Discount............... 700.............. 474................. 926................. RIA.
3% Discount............... 615.............. 416................. 814................. RIA.
Qualitative (un-quantified None.............
costs).
----------------------------------------------------------------------------------------------------------------
Providers, health plans, and government plans would pay for IT staff and other contractors, as well as
clearinghouses and vendors for changes in the forms of new and ongoing fees.
----------------------------------------------------------------------------------------------------------------
Transfers
----------------------------------------------------------------------------------------------------------------
Annualized monetized None............. None................ None................
transfers: ``on budget''.
Annualized monetized None............. None................ None................
transfers: ``off budget''.
----------------------------------------------------------------------------------------------------------------
VI. Response to Comments
Because of the large number of public comments, we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
List of Subjects
45 CFR Part 160
Administrative practice and procedure, Computer technology, Health
care, Health facilities, Health insurance, Health records, Hospitals,
Medicaid, Medicare, Penalties, Reporting and recordkeeping
requirements.
45 CFR Part 162
Administrative practice and procedures, electronic transactions,
health facilities, health insurance, hospitals, incorporation by
reference, Medicaid, Medicare, Reporting and recordkeeping
requirements.
For the reasons set forth in this preamble, the Department of
Health and Human Services proposed to amend 45 CFR subchapter C to read
as follows:
PART 160--GENERAL ADMINISTRATIVE REQUIREMENTS
0
1. The authority citation for part 160 continues to read as follows:
Authority: 42 U.S.C. 1302(a), 42 U.S.C. 1320d-1320d-8, sec. 264
of Pub. L. 104 191, 110 Stat. 2033-2034 (42 U.S.C. 1320d-2 (note)),
5 U.S.C. 552; secs. 13400 and 13424, Pub. L. 111-5, 123 Stat. 258-
279, and sec. 1104 of Pub. L. 111-148, 124 Stat. 146-154.
Sec. 160.103 [Amended]
0
2. In Sec. 160.103, paragraph (10) of the definition of
``Transaction'' is amended by removing the word ``claims'' and adding
in its place the word ``care''.
PART 162--ADMINISTRATIVE REQUIREMENTS
0
3. The authority citation for part 162 continues to read as follows:
Authority: 42 U.S.C. 1320d--1320d-9 and secs. 1104 and 10109 of
Pub. L. 111-148, 124 Stat. 146-154 and 915-917.
0
4. Section 162.103 is amended by adding the definitions of ``Attachment
information'' and ``Electronic signature'' to read as follows:
Sec. 162.103 Definitions.
* * * * *
Attachment information means documentation that enables the health
plan to make a decision about health care that is not included in
either of the following:
(1) A health care claims or equivalent encounter information
transaction, as described in Sec. 162.1101.
(2) A referral certification and authorization transaction, as
described in Sec. 162.1301(a) and the portion of Sec. 162.1301(c)
that pertains to authorization.
* * * * *
Electronic signature means an electronic sound, symbol, or process,
attached to or logically associated with attachment information and
executed by a person with the intent to sign the attachment
information.
* * * * *
0
5. Section 162.920 is amended by:
0
a. Revising the introductory text and paragraph (a) introductory text;
and
0
b. Adding paragraphs (a)(19) through (22) and (e).
The revisions and additions read as follows:
Sec. 162.920 Availability of implementation specifications and
operating rules.
Certain material is incorporated by reference into this part with
the approval of the Director of the Federal Register under 5 U.S.C.
552(a) and 1 CFR part 51. To enforce any edition other than that
specified in this section, the Department of Health and Human Services
must publish a document in
[[Page 78468]]
the Federal Register and the material must be available to the public.
All approved incorporation by reference (IBR) material is available for
inspection at the Centers for Medicaid & Medicare Services (CMS) and
the National Archives and Records Administration (NARA). Contact CMS
at: 7500 Security Boulevard, Baltimore, Maryland 21244;
[email protected]; (410) 786-6597. For
information on the availability of this material at NARA, visit
www.archives.gov/federal-register/cfr/ibr-locations.html or email
[email protected]. The material may be obtained from the following
source(s):
(a) ASC X12, 7600 Leesburg Pike, Suite 430, Falls Church, VA 22043;
Telephone (703) 970-4480; FAX (703) 970-4488; https://www.X12.org.
(19) The X12N 275--Additional Information to Support a Health Care
Claim or Encounter (006020X314), September 2014; IBR approved for Sec.
162.2002(d).
(20) The X12N 275--Additional Information to Support a Health Care
Services Review (006020X316), August 2021; IBR approved for Sec.
