As the national operating rule author, CAQH CORE strives to improve the efficiency, accuracy and effectiveness of industry-driven business transactions by working on priority topics.
Health Care Claims
Every day, millions of health care claims are transacted between providers, vendors and payers. Providers across the country have been equipped to manage electronic transmission of the X12N 837 for decades, and for just as long, providers have been burdened with the need to manage unique payer requirements. At the same time, payers want clean claims and seek to provide enough granularity to providers for timely claim re-submission. Revisiting the operating rules that govern health care claims to address new developments and support future innovations through our most basic transaction can move the industry forward via means already familiar to stakeholders across the healthcare spectrum.
Within the health care claims transaction set are the submission (X12N 837), acknowledgement (X12N 999, 277CA) and adjudication functions that support provider/payer communication. According to the 2022 CAQH Index, in the last ten years, industry has nearly completely adopted electronic claims submission and acknowledgement. In 2021, an estimated 97% of claims and 100% of acknowledgements were transmitted electronically in the medical industry. The dental industry has similar adoption trends, with 86% of claims and 100% of acknowledgments transmitted fully electronically in 2021. Though the electronic adoption of claim transactions is exceptionally high, industry continues to suggest that the information provided in transactions between payers and providers varies significantly, increasing administrative burden and necessitating manual intervention for claims management.
Early in 2022, CAQH CORE finalized Health Care Claim Infrastructure Operating Rule updates that streamline and standardize the exchange of information related to the submission, acknowledgment and adjudication of health care claims for the X12N 837. Batch and real-time processing requirements, connectivity and system availability are a few highlights of the much-needed operating rule updates that will reduce administrative burden and provide clarity to industry stakeholders. In addition to these improvements, CAQH CORE Participating Organizations conveyed a desire to address claim information issues that drain time and resources and can be remediated with a data content operating rule – specificity and guidance that is missing for the claim transaction.
In 2023, CAQH CORE is launching a Health Care Claims Subgroup to define data content requirements that will remediate pain points in the exchange of claim information across the healthcare enterprise. The scope of this Subgroup is broad and will include telehealth claim submission, a process thrust into the spotlight during the pandemic; claims status and payers’ different attempts to communicate errors or acknowledgements for provider claim re-submission via the X12N 277CA; and value-based payments utilizing claim data to further adoption and innovation in the space. The Subgroup will address other areas as identified and prioritized by Subgroup membership.
Additional Medical Documentation/Attachments
Attachments refer to the exchange of patient-specific medical information or supplemental documentation to support an administrative healthcare transaction and are a bridge between clinical and administrative data. Currently, the exchange of attachments is mostly a long, manual process. The electronic exchange of attachments to communicate medical information and supplemental documentation between health plans and providers is an opportunity to change this in a significant way and open a line of communication between administrative and clinical systems.
Attachments provide health plans with vital information for adjudication of a subset of claims, prior authorizations, referrals, post-adjudication appeals, audits and other critical use cases. However, the attachments workflow remains primarily manual and immensely burdensome. Findings from a 2019 CAQH CORE industry survey highlight industry’s frustration with the time and money needed to exchange medical documentation. According to the 2022 CAQH Index, in 2021 only 24% of medical and 31% of dental attachments transactions were performed fully electronically. While a long awaited for proposed standard is currently under consideration to further guide industry adoption of electronic attachments transactions, CAQH CORE Participating Organizations have since convened to create common specifications to support the exchange of attachments and additional documentation using existing and emerging standards.
As a result of a prioritized effort by over 100 multi-stakeholder organizations, the CAQH CORE Attachments Operating Rules were approved and published in 2022 to support the Prior Authorization and Health Care Claims workflows. The CAQH CORE Attachments Operating Rules specify common infrastructure, data content and connectivity requirements to establish consistent expectations for the exchange of attachments, providing immediate value to the industry. The rules establish a common set of standard agnostic specifications to support the exchange of attachments sent with the X12 275 transaction and without using the X12 275 transaction (e.g., HL7 FHIR Resources, HL7 C-CDA, etc.).
While many stakeholders have cited lack of mandated standard as the reason industry lags behind in electronic attachment adoption, by supporting both X12 and non-X12 exchanges of attachments, CAQH CORE Attachments Operating Rules offer flexibility to an industry in transition and ensure continued interoperability regardless of where an entity may fall on the technological spectrum. The operating rules support the current standards proposed by HHS in addition to emerging standards like HL7 FHIR.
Eligibility Verification
Eligibility and benefit verification involves an inquiry from a provider to a health plan or from one health plan to another to obtain eligibility, coverage or benefits associated with the plan and a response from the health plan to the provider. Electronic adoption of eligibility and benefit transactions is widely adopted across the industry, however, there is a need to additionally adopt pressing updates to existing operating rules to improve system availability, address telehealth services and standardize the return of additional relevant data, such as requirements for prior authorization. In addition, there is an opportunity to expand eligibility verification operating rules in the pharmaceutical space, where there are currently provider barriers to accessing their patients’ drug benefit information covered under the medical benefit.
According to the 2022 CAQH Index, electronic adoption of eligibility and benefit verification transactions has steadily increased in recent years. In 2021, 90% of medical and 75% of dental eligibility verification transactions were fully electronic. High adoption is driven by federal mandate of the X12N 270 and 271 transactions and their companion CAQH CORE Operating Rules. It is additionally sustained by an industry-wide desire to reduce manual workflows – primarily consisting of phone calls – between providers and health plans requesting information about benefits. Despite impressive levels of adoption, the 2022 CAQH Index found that there is a remaining annual cost savings opportunity of approximately $13.5 billion for the medical and dental industries combined by switching to fully electronic exchange, pointing to gaps in business rules that facilitate automation.
