The Impact of Phase IV CAQH CORE Operating Rules

Based on industry demand, the Phase IV Operating Rules focus on infrastructure requirements that address the transmission of electronic data to-and-from health plans. The benefits of their use include:

  • Increase consistency and automation across entities.
  • Identify gaps or barriers at any point in the transaction.
  • Increase usage of automated electronic transactions.
  • More efficient processes resulting in reduced administrative costs.
  • Improve customer services to patients and providers.
  • Reduce staff time for phone inquiries.
  • Enhance revenue cycle management, resulting in improved cash flow.

These operating rules provide all participants in the process with basic expectations for each transaction, including:

  • An acknowledgement to ensure the transaction has been received, has not been lost between entities, and will be addressed.
  • Required response times for acknowledgement and processing for both real-time and large record “batch” submissions.
  • Offering at least one common method of connectivity (i.e., a “safe harbor”) among entities transmitting data electronically.
  • A minimal amount of time for system availability to receive and send data.
  • A common format that entities must use when providing information about their proprietary data exchange systems via “companion guides.”

As with all CAQH CORE Operating Rules, these are intended to be a base, or minimum, set of requirements. It is expected that many entities will go beyond these requirements to achieve the benefits of electronic interoperability in business transactions – benefits that extend to their organizations as well as their trading partners.

When each critical player in the transaction process adopts the CAQH CORE Operating Rules, the entire healthcare system realizes the greatest value and return-on-investment. Health plans, clearinghouses, healthcare providers, vendors, employers and employee benefit managers all have an important role in creating an efficient system with which to share electronic business transactions.

Learn more about the Phase IV CAQH CORE Operating Rules, how they will impact your organization, and the steps needed for compliance:

Health Plans and Clearinghouses

Benefits of the Phase IV Operating Rules in Use

While healthcare claims are among the most frequent transactions between providers and health plans or clearinghouses, they still present an ongoing challenge. Use of these operating rules means providers will immediately learn if the claim submission was successfully received by the plan and moved into their adjudication system. The provider is quickly made aware of obvious errors, so they can be corrected, reducing payment time.

Prior authorization requests are often submitted by providers to health plans manually by fax and phone since the response to these transactions can be so inconsistent. Responses may come days later, causing reimbursement concern for both the provider and patient. When each entity in the transaction follows the new operating rules, providers will learn immediately whether the plan has received and is reviewing the request for a specific medical procedure or service.

Delays or errors in processing employee change-of-life events in the enrollment and disenrollment transaction, or employee data in premium payment transactions between health plan and employers (or their employee benefit vendors) may result in healthcare services being provided to patients whose coverage has changed or is no longer in force, leaving providers with uncollectible debt. To reduce these delays and avoidable errors, the operating rules require health plans to immediately acknowledge receipt of this employee information and that the transaction is being processed. 

Working Together to Achieve the Promise of the Phase IV Operating Rules

Acknowledgements

Under CAQH CORE rules, health plans are required to acknowledge receipt of the submitted transaction within a specified amount of time after submission. The plan must also inform the sender whether the plan will process the claim.

Phase IV CAQH CORE Operating Rules image

Claims 

As part of this requirement, health plans (or their agents) must support the use of the Claim Acknowledgement (ASC X12N v5010 277CA) which enables more information as to why a specific claim was rejected. The rule requirements apply to the professional (ACS X12N v5010 837P), institutional (ACS X12N v5010 837I) and dental (ACS X12N v5010 837D) claim formats.

Prior Authorization

Health plans (or their agents) are required to acknowledge receipt of requests for prior authorization from healthcare providers within a specified amount of time after submission using the ASC X12 999 Functional Acknowledgment. The ASC X12N v5010 278 must be acknowledged with an ASC X12 999 or the ASC X12N v5010 278 Response must be returned.

Enrollment and Disenrollment

This operating rule requires health plans (or their agents) to acknowledge receipt of employee enrollments, disenrollments or changes to enrollments when submitted through an ASC X12N v5010 834 transaction through the use of the ASC X12 999 acknowledgment.

Premium Payments

Health plans (or their agents) must acknowledge receipt of the ASC X12N v5010 820 Premium Payment through the use of the ASC X12 999 acknowledgment.

Phase IV CAQH CORE Operating Rules image

Response Times

Response time requirements specify the overall length of elapsed time between when a transaction is sent to a health plan or clearinghouse and when an acknowledgements(s) must be available to the sender stating whether the transaction was accepted, accepted with errors or rejected. 

