The Home Infusion EDI Coalition (HIEC) Resource Center |
Standardized Coding and Electronic Claiming for Home Infusion Under HIPAA
This page includes frequently asked questions on coding for home infusion therapy, as well FAQs on HIEC and HIPAA's Impact on Home Infusion Claiming and Coding. To return to the HIEC homepage click here.
FAQs on Coding for Home Infusion Therapy
NHIA serves as the national clearinghouse for recommendations for additions and modifications for home infusion therapy service codes. NHIA's Home Infusion EDI Coalition (HIEC) considers the inquiries and evaluates the requests for codes. Below are questions of wide interest with answers from HIEC.
Can HCPCS or CPT® code descriptions be changed by payers or providers, i.e. use the code with a different meaning? - added March 31, 2003
Is the payer allowed to wait until the compliance deadline to conform to requirements that prohibit changing of code descriptions? - added March 31, 2003
Must providers and payers break out coding for home infusion nursing visits? Or, could they agree to include some home nursing as part of the per diem when the HCPCS per diem "S" codes are used? - added March 31, 2003
Are the rules different for paper claims using S-Codes [re. not changing the meaning of codes]? - updated March 31, 2003
If compliance with code definitions is required under HIPAA, what can be done if a payer does not follow this mandate? - updated March 31, 2003
Since I read the requirement to bill drugs with NDC number was repealed, what is the standard to code drugs on claims? - updated October 21, 2003
What changes are underway to improve coding for home infusion nursing visits? - updated October 21, 2003
Why had NHIA identified CPT code 99539 ("unlisted home visit service or procedure") to code a home nurse visit for provision of home infusion therapy (HIT)? - updated March 31, 2003
Exactly what drugs are included in the TPN per diem "S" code descriptions, and why has there been confusion on this? - updated March 31, 2003
We provide Solumedrol and wonder why there isn't a per diem "S" code for corticosteriod infusion therapy? - updated March 31, 2003
Can HCPCS or CPT® code descriptions be changed by payers or providers, i.e. use the code with a different meaning?
No. A goal for HIPAA administrative simplification was to end "custom coding", including prohibiting changing the meanings assigned to what would otherwise be standardized codes. The HIPAA regulations are very clear in this area.
Of course, the law is the Health Insurance Portability and Accountability Act of 1996, Public Law 104-191. The relevant HIPAA regulations are found in 45 CFR Part 162 and were released as part of the August 17, 2000 Transactions and Coding Standards Rule. There are two separate parts of these regulations prohibiting change of code descriptions.
The first part is actually a composite of different regulation sections. Taken together, they do the following:
- The regulations require use of HCPCS and CPT-4 codes sets.
- A code set includes the descriptors.
- Descriptor means the text defining a code.
- Therefore, no changes to code descriptions are allowed.
Next are the specific regulations:
Sec. 162.103 Definitions.Code set means any set of codes used to encode data elements, such as tables of terms, medical concepts, medical diagnostic codes, or medical procedure codes. A code set includes the codes and the descriptors of the codes.
Descriptor means the text defining a code.
Sec. 162.1000 General requirements.
When conducting a transaction covered by this part, a covered entity must meet the following requirements: (a) Medical data code sets. Use the applicable medical data code sets described in Sec. 162.1002 as specified in the implementation specification adopted under this part that are valid at the time the health care is furnished.
Sec. 162.1002 Medical data code sets.
The Secretary adopts the following…code sets as the standard medical data code sets:…e) The combination of…HCPCS…and CPT-4…for physician services and other health care services…(f)…HCPCS…for all other substances, equipment, supplies, or other items used in health care services.
While the first part just cited stands on its own as sufficient prohibition of changing code descriptions, there is yet a second part in Sec. 162.915 that addresses the "Trading Partner Agreements" necessary for electronic claims which states the following:
A covered entity must not enter into a trading partner agreement that would do any of the following: (a) Change the definition, data condition, or use of a data element or segment in a standard. (b) Add any data elements or segments to the maximum defined data set. (c) Use any code or data elements that are either marked "not used'" in the standard's implementation specification or are not in the standard's implementation specification(s). (d) Change the meaning or intent of the standard's implementation specification(s).
With even more clarity, the U.S. Department of Health and Human Services writes the following on their HIPAA FAQ web page:
Q: May health plans stipulate the codes or data values they are willing to accept and process in order to simplify implementation?A: The simplest implementation is the one that is identical to all others. If the standard adopted stipulates that HCPCS codes will be used to describe procedures, then the health plan must abide by the instructions for the use of HCPCS codes.
