NACHA Operating Rules Update: Healthcare Payments

Transcription

1 NACHA Operating Rules Update: Healthcare Payments J. Steven Stone, AAP Senior Vice President PNC Bank Chuck Floyd, AAP Manager of Education Viewpointe, LLC

2 2 Disclaimer This course is intended to provide an overview of important healthcare payments-related issues that will impact financial institutions and the healthcare industry in the future. Responsibility for compliance with all legal and regulatory requirements remains at all times with individual users. This presentation and the information contained in it are not intended to be used as legal advice. NACHA, PNC Bank and Viewpointe provides this material as is without warranty of any kind, either express or implied, including, but not limited to, the implied warranties of merchantability or fitness for a particular purpose. This document could include technical inaccuracies or typographical errors, and individual users are responsible for verifying any information contained herein. The information in this document and discussed in this presentation is the exclusive property of NACHA, PNC Bank and Viewpointe Clearing, Settlement & Association Services, LLC. It may not be copied, disclosed, or distributed, in whole or in part, without the express written permission of NACHA, PNC Bank or Viewpointe.

3 3 Agenda Health Care EFT Standard and Operating Rules Changes to the NACHA Operating Rules to support the healthcare Industry Impacts and opportunities for financial institutions

4 4 Healthcare Rules that Impact ACH Payments January 10, 2012 Adoption of Standards for Health Care Electronic Funds Transfers and Remittance Advice August 10, 2012 Adoption of Healthcare Operating Rules for Healthcare Electronic Funds Transfers (EFT) and Remittance Advice Transactions

5 5 Healthcare Rules that Impact ACH Payments January 10, 2012 Adoption of Standards for Health Care Electronic Funds Transfers and Remittance Advice August 10, 2012 Adoption of Healthcare Operating Rules for Healthcare Electronic Funds Transfers (EFT) and Remittance Advice Transactions

6 6 Healthcare EFT Standard Final Rule January 10, 2012, HHS issued Administrative Simplification: Adoption of Standards for Health Care Electronic Funds Transfer (EFT) Interim Final Rule (IFC) with 60 day comment period Established a healthcare EFT standard Established standard for remittance information Became final on July 10, 2012 (50 comments; no changes) Defined Health Care EFT as a transaction under HIPAA for the first time (45 CFR ) Identified NACHA CCD+ as the EFT standard (45 CFR )

7 7 Healthcare EFT Standard Final Rule Divided the EFT payment flow into three stages Stage 1 Payment Initiation Stage 2 Transfer of Funds Stage 3 Deposit Notification Health Plan (Originator) Treasury Stage 1 Payment Initiation Health Plan s Financial Institution (ODFI) Stage 2 Transfer of Funds Provider s Financial Institution (ODFI) Stage 3 Deposit Notification Provider (Receiver) Treasury Health care payment/processing information via EFT Claims Processing ERA Billing and Collections

8 8 Healthcare EFT Standard Final Rule Adoption of Standard for Data Content of the Addenda Record The CCD+Addenda must contain the TRN Reassociation Trace Number data segment as defined by X TR3 version 5010 (Implementation Guide) ~ ASC X12N V TRN*1*12345* * \ 0001NNNNNNN NACHA CCD+ Addenda

9 9 Healthcare EFT Standard Final Rule Allows for EFT s conducted outside the ACH Network The healthcare EFT standard does not apply to EFTs conducted outside the ACH Network Final rule neither prohibits nor adopts any standards for health care EFT transmitted outside the ACH Network. References use of both wire transfer and card payments BUT if a Provider requests use of the Healthcare EFT Standard, the Health Plan or Third Party Provider must use the CCD+ Addenda to deliver the claims reimbursement (subject to the Plan s established enrollment process)

10 10 CMS Frequently Asked Questions (07/12/12) Q. Are HIPAA covered entities required to use the ACH Network to transmit and receive health care claim payments by electronic funds transfer (EFT)? A. No. As of January 1, 2014, health plans and providers are not prohibited from using other networks such as Fedwire, card payment networks, etc. However, if a provider requests that a health plan conduct EFT using the ACH Network, the health plan is required to do so. Regardless of the network used, every effort should be made by the health plan to ensure that re-association between the payment and the remittance advice can be automated by providers.