This operating rule has requirements for both real time and batch processing modes for claims.  For real time, the response time for both sending and acknowledgement should not exceed 20 seconds. For batch processing mode, claims submitted before 9 PM ET health plans must return an acknowledgment to the provider by 7 AM ET the next business day.  This timing is consistent with the response times for other Phase I, II and III CAQH CORE Operating Rules.

Phase IV CAQH CORE Operating Rules image

This rule does not apply when the HIPAA-covered provider and the HIPAA-covered health plan are engaged in the conduct of Real Time Claim Adjudication (RTA).

Note: Claims attachments, which providers often include as part of claims submission, are not included in the Phase IV CAQH CORE Operating Rules as that standard is currently in development.

Phase IV CAQH CORE Operating Rules image

Connectivity

These relatively simple changes from previous CAQH CORE Operating Rules align with industry trends, and should help achieve significant improvements in interoperability.

Phase IV CAQH CORE Operating Rules image

The operating rules require a “safe harbor” – offering one shared method of connectivity among all entities transmitting data. The Phase IV Connectivity Rule designates the widely-used HTTPS protocol for secure communication via the public Internet (SOAP WSDL). Also, entities may only use one, higher-level type of authentication – digital certificates – which helps CAQH CORE support technical upgrades that the healthcare industry is making to increase the security of all electronic transactions. Additional security may be added, but at a minimum digital certificates must be applied with the safe harbor.

Phase IV CAQH CORE Operating Rules image

Just as paper documents must be put into an envelope for mailing, so too must electronic transactions be placed into a “message envelope” for electronic transmission from the sender to the receiver. The Phase IV CAQH CORE Connectivity Rule has chosen a single message envelope standard (SOAP v1.2) for transmission.  This standard is used in other industries and in clinical care health information technology (HIT) systems. A message envelope must include the information that identifies the sender, receiver and the types of transactions being transmitted. It also includes a structure for organizing other important data that enables reliable tracking (such as date, time and unique identifiers).

In addition, this operating rule now allows the use of TLS 1.1 or higher as well as SSL v3.0 for security for data in transit. This strikes a balance, enabling those entities that must use TLS 1.1 or higher to comply with other security requirements to also meet the CAQH CORE Operating Rules.

The safe harbor connectivity and security operating rules apply to all the transactions in Phase IV.

Phase IV CAQH CORE Operating Rules image

System Availability

The system availability requirements establish the amount of time a system must be available to process the specified transactions. 

Phase IV CAQH CORE Operating Rules image

Phase IV CAQH CORE Operating Rules image

Companion Guide

Companion guides are created by individual health plans and other entities to provide specific information on the requirements needed to successfully complete an electronic transaction with their organization.  CAQH CORE has created a master template so that all these guides share a consistent format for ease of use.

Phase IV CAQH CORE Operating Rules image

 

 

Healthcare Providers and Practice Management System Vendors

Healthcare Providers are burdened with a number of manual administrative interactions with health plans, clearinghouses and other entities. These manual interactions take time and resources for staff to conduct, and often result in confusion for both providers and patients.

Electronic transactions, once implemented, can save healthcare providers and their staffs time, cut costs and reduce complexity for many of the most common business transactions. Previously, CAQH CORE has developed operating rules that helped streamline and create consistency for other healthcare electronic business transactions including electronic funds transfer (EFT) and electronic remittance advice (ERA)

The new Phase IV CAQH CORE Operating Rules cover two transactions used by providers:  healthcare claims and prior authorization.

Benefits of the Phase IV Operating Rules in Use

While healthcare claims are among the most frequent transactions between providers and health plans or clearinghouses, they still present an ongoing challenge. Use of these operating rules means providers will immediately learn if the claim submission was successfully received by the plan and moved into their adjudication system. The provider is quickly made aware of obvious errors, so they can be corrected, reducing payment time.

Prior authorization requests are often submitted by providers to health plans manually by fax and phone since the response to these transactions can be so inconsistent. Responses may come days later, causing reimbursement concern for both the provider and patient. When each entity in the transaction follows the new operating rules, providers will learn immediately whether the plan has received and is reviewing the request for a specific medical procedure or service.

Next steps. Healthcare providers will be unable to realize the benefits of the operating rules without coordinating with their health plans and vendors involved in these transactions. For example, practice management system vendors can offer substantial benefits to providers by following the CAQH CORE Operating Rules, and providers can urge their practice management systems, clearinghouses, and other vendors to follow the common business rules and thus bring about a faster transition to more value-added electronic transactions. Widespread adoption at each step of the process: by health plans, clearinghouses, providers and vendors is necessary to achieve the goal of low-cost, real-time, effective business transactions within healthcare.

