HIPPA
The Administrative Simplification provisions of the Health Insurance Portability and Accountability Act (HIPPA) of 1996 contain a number of requirements which will improve and simplify the administrative demands on providers of health care. Although use of electronic health care transactions has grown significantly, especially for Medicare, providers have complained that different health plans have different format requirements for transactions. Even when the same format is accepted by multiple plans, those plans usually have different coding or other completion requirements for the formats. This forces providers to be able to respond to each plan's separate requirements if the providers want to be able to interact electronically with those plans for billing, payment, eligibility, claim status query, and a number of other health care transactions, This is inefficient, expensive, and confusing.
HIPAA will remedy those complaints. You will begin to experience the benefits of HIPAA on electronic health care transactions within the next few years. As this may have some significant impact on your operations and your planning bill/practice management systems, Medicare plans a series of educational efforts to furnish you with the information you may need to make informed choices. In addition, information will also be shared with professional associations, their publications, and national media to publicize the impact of these changes.
HIPAA Administrative Simplification Summary Background
HIPPA requires that the Secretary of the Department of Health and Human Services adopt standards for electronic transactions and data elements for those transactions, standard code sets to be used in the transactions, unique health identifiers, and security standards and safeguards for electronic information systems involved in those transactions. This article is limited to information on the HIPAA transaction standards.
The following health care transaction standards are specified:
- Health claims or equivalent encounter information
- Enrollment and disenrollment in 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
- First report of injury
- Coordination of benefits
- Attachments
A proposed rule was published in the Federal Register on May 7, 1998, to adopt certain version 4010 electronic formats developed by the American National Standards Institute (ANSI) accredited X12N subcommittee as the national standards for each of the specified electronic health care transactions and National Council for Prescription Drug Programs (NCPDP) electronic formats for retail pharmacy transactions. Those X12N standards are the 837 (claims, encounter, and coordination of benefits), 834 (enrollment and disenrollment), 270/271 (eligibility query and response), 835 (payment and remittance advice), 820 (premium payments), 276/277 (Claim status inquiry and response), and 278 (referral certification and authorization).
HIPPA requires that the adopted standards be implemented by virtually all health plans in the United States, including Medicare and Medicaid. Providers that exchange any of these transactions electronically with health plans must either transfer transactions that comply with the implementation guides adopted in the final rule, or contract with a third party to translate their transactions into or from the standard formats. (See Advanced Healthcare Solutions, Inc. Claims Processing and Clearinghouse services).
Likewise, health plans that conduct these transactions electronically must be able to receive and send standard transactions that comply with the requirements in the published implementation guides. Effective with implementation of these standard transaction formats, a plan may not require that you exchange electronic transactions of these types in any other format. Nor may you or a plan use a trading partner agreement to override, substitute or otherwise change any requirement or condition of use of any part of a standard transaction's implementation guide.
A health plan that is unable to directly exchange electronic transactions in a standard format can contract with a third party to translate incoming and outgoing transactions to comply with the standard format requirements. If a health plan chooses this option, it cannot charge providers or other third parties who choose to use the standards for those translation costs. Nor may a plan delay or disadvantage processing of transactions which are submitted or issued in a standard format.
HIPAA requires that the transaction standards be implemented by most health plans and "electronic" providers within 2 years of the effective date of publication of the final rule in the Federal Register. Due to the number of providers involved and the need for system testing with those providers, Medicare expects to have a 12-15 month transition period during which electronic providers will convert to the HIPAA version of the transaction standards.
What This Means for Providers
Once the transaction standards are implemented nationally, a provider will be able to submit the same transaction in the same format to any health plan equipped for the receipt of electronic transactions of these types. Likewise, an "electronic" provider will receive transactions of these types from any plan in the same format. This will make it more cost-effective for most health care providers to use new software to automatically produce standard transactions to send to plans and to automatically post data directly to accounts receivable, or contract with a third party to receive transactions on their behalf. (See Advanced Healthcare Solutions, Inc. Full Service Billing)
However, many providers and plans may need to make some significant changes to realize the benefits of HIPAA. Once the HIPAA transaction standards are fully implemented, Medicare will no longer accept flat-file electronic UB-92 or National Standard Format (NSF) transactions for claims. Nor will Medicare issue any electronic remittance advises in the NSF format, or exchange any electronic transactions of the type specified by HIPAA, such as eligibility inquiries/responses, in any version not adopted as national standard in the final rules for Administrative Simplification transactions standards.
Where you currently use a clearinghouse, billing service, or other third party to translate your outgoing or incoming electronic transactions, you can continue to use a third party who is capable of HIPAA standard format translation for those services. (See Advanced Healthcare Solutions, Inc. becomes HIPAA compliant) If you do not use a third party, you must choose whether to install software that can send and receive in the HIPAA transaction standard or contract with a third party for this service.
Providers that do not currently electronically transmit some or any of the transactions affected by HIPAA should re-examine their situation to see if it would be cost-effective for them to begin to use or expand their use of EDI (Electronic Data Interchange). Medicare carriers and intermediaries are already able to receive claims in the X12N 835 format, and is the only electronic remittance advice intermediaries may send. Medicare contractors are also able to accept eligibility inquires electronically and respond electronically, but not in an X12 format, and will need to convert to use of the X12N 270/271 formats for this.
Providers that would like to obtain more information about EDI under Medicare and HIPAA may also want to consult the following Web sites:
EDI standards currently used by Medicare:
www.hcfa.gov/medicare/edi/edi.htm
X12N version 4010 transaction implementation guides
www.wpc-edi.com/hipaa
Text of Administrative Simplification law and regulation
www.aspe.os.dhhs.gov/admnsimp
X12N meeting and workgroup meeting information and minutes
www.disa.org (Select the Insurance, X12N, subcommittee)
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