The italics are added above to highlight importance. Words are omitted where marked with "…" for brevity and clarity, but the omissions do not change the meaning.
Is the payer allowed to wait until the compliance deadline to conform to requirements that prohibit changing of code descriptions?
Yes, they can wait. But the proactive payer is actively working to achieve full HIPAA compliance as soon as possible to guarantee they are not subject to HIPAA transaction and coding penalties on October 16, 2003.
Must providers and payers break out coding for all of the dispensed drugs, including even diluents, flushing solutions, D5W, etc. in claims? Or, could they agree to include some drugs as part of the per diem when the HCPCS per diem "S" codes are used?
Under HIPAA rule, providers, payers and clearinghouses may not change the meanings of HCPCS or CPT descriptions within an electronic claim. See the FAQ on the relevant regulations. Therefore, because most of the HCPCS per diem "S" codes for home infusion therapy specify "drugs and nursing visits coded separately", drugs cannot be included in the per diem. To do otherwise would be an enforceable violation of HIPAA law. Thus, drugs are coded and paid for separately.
Break out from the per diem all non-compounded drugs (e.g. injectables, flushing solutions) as well as all the drugs used within a compound including the primary drug, the diluent, and the solution compounded into. Put another way, all drugs requiring an Rx (often called legend drugs in state law) are coded, billed and paid for separately from the per diem charge.
Note also that enteral formulae are coded separately when using the enteral per diem "S" codes. An exception is for TPN per diem "S" codes where standard TPN formula drugs are not coded separately (see NHIA's coding standard document for specific list of these drugs).
Must providers and payers break out coding for home infusion nursing visits? Or, could they agree to include some home nursing as part of the per diem when the HCPCS per diem "S" codes are used?
Under HIPAA rule, providers, payers and clearinghouses may not change the meanings of HCPCS or CPT descriptions within an electronic claim. See the FAQ on the relevant regulations. Therefore, because most of the HCPCS per diem "S" codes for home infusion therapy specify "drugs and nursing visits coded separately", home infusion nurse visits cannot be included in the per diem. To do otherwise would be an enforceable violation of HIPAA law. Thus, nursing visits are coded and paid for separately.
Are the rules different for paper claims using S-Codes [re. not changing the meaning of codes]?
Paper claims are not technically covered under HIPAA coding rules. However, it is unlikely payers will have different meanings for the same code in their claim processing system. Therefore, payers are likely to expect a break out all of the dispensed drugs and home infusion nursing visits when processing claims with the HCPCS per diem "S" codes, even if submitted on paper.
The best way for a provider to prevent being imposed with non-standardized coding requirements among different payers will be to submit their claims electronically, as HIPAA law leaves no room for non-standardized coding in electronic claims.
If compliance with code definitions is required under HIPAA, what can be done if a payer does not follow this mandate? What are the penalties?
As HIPAA developments unfold including publication of an enforcement rule, the answer may become clearer. For now, we can tell you this. The 1996 HIPAA law specified financial penalties for each violation to be $100, up to $25,000 maximum. There are approximately 80 HCPCS "per diem" codes for home infusion. This could mean violators might be assessed an annual penalty of $2,000,000 (80 x $25,000).
For HHS, the enforcement body will be CMS. Even though an enforcement rule is not yet published, a payer's HIPAA compliance manager should concur that code meanings cannot be changed, so try to get this person involved in your communication with the payer.
Since I read the requirement to bill drugs with NDC number was repealed, what is the standard to code drugs on claims?
In February 2003, the U.S. Department of Health and Human Services (HHS) released its rule modifications to 45 CFR Part 162, Modifications to Electronic Data Transaction Standards and Code Sets. (View pdf with this rule). We call it the "Modified TCS Rule". HHS has written that they repealed setting the standard as NDC number for drug coding on the X12N electronic claim.
- X12N is the set of electronic data transaction standards for submission of most health care claims, including home infusion therapy claims which are submitted through the X12N "professional" claim standard.
In fact, HHS writes that therefore there is no standard. On surface, anything goes. But, there is more to this.
The good news is that the X12N electronic claim standard "permit[s] use of either the NDC or HCPCS to code drugs and biologics on non-retail pharmacy claims" (quote from Modified TCS Rule preamble). Thus, while repealing NDC as the standard for reporting drugs and biologicals in X12N claims, their requiring use of X12N means that HHS established the drug coding standard to be either NDC or HCPCS. Custom and "local" coding for drugs is not allowed.
For completeness, we add that the coding standard for submitting retail pharmacy drug claims (using an electronic standard called NCPDP) remains as NDC, only. While this may be good news for retail pharmacy, home infusion pharmacies have two different drug coding systems to support in their X12N professional claims.