162.2002(c).
(21) The X12N 277--Health Care Claim Request for Additional
Information (006020X313), September 2014; IBR approved for Sec.
162.2002(e).
(22) The X12N 278--Health Care Services Request for Review and
Response (006020X315), September 2014; IBR approved for Sec.
162.1302(e).
* * * * *
(e) Health Level Seven International (HL-7), 3300 Washtenaw Avenue,
Suite 227, Ann Arbor, MI 48104; Telephone (734) 677-7777; FAX (734)
677-6622; www.hl7.org.
(1) HL7 CDA R2 Attachment Implementation Guide: Exchange of C-CDA
Based Documents, Release 1--March 2017; IBR approved for Sec.
162.2002(a).
(2) HL7 Implementation Guide for CDA Release 2: Consolidated CDA
Templates for Clinical Notes (US Realm) Draft Standard for Trial Use
Release 2.1, Volume 1--Introductory Material, June 2019 with Errata;
IBR approved for Sec. 162.2002(b).
(3) HL7 Implementation Guide for CDA Release 2: Consolidated CDA
Templates for Clinical Notes (US Realm) Draft Standard for Trial Use
Release 2.1, Volume 2--Templates and Supporting Material, June 2019
with Errata; IBR approved for Sec. 162.2002(b).
0
6. Section 162.1302 is amended--
0
a. In paragraph (c), by removing the phrase ``standards identified in
paragraph (b)(2)'' and adding in its place the phrase ``standard
identified in paragraph (b)(2)(i)''; and
0
b. By adding paragraph (e).
The addition reads as follows:
Sec. 162.1302 Standards for referral certification and prior
authorization transaction.
* * * * *
(e) For the period from January 1, 2012--
(1) Through [24 months from effective date of the final rule], the
standard identified in paragraph (b)(2)(ii) of this section;
(2) On and after [24 months from the effective date of the final
rule], the X12N 278--Health Care Services Request for Review and
Response (006020X315) (incorporated by reference, see Sec. 162.920).
0
7. Add subpart T, consisting of Sec. Sec. 162.2001 and 162.2002 to
read as follows:
Subpart T--Health Care Attachments
Sec.
162.2001 Health care attachments transaction.
162.2002 Standards for health care attachments transaction.
Subpart T--Health Care Attachments
Sec. 162.2001 Health care attachments transaction.
A health care attachments transaction is the transmission of any of
the following:
(a) Attachment information from a health care provider to a health
plan for any of the following purposes:
(1) In support of a referral certification and authorization
transaction, as described in Sec. 162.1301(a).
(2) In support of a health care claims or equivalent encounter
transaction, as described in Sec. 162.1101.
(b) A request from a health plan to a health care provider for
attachment information.
Sec. 162.2002 Standards for health care attachments transaction.
The Secretary adopts the following standards for the period on and
after [24 months from effective date of the final rule]:
(a) For transmissions described in Sec. 162.2001, HL7 CDA R2:
Attachment Implementation Guide: Exchange of C-CDA Based Documents,
Release 1--March 2017 (incorporated by reference, see Sec. 162.920).
(b) For transmissions described in Sec. 162.2001(a) --
(1) HL7 Implementation Guide for CDA Release 2: Consolidated CDA
Templates for Clinical Notes (US Realm) Draft Standard for Trial Use
Release 2.1, Volume 1--Introductory Material, June 2019 with Errata
(incorporated by reference, see Sec. 162.920)
(2) HL7 Implementation Guide for CDA Release 2: Consolidated CDA
Templates for Clinical Notes (US Realm) Draft Standard for Trial Use
Release 2.1, Volume 2 -- Templates and Supporting Material, June 2019
with Errata (incorporated by reference, see Sec. 162.920).
(c) For transmissions described in Sec. 162.2001(a)(1), the X12N
275 Additional Information to Support a Health Care Services Review
(06020X316).
(d) For transmissions described in Sec. 162.2001(a)(2), the X12N
275 Additional Information to Support a Health Care Claim or Encounter
(06020X314).
(e) For transmissions described in the following:
(1) Section 162.2001(b) that pertain to Sec. 162.2001(a)(2)
transmissions, the X12N 277--Health Care Claim Request for Additional
Information (006020X313) (incorporated by reference, see Sec.
162.920).
(2) Section 162.2001(b) that pertain to Sec. 162.2001(a)(1)
transmissions, the standard specified in 45 CFR 1302(e)(2).
Dated: December 14, 2022.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2022-27437 Filed 12-15-22; 4:15 pm]
BILLING CODE 4150-28-P