Only 6 months until next HIPAA hurdle

It may be too early to panic, but it's time to start getting ready for federal standards for electronic transactions.

By Joel B. Finkelstein, amednews staff. April 21, 2003.

Washington -- Health plans and other payers that are having problems implementing new electronic transaction standards may pass those problems down the line to physicians.

Electronic transaction provisions of the Health Insurance Portability and Accountability Act require payers, clearinghouses and physician practices to conform to a national standard for maintaining and transmitting patient claims and other forms.

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Topic: HIPAA

Physicians have until Oct. 16 to come into compliance with these standards. But the Dept. of Health and Human Services set April 16 as the deadline for clearinghouses and software vendors to begin testing their upgrades so that doctors, in turn, can make their deadline.

The types of electronic transmissions covered in the rule include claims (or encounter information), coordination of benefits, remittances, eligibility verification, pre-certification or authorization for referrals, and claims status inquiry.

"We believe the industry is making great strides in moving forward with implementation," said Edward D. Jones, chair of the Workgroup for Electronic Data Interchange, an organization created to foster the use of electronic transactions in the health care market.

The health care industry is large and complex. Along the path to compliance, doctors have multiple payers to deal with and vice versa, he said.

There is a lack of information about where physicians are in terms of getting ready for the deadline, said Carl Cunningham, director of the practice management center at the American College of Physicians. But an informal poll at a recent meeting suggests that about three-quarters of physicians have been at least asking vendors about readiness.

"It's reassuring to me that physicians know about the rule," he said.

Yet there are still many elements that "need to be put in place, and it's not clear that all of that is going to occur by the deadline," said Jones, a HIPAA consultant based in Seabrook Island, S.C.

It is not yet known how many software vendors and clearinghouses will miss the compliance deadline.

The transaction rule calls for claims to take on a standard format and to include a baseline of required patient and practice information.

Forms filed under the rule also may contain so-called situational content, which includes any information that is only required under specific circumstances. For example, claims for a patient who was in a car wreck would require the date of the crash.

"There are hundreds and hundreds of [situational data elements], and trying to figure out which ones apply to your patients is daunting," said ACP's Cunningham.

Physicians who use a clearinghouse to file patient claims also may find those entities asking for additional information to fulfill the rule's new data requirements.

It is because of these considerations that HHS mandated the six-month window between testing the new transaction procedures and compliance by physicians' offices.

Time to check in with vendors

But that schedule is inherently precarious, as the clearinghouses and vendors can't begin testing their systems and software until payers upgrade their claims processes, which some have been slow to do.

Those delays could get passed to doctors' office, some of which are already getting the runaround from software vendors who are not ready to begin testing upgrades.

"Speaking from the physician-practice standpoint, always request answers to inquiries in writing," Jones said. "And if a vendor is not forthcoming, or not going to be compliant, then the practice can make the decision to look for an alternative."

Jones predicted that market forces would be a stronger driver of compliance than complaints to HHS.

Cunningham encouraged doctors to keep the pressure on vendors to be ready by the deadline. The health care marketplace is a system built on trust, especially so because the data transmitted between parties contain sensitive information, he said. "There is going to be a disincentive for not complying, because you'll lose business."

The Workgroup for Electronic Data Interchange has encouraged HHS to prepare for the growing pains of implementing the new system. The group foresees problems with physicians inadvertently submitting noncompliant claims.

Some industry watchers are also worried that some small physician offices will decide to move back to paper claims to avoid compliance hassles.

"Enforcement activities will focus on obtaining voluntary compliance through technical assistance," HHS said. "The process will be primarily complaint-driven and will consist of progressive steps that will provide opportunities to demonstrate compliance or submit a corrective action plan."

But physicians also may find their claims denied by Medicare and other payers if their forms don't fit the correct format. If their claims do meet the format requirements but lack required information, they still could be rejected.

According to ACP guidance, it is unlikely that the government will start throwing physicians in jail if they are not ready in time, but it would be wise to have a compliance plan before the October deadline.