Fortunately, there are sensible approaches to coding drugs on X12N claims with NDC numbers along with HCPCS codes. Learn how to do this in NHIA's Coding Standard.
What changes are underway to improve coding for home infusion nursing visits?
In the 2002 code sets, there were unfortunate gaps in codes available for use on claims for home nurse visits associated with home infusion. But now we have some very good news! Things are greatly improved in 2003 through release of the Centers for Medicare and Medicaid Services' (CMS) 2003 HCPCS codes and the American Medical Association's (AMA) 2003 CPT codes.
Included in 2003 HCPCS effective 1/1/03 were "S" codes and modifiers that provide for home infusion nursing billing by visit up to two hours and incremental hours exceeding that.
CPT 2003 codes are also available. As compared to the 2002 CPT codes, effective January 1, 2003 there were significant changes for coding home infusion nursing, but the code set available was overly complicated. Because of this, NHIA had advised that providers and payers not adopt those CPT codes for home infusion nursing.
But early in 2003, AMA announced a very positive step to provide a permanent resolution for this coding in time for the October 2003 HIPAA coding deadline. Posted on their CPT web site is a much simplified code set for home infusion nurse visits, with changes effective for use on July 1, 2003. (If you have been familiar with these codes, be aware that codes 99551-99569 are deleted, replaced by codes 99601 and 99602.)
As had been available in HCPCS since 1/1/03, CPT coding now facilitates home infusion nursing billing by visit up to two hours and incremental hours exceeding that. Information on how to use these codes will be found in NHIA's National Coding Standard. These CPT updates are now included in AMA's 2004 CPT coding references, e.g. CPT 2004 Professional Edition.
All of this is the result of a decision made in 2001 by the administrators of the HCPCS and CPT coding systems. Specifically, they decided that home infusion nursing service codes belong in CPT whereas codes for other home infusion products and services belong in HCPCS. Accordingly, the respective code sets were changed in 2003.
Hence, these 7/1/03 CPT codes will be the home infusion nursing codes for the long-term. Because the HCPCS nurse visit codes (S9802 and S9803) were dropped effective 7/1/03, those who are now restructuring coding systems and contracts should use the CPT codes (99601 and 99602) as they are interchangeable with the deleted HCPCS codes.
Here is a final note for the home infusion coding experts. In HCPCS, there had existed a S9524 home infusion nursing code not included in NHIA's National Coding Standard. Effective April 1, 2003, this code is deleted from HCPCS. The most current list of HCPCS codes, including changes in between the annual release, are found at CMS' HCPCS web site.
Why had NHIA identified CPT code 99539 ("unlisted home visit service or procedure") to code a home nurse visit for provision of home infusion therapy (HIT)?
We had searched throughout the 2002 HCPCS and CPT code sets for a specific "per visit" HIT nursing code, but we found no such code existed. Hence, the first version of our coding standard used 99539. In 2003, added to HCPCS and CPT are nurse visits codes as a result from NHIA's HIEC activity. Accordingly, the current version of the coding standard no longer includes 99539.
Exactly what drugs are included in the TPN per diem "S" code descriptions, and why has there been confusion on this?
Drugs included in the TPN per diem "S" code descriptions are those that are part of a standard TPN formula. Excluded are lipids, specialty amino acid formulas, and other drugs not part of a standard TPN formula. An excerpt from one of the "S" code descriptions precisely defines it: "includes standard TPN formula; lipids, specialty amino acids, drugs and nursing visits coded separately". Notice an important semi-colon is placed after the word formula.
In one commercial HCPCS code reference list, the publisher replaced the semi-colon with a comma in their 2002 publication. In spite of the confusion caused, the publisher informs NHIA they were unable to correct the publication until their 2003 edition.
Even worse, CMS has had typographic problems with both "temporary HCPCS coding decisions" posted on their HCPCS web site and in what they released that publishers would include in 2003 HCPCS publications. Fortunately, in the 2003 release a careful reading of each description from CMS will show that excluded are lipids, specialty amino acid formulas, and other drugs not part of a standard TPN formula.
We provide the best TPN code descriptions–those CMS intends to have–in Section VI of our NHIA National Coding Standard, where in Section III.G. you will find a detail list of drugs included/excluded in the per diem.
We provide Solumedrol and wonder why there isn't a per diem "S" code for corticosteriod infusion therapy?
You must not be reading the latest version of NHIA's National Coding Standard. Code S9490 was added to HCPCS effective July 1, 2002 and is included in our standard.
