• Health reform
• EMRs
• Medicare
• Liability
• AMA House
• » More

• Contract Language
• Ethics Forum
• In the Courts
• Practice Management
• Technically Speaking
• » More

• Issue dates
• Regions
• Health plans
• Sections
• News briefs
• Columns
• Editorials
• Letters
• Series
• Writers
• Other years

• Search tips
• Email alert
• RSS
• Mobile
• Subscribe
• Institutions
• Staff directory
• Advertising
• Permissions
• Reprints
• News media
• Site guide
• Useful links
• About
• Premium
• Contact

• AMA Wire
• CPT
• DMPHP
• JAMA
• JAMA&Archives
• news@JAMA
• Virtual Mentor
• Physician jobs

CMS gives doctors more time to meet latest HIPAA rule

The government's goal is to encourage doctors to continue the shift toward standardized electronic claims.

By Joel B. Finkelstein, amednews staff. Oct. 6, 2003.

• PRINT|
• E-MAIL|
• RESPOND|
• REPRINTS|
• SHARE
•  

Washington -- Federal officials have unveiled their contingency plan to make the Oct. 16 deadline for complying with new electronic health care transaction standards less painful.

Medicare will continue to accept, for an as-yet-undetermined period, noncompliant electronic claims from fee-for-service doctors and others after the deadline, Centers for Medicare & Medicaid Services officials said. Less than a month from the deadline, Medicare was receiving 14% of its transactions in a compliant format.

With its announcement, the agency is trying to encourage physicians, especially those in small offices, to keep up their progress toward compliance with the standards. Government officials feared that without some assurances, physicians in small practices would stop filing electronic claims altogether, rather than risk the consequences of failing to comply with the new rules. The standards were mandated by the Health Insurance Portability and Accountability Act.

Experts who have been predicting a claims payment "train wreck" due to a widespread lack of preparedness for the new standard are hoping that other large health care payers will quickly follow Medicare's lead in accepting noncompliant claims, also known as legacy claims.

"The AMA urges private-sector payers to follow the lead of CMS and develop a contingency plan that allows legacy claims while the medical community transitions into full compliance," said AMA Trustee Joseph M. Heyman, MD. Surveys make it clear that doctors have made progress, but won't be ready in time, he added.

An announcement that the nation's 42 Blue Cross and Blue Shield companies would accept noncompliant claims quickly followed CMS' statement.

Because CMS is required to enforce the electronic transaction rule, as well as bring Medicare into compliance with it, officials say they see both sides of the coin. "As the largest HIPAA covered entity, we at Medicare do understand the difficulties in becoming compliant firsthand," said CMS Acting Deputy Administrator Leslie V. Norwalk.

"The Dept. of Health and Human Services recognizes that transactions often require the participation of two covered entities, and that noncompliance by one covered entity may put the second covered entity in a difficult position," she said. This is why the department says penalties and fines will not be imposed on noncompliant physicians or payers who are making a clear, good-faith effort to comply.

Payers such as Medicare and other large health plans have strong motivation to keep physicians filing electronic claims. Paper claims can cost three times as much to process.

Confusion persists

Experts continued to reassure physicians that CMS has chosen to take a flexible and understanding approach to enforcing the new standard. It is unlikely federal agents will come knocking on doctors' doors to impose fines or penalties, they maintained.

But much confusion remains, mainly due to the law's complexity.

Experts said many physicians still are not clear on the differences between the three rules mandated by HIPAA: the transaction and code set standards, the privacy rule and the security rule. HHS has made an effort to make sure the rules complement and don't contradict each other, and has established different compliance and enforcement efforts for each of the three HIPAA components.

Even now, CMS' Norwalk said, Medicare is reaching doctors who have overlooked pleas to become compliant with the transaction rule because they thought they were done with HIPAA in April when the privacy regulation went into effect. A similar effect is expected when compliance with the security rule heats up.

Another persistent problem is the government's aim of 100% compliance, said William R. Braithwaite, MD, PhD, a former HHS official who helped write the HIPAA rules. "It is impossible to comply 100% with standards in any environment," he said. CMS cannot hold themselves to that threshold because 5% of the claims that Medicare pays contain errors.

He and other experts also reminded covered entities such as doctors that the standards are not set in stone. The law allows HHS to modify the rule once a year to adapt to problems that arise and changing needs. Physicians were encouraged to participate in that process.

The end of the beginning

Compliance with the electronic transaction rule requires an investment of both time and money, but the long-term benefits are worth it, industry experts said at a recent HIPAA summit in Baltimore.

The American health care system is experiencing a crisis in the ability of physicians to deliver high-quality care, said John R. Lumpkin, MD, MPH, chair of National Committee on Vital and Health Statistics, which advises HHS.

Administrative burdens are increasingly interfering with doctors' ability to attend to patients. It takes an average of 17 years for research findings to trickle down to standards of practice. And, according to some recent studies, receiving quality medical services in the current system is virtually a "crap shoot," he said.

Computerization has the potential to change all that.

"Automation of information systems is the transforming technology," Lumpkin said. The electronic standards, as mandated by HIPAA, are the "end of the beginning" of that transformation, he added. Health care was "the only industry that couldn't adopt administrative simplification voluntarily," Dr. Braithwaite said, explaining why Congress became involved in imposing standards.

He added that members of the medical community have to work together, as well as with federal officials, without falling prey to "HIPAA hysteria," an overreaction to the rules that leads to the perception that the light at the end of the tunnel is an oncoming train.

Back to top

 ADDITIONAL INFORMATION: