In This Issue: Attachments - Staple it to a Claim

Issue summary and other notes...

Article 1 Claim Attachments. Five to ten percent of claims have an attachment. Learn how claims process improvement, technology, and HIPAA changes affected claims attachment processing.

Notes

"You can only stumble if you're moving." Roberto Goizueta - former CEO Coca Cola Corporation

"Patients will ultimately be the stewards of their own information." John Halamka - CIO Harvard Medical School New York Times

Claim Attachments: Staple it to a Claim

Claims attachments current state and best practices.

Claims attachments are an area of the claims process that is small enough to overlook but difficult enough to make both payers and providers unhappy. Today 5 and 10 percent of all claims have an attachment. Despite their relatively small role in the overall claims process picture, attachments are associated with many claims process issues.

There are three basic types of claim attachments. Anything you can staple to claim is considered an attachment. As impossibly broad as that might seem, the day to day reality of attachments is that they can be simplified into three basic buckets,

1. Other Carrier Coordination Information: In circumstances were members have primary and secondary insurers, there needs to be a means to communicate between the payers – specifically, secondary payers needs to know what was paid by the first payer. This coordination between payers, known as COB, is generally a standard process. The lion’s share of coordination (over 75%) involves Medicare claims. Medicare provides an EOMB that can be attached to a claim submitted to a secondary payer with Medicare payment information. In the 2005 WEDI attachment survey, EOMBs were the most commonly submitted attachment by a significant margin. There is also a corresponding HIPAA transaction (part of the 837) which enables a provider to submit payment information from a primary payer.
2. Medical / Service Related Information: Payers have long requested additional service related information – everything from ambulance miles, to patient notes, to equipment receipts. The variations in medical and service related information are apparent in the 2005 WEDI attachment survey with over 50 types of additional required information that could be categorized at clinical. HIPAA transactions were expanded in 2005 to include six of the most common ‘medical information’ related attachment requests. These are mapped to the 275 transaction. The six are: (1) Ambulance services, (2) emergency department, (3) rehabilitation services, (4) clinical reports, (5) laboratory results, and (6) medications.
3. All Other: This group, while small (less than 1%) includes everything from handwritten correspondence to referrals to accident reports. Because payers and providers are still working through implementation and use of the current HIPAA attachment related transactions, it is unlikely that further expansion of standard electronic attachments will be forthcoming in the next 24 months.

Claims with attachments are expensive to process. No matter how you look at it, attachments require providers to submit two items and consequently require payers to process two items. Claims with attachments require additional steps to generate the submission information. In the 2005 WEDI study of attachments, which surveyed 252 providers only half of them had closely integrated financial and clinical systems – making it a challenge for many providers to generate attachments with a clinical component. Even more challenging than system integration, providers also reported a significant portion of attachment information is in paper format in the provider office. From the payer perspective, because many attachments remain on paper, there are additional steps to input them on the payer side. Finally, because of the complexity they often add to a claim, a very small percent of claims with attachments auto-adjudicate. A single attachment can easily have an administrative cost as high as $50 ($30 for the provider and $20 for the payer) – well over 4 times the cost to process an average claim.

Attachment submitters face multiple submission guidelines and processes. How, when and why are attachments required? Are providers expected to submit attachments with the claim? Or should they wait to be ‘noticed’ by the payer? It is very confusing. Few providers, particularly those specialty providers with services that often require attachments, find the process for submitting attachments to be administratively simple. However, there are a few process trends. First, when providers are aware of attachment submission requirements, they generally prefer to submit the attachment attached to the original claim submission. Payers go both ways. For some specific and unambiguous submission requirements (‘every ambulance claim must have attached…’) some payers allow providers to submit the attachment with the claim. COB information, for example, is commonly submitted with the claim. For COB information, where payers are secondary to Medicare, this is fairly standard. Unsolicited attachments often get lost. Move to solicited.