FAQs on HIEC and HIPAA's Impact on Home Infusion Claiming and Coding
NHIA provides answers to common questions we receive relating to HIEC, HIPAA, and HIPAA's impact on home infusion therapy claiming and coding resulting from the transaction and coding standards.
What is HIEC? – updated March 31, 2003
What is HIPAA? – updated March 31, 2003
On July 24, 2003, CMS said HIPAA transaction and coding enforcement on October 16, 2003 is coming. Is your home infusion business prepared? How do you achieve the benefits? How can you avoid a HIPAA "train wreck" should it occur? – updated October 21, 2003
Are there any exceptions to the enforcement of the October 16, 2003 deadline for Covered Entities for HIPAA coding compliance? – added August 1, 2003
Who must comply with the HIPAA transaction and coding regulations? – updated March 31, 2003
What are the home infusion therapy fee schedule and contracting issues brought upon by standardization of coding under HIPAA? – updated March 31, 2003
Would we still be HIPPA compliant if we billed a customer our "usual and customary" or "list" charges? – updated March 31, 2003
Are payers required to accept claims electronically? – added March 31, 2003
Will providers have to transmit claims electronically under HIPAA? – updated March 31, 2003
Will providers have to transmit Medicare claims electronically? – updated March 31, 2003
Which coding sets have been approved under HIPAA? – updated March 31, 2003
For paper claims, must we conform to HIPAA standardized coding regulations? – updated March 31, 2003
Which electronic transaction standards have been endorsed under HIPAA? – updated March 31, 2003
Through which electronic format are home infusion therapy claims submitted under HIPAA: X12N Professional or NCPDP Retail Pharmacy? – updated October 21, 2003
Through which electronic format are home infusion therapy Medicare (DMERC) claims submitted under HIPAA: X12N Professional or NCPDP Retail Pharmacy? – updated July 9, 2003
UPDATED! What coding sets are currently used for home infusion therapy? Commercial? Medicare? Medicaid? – updated April 16, 2004
What is "per diem" billing? – updated March 31, 2003
Are home infusion therapy claims currently submitted electronically? – updated March 31, 2003
Why weren't NHIA's HIEC codes approved under HIPAA? – updated March 31, 2003
The Home Infusion EDI Coalition (or HIEC, pronounced "hi-eck" was formed in 1994 as a broad-based coalition of providers, payers, and claims clearinghouse organizations seeking a sensible national standardized electronic claiming system for home infusion. In 2000, HIEC officially affiliated with the National Home Infusion Association and became an official committee of the association reporting to the NHIA board of directors.
The mission of HIEC is to formulate, communicate, and implement a nationally standardized coding system devoted to the description and classification of infusion products and services, and promote and advance electronic claiming for infusion therapy services. NHIA believes that the development of universal coding and electronic claiming will provide administrative efficiencies and improved cost-effectiveness for providers and payers alike.
Federal Health Insurance Portability and Accountability (HIPAA) regulations published in August 2000 will help us meet this important goal. While these regulations originally would have required many health care payers to utilize standardized coding and electronic claiming by October 2002, most submitted an ASCA compliance plan to qualify for a one-year extension. Thus, conformance is required by October 16, 2003.
Through the HIEC Committee, NHIA has taken aggressive steps to build the future of standardized coding and electronic claiming for home infusion. NHIA developed a model coding system, NHIA's HIEC Coding System, and advocated for the approval of this system under HIPAA. While the HIEC Coding System was not approved under HIPAA, the HIEC model has been largely incorporated into the federal HCPCS coding system. HIEC developed the NHIA National Coding Standard for Home Infusion Claims Under HIPAA as an educational resource for using these new, HIPAA-approved codes, and is working to develop a data format guide ("companion guide") for home infusion electronic claims.
Click here to see who is on the HIEC Committee.
The Health Insurance Portability and Accountability Act, enacted by Congress in 1996, included a wide range of provisions affecting private health insurance coverage.
Title I of HIPAA protects health insurance coverage for workers and their families when they change or lose their jobs. Other provisions of HIPAA are designed to improve the efficiency and effectiveness of the health care system by standardizing the electronic data interchange of certain administrative and financial transactions while protecting the security and privacy of the transmitted information.
The U.S. Department of Health and Human Services (HHS) has been working on regulations to implement these provisions, including rules on transaction and coding, health information privacy, data security, national provider identifiers, and national employer identifiers.
On August 17, 2000, HHS published final regulations on the transaction and coding provisions of HIPAA. These provisions are intended to reduce the costs and administrative burdens of health care by facilitating standardized, electronic transmission of many administrative and financial transactions that are currently carried out manually on paper. HHS estimates that the administrative simplification regulations will provide a net savings to the health care industry of $29.9 billion over 10 years.
