June HIPAA 5010 Changes

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1 June 2010 HIPAA 5010 Changes

2 Current Scenario The final rule for HIPAA 5010 has been published to standardize the electronic exchange of healthcare claims. Updates have been mandated in all the nine healthcare electronic transactions from the former ASC X12 version A1 (4010) to newer (5010). All covered entities are required to adopt the new HIPAA electronic transaction standards by Jan 1, Key objective of the newer protocol is to improve the functionality and address the concerns that have been identified which were not thoroughly analyzed during 4010 adoption. The implementation of 5010 presents substantial changes in the content of the data involved in outgoing and incoming transactions. Thus this would require all the health plans to upgrade their business policies, processes and systems for accommodating 5010 changes. A closer evaluation of the standard indicates that this compliance is NOT just about transactions, codes, data elements, field length; it is about tactful Change Management along with Business and Clinical processes reengineering. The health plans would incur a number of costs to implement Version These costs would be attributed to business flow changes, software analysis & procurement/customized software development, integration of new software with existing systems, staff training, collection of new data, testing and transition activities. HCL, an end to end IT service provider, with its wide service portfolio can help the health plans in smooth changeover to HIPAA 5010 standards.

3 HCL s HIPAA 5010 EdiT Solution HCL s edit 5.1 Solution is a suite consisting of frameworks, tools, checklists that provides end-to-end offering to the healthcare plans for implementing HIPAA version Program Management Consulting/ Assessment Phase Implementation Phase Support Discovery Phase Identity processes, critical IT assets that are getting impacted Documentation of risks associated with transactional changes System Enhancement Migration platform enablement Application code changes Database changes Business flow changes Interface changes Reporting changes Support Transition supportdual workflow Post implementation support Impact Analysis Identification of system controls Transactional control mapping to business processes and IT assets Identify magnitude of impact in each area Testing Integrity testing Functional testing Integration testing Regression testing Data migration testing Dual Workflow testing HIPAA 5010 plugs in the crevices of the previous version This upgrade requires a thorough and systematic approach to facilitate the successful implementation. The HIPAA 5010/ D.0 upgrade solution covers the following phases: Phase 1 - Discovery Phase Phase 2 - Impact Analysis Phase 3 - System Changes Fig. 1.1: Upgrade Methodology Phase 4 - Verification and Validation Phase 5 - Transition to HIPAA 5010 Standard The suite consists of well defined components for each phase starting from discovery to transition. These components also work in isolation, targeting specific needs of our customers such as Impact analysis, System changes, Testing etc.

4 Phase 1: Discovery Phase The process is initiated by conducting the AS-IS study of policies, processes and IT assets to understand the enterprise landscape. Based upon the transaction changes all the affected entities are identified and the associated risk is calculated. Considering the varied level of impacts of the identified risk areas, a contingency plan is designed. HCL uses its proprietary Enterprise Discovery Framework to facilitate enterprise discovery and consequently mapping of business processes to IT applications. It forms the basis for any further phases of the upgrade methodology. Phase 2: Impact Analysis The impact analysis will identify the impact of new transaction standard at various functional levels. It also helps the health plans in defining the roadmap and implementation strategy for the adoption of HIPAA 5010/ D.0 standards. Business Areas HIPAA Impact Claims Administration Eligibility and Authorization Management Enterprise Processes Medical Management Membership Management Pricing Management Provider Management Recovery, Settlements and Recoupment Reporting and Accreditations Overall Impact Impact: >75% 50-75% 25-50% <25% No Fig. 1.2: Impact Analysis As per the assessment done by HCL, there are more than 3,500 changes over previous 4010A1 transaction standard. These changes have a significant impact on health plans across policies, processes, systems and people. Fig 1.2 summarizes the impact of HIPAA 5010 on different business areas of health plans analyzed by HCL. HCL recommends the following activities to be considered for effective impact analysis for HIPAA 5010/D.0.

