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Quick Reference Guide
If you have received this e-mail, you are probably involved in
some way in the third-party billing or Accounts Receivable (AR)
process. Through your work in Patient Registration, the Business
Office, or Finance, you have probably at least heard about Electronic
Transactions. Because Electronic Transactions not only make good
business sense but it's also the law, IHS is producing detailed
and simple-to-use training materials to help you successfully meet
the requirements for HIPAA electronic transactions and code sets.
This e-mail provides an introductory overview to Electronic Transactions.
It also requests e-mail feedback from you about the information.
That feedback will be incorporated into the final training binder,
so use the link at the bottom and contact us. In addition, please
forward this e-mail on to anyone else who needs this information.
Your input is vital!
First, a graphic look at the process and positions affected.
There is a good chance that you know about the changes being implemented
throughout IHS in third-party billing and accounts receivable. In
fact, you may be at a facility that is participating in that implementation
process. In any case, you have undoubtedly heard stories about the
challenges of getting the system up and running.
and Old Formats
(Coordination of Benefits)
to submit claims to secondary insurers.
Well, help is on the way! Over the next three months, we will provide
the information you need to bring two important functions into the
electronic age. The two functions are:
- Health Claims & Equivalent Encounter Information or the 837
- Health Care Payment & Remittance Advice or the 835
You may not need all the information we provide to do your job,
but at least some of it will apply to you. We will guide you through
each step of the process, pointing you to references for additional
information and giving you resources for one-on-one help.
In this first e-mail, you will learn:
IHS’ goal is to make everyone’s job easier. In the process, revenue
will increase, cash flow will even out, and we will be supporting
the mission of providing the highest quality health care to all
American Indians, Alaska Natives, and those served by our urban
In addition to HIPAA and its legal requirements, three developments
over the past 15 years have affected third-party billing and accounts
Insurance Portability and Accountability Act of 1996
passed by the United States Congress, the Health Insurance
Portability and Accountability Act of 1996 (HIPAA) instituted
a number of administrative reforms. HIPAA impacts all
functions, processes, and systems that store, handle,
or generate health information. The law changes the way
health care providers must protect the privacy of a patient's
health information and contains security procedures that
must be followed to protect the integrity of a patient's
health information.Of major importance in the HIPAA legislation
is the issue of data and transaction standardization –
a mandate very few healthcare providers can sidestep if
they bill third parties for services provided to patients.
date has not been specified for when all health
care providers and insurers
must comply with HIPAA. However, a date is expected and
members should be able to show “good faith efforts” working
- More medical information is being stored and exchanged electronically.
- In increasing numbers, patients are requesting access to and
copies of their medical records.
- Health care costs, including administrative costs, have soared.
The result? Medical facilities are faced with additional tasks.
electronic patient records protected so that only the right
people have access to them.
a system that tracks who accesses patient records and when.
the time spent doing paperwork.
How do we address the tasks of privacy, accountability, and efficiency?
For those of us who are responsible for billing office functions,
it means moving as rapidly as possible into full-scale Electronic
While Electronic Transactions make good business sense and address
important patient rights issues, there is another reason for them:
We do not have a choice. The law requires us to.
In 1996, Congress passed the Health
Insurance Portability and Accountability Act (HIPAA). Among
other provisions, HIPAA includes a section on Administrative Simplification.
This section was intended to reduce the costs and administrative
burdens of health care by making possible the standardized, electronic
transmission of many administrative and financial transactions using
standard record formats, code sets, and identifiers.
Standardized Electronic Transmission
The impact of electronic standardization as described in the Administrative
Simplification section of HIPAA is that it increases risk to the
security and privacy of individually identifiable health information.
Because Congress did not enact legislation defining the privacy
and security requirements of HIPAA, the Department of Health and
Human Services (DHHS) was required to provide the requirements.
There are currently four final rules from DHHS for HIPAA:
Electronic transactions will have benefits for many people, once
the system is implemented and working properly.