11 Amendments to the NACHA Operating Rules to support Healthcare EFTs Define and establish a Health Care EFT Transaction A CCD Entry originated by a Health Plan to a Health Care Provider with respect to a health care claim Must have one Addenda Record that contains the ASC X TRN (Reassociation Trace Number) data segment in the Payment Related Information field Used for reassociating the EFT with an ERA Allows use of the tilde ~ as an EDI segment terminator TRN*1*12345* * ~ 0001NNNNNNN NACHA CCD+ Addenda

12 Amendments to the NACHA Operating Rules to support Healthcare EFTs Define and establish a Health Care EFT Transaction A CCD Entry originated by a Health Plan to a Health Care Provider with respect to a health care claim Must have one Addenda Record that contains the ASC X TRN (Reassociation Trace Number) data segment in the Payment Related Information field Used for reassociating the EFT with an ERA Allows use of the tilde ~ as an EDI segment terminator Standard transaction description of HCCLAIMPMT Standard identification of payer the name of the health plan as it is known by the provider 12

13 Amendments to the NACHA Operating Rules to support Healthcare EFTs Establish requirements for delivery of Reassociation Trace Number to providers using Non-Consumer Accounts Either automatically or upon request, the provider s financial institution must provide or make available the Reassociation Trace Number by the opening of business on the second banking day following the settlement date of the EFT The financial institution must offer an option to receive or access the Reassociation Trace Number via a secure, electronic means (minimum 128-bit RC4 encryption) Aligns with CORE rule on secure connectivity Aligns with existing NACHA rules on secure transmission of banking information 13

14 Amendments to the NACHA Operating Rules to support Healthcare EFTs The rules will become effective on September 20, 2013 Ensures financial institutions readiness to support Healthcare EFTs prior to January 1, 2014 compliance date for HHS regulations and Medicare EFT mandate Health plans can work toward implementation and compliance on all sets of regs/rules simultaneously Health plans can implement standard transaction description and identification earlier Financial institutions can offer services earlier to make reassociation trace numbers available to interested providers 14

15 15 Healthcare Rules that Impact ACH Payments January 10, 2012 Adoption of Standards for Health Care Electronic Funds Transfers and Remittance Advice August 10, 2012 Adoption of Healthcare Operating Rules for Healthcare Electronic Funds Transfers (EFT) and Remittance Advice Transactions

16 16 IFC Healthcare Operating Rules for EFT & ERA August 10, 2012 HHS issued the interim final rule with comment on the adoption of operating rules for the health care EFT and Remittance Advice Transaction Adopts the Phase III CAQH CORE EFT & ERA Operating Rules Set 1 addressing four areas of administrative tasks: Provider enrollment in EFT and ERA; Implementing infrastructure and communication networks between trading partners; Reassociation of the payment information with the remittance information; and Posting payment adjustment and claim denials 1 The IFC does not adopt the Batch Acknowledgement Requirements in Section 4.2 of CAQH CORE Rule 350, as the Secretary of HHS has not yet adopted HIPAA-standards for acknowledgements.

17 17 IFC Healthcare Operating Rules for EFT & ERA August 10, 2012 HHS issued the interim final rule with comment on the adoption of operating rules for the health care EFT and Remittance Advice Transaction Adopts the Phase III CAQH CORE EFT & ERA Operating Rules Set 1 addressing four areas of administrative tasks: Provider enrollment in EFT and ERA; Implementing infrastructure and communication networks between trading partners; Reassociation of the payment information with the remittance information; and Posting payment adjustment and claim denials 1 The IFC does not adopt the Batch Acknowledgement Requirements in Section 4.2 of CAQH CORE Rule 350, as the Secretary of HHS has not yet adopted HIPAA-standards for acknowledgements.

