Press Releases

Industry Lessons Learned from ASC X12 5010 Implementation - Letter from WEDI to CMS

November 06, 2012

RE: Industry Lessons Learned from ASC X12 5010 Implementation

Dear Administrator Tavenner:

In its advisory role under the Health Insurance Portability and Accountability Act (HIPAA), the Workgroup for Electronic Data Interchange (WEDI) periodically brings to your attention issues related to Administrative Simplification and related areas that it believes merit review and consideration by the Secretary of Health and Human Services (HHS).

As the discretionary enforcement period for ASC X12 5010 has come to an end and the health care industry looks ahead towards the implementation of future regulatory requirements, WEDI has reviewed the “lessons learned.” Our goal with collecting these experiences is to develop a series of recommendations that should be considered by HHS and the Centers for Medicare & Medicaid Services (CMS) in the future in order to help mitigate similar implementation challenges and to help the industry successfully navigate other related critical changes.

WEDI strongly urges CMS to consider the following recommendations:

Recommendation #1: Pilot testing of standards should occur before adoption and before final implementation

With pilot testing of the ASC X12 5010 transactions prior to the adoption and implementation, issues could have been identified sooner and the industry could have been prepared for addressing those issues during their respective implementations. As an example, the institutional health care claim transaction (837I) required publication of an errata document to fix the data element Revenue Code (SVD04), which had been changed erroneously to “Not Used” in 5010 when it should have remained “Required.” This error could have been caught in pilot testing during development may have avoided the errata publication. In fact, pilot testing could have likely found all of the errata changes that had to be published for the professional health care claim, dental health care claim, and eligibility request and response transactions. The necessity for the errata documents was seen by many as a reason for the delay in vendors releasing their software products and organizations being ready for testing on time, because organizations waited until the errata documents were final and adopted through regulation.

Based on the experience in ASC X12 5010, WEDI urges CMS to develop a policy to not adopt new standards without pilot testing. WEDI offers its resources to assist in the pilot testing and evaluation of results.

Recommendation #2: For subsequent regulation, CMS should work with WEDI to develop steps and processes to understand appropriate testing approaches, timelines and capabilities that will facilitate industry “readiness”

During the transition to ASC X12 5010, WEDI noted that there was confusion as to what “testing” and “readiness” meant in the industry. For example, did they mean that some or all systems were tested, were they tested internally and externally, was production data tested, and at what point was the organization “ready?”

In the case of ASC X12 5010 testing, most testing was done for submission and no return transaction test was conducted. WEDI believes that proxy testing, or not testing with real transactions with real partners, is not adequate. While testing with vendors is one step, there must be end-to-end testing to ensure a business transaction can be carried out in full. We acknowledge that the definition of end-to-end testing has not been established at this time.

WEDI recommends that CMS work with us to develop industry consensus on steps and processes to understand appropriate and feasible testing approaches, timelines and capabilities that will define the appropriate level of testing and facilitate industry readiness. This would include identifying appropriate needs related to education, data capture, and data usage. We urge CMS to work with us as early as possible in the regulatory process to establish these requirements for the specific implementation subject to the regulation.

Recommendation #3: CMS must develop a process, in partnership with private industry, to identify and capture issues early through testing phases and develop a process to clearly identify which issues are being addressed and their relative priority

During the implementation of ASC X12 5010, it was very difficult to tell what challenges organizations were dealing with during testing. WEDI believes that CMS should develop, or partner with organizations, to create a system to capture testing and implementation issues in order to provide the industry with a common database of issues that can be consulted. Such a system might have revealed patterns of common challenges.

As the industry was in the midst of implementation, it became very difficult to determine which organizations were dealing with which specific issues. As an example, organization A might be dealing with a certain problem processing a claim. Organization A may not have known that its trading partners were aware of the issue and working to resolve it. In addition, organization B may have been having the same problem and not be aware that others were too.

In partnership with CMS and other industry representatives, WEDI implemented an ASC X12 5010 implementation database that was useful in collecting implementation challenges and triaging the problem to the right organization. This initiative was launched after the compliance deadline. Future implementations should have a similar support system in place well before the compliance deadline to provide the full benefits to the industry. WEDI offers to continue its work in this area, as it did with the ASC X12 5010 implementation.

Recommendation #4: Partner with WEDI on surveying industry readiness

In the Spring of 2012, CMS sent out WEDI’s ICD-10 readiness survey through its listserv. The result was an extraordinarily large response (nearly 2,600 responses). The lesson learned here was that CMS can help push out private industry survey polls in order to boost the amount of responses. Better response rates to surveys will allow decisions to be made from a larger percentage of the industry. Additionally, WEDI believes that CMS can work with us to help “coordinate” surveys in order to avoid “survey-fatigue”.

Augmenting some of the online polls currently being conducted, CMS may wish to consider conducting a more thorough and scientific survey related to industry readiness. WEDI recommends that funding be directed to help create more statistically valid surveys.