"I didn’t realize how important it was to put in
all the correct information – like all the parts of the address
and every type of insurance the patient has and the relationship
between the patient and insured person."
"If you don’t enter the codes right, the claim keeps
"You have to edit every claim thoroughly. If you
don’t, the claim will be rejected. Figuring out the error
reports is not fun."
"We put off doing this for a long time because the
old way seemed to work fine. But we are so much more efficient
with the new process. We can actually keep up with the work."
“The thing that I really like about the 835 is
that posting is so much easier. Now we have more time for
- Finance Office Manager
"We were really worried about what this would mean
to our revenue stream. We knew in the long run we would get
paid much faster. But what would happen when we were going
through testing? Well, it really wasn’t so bad. We planned
for the extra labor time that would be required and it is
really paying off."
HIPAA compliance is as much a matter of management as it is of
technology. IHS' Office of Information Technology (OIT) continues
to work hard to put in place the resources you need to successfully
implement electronic transactions at your facility.
- The RPMS tools you need are ready.
- The materials you need are on hand.
- Problem solving is ongoing and best practices are being developed.
- Help is available.
The RPMS tools you need are ready.
Complying with HIPAA does not mean that you have to learn a new
software package. RPMS has been analyzed to determine what modifications
are needed and those software requirements have been made.
Party Billing and
Generic Interface Software (GIS)
p2 & p5 (Optional)
Institutional, Professional and Dental Claim Requests
Billing, v2.5, p6
v98.1, Patch 13
Adding Provider Taxonomy provides instructions to add provider
and location taxonomy codes. As a backup, third party RPMS software
(3P) uses crosswalk to find taxonomy number.
Acknowledgement and Comp Report
been developed to convert error report format into list of segment
lines for easier interpretation.
Claim Replay, (Remittance Advice)
Receivable, v1.7, p4
Standard Adjustment/Reason Codes
Receivable, v1.6, p4
* Contact ITSC
to verify that these are the most current releases.
Materials you need are on hand.
In the past year, IHS has developed four training documents:
- HIPAA Compliance: Business Transactions (for Area HIPAA Coordinators)
Medicare Part A: 837 Testing and Production Procedures (sent
to all Area Offices)
Medicare Part B: 837 Testing and Production Procedures (sent
to all Area Offices)
835 Testing and Production Procedures (sent to all Area Offices)
During the next three months there will be additional materials.
They will be divided into four topics:
- Preparing to Test the 837
- Testing the 837
- Reading 837 Error Reports and Making Corrections
- Testing and Posting the 835 Remittance
For each topic, you will receive an e-mail like this one that provides
an overview of the topic. Included in the e-mail will be links to
All of the materials will be posted on a new web site, especially
developed for those involved in Electronic Transactions. That way
you can access the materials at any time right from your desktop.
At the conclusion of the three months, all the materials will be
compiled into a binder with a CD-ROM for future refresher or new
Problem solving is ongoing and best practices are being
developed. In addition to regular internal technical meetings,
OIT holds a regular national I/T/U conference call to discuss Area
status reports, issues and solutions, and best practices. If you
would like to participate in this call, please notify the ITSC
Help is available.
The Area Office is the place to start when you have questions. If
they are unable to answer you questions, contact the ITSC
IHS tracks the testing status of business transactions. To see the
current testing status, click
This newsletter is one in a series of six on the topic "Electronic
Transactions . . . It's Easier Than You Think." Each of the newsletters
is associated with a PowerPoint presentation expands on the contents
of the newsletter in a format that supports self-paced or group
training. Even greater technical detail is presented in two Quick
Reference Guides: "Working with the 837 Transaction" and "Working
with the 835 Remittance Advice." Electronic versions of these materials
are available on the IHS Electronic Transactions website at www.ihs.gov/AdminMngrResources/HIPAA/index.cfm.
A training resources binder includes printed copies of these materials
and a CD-ROM with electronic copies of the files.
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Quick Reference Guide