CAQH CORE Releases EFT and Remittance Advice Transactions, Public Comment Period Opens

Instant Information For Hospitals, Doctors, Patients, and Health Plans

“Imagine an American healthcare system where doctors and hospitals can instantly verify patient insurance information before or at the time of care.  From any health plan.  With any electronic system…”  These words are the vision of the CORE (“The Committee on Operating Rules for Information Exchange”) which is backed by several health plans, providers, agenncies, and vendors.  Among its initiatives are a Universal Provider Datasource (UPD), real-time electronic funds transfer for claims, real-time status, real-time eligibility at the point of care.

Banks HIPAA status  – Beginning the Convergence of Banking and Healthcare

Prior postings to the Federal Register dating back to first quarter of 2012 have noted that banks will be involved in the data interchange between plans and providers as they begin to support EFT.  This makes the bank in effect a clearing house, subject to HIPAA regulations regarding privacy and security.

Standards such as this will start to integrate electronic funds and protected patient data requiring new standards and consideration of new issues.

From the CAQH letter to HHS:

“Some financial institutions will continue to translate nonstandard payment/processing information received from health plans into the CCD format…[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][and] become de facto health care clearinghouses as defined by HIPAA. To the extent, however, those entities engage in activities of a financial institution, … they will be exempt from having to comply with these HIPAA standards with respect to these activities.”

CAQH Releases CORE IFR for EFT and Remittance

CAQH CORE announced that the Centers for Medicare and  Medicaid Services (CMS)  issued an Interim Final Rule (IFR) with comment period – Administrative Simplification: Adoption of Operating Rules for Health Care Electronic Funds Transfers (EFT) and Remittance Advice Transactions.

Health plans Backing CORE

Aetna, Cigna, several state Blue Cross Blue Shield plans (Blue Cross Blue Shield of Michigan, CareFirst BlueCross BlueShield, Excellus Blue Cross Blue Shield, Independence Blue Cross Healthcare Service Corporation and Wellpoint, which own several Blue plans), United Health.

Providers Backing CORE

Leading providers who back CORE include Adventist,  Dignity Health, Cedars-Cinai, Healthcare Partners, Mobility Medical, New York Presbyterian, North Shore Health System, Physician Healthcare Network, Spectrum LaboratyrNetwork, and University Physicians.

Standards Groups and Associations Backing Core

AHIP, ASC X12, Blue Cross and Blue Shield Association (BCBSA), Delta Dental PLans, HL7, Healthcare Association of New York State, Healthcare Billing and Management Association, LINXUS, National Committee for Qualty Assurance (NCQA), National Council for Prescription Drug Programs (NCPDP), JN Shore (WEDI Affiliate) Private Sector Technology Group, Utah Health Information Network (UHIN).

Government Agencies Backing Core

Louisiana Medicaid – Unisys, Michigan Department of Community Health, Minnesota Department of Human Services, Oregon Department of Human Resources.

Vendors Backing CORE

CareMedica Systems, Electronic Data Systems (EDS), Electronic Network Systems (ENS, owned by Optum), First Data, Gateway EDI, Healthare Adminstration Technolgies, IBM, Optum, InstaMed, mPay Gateway, National Account Service Comany (NASCO), NetGen Healthcare Information Systems, Payerpath (Misys), Recondo, Secure EDI Health Group, and TriZetto.

Realizing Benefits of Core Require Updated Healthcare IT Infrastructure

CORE will have the effect of reducing lengthy waiting periods for patients who wish to know if they are eligible, what the status of a claim is, and what their out of pocket reimbursement will be and when it will be received.  It will force health plans and providers to replace decades old mainframes that use ‘batch’ oriented mechanisms to answer these and other questions with near real-time capabilities.   In the future, CORE will help move healthcare to more of a retail experience for the consumer, “…at the point of care.”

The IFR adopts the Phase III CORE EFT & ERA Operating Rule Set, including:

  • EFT Enrollment Data Rule
  • ERA Enrollment Data Rule
  • EFT & ERA Reassociation (CCD+/835) Rule
  • Uniform Use of CARCs and RARCs (835) Rule, with the CORE-required Code Combinations for CORE-defined Business Scenarios
  • Health Care Claim Payment/Advice (835) Infrastructure Rule (except for the batch acknowledgement requirements)

The Catch – Will Health Plans and Other Healthcare Organizations be Able to Support CORE any time Soon?

Third parties who provide clearing house services and claims settlement for out of network, in-network and pharmacy claims are proving they can deliver faster claims processing and daily if not real-time claims status.  Would they be in a better position to provide these services?  Similarly there are near real-time eligibility companies who have sprung up to solve these problems for their clients.  New more innovative companies may be in the best position to realize the dream of CORE and provide it as a service to some of the health plans and providers who back this initiative.

Public comment may be submitted at until October 9, 2012.  The direct link to the published document is here:!documentDetail;D=HHS_FRDOC_0001-0461[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Michael F. Arrigo

Michael Arrigo, an expert witness, and healthcare executive, brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health I.T., and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations that provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and billing, fraud damages, and electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, malpractice, and insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software S.A. (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for the top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls I.T. audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto-economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and published in Healthcare I.T. News. Mr. Arrigo serves as a member of the board of directors of a publicly traded company in the healthcare and data analytics industry, where his duties include: member, audit committee; chair, compensation committee; member, special committee.

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