Hospitals won't be able to shove the federally proposed claims attachment rule onto the back burner forever. CMS currently anticipates that the HIPAA Electronic Health Care Claims Attachments final rule from the Department of Health and Human Services is expected to be released in September 2008. The rule proposes standards to electronically ask for, and receive, additional healthcare information for claims in the form of an electronic attachment to support healthcare claims data. And almost no one, it seems, is even close to ready.

A claim attachment is documentation supporting rationale, justification or outcome of service. It can include certifications, medical records or images. Claims attachments bridge the gap between billing and medical records functions. “From a high level overview, what's important is it will start to provide the capabilities of attaching clinical information to claims so that the payers aren't withholding payment on those claims,” says Mike Davis, executive vice president of products and services at Chicago-based HIMSS Analytics. “While you're doing all the discharge summary, medical records searching, and faxing, you're not getting paid.”

Clearly, this rule is going to impact a hospital's bottom line, so it's important to be prepared.

The Workgroup for Electronic Data Exchange (WEDI) in Reston, Va., has been active in this area. Ana Croxton, director of claims and EDI product management at NextGen (Horsham, Pa.) worked on a WEDI claims attachment pilot project and agrees there's a lot at stake for the bottom line. “We went into this pilot with curiosity because we feel there's a great deal of ROI for the payers and providers alike,” she says. “You can imagine the time spent retrieving these claims and attaching them to send on to the payer, who then has to scan them in and read them manually.”

According to Davis, the biggest impact is going to be for organizations that have a high number of pending claims. He says it's important to remember that a lot of those pending claims are the more complex cases with a lot of co-morbidities. “These are very expensive cases.” Though he says it may only be 10-15 percent of cases that will utilize claims attachment, he says that number is deceiving. “It may not seem like a high percent, but it's the actual dollar amount of those that may be significant.”

There is an upside to the rule in terms of implementation. “The nice thing about this rule, says Davis, “is that the government is technically agnostic.” That means, to comply with the regulation a hospital can use document imaging, as well as the more sophisticated EMRs, to attach the documents. “Most hospitals can afford document management systems,” he says, “or more sophisticated xml. So that's not a problem.”

John Hawkins, senior product manager at Reston, Va.-based QuadraMed, who says QuadraMed has been watching this for two years, agrees, but points out the bigger problem. “A PDA document attached to the standard EDI transaction is fairly straightforward, though it's still going to take some work because not everybody is on HL7 3.0 yet. The big challenge is how to do the final attachment of the claim to the clinical document.”

Many say the biggest problem is defining the standard for communication. Most vendors agree that one thing that's going to be challenging is when there's more than a single vendor solution in an institution. “If you have a QuadraMed Revenue Cycle and a Cerner (Kansas City, Mo.) care management setup, says Hawkins, “the communication from the billing system to Cerner to actually extract the clinical data isn't defined anywhere.”

Croxton's pilot for WEDI to work on that communication was with Empire Medicare Services of New York and New Jersey. Empire made modifications to the NextGen application that enabled it to extract the necessary data to comply with the rule. “All the pilot did was say we could do it,” Croxton says. The sad part though, she says, has been lack of interest. “We couldn't find anyone to do another pilot with. We actively approach people and say we want to take it to the next level, we want to take it into production.” But so far, she has no takers.

The reticence to deal with this topic, say most, is hospitals' already full plates — things like NPI and mandated code sets.

So what can a hospital do to ensure it will be prepared? Most hospitals have patient billing systems, legacy systems and old monolithic architecture. “All these systems are expensive,” Davis says. “Will this make people begin to evaluate their system and ask if they need to replace it?” Davis says he believes hospitals should now be in a stage of looking at their patient billing and registration systems and their electronic information for the six areas of the rule to figure out how they're going to be able to get that information on the patient bill and on the claim. The best place to start, most agree, is by talking to their vendor.

Hawkins says that hospitals need to investigate with their vendor. “And not only their HIS vendor but any separate vendors that do their bolt-on third-party billing,” he adds. Croxton agrees. “Hospitals and physician groups are going to have to talk to their vendors to see if they have the technical ability to deal with this rule.”

And Davis believes hospitals should already be planning. “If a hospital is trying to be proactive, they should be a year into their evaluation already.” He says as soon as the notice of the proposed rule was announced in the federal registry, hospitals should have been reading and then participating in the comment period. “This is something that the business office should have been watching closely.”

In particular, Davis says if a hospital is at the stage of shopping for a new system, the proposed claims attachment rule should certainly be a consideration. Davis adds, “I think this will cause a lot of organizations to sit down and look at their various applications, both clinical and financial, because this could drive some replacement.” He says the decision to replace an existing system will depend on how well their vendors react.

Croxton sees a great deal of potential in the rule. “We feel confident we could prove our ability to make it work and to have the ROI be beneficial to the end user, not just the big hospital but the small physician groups too.”

The ramifications of the rule go beyond individual hospitals, Davis opines. He sums up the views of many when he says the rule could represent real monetary savings in healthcare delivery. “We talk a lot about the need for the electronic medical record, but the need for administrative simplification, in my opinion, is another way we could be saving money,” he says. “I think this is a good and important first step for this country to start to move forward in the more effective integration of financial and clinical information.”