American College of Physicians: Internal Medicine — Doctors for Adults ®

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Despite a reprieve, first HIPAA deadline is coming soon

From the February ACP-ASIM Observer, copyright 2002 by the American College of Physicians-American Society of Internal Medicine.

By Scott Jauch

When the government announced it would give physicians more time to implement new rules regulating how they electronically send and receive health care information, it seemed like good news. In truth, the announcement may be a mixed blessing.

Late last year, Congress passed a law extending the implementation of new standards that are part of the Health Insurance Portability and Accountability Act (HIPAA). ACP-ASIM and other groups had lobbied for an extension to give physicians more time to sort out problems with their computer vendors and/or clearinghouses.

The HIPAA standards, incorporated into the transactions and code sets final rule, will require everyone who sends or receives electronic health care information to follow the same technical standards. The new rules aim to reduce paperwork and increase efficiency by standardizing financial and administrative transactions like patient claims.

Originally, the deadline for implementing the transactions standards was October 2002. The law signed by the President pushes that date back to October 2003—but only under certain conditions.

First, it is important to note that the new law does not automatically delay the HIPAA requirement. To be eligible for an extension, you must submit a simple form to the Secretary of HHS explaining why you need more time to comply.

HHS is expected to produce a model form by March 2002 that physicians can use to file for an extension, although individually developed forms will also be accepted. The model form under development is not intended to be burdensome for physicians and should take as little as five to 10 minutes to complete. To simplify this process further, HHS plans to accept an online version of the form.

Once you have requested an extension, your practice must begin testing HIPAA-compliant transactions no later than April 16, 2003. In short, the one-year extension will give you only six extra months before you must begin testing.

The government is expected to grant extensions to help resolve specific compliance problems. For example, if you determine that your computer vendor will not be able to provide software capable of processing HIPAA-compliant claims by the October 2002 deadline, you may file for an extension. The extension should buy time to resolve the problem and enable your vendor to finish software reprogramming.

In a worst case, where the vendor is not becoming compliant, an extension could buy you enough time to purchase a replacement computer system or contract with a clearinghouse to transmit HIPAA-compliant claims for your practice.

The recent legislation also requires practices with 10 or more full-time-equivalent employees to submit all their Medicare claims electronically beginning Oct. 16, 2003. Unless you submit all claims by paper and have fewer than 10 full-time-equivalent employees, you must comply with the new transaction standards. Failure to do so could result in exclusion from the Medicare program.

While the main burden of the transactions rule will be borne by computer vendors and health plans, physician practices ultimately are responsible for ensuring that their information systems are HIPAA-compliant. Doing so will require some effort. Therefore, you should begin contacting your computer vendors and clearinghouses to determine their timetables for reprogramming, software testing and implementation.

For guidance and practical assistance in this process, the College's Practice Management Center will release the "HIPAA Electronic Transactions Manual." This free member benefit will be available online this spring at www.acponline.org/pmc/regulatory.htm. (Free registration is required.)

Scott Jauch is a Practice Management Associate in the College's Washington office.

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