The new HIPAA standards establish standard data content and formats for submitting electronic claims and other administrative health transactions. All health care providers will be able to use the electronic format to bill for their services, and all health plans will be required to accept these standard electronic claims, referral authorizations, and other transactions.
By law, health plans (with the exception of small self administered plans), health care clearinghouses, and health care providers that choose to transmit their transactions in electronic form must comply with these rules no later than October 16, 2003. These organizations are called "covered entities" in various HIPAA regulations.
Other HIPAA regulations now published are on privacy, security and national employer identification (EIN), while more regulations to be published are on national provider identification (NPI), claim attachments and enforcement principles. Click here for more information about HIPAA.
On July 24, 2003, CMS said HIPAA transaction and coding enforcement on October 16, 2003 is coming. Is your home infusion business prepared? How do you achieve the benefits? How can you avoid a HIPAA "train wreck" should it occur? – updated October 21, 2003
October 16, 2003 is now past. On July 24, 2003, the Centers for Medicare & Medicaid Services (CMS) announced, "The law is clear: October 16, 2003 is the deadline for covered entities to comply with HIPAA's electronic transaction and code sets provisions."
For home infusion therapy providers and payers, great benefits are anticipated from the standardization of coding that will enable widespread electronic claiming. Both entities should be taking steps now for realization of these benefits.
The July 24 announcement from CMS came in spite of concerns about a pending HIPAA "train wreck" resulting in severe delay of payments to health care providers. Providers were urged to plan for contingency steps to avoid adverse impact if it occurred.
Learn more about CMS's announcement, a potential "train wreck", implications for home infusion providers, and steps providers should undertake now in articles contributed by Bruce E Rodman, HIEC Chair and Pete Tanguay, HIEC Committee Member.
PAYER CONTINGENCY PLANS: Since CMS's July 24 announcement, CMS responded further to industry concerns by encouraging payers to provide for "contingency plans" for continued operation after the October 16 compliance deadline, even though not all electronic transactions may be conducted in a HIPAA-compliant manner. Setting an example, CMS directed its Medicare contractors to continue accepting non-compliant electronic claims even after the deadline. Read about this from Region D DMERC's HIPAA web site.
IMPORTANT: Most providers are still required to submit their Medicare claims electronically beginning October 16, 2003. For claims submitted to the DMERCs, this means for providers that have been submitting Medicare claims on paper and are subject to this requirement, then they must be submitting most claims to the DMERCs electronically starting October 16, 2003. Read more about this requirement.
Are there any exceptions to the enforcement of the October 16, 2003 deadline for Covered Entities for HIPAA coding compliance? – added August 1, 2003
There is a short extension past 10/16/03 granted to certain government payers for compliance to use of standardized coding. Under their interpretation of an act called BIPA 2000 (Section 532), on 6/6/03 the Centers for Medicare & Medicaid Services (CMS) informed the states that local codes developed by state Medicaid and SCHIP (State Child Health Insurance Programs) programs may be used through 12/31/03. CMS writes that these codes are known as HCPCS Level III codes.
Subsequently, CMS informed NHIA that the categories of payers granted this extension to 12/31/03 are:
- State Medicaid programs
- Medicaid managed care organizations for their Medicaid claim business
- SCHIP programs
Also granted this extension for Level III HPCPS codes approved by Medicare for local contractor use are:
- Medicare contractors for their Medicare claim business
- Medicare+Choice payers for their Medicare claim business
CMS informed NHIA that no extension is granted to any other category of payers or claims. Of course, the extension means providers would not be in violation by using these Level III HCPCS codes with these payers.
We note that this extension is only for codes. The enforcement date to use HIPAA-compliant electronic claims transactions remains at 10/16/03 for all covered entities.
Who must comply with the HIPAA transaction and coding regulations?
Originally, many people were under the misconception that the HIPAA regulations apply to governmental payers only. Most now realize this is incorrect. The purpose of the HIPAA transaction and coding provisions are to increase government and private-sector efficiency by facilitating standardized electronic claiming and coding. The rules apply to commercial, Medicare, and Medicaid health plans. And, to providers and clearinghouses.
What are the home infusion therapy fee schedule and contracting issues brought upon by standardization of coding under HIPAA?
Providers and payers should be aware that converting codes may mean restructuring of your contracts is necessary. Payers must convert their claims processing systems from custom codes to HIPAA-approved codes. For most commercial payers and even some Medicaid programs, the new codes will be the per diem "S" codes. This means some payers will be approaching providers with proposals for restructured contracts to match these codes. Such payer actions will escalate rapidly as most have only until October 16, 2003 to complete their conversion to the standardized per diem codes per HIPAA regulation.
