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1. edifecs confidential 1Pathways to Partnerships | Experience Guide to Operating Rule Implementation and Compliance
An Experience-based Guide to
Operating Rules Implementation
and Compliance
John Kelly, Principal Business Advisor, Edifecs
Amrita Kalkura, Senior Analyst, Operating Rules, Edifecs
Presenters:

2. edifecs confidential 2Pathways to Partnerships | Experience Guide to Operating Rule Implementation and Compliance
1. Current State of Industry
Readiness
2. Compliance
 Meaning of compliance
 First certification
 Ongoing compliance
 Penalties
3. Implementation Approach
 Challenges
 Implementation approach
 Edifecs solutions
4. Short Demo
5. Conclusion
Agenda

3. Industry Readiness

4. Pathways to Partnerships | Experience-based Guide to Operating Rules Implementation and Compliance
Industry Trends
Healthcare Plans Healthcare
providers
Plans and Providers
Combined Average
Adoption Rate for
fully electronic
HIPAA transaction
(Health Plans)
Eligibility & Benefit
Verification
95% 69% 82% 65.3% (‘13)
Claim Status Inquiry 90% 54% 72% 49.6% (‘13)
Source: 2014 CAQH Index. All responding health plans, % of transaction
Adoption rates of electronic transactions broken out by health plans versus healthcare providers
Fully Electronic
(HIPAA Standards)
Fully Manual
(Phone, Fax)
Partially Electronic
(Web Portal, IVR)
Eligibility & Benefit
Verification
+14% -1% +13%
Claim Status Inquiry +23% 0% +17%
Year over Year variation by Health Plans Reporting both 2012 and 2013
Eligibility and Claim Status Transaction

5. Pathways to Partnerships | Experience-based Guide to Operating Rules Implementation and Compliance
Industry Trends
Source: 2014 CAQH Index. All responding health plans, % of transaction & NACHA
Healthcare Plans Healthcare
providers
Plans and Providers
Combined Average
Adoption Rate for
fully electronic
HIPAA transaction
(Health Plans)
Remittance Advice 55% 47% 82% 46.4% (‘13)
Adoption rates of electronic transactions broken out by health plans versus healthcare providers
Fully Electronic
(HIPAA Standards)
Fully Manual Partially Electronic
(Web Portal, IVR)
Remittance Advice +8% -16% +52%
Year on Year variation by Health Plans Reporting both 2012 and 2013
Transaction
Increase over 2014
Volume of
CCD+/EFT
Value of CCD+/EFT
EFT +105% 149 million 876 billion
2014 Healthcare EFT Volume
ERA Transactions

6. Pathways to Partnerships | Experience-based Guide to Operating Rules Implementation and Compliance
CAQH CORE
Certified Organizations
Source: http://www.caqh.org/core/core-certified-organizations-pending-and-current
36%
5%32%
27%
Health Plans Providers Clearing Houses Vendors

7. Compliance

8. Pathways to Partnerships | Experience-based Guide to Operating Rules Implementation and Compliance
What are
Operating Rules?
Built on HIPAA standards
• Make EDI more predictable
and consistent
• Clear definition of rights
and responsibilities
• Clear definition of security
and exception processing
Implementation in Phases
• Phase I & II - Eligibility
verification & claim status
inquiry
• Phase III – Electronic
Remittance Advice &
Electronic Funds Transfer
• Phase IV - Claim,
authorization, enrollment,
attachments and premium
transactions
System Impact
• Impacts both front-end and
backend systems
• Connectivity
• Acknowledgements,
responses & exception
processing
• Companion guides
• Transaction content (service
types, AAA codes, CARC
codes, etc.)
• System availability
Industry Impact
• Health plans
• Clearinghouses
• Providers
• Vendors (EMR, RCM, etc.)
• ACOs
ACA defines Operating Rule as “The necessary business rules and guidelines for the electronic
exchange of information that are not defined by a standard or its implementation specifications”