5 Activity Responsibility Deliverable Identify and review all policies and business processes for HIPAA version 5010/ D.0 impact Identify and review Systems for HIPAA impacts and gaps Create a summary report of findings and recommend implementation strategy Understand and review health plan policies and business processes Assess and report all the specific impacts of HIPAA 5010/ D.0. Redesign and define TO-BE policies and business processes for achieving compliance Identify and determine the impact on IT Architecture Applications (at the code level) Databases Interfaces Infrastructure Analyze process change impact on applications and define TO-BE application landscape Prepare a summary report of all impacts of HIPAA 5010/ D.0. on policies, business processes and systems Recommend system implementation strategies and conduct a cost benefit analysis Report identified gaps Matrix listing each policy and business process along with HIPAA 5010/ D.0. impact Prepare policy and business process change plan and implementation roadmap Report Identified impact Matrix listing each system, application, interface etc along with HIPAA impact Final report identifying implementation recommendations for policies and processes Cost benefit analysis & organization strategic technology implementation plan and roadmap HCL uses its exact Methodology during the impact analysis phase to analyze an integrated AS-IS view of business-applicationtechnology-data of the entire enterprise and define the TO-BE landscape. HCL s exact Methodology (explore, Analyze, Craft and Transform) defines the intermediate milestones for visibility, review and validation. Phase 3: System Changes Based upon the recommended implementation strategy, master work plan should be developed. The master work plan covers all the tasks and activities needed to bring in the required changes without duplication and rework. These tasks are then executed in a structured manner along with necessary reviews and testing in order to complete these accurately and on time.

6 HCL recommends following a top down structured approach for system enhancements. As per our analysis, health plans will have to make extensive changes to information management systems in a relatively short timeframe to meet the federal deadline. The changes include: Application code changes Business flow changes Database changes Presentation and interface changes Reporting changes HCL has a knowledge repository of impacted policies, processes, applications and the impacted entities in a health plan. This knowledge will enable faster understanding of the existing customer landscape and movement to the desired TO-BE state meeting the federated timelines. Phase 4: Verification and validation Once the system changes are executed, these must be tested extensively to maintain the integrity and effectiveness of business transactions. The health plans should first focus on testing the systems/ changes internally to gain a level of confidence in order to accept, process, and generate a compliant transaction before testing with the business partners. Following are representative test situations for internal and external testing across health plan sub-systems. Internal Testing Health Plan Systems Functional Testing Integration Testing Regression Testing Performance Testing Security Testing Performance Testing Security Testing EDI Gateways Interactive Voice Response CRM system Inhouse Reporting System Actuarial System Core Claim Administrative System Sales Performanace Management System Health Analytics System Corporate Financial System Document Management System Business Process Management System Medical Management Enterprise Dataware House Fig. 1.3

7 Above details are explained further by describing a business scenario; transaction 834 has been illustrated. Fig. 1.4 Thus this phase entails verifying and validating the system changes as a result of HIPAA 5010/ D.0. HCL recommends following activities to be performed while testing the HIPAA 5010/D.0. changes. Activity Responsibility Deliverable Establish a quality assurance process Develop & execute test plans Review the testing results Generate QA status reports Develop a process to assure quality is maintained throughout the project Develop and run test cases for each group of test scenarios Audit results of each testing scenario Monitoring of any corrective action plans with regard to testing Monitor reports for any significant issues or risks QA Plan Test scripts/ scenarios and test cases for all functional areas of the health plan Summary of findings of unit testing, system testing, integration testing Regular reports on the progress of corrective action plans Weekly, Monthly, Quarterly; Ad hoc reports etc. Generation of test data requires tremendous effort and thereby shoots up the testing cost exponentially. This necessitates the use of real time data for testing in order to keep the cost in check. HCL understands the importance of protecting the sensitive patient information against any security and privacy breach and therefore advice that the test data containing the identifiable information should be scrambled/ masked to make it ineligible and incomprehensible, yet effective for testing. HCL has a READY compliance testing toolkit consisting of library of testing scenarios & test cases at unit, system and functional level, incorporating all the 5010 changes. We have a proprietary test automation framework called xfit which is designed for automation of integration/ database testing customized for HIPAA 5010 requirements.