Each home infusion per diem HCPCS code specifically includes "administrative services, professional pharmacy services, care coordination, and all necessary supplies and equipment." This is an important recognition in CMS' coding system that these services are a critical component of infusion therapy.
Payers should benefit from providers' discussion and education on infusion services and costs, why these services and facilities are necessary to ensure safe and effective patient care, and the many regulations and standards to which providers are held accountable. Providers will find this is a most important educational process–providers should be proactive and prepared. All must keep in mind that treatment alternatives to home infusion are generally vastly more expensive.
Providers need to know what per diem rates are necessary to cover their costs. The per diem charge must cover all costs (direct and indirect) other than drug costs and nursing visit charges. NHIA's per diem definition provides a thorough listing of all services and costs, and has proved to be very useful to both providers and payers in understanding the per diem payment methodology.
Not all contracts will need significant changes because many already matched well with the coding structure in the HCPCS per diem "S" codes. Where there are significant changes, they tend to be involved with billing for home nurse visits and all drugs outside of the per diem as required by the "S" code descriptions. NHIA's National Coding Standard provides guidance in its Section II.A.1.
Would we still be HIPPA compliant if we billed a customer our "usual and customary" or "list" charges?
The HIPAA administrative simplification regulations do not establish pricing. Therefore, if your contracts are based on HIPAA-compliant coding, you are in compliance with that part of the standard. Even though the new HCPCS "per diem" codes for home infusion are in the federal HCPCS system, there are no federal fee schedules attached to those codes because they are for commercial payer and perhaps also Medicaid payer use.
Are payers required to accept claims electronically?
Yes. Providers can request payers to accept their health claims electronically using HIPAA transaction and coding standards. Under HIPAA law, payers are required to accept these claims for payment and are subject to penalties if they do not. For home infusion therapy claims, this means what has been traditionally a non-standard and paper claim submission process will soon become standardized and electronic. Great benefits from streamlining of the claims payment process are nearby!
Will providers have to submit claims electronically under HIPAA?
With an exception for Medicare claims per the ASCA law, the HIPAA transaction and coding regulations do not require claims to be submitted electronically. What they do require is that payers be able (either directly or through a claims clearinghouse) to support electronic transactions for the following business functions:
- Health claims and equivalent encounter information;
- Health care attachments;
- Enrollment and disenrollment in a health plan;
- Eligibility for a health plan;
- Health care payment and remittance advice;
- Health plan premium payments;
- Health claim status;
- Referral certification and authorization; and
- Coordination of benefits.
Will providers have to transmit Medicare claims electronically?
Yes, many will. In December 2001, President Bush signed into law H.R. 3323, the Administrative Simplification Compliance Act, or ASCA (Public Law 107-105). The law provided for a one-year extension of the date for complying with the HIPAA transactions and code set standards.
By October 16, 2003, ASCA also requires that providers submit all claims electronically to Medicare, although there are waivers for certain small providers and if other exceptions are granted by HHS. (As of March 2003, no exceptions are announced).
Which coding sets have been approved under HIPAA?
Four coding sets are chosen for medical products and services:
- ICD-9-CM for disease and injury state description, certain preventative and disease management activities, and inpatient hospital charges;
- CPT-4 codes for physician services;
- Level II HCPCS for "Other Health-Related Services" (including home infusion services);
- NDC numbers or HCPCS codes for drugs and biologicals on institutional and professional claims.
- NDC coding has specific advantages over HCPCS: (1) NDC's exist for nearly all drugs and biologicals (HCPCS are not assigned for many drugs), (2) NDC identifies each drug, its packaging and it manufacturer, and (3) specifying of quantities used is simpler with NDC's (i.e. fewer errors). Because of these reasons, NDC's are used on the majority of home infusion therapy claims.
- Originally, HHS recognized the advantages and had selected NDC only, but projected costs of conversion to NDC from some health segments caused HHS to change their decision.
- For retail pharmacy drug claims: NDC numbers.
- As home infusion therapy claims are not retail pharmacy claims, this does not apply for home infusion therapy.
For paper claims, must we conform to HIPAA standardized coding regulations?
Paper claims are not technically covered under HIPAA coding rules. However, it is unlikely payers will use different claims adjudication rules and coding for paper vs. electronic claims.
The best way for a provider to prevent being imposed with non-standardized coding requirements among different payers will be to submit their claims electronically, as HIPAA law leaves no room for non-standardized coding in electronic claims.