Recommendation #5: Further evaluate the process for return on investment (ROI) and implementation cost analysis to ensure these estimates are realistic and based on quantitative evidence

Evaluating the ROI and cost of implementation are crucial to determining the true impact and benefit of adopting future standards. As was the case with ASC X12 4010 and ASC X12 5010, the total cost of implementation and reaching full deployment far exceeded the initial cost estimates. WEDI believes that these analyses must be thoughtful and realistic. While a determination may be made that although costs do outweigh the ROI, a decision may still be made to proceed, but the industry as a whole or those stakeholders with projected higher costs will be better prepared to manage the costs of the implementation.

We urge CMS to study these critical metrics further and to conduct statistically valid surveys in order to fully analyze these costs prior to the adoption of standards and to engage private industry in gathering implications. WEDI offers to work with CMS to mobilize our members to provide ROI data.

Recommendation #6: Avoid taking on too many changes in times of complex standards deployments

One of the lessons learned in the most recent implementation of ASC X12 5010 was that trying to make too many changes at one time introduces complexity to the change we’re trying to achieve and sets up a greater opportunity for failure. As an example, as Medicare was working to implement ASC X12 5010, it also worked to revamp its flat file systems.

WEDI urges CMS to be mindful of the collective burden of new regulations. While there are statutory requirements that may be outside its control, CMS should do its best to allow extended implementation periods or discretionary grace periods when possible when requirements are overlapping. In the case of ASC X12 5010, the industry also had to prepare to take on operating rules, meaningful use, and prepare for ICD-10. While we understand the need for the adoption of standards and the desire to move the industry forward, we urge CMS to provide more consideration on the total cumulative impact of changes.

Recommendation #7: CMS should consider encouraging and promoting the development of a voluntary certification process for vendors

It has become very clear in the deployment of new regulations that vendors are critical to successful implementations. As an example, many providers rely on practice management vendors to comply with regulatory changes. These vendors, however, are not covered entities and significant challenges exist in the readiness of these vendors.

WEDI believes that a voluntary certification process for vendors should be adopted, similar to the approach taken by the Office of the National Coordinator (ONC) for electronic health record (EHR) vendors. We recommend that funding be granted to CMS with the purpose of overseeing the creation of the certification process. The new certification process would ensure that vendors will have completed their software changes in advance of the implementation of new standards. WEDI offers to convene industry stakeholders, and would invite CMS participation, to further discuss the development of a vendor certification process.

Recommendation #8: CMS should encourage the consistent use of Acknowledgement transactions

Understanding that the industry is engaged in implementation of numerous mandates, we believe there is still significant ROI in the consistent use of acknowledgments. Identifying where transactions were getting delayed in between trading partners became a crucial challenge during the ASC X12 5010 implementation. In some cases, claims can pass through up to 11 different intermediaries before reaching their destination. During the ASC X12 5010 implementation, it became unclear where certain problems were, because organizations could not easily tell where the claim was in transport.
WEDI strongly urges CMS to consider mandating use of acknowledgement transactions in order to provide a trail that can be used to more easily triage these challenges in future implementations. CMS should partner with WEDI to convene a meeting of the key stakeholders (including appropriate standards organizations and operating rules entities) to facilitate industry consensus and appropriate next steps.

Recommendation #9: WEDI encourages CMS to work with us to educate providers and other key stakeholders on standards changes and their impacts

WEDI and HHS have a long history of working together in offering joint educational programs to help educate stakeholders on regulatory changes. Several years ago, WEDI and the Office of Civil Rights developed joint privacy education programs and most recently in partnership with CMS, we conducted joint webinars on ASC X12 5010 implementation support.

WEDI recommends that CMS work collaboratively with us to develop educational briefings and webinars to help providers and other key stakeholders learn about the impact of standards changes. As was discussed earlier, many providers rely on their vendors to make changes related to industry standards and regulatory changes. Providers, however, must be informed as to what these changes mean to them in order to help make them informed consumers. Despite aggressive education campaigns by provider organizations, more must be done.

WEDI also suggests that CMS partner with ONC to leverage the regional extension centers (REC) and regional offices that are already in place and supporting the industry in EHR deployments across the country. The RECs have the staff and resources to train at a local level and could assist in communicating new changes outside of just EHRs.

In closing, our most recent implementation of ASC X12 5010 identified a number of opportunities for CMS and the private industry to do things differently in order to enable the success of future regulatory changes. We urge you to accept the collective thinking of WEDI in planning changes for upcoming regulatory changes such as: Operating Rules, Health Plan Identifier, and ICD-10. Some of these challenges have existed, in fact for years, but our opportunity to make meaningful change is now. Together, we can advance administrative simplification and ease the implementation challenges that we have all faced.

WEDI requests a meeting with you to discuss how we can work together to help implement the aforementioned recommendations and to lay out a roadmap for next steps. WEDI appreciates the opportunity to collaborate with the CMS, especially with the staff of the Office of E-Health Standards and Services and stands ready to assist in clarifying the attached as needed.

Devin A Jopp, President and CEO of WEDI, or I would be pleased to answer any questions pertaining to WEDI’s recommendations.


Don Bechtel
Chairman, WEDI

CC: WEDI Board of Directors
CC: Rob Tagalicod, Director, Office of E-Health Standards and Services