18 18 Who is CORE? Committee on Operating Rules for Information Exchange (CORE) Initially sponsored by CAQH to develop industry-wide operating rules, built on existing standards, to streamline administrative transactions Rule writing Certification and testing Education and outreach

19 19 Phase III CORE EFT & ERA Operating Rules Rule 380/382 EFT/ERA Enrollment Standardized Data Element Groups, Individual Data Elements, and Sub-Elements Maximum allowable data; plans can use less Element Names and definitions may not be modified Electronic enrollment must be offered Instructions for completion must be provided

20 20 CORE Standardized Data Elements (sample)

21 21 Phase III CORE EFT & ERA Operating Rules Rule 380/382 EFT/ERA Enrollment Standardized Data Element Groups, Individual Data Elements, and Sub-Elements Maximum allowable data; plans can use less Element Names and definitions may not be modified Electronic enrollment must be offered Instructions for completion must be provided Does not standardize enrollment terms and conditions

22 22 Phase III CORE EFT & ERA Operating Rules Rule 370 EFT/ERA Reassociation Requirement 4.1 Providers must proactively contact their financial institutions to arrange for the delivery of the CORErequired Minimum CCD+ Data Elements necessary for successful reassociation of the EFT with the ERA. (Effective Entry Date, Amount and the TRN Reassociation Data Elements)

23 23 Phase III CORE EFT & ERA Operating Rules Rule 370 EFT/ERA Reassociation Requirement 4.2 Plans must release for transmission to Providers the v corresponding to the CCD+ No sooner than three business days prior to the CCD+ Effective Entry Date, and No later than three business days after the CCD+ Effective Entry Date The CCD+ must have a valid Effective Entry Date that corresponds to the v BPR16

24 NACHA Operating Rules Refresher RDFI must provide payment-related information to Receivers Upon request of a Receiver (Provider) By the opening of business on the RDFI s second banking day following the settlement date of the entry Applies to all CCD entries Sign up for service with RDFI Do not currently state how the data is to be delivered Do not address issue of charging for service

25 25 EFT and ERA Process Flow Health Plan creates the CCD+ and ERA ERA (835) Remittance Advice ERA (835) Payment/Advice sent from the Health Plan to the Provider through separate channel Provider receives the ERA with the TRN Reassociation segment and must match it to the TRN Reassociation segment received from the RDFI Provider ODFI sends The CCD+ payment to the ACH Operator RDFI receives CCD+ and posts funds to Provider s account Reassociation TRN segment sent to the Provider if requested

26 26 Five Major Components of New Rule Unique identification of health care EFTs Additional formatting requirements for health care EFT transactions Delivery of payment related information (reassociation number) Addition of new EDI data segment terminator Health care terminology within the NACHA Operating Rules

27 27 Unique Identification of Health Care EFTs Company Entry Description Field Contains description of purpose of entry Contents of field usually decided by Originator Required content in specific cases Example: REVERSAL for reversing entry Example: REDEPCHECK for represented check entry HCCLAIMPMT required for Health Care EFT transaction

28 28 Additional Formatting Requirements If HCCLAIMPMT is used: Company Name Field Name of health plan originating entry or Name of self-insured organization s third-party administrator Recognized by healthcare provider To whom healthcare provider submits claims

29 29 Additional Formatting Requirements If HCCLAIMPMT is used: Addenda Record One addenda record required Addenda record indicator field = 1 Payment Related Information Field Must contain one ANSI 1 ASC 2 X12 Version TRN (reassociation trace number) data segment 1 American National Standards Institute 2 Accredited Standards Committee

30 30 Delivery of Payment Related Information If HCCLAIMPMT is used: Automatically or upon request of Receiver holding nonconsumer account Available by opening of business on second banking day from settlement Offer or make available an option for secure electronic delivery Minimum equivalent of 128-bit RC4 encryption technology

31 31 Delivery of Payment Related Information Deliver automatically - example included in a transaction description on an online account statement Deliver upon request - example provider requests a specific delivery method, such as secure Must offer at least one option to receive or access the reassociation trace number via secure, electronic means

32 32 CCD+ and Reassociation Number Addenda record contains: Data Segment Identifier TRN TRN01 - Trace Type Code (minimum 1/maximum 2) (required field) TRN02 - Reference Identification (reassociation number) (minimum 1/maximum 50) (required field) TRN03 - Originating Company Identifier (payer identifier) (minimum 10/maximum 10) (required field) TRN04 Reference Identification (minimum 1/maximum 50) (situational field)

33 33 Sample TRN Data Segment 705TRN*1*12345* * \ Addenda Type Code Record Type Code Reassociation Trace Number Payment Related Information Addenda Sequence Number Entry Detail Sequence Number TRN*1*12345* * \ TRN01 required min 1/max 2 TRN02 required min 1/max 50 TRN03 required min 10/max 10 TRN04 situational min1 /max 50