Which electronic transaction standards have been endorsed under HIPAA?
Two electronic transmission standards were chosen: ASC X12N for all transactions except for certain retail pharmacy drug transactions, which are to be billed using the NCPDP Version 5.1 format. Professional pharmacy claims, including claims for home infusion therapy, are to be billed with the ASC X12N 837 "professional" format.
Through which electronic format are home infusion therapy claims submitted under HIPAA: X12N Professional or NCPDP Retail Pharmacy?
Home infusion therapy providers will submit their claims using only the ASC X12N 837 electronic claim format. This direction is provided by the Centers for Medicare & Medicaid Services (CMS) with two FAQs first posted in March of 2003 on CMS's HIPAA web site and a subsequent letter written to NHIA. CMS's direction applies to home infusion therapy claims submitted to all payers, including charges for drugs that are part of their claims. In October 2003, CMS updated these FAQs to address some questions that had arisen, including:
- What does this mean if the home infusion provider is licensed as a "retail pharmacy" in some states?
- What does this mean if a home infusion therapy provider also has a retail pharmacy business line?
According to CMS, "Although Home Infusion Therapy providers may be licensed as retail pharmacies in some states, their model for dispensing drugs and biologics for infusion, injection, or inhalation using a nebulizer, as well as dispensing total parenteral and enteral nutrition, is very different from that of traditional retail pharmacies". And, "The ASC X12N 837 claim standard must be used for billing the drugs, biologics, parenteral nutrition and enteral nutrition that are provided by the pharmacy, and usually billed along with the service, supply, and equipment components of Home Infusion Therapy, i.e. comprising a total claim for Home Infusion Therapy".
Read everything from CMS's FAQs
On April 8, 2003, CMS's Director of its Office of HIPAA Standards wrote a letter to NHIA to further confirm the direction CMS has set. Significantly, the Director wrote "a requirement to bill home infusion drugs using the NCPDP format would fail to meet the administrative, clinical, coordination of care, and medical necessity requirements for home drug infusion therapy claims."
- We note that for paper claims, most payers accept home infusion therapy claims on the CMS 1500 form (formerly called the HCFA 1500 form). Payers are unlikely to have separate claims processing systems-one for electronic and a second system for paper claims. Hence, home infusion therapy electronic claims will be routed through the X12N 837 Professional claim standard as it is the equivalent to the CMS 1500 form.
While a letter NHIA wrote to CMS in December of 2002 asked for clarification about home infusion claims that are submitted to Medicare, you should realize that CMS's direction in its FAQs and April 8 letter apply to claims submitted to all payers. That is because it's unlikely the CMS Office of HIPAA Standards would issue directives unique to type of payer since HIPAA regulations, generally, are not unique to payer. Notably, this CMS office which issued the direction is responsible for the enforcement of HIPAA regulations for health care claim transactions.
In conclusion, all of this means that after payers fully conform to HIPAA regulations, there will be no "split billing" of home infusion therapy drugs submitted through the NCPDP retail pharmacy format to a DMERC or any other payer, and that all components of home infusion therapy claims-services, supplies, DME, drugs, biologicals, TPN, and enteral nutrition-are submitted through the X12N 837 claim format.
Through which electronic format are home infusion therapy Medicare (DMERC) claims submitted under HIPAA: X12N Professional or NCPDP Retail Pharmacy?
Per direction provided by CMS (see FAQ), home infusion therapy (HIT) claims are submitted only on the ASC X12N 837 electronic format. Under HIPAA, there will be no "split billing" of drugs submitted through the NCPCP retail pharmacy format to a DMERC or any other payer.
In its Program Memorandum Transmittal B-03-024 of April 21, 2003, CMS issued direction to each DMERC carrier that claims submitted by home infusion pharmacies are billed on the X12N 837 since they are professional pharmacies. Hence, there is no split billing of these claims using the NCPDP transaction.
After B-03-024 was issued, NHIA received inquiries as to whether claims for drugs covered under the inhalation device benefit and epoetin from home infusion pharmacies are also to be submitted only through the X12N 837 claim. While we interpreted all of CMS's direction to include both types of drugs, we decided to inquire further with CMS. Their answer received in a June 10, 2003 email affirmed that X12N 837 is the claim format:
From CMS: "Your second issue concerns Epoetin and drugs covered under the inhalation device benefit. You asked for acknowledgement that the DMERCs would accept the X12N 837 when these drugs are submitted by home infusion pharmacies. All claims submitted by home infusion pharmacies are to be billed on the X12N 837. The DMERCs do not distinguish between the product or the service supplied."
