Contributed by Robert Tennant
It seemed straightforward and simple: transition all providers from the current cumbersome system of multiple proprietary identification numbers to a single number. How difficult could it be, converting to this new number and reaping the benefits of administrative simplification?
Implementing the National Provider Identifier has proven to be far more challenging – and success has been considerably more elusive than many had envisioned. The resulting difficulties have forced the government to devise innovative contingency plans to avoid potentially catastrophic disruptions in claims payments.
In an era of increasing concerns regarding healthcare costs, many see the NPI, mandated as part of the Health Insurance Portability and Accountability Act of 1996, as a microcosm of the Centers for Medicare & Medicaid Services’ efforts to implement administrative simplification measures in an attempt to trim expenses.
However, to reap the full benefits of administrative simplification, regulations must be adopted in an efficient and cost-effective manner. That efficiency and cost-effectiveness was largely absent from the NPI implementation process.
After warnings from the Medical Group Management Association and others in the industry that full NPI compliance would not be achieved by the deadline set for May 23, 2007, CMS now has issued two separate contingency plans – one for HIPAA-covered entities generally and one specific to the Medicare fee-for-service program.
The covered entity contingency plan stipulates that an entity would not be subject to enforcement action if they exhibit “good-faith” efforts to comply. One example of a typical real-world contingency plan would be for a payer to continue accepting legacy identifiers until May 23, 2008, as it develops internal crosswalks between the NPI and legacy identifiers.
By contrast, the Medicare fee-for-service contingency plan continues CMS’ pattern of complicated logic by refusing to announce a hard and fast date for when claims with legacy identifiers will no longer be accepted. Rather, the agency plans to monitor the percentage of claims that come in with NPIs. After that percentage reaches some level – as yet unspecified by CMS – the agency will start refusing claims that do not contain NPIs.
There is concern within the provider community that payers, including CMS, will fail to give adequate notice before ending the contingency plan. Many physician practices are at the mercy of the practice management and billing software vendors to prepare their systems to include NPIs on transactions.
In some cases, and for various reasons, that software has not been updated. Another problem is that some older software installed in practices is simply not being modified by vendors, forcing practices to buy new software and often costly new hardware to run it.
Why the need for contingency plans? Several factors have impeded the ability of providers to meet the May 23, 2007, deadline. Although CMS made the National Plan and Provider Enumeration System available in May 2005 for providers to begin applying for numbers, the agency failed to develop sufficient educational and outreach materials to assist the industry in adequately understanding the NPI and the steps necessary to prepare.
Most importantly, CMS failed to issue their data dissemination policy in a timely manner. The prolonged delay of the data policy has limited the ability of covered entities to meet the regulatory deadline. This critical policy would have provided important guidance for providers that wanted to share their identifiers with other covered entities. For the NPI to succeed, it has to be shared with appropriate business partners. Uncertainty regarding who can share NPIs with whom, and the fear of litigation if impermissible disclosures are made, has curtailed the industry-wide sharing of NPIs. Most importantly, CMS has yet to make available the online database of NPIs. Instead, practices must telephone, e-mail, write or fax referring physicians to obtain NPIs, creating massive administrative work and hassle.
CMS’ delay in releasing the data dissemination policy has prevented medical practices and others from developing crosswalks and implementing related business decisions because they do not have the identification numbers of the providers with whom they conduct business. Because the industry anticipated earlier publication of the policy, options for obtaining NPIs from referring providers were not seriously pursued until recently, hampering the ability of providers to fully populate internal databases.
Without these NPIs, medical groups haven’t been able to test practice management and billing systems with clearinghouses and payers. As the industry found with the recent (and ongoing) conversion to standardized electronic HIPAA transactions, testing between trading partners is critical to ensure a smooth transition.
NPIs will not be the last healthcare standard mandated by regulation. Understanding this, what lessons can government and industry learn from the protracted implementation of this so-called simple administrative simplification provision?
Smooth adoption of any new regulation now appears to hinge on several factors – a clear strategy from the federal government, including the identification and achievement of critical milestones; piloting the standard before national rollout to identify issues and concerns, as well as to develop solutions; education and outreach to the affected sectors, including software vendors, which, although not covered entities under HIPAA, are obligatory partners in every implementation effort; and constant monitoring of industry readiness.
By all accounts, the NPI implementation process fell short in every one of these categories. However, it is not too late to learn from the implementation of the NPI and improve the process for future regulations.
Robert Tennant is senior policy advisor for health informatics for the Medical Group Management Association, an Englewood, Colo.-based organization representing administrators of medical group practices.