Claims with attachments take longer to process. The average commercial claim in the U.S. is processed in 41 days with 15 of those days on the payer side and 26 on the provider side (source: ClaimHeader benchmark). More than half of all claims are submitted within 10 days from the date of service. Providers however, have long argued that additional information requests are simply a way for payers to delay payment. In an older 1993 WEDI study of attachments, provider frustration with the time to pay associated with attachments is clear. To compound this frustration, in most states, the prompt pay period (the time period within which a payer is required to process the claim), is extended by the time to request, receive and process the additional information (the attachment). Given the significant costs associated with an attachment, even adding $10 to the cost of a claim generally exceeds the incremental prompt pay interest for all but a few claims. Attachments make providers angry and generate additional work – and no payers (to our knowledge) use them to slow payment.

Attachments are a key source of payment errors. According to anecdotes we have gathered, claims with attachments are more likely to have errors. The higher level of errors is because claims with attachments generally require manual processing – often with multiple steps, calculations, and reviews. Beyond the accuracy issues, attachments also pose audit issues. Claims with attachments are more time consuming and often more difficult to audit.

Attachments are expensive, slow, cause errors, and confusing – which should not surprise anyone. Changes to attachments however, have come and more are coming.

1. Attachment volume is dropping: Our longitudinal numbers are a bit shaky, but what we have starting in the late 1980’s we believe about 25% of claims required attachments, attachment volume has dropped by 50% roughly every 8 years, with levels today hovering near 5%. For individual payers these numbers can vary significantly depending upon the lines of business (benefits).
2. Attachments are going electronic (and standard): Standard fields in an electronic format are less expensive to handle than non-standard fields in on paper. HIPAA is driving important changes in claims. The HIPAA code set efforts are explicitly intended to standardize attachments, attachment data elements, and where appropriate, reduce attachments altogether. The 837 contains fields for COB information and, as of 2005, the 277 was designed to handle six medical information related attachments. At the same time, as highlighted in the 2005 WEDI survey, electronic exchange of attachment information has not yet achieved significant volume. The relatively low volume of electronic attachments is generally attributed to the payer/provider reluctance to aggressively apply new technologies. Other surveys and industry anecdotes indicate that the cost and time to adopt HIPAA transactions has been significantly underestimated.
3. Attachment Process Changes: The previous 15 years have seen significant increases in EDI claims submission, payer auto-adjudication rates, and reductions in provider submit time. Steady claims process improvement is underway. Attachments are part of that improvement. One of the changes made by roughly 50% of payers is to move to a solicit model – which means ‘submit the claim without the attachment and we’ll ask if we need it’. Solicit often works better because payers are able to manage ‘I ask for X, I receive X’ better than they manage ‘I receive X, what is X and why do I need X?’. In Massachusetts, for example, MassHealth sends a Claim Attachment Form (CAF) to a provider requesting additional information as needed – and ‘recommends’ providers do not submit attachments with the claim itself.

As mentioned above, attachments are a small enough piece of the claims process to easily overlook but a painful enough piece to get attention. As with many other pieces of the claims process, there is no silver bullet for attachments. History says, their volumes will likely continue to drop, that standards will be created to make more of them electronic and that these standards will slowly be integrated into claims process technologies and business processes. That said, there are a few thoughts that apply to better managing attachments today.

1. Keep going with HIPAA: Both payers and providers need to start using the parts of the 837 that enable COB data. They should also start using the 277 for the six attachments it was designed for. Vendors need a push to support adding/improving features that support these attachment related transactions. Payers should set up pilots with their largest attachment submitters to try the new transactions and, where appropriate, build incentives into contracts to reduce attachments.
2. Reduce attachments: No matter how electronic the world may be, processing one item is always easier than processing two. Design attachments out of your claims process either by using authorizations and referrals or adopting a ‘pay and chase’ approach – or both. The simple cost benefit template for an attachment: How often does the information in this attachment change the adjudication outcome of a claim and by how much? If the answers are ‘not often’ and ‘not much’, do away with the attachment.

We’d like to hear more from you about how you’ve tackled attachments in your operation.  Please email me with your feedback. All responses are kept confidential. (rkobs@datamethod.com).