The CAQH CORE Eligibility & Benefit Operating Rules establish consistent requirements for the exchange of patients’ insurance coverage and benefits between providers and health plans. Current federally mandated requirements include real-time responses, return of patient financial responsibility, defined error reporting and 86% system uptime as well as data content requirements to provide benefit details for certain service type codes. These requirements have clear benefit to the industry, but are a decade old and in 2022, CAQH CORE Participating Organizations updated the Eligibility & Benefit Operating Rules to address evolving business needs. The updated rule set includes the addition of data content indicating telehealth eligibility, optimization of system uptime from 86% to 90% and, among other significant changes, requirements for health plans to return benefit information for an expanded list of service type codes and newly added procedure codes. CAQH CORE is working with industry to promote the benefits of implementing these updated rules which are currently available for industry adoption.
Additional enhancements to the eligibility transaction can drive even greater automation. Coverage for medication under the medical benefit is often not returned in an eligibility response and providers must resort to burdensome methods to retrieve this information, resulting in lost time, increased costs and delayed access for patients. In collaboration with NCPDP, CAQH CORE is exploring new eligibility data content rules to support the exchange of detailed coverage and benefit information for medication covered under the medical benefit in order to enable patients access to medication information in a timelier manner.
Prior Authorization
Prior authorization (PA) began as a way to manage the utilization of healthcare resources. It requires providers to request approval from a health plan before a specific procedure, service, medication or device is provided to the patient. The healthcare industry relies heavily on labor-intensive manual methods to complete the prior authorization process and each step of the process generates administrative burden and can delay patient care. A move towards automation would deliver savings in time and money, but multiple barriers exist including the need for consistent data content and a lack of integration between clinical and administrative systems.
Numerous barriers have prevented or slowed the adoption of electronic prior authorization and adoption of the electronic X12 278 transaction remains extremely low. Only 28% of the medical industry has fully adopted the electronic transaction according to the 2022 CAQH Index. These barriers are wide-ranging, encompassing the nature of the transaction itself, the lack of operating rules to support use of the electronic transaction standard, a lack of infrastructure supporting electronic submission of supporting clinical documentation, vendor readiness, the ubiquity of web portals and a myriad of state laws. In addition, some components of the prior authorization workflow occur outside the scope of the electronic standard.
The CAQH CORE Prior Authorization & Referrals Operating Rules standardize key components of the prior authorization process, including attachments sent to support a prior authorization request, closing the gaps in electronic data exchange to move industry towards a fully electronic end-to-end workflow. The rule set standardizes data content requirements and enable real time adjudication through response time requirements, which include a maximum 2 business day response window to the prior authorization workflow. By addressing the X12 278 transaction as well as use of web portals, operating rule implementation reduces unnecessary back and forth between providers and health plans, ensuring timely patient care.
As part of its integrated model, CAQH CORE continually measures the impact of operating rules, including maintenance and updates to meet evolving industry business needs. In addition, CAQH CORE is collaborating with standards development organizations focusing on the interplay of existing and emerging standards and operating rules to close automation gaps and streamline the prior authorization process. Of note, CMS recently issued an Interoperability & Electronic Prior Authorization Proposed Rule. You can find CAQH’s letter to Administrator Brooks-LaSure with comments related to the proposed rule here. Our feedback emphasizes the importance of applying the proposed rule across all payer types to prevent fragmented implementation, supports utilizing APIs for efficient exchange of health information and highlights the positive role of standards for the collection of social determinants of health data.
Value-based Payments
Value-based payment (VBP) models are transforming a sizable portion of the U.S. healthcare economy by aligning provider compensation with the quality of the care they deliver. However, innovation and experimentation are ongoing and operational challenges may create barriers to adoption. The healthcare industry is reliant on a fee-for-service system, one that is not always compatible with value-based payments. Consequently, a patchwork of proprietary approaches and workarounds is emerging to implement and administer these complex programs.
In 2020, approximately 41% of all healthcare payments were tied to quality performance, touching approximately 80% of the covered U.S. population (HCP LAN). Adoption of VBP models has exhibited steady growth and is expected to continue its ascent over the next decade. CAQH CORE is encouraged by the expanding influence of VBP; however, success is still predicated on traversing the persistent barriers that threaten adoption. These barriers include known issues, such as limited data availability and standardization, as well as emerging issues, like increasing program complexity that complicates program management.
CAQH CORE has been an active participant in reducing inefficiencies and barriers to entry in VBP. The 2018 report All Together Now: Applying the Lessons of Fee-for-Service to Streamline Adoption of Value-Based Payments identifies five operational areas that, if addressed, could minimize variation and aid implementation of VBP models. As a result of this research, CAQH CORE Participants developed and approved a set of Attributed Patient Roster Operating Rules and an Eligibility & Benefits Single Patient Attribution Data Content Rule to standardize data exchange to support patient attribution, a key component of many value-based care arrangements. These operating rules outline procedures for payers to indicate the patients attributed to a VBP contract either using a roster transmitted using the non-HIPAA-mandated X12N 834 transaction or as an individual as part of the eligibility transaction (X12N 270/271). In a 2022 environmental scan CAQH CORE Participating Organizations recognized the need for data content operating rules to standardize VBP data collection, analysis and exchange.
In 2023, CAQH CORE is launching a Value-based Payments Subgroup to define data content operating rules for the claim submission transaction (X12 837) and benefit enrollment transaction (X12 834). Based on the 2022 environmental scan, specific focus will include ensuring support for the collection and analysis of social determinants of health data, aligning the industry around the use of ‘best practice’ data sets, aligning the application of infrastructure requirements to VBP models, and unifying contractual terms to align disparate industry definitions.