March xx, 2007

The Honorable Michael O. Leavitt

Secretary

U.S. Department of Health and Human Services

200 Independence Avenue SW

Washington, DC 20201

Dear Secretary Leavitt:

The National Committee on Vital and Health Statistics (NCVHS) is
responsible for monitoring the implementation of standard transactions,
code sets, and identifiers adopted pursuant to the Health Insurance
Portability and Accountability Act of 1996 (HIPAA).

Section 1174 of the Act permits the Secretary to make modifications to
any established standard after the first year, but not more frequently
than once every 12 months. It permits the Secretary to modify an initial
standard at any time during the first year of adoption, if it is
determined that the modification is necessary to permit compliance with
the standard.

During the past several years, NCVHS has observed, and the industry has
testified, that the time required to update and receive federal approval
of new versions of HIPAA transaction standards may take five or more
years. The current process includes the following steps:

> 1\. Development of new versions of health care information system
> standards by ANSI-accredited standards development organizations
> (estimated time: 1.5 - 2.5 years)
>
> 2\. ANSI certification that new version was developed in accordance
> with ANSI consensus-based process (estimated time: 0.75 - 1 year)
>
> 3\. Review and approval of updates in open public forums such as NCVHS
> (estimated time: 0.5 - 1.5 years)
>
> 4\. Initiation of process of promulgation through federal government's
> Notice of Proposed Rulemaking (NPRM) process, including publication in
> the Federal Register with a 90-day window for written public comment
> and publication of a final rule. (estimated time: 2.5 - 7+ years)

The resultant minimum five year timeline is inconsistent with the
objective of accelerating the development, review, and adoption of
health care information standards to improve health care quality and
patient safety, and reduce health care costs. Further, the protracted
timeline may result in unanticipated consequences including the
development of interim proprietary solutions which undermine the goal of
interoperability.

On September 26, 2006, the NCVHS Subcommittee on Standards and Security
heard testimony from Health Level 7, ASC X12N, and NCPDP \-- the three
Standards Development Organization (SDO) members of the HIPAA Designated
Standards Maintenance Organizations' (DSMO) Steering Committee. DSMOs
are organizations designated by the HIPAA regulations to coordinate the
process of updating HIPAA transaction standards. The DSMO
representatives presented a proposal to streamline the HIPAA process for
approving new versions of existing transaction standards, while
maintaining the essential opportunities for all sectors of the health
care delivery system to review and comment on the standards. They
observed that, based on industry experience, the time from SDO approval
to implementation is the major delay in the process. Their estimates
suggest that from the time a health care organization requests changes
to a "HIPAA adopted" implementation specification, whether through the
DSMO Change Request System or via the SDO's data maintenance process,
the minimum time to implementation is **5 years.** Examples cited
included:

-   An NPRM for "claims attachments standards" under HIPAA was drafted
    in 1998, and finally published in late 2005.

-   An NPRM expected to obtain public comments re: issues in the
    pharmacy industry for billing of supplies and professional pharmacy
    services first identified in 2001 had yet to be published.

Compounding the problem of the protracted timeline is the lack of
predictability surrounding the timing of the process. The lack of
predictability has led many health care delivery systems and vendors to
develop proprietary solutions which can solve problems in a timely
manner, but which undermine interoperability. This dysfunction may not
be visible until there is a need to share health care information at a
regional or national level.

On January 25, 2007, in response to Subcommittee feedback, the three
SDOs presented the updated proposal to streamline the health care
standards development review and approval process, which is enclosed
with this letter. The updated proposal retains many existing processes
but offers a more efficient approach to several key areas where problems
exist. The essence of these changes is that they encourage all
interested parties in health care (including payers, providers and
vendors) to participate in the development of the standards at the SDO
level by announcing SDO meetings in the Federal Register, shortening the
time for NCVHS review and approval, and significantly shortening the
time for the NPRM process. If accepted, this streamlined process could
potentially cut three years or more from the current standards adoption
process. Opportunities for input and participation are not eliminated,
but the proposal encourages the expansion of the open public
participation in the standards development process at the SDO level in a
manner that would enable modification of the NPRM process and thereby
minimize redundancy. The proposal also helps to make the process more
predictable. At the January meeting, the Subcommittee considered this
updated proposal and heard reactions to it from health care providers,
payers, vendors, and clearinghouses representing entities covered by
HIPAA, and those supporting these entities. None was opposed to the
proposal. However, testimony from representatives of the pharmaceutical
industry expressed the desire that written testimony to HHS would still
be permitted within the new proposal framework.

NCVHS endorses the proposal to streamline the HIPAA transaction process
and recommends that HHS consider its adoption. As a precursor to
adoption, NCVHS recommends that the proposal be evaluated by HHS legal
counsel to determine how it could best be implemented in a manner that
is consistent with the Administrative Procedures Act.

Sincerely,

/s/

Simon Cohn, M.D., M.P.H.

Chairman, National Committee on Vital and Health Statistics

Cc: HHS Data Council Co‑Chairs