HIPAA's Electronic Transaction Compliance Deadline Extended for One Year

from May 30, 2002, issue of AAPA News


By Michele Sullivan

As long as you know where you’re going with HIPAA, you have 12 more months to get there … but your travel plans are still due by October 16.


Health care providers have another year to come into compliance with the electronic transaction standards of the Health Insurance Portability and Accountability Act (HIPAA). The original regulation, published in August 2000, required every provider who filed health insurance claims electronically to adopt HIPAA’s electronic filing guidelines by October 16, 2002. It became increasingly clear, however, that providers covered by the regulation would be unable to meet the deadline, said Karen Trudel, director of the HIPAA project staff.


On December 27, 2001, President Bush signed into law the Administrative Simplification Compliance Act, which extends the compliance deadline for these standards to October 16, 2003. “For the last six months, a number of organizations had concluded that they needed more time to implement the standards properly, and that’s the impetus for this piece of legislation,” Trudel said. “The intent of Congress was to give the industry more time to implement the standards effectively and test them thoroughly.”


There are a couple of caveats, though. First, covered entities have to submit an action plan detailing how they will meet the deadline. Second, the proposed compliance plan must be ready for testing by April 16, 2003 — only six months after the submission deadline.


Compliance plans, which must be filed with the Department of Health and Human Services (HHS), must contain a summary of the following information:
• An analysis of the reasons why, and the extent to which, the provider is not in compliance with the regulation
• A budget, schedule, work plan, and implementation strategy for achieving compliance
• A statement of whether the provider will act on the plan or will employ an outside contractor
• A time frame that shows when testing will begin

The compliance plans show that providers are seriously planning their strategies, but don’t show the finished product. “The extension plan requirements are not meant to be onerous,” Trudel said. “We have some leeway in what we require. For instance, we may ask for a summary of the compliance budget, or we may just ask if you have a budget. Congress wanted to make sure they put into place a process whereby covered entities would think through the steps they needed to take. This is a way to get people on the road, if they aren’t already.”


Following are some commonly asked questions about HIPAA compliance:

What is the purpose of the standards?
The standards, created by several private sector standards development groups at the direction of HHS, are meant to consolidate the 400 different forms used for health care claims. With a national standard, all providers can submit the same transaction to any health plan in the country, and that health plan must accept it. Conversely, plans will be able to send standard electronic transactions to providers. It’s all meant to reduce confusion and paperwork and increase efficiency.

Who is a ‘covered entity’?
All health plans, all health care clearinghouses, and all health care providers who choose to submit or receive transactions electronically.

What transactions do the standards cover?
The standards cover the following transactions:
• Health claims and equivalent encounter information
• Enrollment in, and withdrawal from, a health plan
• Eligibility for a health plan
• Health care payment and remittance advice
• Health plan premium payments
• Health claim status
• Referral certification and authorization
• Coordination of benefits

How do I figure out what to do?
If you’re in a practice that does your billing, the compliance responsibility rests on the practice. But if you file your own claims, it is your responsibility. HHS was slated to provide a model compliance plan, a guideline to use in determining your next steps. If you use a billing software package, you might want to contact the vendor and find out when its newest, HIPAA-compliant software will be available.


“If PAs are still doing transactions on paper, they really have to make a decision right away,” Trudel said. “This might be the time for them to start moving to electronic data interchange.”

Do I have to buy a new computer system?
No, there’s no requirement for your office to become computerized. And you’re not required to comply if you don’t submit claims electronically; you can still keep on submitting them by mail, phone, or fax. But if you don’t submit electronically, the regulations are a strong incentive to begin. And after the October 16, 2003, deadline, you won’t be able to submit a paper claim to Medicare anymore; to get paid, you’ll have to submit an electronic, HIPAA-compliant form, unless you’re a very small provider or you can prove you have no method for electronic submission. The upshot is: If you don’t submit electronically in a HIPAA-compliant format, you’ll have to pay someone to submit these claims for you.

Where can I get a summary of the standards?
“The standards are extremely voluminous, and I don’t think they’re the kind of thing a provider would want for some light reading,” said Trudel. “But there are a number of really good white papers that have been developed on this subject by the Workgroup for Electronic Data Interchange (WEDI).”


The workgroup includes what Trudel called “some of the real movers and shakers in health care. The best minds in the health care industry got together and developed these papers, and they’re all free,” she said. “This is some of the best information out there.”


These white papers are available on the Web at www.wedi.org. From there, you can also access the Web site of the Strategic National Implementation Process (SNIP), where you can get information about regional compliance efforts.

Will the regulations be enforced?
Yes! HHS has the authority to impose fines of up to $100 for each violation. The total fines imposed in one year can be up to $25,000. You might also be excluded from participation in Medicare.

 

Last Revised: 8/7/03