Working Together to Achieve the Promise of the Phase IV Operating Rules

Acknowledgements

Under CAQH CORE rules, health plans are required to acknowledge receipt of the submitted transaction within a specified amount of time after submission. The plan must also inform the sender whether the plan will process the claim.

CAQH CORE Phase IV Acknowledgements for Providers image

Claims

As part of this requirement, health plans (or their agents) must support the use of the Claim Acknowledgement (ASC X12N v5010 277CA) which enables more information as to why a specific claim was rejected. The rule requirements apply to the professional (ASC X12N v5010 837P), institutional (ASC X12N v5010 837I) and dental (ASC X12N v5010 837D) claim formats.

Prior Authorization

Health plans (or their agents) are required to acknowledge receipt of requests for prior authorization from healthcare providers within a specified amount of time after submission using the ASC X12 999 Functional Acknowledgment. The ASC X12N v5010 278 must be acknowledged with an ASC X12 999 or the ASC X12N v5010 278 Response must be returned.

CAQH CORE Phase IV Acknowledgements for Providers table

Response Times

Response time requirements specify the overall length of elapsed time between when a transaction is sent to a health plan or clearinghouse and when an acknowledgements(s) must be available to the sender stating whether the transaction was accepted, accepted with errors or rejected. 

This operating rule has requirements for both real time and batch processing modes for claims.  For real time, the response time for both sending and acknowledgement should not exceed 20 seconds. For batch processing mode, claims submitted before 9 PM ET health plans must return an acknowledgment to the provider by 7 AM ET the next business day.  This timing is consistent with the response times for other Phase I, II and III CAQH CORE Operating Rules.

Phase IV CAQH CORE Operating Rules image

This rule does not apply when the HIPAA-covered provider and the HIPAA-covered health plan are engaged in the conduct of Real Time Claim Adjudication (RTA).

CAQH CORE Phase IV Response Times for Providers table

Connectivity

These relatively simple changes from previous CAQH CORE Operating Rules align with industry trends, and should help achieve significant improvements in interoperability.

Phase IV CAQH CORE Operating Rules image

The operating rules require a “safe harbor” – offering one shared method of connectivity among all entities transmitting data. The Phase IV Connectivity Rule designates the widely-used HTTPS protocol for secure communication via the public Internet (SOAP WSDL). Also, entities may only use one, higher-level type of authentication- digital certificates - which helps CAQH CORE support technical upgrades that the healthcare industry is making to increase the security of all electronic transactions. Additional security may be added, but at a minimum digital certificates must be applied with the safe harbor.

Phase IV CAQH CORE Operating Rules image

Just as paper documents must be put into an envelope for mailing, so too must electronic transactions be placed into a “message envelope” for electronic transmission from the sender to the receiver. The Phase IV CAQH CORE Connectivity Rule has chosen a single message envelope standard (SOAP v1.2) for transmission.  This standard is used in other industries and in clinical care health information technology (HIT) systems. A message envelope must include the information that identifies the sender, receiver and the types of transactions being transmitted. It also includes a structure for organizing other important data that enables reliable tracking (such as date, time and unique identifiers).

In addition, this operating rule now allows the use of TLS 1.1 or higher as well as SSL v3.0 for security for data in transit. This strikes a balance, enabling those entities that must use TLS 1.1 or higher to comply with other security requirements to also meet the CAQH CORE Operating Rules.

The safe harbor connectivity and security operating rules apply to all the transactions in Phase IV, including prior authorization and healthcare claims.

CAQH CORE Phase IV Connectivity for Providers table

System Availability

The system availability requirements establish the amount of time a system must be available to process the specified transactions. 

Phase IV CAQH CORE Operating Rules image

CAQH CORE Phase IV System Availability for Providers table

Companion Guide

Companion guides are created by individual health plans and other entities to provide specific information on the requirements needed to successfully complete an electronic transaction with their organization.  CAQH CORE has created a master template so that all these guides share a consistent format for ease of use.

CAQH CORE Phase IV Companion Guide for Providers table

Employee Benefit Managers and Related System Vendors

Employers and employee benefit managers are burdened by a number of cumbersome manual administrative processes with health plans, requiring considerable time and resources for staff to complete. Concurrently, in many cases, health plans are burdened by the need to input information received manually or have unique processes for various employers. These manual processes mean that information is shared slowly, is prone to greater error and result in employee confusion when health benefits are unclear.

Electronic transactions, once implemented, can save employers time, cut costs and reduce complexity for many of the most common business transactions. New operating rules in Phase IV cover two transactions between employers (or their agents) and health plans: health plan enrollment and disenrollment, and premium payments.