8 Phase 5: Transition During the transition phase, it is required that the upgraded workflows and newly defined system environments support dualpath processing. In other words both 4010A1 and 5010 transactions should be supported in parallel over a period of time till 4010A1 transactions are completely phased out i.e. until the compliance date. Entities are required to operate dual systems through both testing and implementation phases as different trading partners may migrate at different times. There can be an incremental need for added hardware and communications capacity to support submitting all transactions in both formats during the conversion period. HCL with its business partners has developed a solution that supports the health plans in processing both transaction formats i.e., 4010A1 and 5010 in parallel. Conclusion HCL recommends that the time window provided should be used judiciously by the health plans to adhere to the deadline. Update to the electronic transaction guidelines may happen over the coming years. This mandates all the steps defined above to be revisited if required. Therefore the whole approach of the upgrade should not be termed as one time activity rather a systematic continuous upgrade model. HCL s experience and understanding of health plan business processes and application landscape clubbed with HIPAA 5010 expertise in terms of tools, resources and frameworks, would ensure smooth transition well within timeline. HCL believes that setting up a Program Management Office (PMO) would help the health plans to oversee and monitor the overall implementation effort. Across all the phases, PMO will ensure that the program plan is continually tracked and reflects the reporting progress of each phase to bring required visibility to all stakeholders.

9 Why HCL? HCL edit TM 5.1 solution covers methodology for Enterprise discovery, Impact Analysis, System enhancements, Testing and Transition Support Solution architects and consultants experienced in X12N 4010A1/ 5010 standards Existing knowledge base for impacted policies, business processes, work flows, people, entities and fields Testing toolkit ready; compliance and trading partners Center of Excellence for leading B2B and EDI platforms Subject matter experts in Payer and Provider business processes HCL has a HIPAA security and privacy consulting practice Certified consultants in HIPAA from HIPAA Academy, USA Certified HIPAA Professional Authors Narender Dureja is Practice Director Healthcare at HCL Technologies Ltd. He is a certified professional in hospital information management systems. Narender had been involved in crafting solutions for different industry verticals for the last 20 years. He currently drives the HIPAA 5010 solution at HCL. Mahima Bahri is Senior Consultant Healthcare at HCL Technologies Ltd. She is a Certified HIPAA Professional. She has worked on multiple areas within healthcare domain and is currently engaged in building HIPAA 5010 solution for HCL.

10 10 ABOUT HCL HCL Technologies HCL Technologies is a leading global IT services company, working with clients in the areas that impact and redefine the core of their businesses. Since its inception into the global landscape after its IPO in 1999, HCL focuses on transformational outsourcing, underlined by innovation and value creation, and offers integrated portfolio of services including software-led IT solutions, remote infrastructure management, engineering and R&D services and BPO. HCL leverages its extensive global offshore infrastructure and network of offices in 26 countries to provide holistic, multi-service delivery in key industry verticals including Financial Services, Manufacturing, Consumer Services, Public Services and Healthcare. HCL takes pride in its philosophy of Employee First which empowers our 58,129 transformers to create a real value for the customers. HCL Technologies, along with its subsidiaries, had consolidated revenues of US$ 2.6 billion (Rs. 12,048 crores), as on 31st March 2010 (on LTM basis). For more information, please visit About HCL Enterprise HCL is a $5 billion leading global Technology and IT Enterprise that comprises two companies listed in India - HCL Technologies & HCL Infosystems. Founded in 1976, HCL is one of India s original IT garage start-ups, a pioneer of modern computing, and a global transformational enterprise today. Its range of offerings spans Product Engineering, Custom & Package Applications, BPO, IT Infrastructure Services, IT Hardware, Systems Integration, and distribution of ICT products across a wide range of focused industry verticals. The HCL team comprises over 62,000 professionals of diverse nationalities, who operate from 26 countries including over 500 points of presence in India. HCL has global partnerships with several leading Fortune 1000 firms, including leading IT and Technology firms. For more information, please visit

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