34 34 New EDI Data Segment Terminator Revises definition of payment related information field Adds tilde ( ~ ) as a valid data segment terminator Current accepted terminator is a backslash ( \ )

35 35 New Definitions Applicable to Health Care New definitions include: CORE-required Minimum CCD+ Reassociation Data Elements Health Plan Healthcare EFT Transaction Healthcare Provider Non-Consumer Account

36 36 Impact of Rule Changes to ODFIs Ensure health plan originators comply with Rules Use of HCCLAIMPMT in Company Entry Description field Company Name field containing readily recognized information by Healthcare Provider (Receiver) Correct formatting in Addenda Record Indicator field Correct formatting in Payment Related Information field

37 37 Impact of Rule Changes to RDFIs Do you already have a product or service available for providing payment related information if it is requested? Does it include a secure, electronic delivery option? If no service is currently available develop one Work with third-party service providers or core vendors to determine capabilities (such as adding to the online banking platform) Both ACH Operators have EDI services available that facilitate delivery of the Addenda Record information Will your software accept the ~ as a data segment terminator?

38 38 Impact of Rule Changes to RDFIs If your organization holds accounts for healthcare entities, and receives payments on their behalf, you must comply with NACHA Operating Rules Healthcare Facilities Clinics Hospitals Local group homes Hospice facilities Nursing homes Rehabilitation facilities Medical schools Medical laboratories and testing facilities Pharmacies Practitioners Physicians Physical Therapists Chiropractors Dentists Optometrists/Ophthalmologists Psychologists/Psychiatrist Massage Therapists Midwives Nurses & Nurse Practitioners

39 39 Impact of Rule Changes to RDFIs What health plans are telling healthcare providers to request from RDFI CORE-required minimum CCD+ reassociation data elements Will the RDFI customer service staff understand this request?

40 40 Impact of Rule Changes to RDFIs It s all in the language Provider RTN = Reassociation Trace Number Trace Number = RTN Addenda =?? Bank RTN = Routing & Transit Number Trace Number = unique ACH transaction identifier Addenda = where the Reassociation Trace Number is located

41 41 Impact of Rule Changes to RDFIs What additional training needs to be provided to staff? Prepare for additional requests for payment related information Help staff to understand new language they may hear What opportunities are there to be proactive with healthcare provider customers? Direct these customers to specific pages on financial institution s website? Provide sign up form to these customers rather than waiting to receive request for payment related information?

42 42 Healthcare Opportunities Development Opportunities Potential new revenue opportunities Strengthened relationships with healthcare customers Expanded potential for EFT services for healthcare customers

43 Opportunity to Educate Healthcare Customers and Enhance Relationships 43 ACH and Treasury Management Services Physicians have expressed concern about unauthorized debits to account Debit Filter or Debit Block ACH Positive Pay ACH Origination collection of outstanding patient obligations Delivery of Remittance Information Reduce risk Improve back office administrative processes Educate your healthcare customers on the products and services available from your financial institution that can help them reduce processing time, funds availability and potentially overall costs of their back office processing

44 44 Resources Relating to Healthcare Payments

45 45 Health epayments News Electronic newsletter covering healthcare issues that impact financial institutions To be issued quarterly Register online to receive the newsletter at

46 46 Healthcare Tools for Financial Institutions Healthcare Payments Resource Page Glossary Research paper Links to legislation and organizations Healthcare presentation from PAYMENTS 2011 & PAYMENTS 2012 Healthcare Payments Tool Kit FAQs New publications Healthcare Resource Guide Healthcare CCD+ Implementation Guide

47 47 Healthcare Resource Guide Publication that provides a comprehensive overview of healthcare issues, legislation, language and impacts.

48 48

49 49 Healthcare Payments Resource Guide New publication developed to: Give the reader a basic understanding of the complexities of the healthcare industry, Identify key terms, Review recent healthcare legislation, and Discuss potential impacts on the financial services industry.

50 50 Healthcare Industry Resource Tab Information on healthcare EFT standard implementation Link to ACH Rules Online Healthcare CCD+ Implementation Guide ACH Primer for Healthcare Payments: A Guide to Understanding EFT Payment Processing FAQs on healthcare EFT standard Healthcare reassociation information sheet

51 51 Thank You