Benefits of the Phase IV Operating Rules in Use

Delays or errors in processing employee change-of-life events in the enrollment and disenrollment transaction, or employee data in premium payment transactions between health plan and employers (or their employee benefit vendors) may result in healthcare services being provided to patients whose coverage has changed or is no longer in force, leaving providers with uncollectible debt. To reduce these delays and avoidable errors, the operating rules require health plans to immediately acknowledge receipt of this employee information and that the transaction is being processed. 

Next steps. Employers and employee benefit managers will be unable to realize the benefits of the operating rules without coordinating with their health plans and vendors involved in these transactions. For example, vendors can offer substantial benefits to employers and employee benefit managers by following the CAQH CORE Operating Rules, and employers can urge their vendors modify their offerings to bring about a faster transition to electronic transactions.

Working Together to Achieve the Promise of the Phase IV Operating Rules

Acknowledgements

Under CAQH CORE rules, health plans are required to acknowledge receipt of the submitted transaction within a specified amount of time after submission. The plan must also inform the sender whether the plan will process the enrollment/disenrollment or premium payment.

CAQH CORE Phase IV Acknowledgements for Employers image

Enrollment and Disenrollment

This operating rule requires health plans (or their agents) to acknowledge receipt of employee enrollments, disenrollments or changes to enrollments when submitted through an ACS X12N v5010 834 transaction through the use of the ASC X12 999 acknowledgment.

Premium Payments

Health plans (or their agents) must acknowledge receipt of the ACS X12N v5010 820 Premium Payment through the use of the ASC X12 999 acknowledgment.

CAQH CORE Phase IV Acknowledgements for Employers table

Response Times

Response time requirements specify the overall length of elapsed time between when a transaction is sent to a health plan or clearinghouse and when an acknowledgements(s) must be available to the sender stating whether the transaction was accepted, accepted with errors or rejected. 

This operating rule has requirements for both real time and batch processing modes for enrollment/disenrollment and premium payment. For real time, the response time for both sending and acknowledgement should not exceed 20 seconds. For batch processing mode, transactions submitted before 9 PM ET health plans must return an acknowledgment to the provider by 7 AM ET the next business day.  This timing is consistent with the response times for other Phase I, II and III CAQH CORE Operating Rules.

Phase IV CAQH CORE Operating Rules image

CAQH CORE Phase IV Response Times for Employers table

Connectivity

These relatively simple changes from previous CAQH CORE Operating Rules align with industry trends, and should help achieve significant improvements in interoperability.

Phase IV CAQH CORE Operating Rules image

The operating rules require a “safe harbor” – offering one shared method of connectivity among all entities transmitting data. The Phase IV Connectivity Rule designates the widely-used HTTPS protocol for secure communication via the public Internet (SOAP WSDL). Also, entities may only use one, higher-level type of authentication - digital certificates - which helps CAQH CORE support technical upgrades that the healthcare industry is making to increase the security of all electronic transactions. Additional security may be added, but at a minimum digital certificates must be applied with the safe harbor.

Phase IV CAQH CORE Operating Rules image

Just as paper documents must be put into an envelope for mailing, so too must electronic transactions be placed into a “message envelope” for electronic transmission from the sender to the receiver. The Phase IV CAQH CORE Connectivity Rule has chosen a single message envelope standard (SOAP v1.2) for transmission.  This standard is used in other industries and in clinical care health information technology (HIT) systems. A message envelope must include the information that identifies the sender, receiver and the types of transactions being transmitted. It also includes a structure for organizing other important data that enables reliable tracking (such as date, time and unique identifiers).

In addition, this operating rule now allows the use of TLS 1.1 or higher as well as SSL v3.0 for security for data in transit. This strikes a balance, enabling those entities that must use TLS 1.1 or higher to comply with other security requirements to also meet the CAQH CORE Operating Rules.

The safe harbor connectivity and security operating rules apply to all the transactions in Phase IV, including enrollment and disenrollment and premium payment.

CAQH CORE Phase IV Connectivity for Employers table

System Availability

The system availability requirements establish the amount of time a system must be available to process the specified transactions. 

Phase IV CAQH CORE Operating Rules image

CAQH CORE Phase IV System Availability for Employers table

Companion Guide

Companion guides are created by individual health plans and other entities to provide specific information on the requirements needed to successfully complete an electronic transaction with their organization.  CAQH CORE has created a master template so that all these guides share a consistent format for ease of use.

CAQH CORE Phase IV Companion Guide for Employers table

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