The email NHIA received on June 10 from CMS' Office of HIPAA Standards' Gladys Wheeler, Health Insurance Specialist, included that, "This response was cleared by Gary Kavanagh, Director of Information Services, Business Systems Operations Group, and Cathy Carter, Deputy Director of the Office of Information Services, Business Systems Operations Group." NHIA understands these CMS groups provide information technology directives to the DMERC contractors. View a June 12, 2003 follow up letter from Ms. Wheeler which also addresses an issue involving an edit that might enforce use of the NCPDP claim transaction by non-home infusion pharmacies that NHIA asked for clarification on.
UPDATED! What coding sets are currently used for home infusion therapy? Commercial? Medicare? Medicaid?
In the past, commercial payers, Medicaid plans, and other government plans had responded to the lack of standardized coding for home infusion by creating their own "home grown" codes. The result is that prior to the start of HIPAA implementation, there were almost as many code sets as there were payers. While each code set may have met the needs of the individual payer, the use of multiple coding sets was highly inefficient for providers, who needed to ensure accurate billing under the parameters of each individual coding set.
Commercial Coding. Under HIPAA regulations, these "local" or proprietary (i.e., payer-specific) codes, sometimes labeled as HCPCS Level III codes, are no longer be allowed. Starting in 2002, the Centers for Medicare and Medicaid Services (CMS) included a comprehensive set of HCPCS "per diem" codes that are now widely used by most commercial and some government payers to process home infusion claims. HCPCS contains the only HIPAA-approved code set available that supports the typical per diem contracts present in the marketplace.
Medicare Coding. Because Medicare does not have a specific home infusion therapy benefit, a much lower percent of these claims are paid by Medicare as compared with many other health services. We should note that Medicare uses a Medicare-specific HCPCS code set, useful only for the very limited coverage available and not suitable for use in most commercial insurance situations. (Because these codes are HCPCS, Medicare is HIPAA-compliant in this area.)
Medicaid Coding. The state Medicaid organizations have had different and often custom coding systems for home infusion therapy (and many other) claims. Each state has been working on conversion to standardized codes for all of the health segments they cover. The states can convert to the HCPCS "per diem" codes as a way to significantly streamline the payment for and processing of home infusion claims. If they do this, they will experience simpler claims to adjudicate, reduced claim errors, fewer claim resubmissions, etc. all leading to lowering their costs of processing these claims. Some plans have already adopted the HCPCS "per diem" codes, while others are considering adoption.
Home infusion therapy services encompass a wide range of products and services designed to achieve physician-defined therapeutic endpoints such as resolution of infection or management of chronic pain. As such, these services more closely resemble comprehensive inpatient treatment than standard retail drug therapy, and home infusion pharmacies have frequently been described as "hospitals without walls."
Consequently, the majority of home infusion therapy services are paid on a per diem basis. Per diem billing allows payers to aggregate all the individual home infusion cost items-including sterile product compounding, clinical monitoring, intravenous medications, and drug administration supplies and equipment-within a single line item for each day the patient is on service. This method streamlines claims submission processing and enhances utilization and financial management of infusion therapy services, while facilitating cost comparisons to other IV therapy treatment settings. To learn more about per diem billing in home infusion, view NHIA's definition of per diem.
Are home infusion therapy claims currently submitted electronically?
In the commercial and Medicaid sectors, there is very little true electronic data interchange (EDI) for home infusion therapy. Most claims are submitted on paper, while in some cases the data is re-keyed into a proprietary computer system for non-standardized electronic submission. This situation is expected to dramatically improve during 2003 given HIPAA requirements for true EDI. For home infusion claims submitted to Medicare, many are sent electronically using a non-HIPAA-compliant electronic data format called NSF, and in 2003 these claims are being converted to the HIPAA-compliant format, called X12N 837 Professional.
Why weren't NHIA's HIEC codes approved under HIPAA?
One goal of HIPAA was to streamline all coding for all health care services within a very short list of well-established coding systems. The HIPAA regulations recognized standardization where it already existed, and established processes and timetables for promoting standardization where it did not exist. Under the HIPAA framework set up by HHS, home infusion therapy participants were directed to approach the coding administers for the approved HCPCS and CPT code sets to resolve the "coding gaps".
The final solution put into the HCPCS and CPT code sets by their administrators incorporated much of the structure of the HIEC coding system. While there are some differences, in reality much of the HIEC code system was "approved" for HIPAA when incorporated into HCPCS and CPT. Some even call the HCPCS "per diem" codes "the HIEC codes".
Use of the HCPCS "per diem" and CPT home nursing codes will bring standardization to home infusion therapy, as it already exists in physician billing and other health care areas.