9. Pathways to Partnerships | Experience-based Guide to Operating Rules Implementation and Compliance
What are
CAQH CORE
Operating Rules?
Batch and real
time
acknowledgement
Data and
connectivity
Companion
guide
Response time
and availability
Focused on promulgating OR to
increase usefulness of and reduce the
administrative challenges associated
with eligibility and benefit inquiries
Operating Rules – Phase I Operating Rules – Phase II Operating Rules – Phase III
The Phase II rules build on the Phase I
rules, with additional rules for patient
identifiers, patient accumulators,
claims status and connectivity.
This CORE Rule builds upon and
extends the Phase I and Phase II
CORE infrastructure rules to the
conduct of
the v5010 X12 835
Claim
Status
Patient Last
Name
AAA
Reporting
Eligibility Data
Content
Infrastructure CARC and
RARC
Re-association
ERA and EFT
enrollment
data rule

10. Pathways to Partnerships | Experience-based Guide to Operating Rules Implementation and Compliance
What does
Operating Rules
compliance mean?
Expected to have already
implemented phase I,II
and III by 1/1/2014
First Certification
Ensure production
compliance
• First Certification is a “point in time”
snapshot of compliance
• First Certification Testing is not
exhaustive
• Health plans must continue to stay
compliant in production under changing
conditions to avoid penalties
Key Takeaways

11. Pathways to Partnerships | Experience-based Guide to Operating Rules Implementation and Compliance
First Certification
Option 1: CORE Certification
 Complete certification testing using CORE
authorized testing vendor (e.g. Edifecs)
 Submit required documentation to receive CORE
seal
 Takes 2-3 EDI resources 3-5 months to complete
testing
 Troubleshoot issues as they are uncovered
Option 2: HIPAA Credential Option
 Testing with 3-25 trading partners representing at least
30% transaction volume
 Provide contact details of trading partners to CORE
 Attestation by authorized rep that testing was
performed
 Effort and time required will vary based on # of trading
partners
First Certification (due by 12/31/2015)
CORE
Certification HIPAA
Credential

12. Pathways to Partnerships | Experience-based Guide to Operating Rules Implementation and Compliance
Ongoing
Compliance and Drivers
New Line
of
Business
Increased
Volumes
Resource
Changes
Defects
and
Changes
New
Product
and
Benefits
System
Version
Upgrade
Future State Roadmap & Events
New
Trading
Partners
New Data
Types and
Processing
OR
Compliant
Processing Maintain Compliant Processing
2016
Penalties
assessed
based on
audits
Must prove
compliance
during an audit
Must
remediate
any non-
compliance
identified
during an
audit
Systems
must be
available
86% of the
time (except
planned
downtimes)
90% of
transactions
must be
compliant on
a monthly
basis

13. Pathways to Partnerships | Experience-based Guide to Operating Rules Implementation and Compliance
Illustration of
Potential Savings
and Penalties
Efficiencies/Cost Savings
Reduced phone calls
Health plan avg. savings per call - $ 1.90
Providers avg. savings per call - $3.40
$8 billion savings potential for industry
Compliance/Penalties
Part of ACA
Health Plans must comply
Compliance based on first certification
Ongoing compliance – random and complaint driven
audits
Penalties of $1/member/day up to $20/member/year
Potential penalties can range from 9M (Small State) to
51M (Large State Medicaid Plan)
Doubled penalties for misinformation
State level penalties may exist
Executives must attest compliance
Example - Potential
Annual Savings =
$800K[1]
Example - Annual
Penalty Exposure =
$10M [1]
[1]Assumptions:
Health plan with 500K members, ~182K eligibility and 73K claim status phone calls
per annum
50% reduction in manual phone calls due to Operating Rules
Used CAQH savings calculator: http://www.caqh.org/index_savingscalculator.php

14. Pathways to Partnerships | Experience-based Guide to Operating Rules Implementation and Compliance
Next Topic
Impact of operating Rules
on Health Plans
Implementation Approach
Implementation
Challenges
Case Study Demo
CORE and Product
Testing
Key Takeaways
Resources
Other Resources
Contact
Share
Administrative Simplification
Webinar Recordings
Questions?
amrita.kalkura@edifecs.com