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New tools to help you prepare your practice for HIPAA

To file claims electronically, you need to make sure your office software complies with the law

From the January ACP-ASIM Observer, copyright 2003 by the American College of Physicians-American Society of Internal Medicine.

Your software ready for HIPAA? Ask your vendor these questions

By Scott Jauch

If you're waiting for your software vendor to help you comply with the first rule implemented under the Health Insurance Portability and Accountability Act (HIPAA), you may be in for a surprise. While many vendors are helping physician offices comply with HIPAA regulations, some may not make the deadline—and others may offer little help at all.

The good news, however, is that the College's Practice Management Center has several tools to help ACP-ASIM members make sure their practice software meets HIPAA requirements.

First, some background: The HIPAA transactions and code sets rule was created to standardize business transactions commonly used in medicine. Under the rule, all organizations must use the same standards to electronically transmit health care claims, remittances, patient eligibility verifications, treatment and referral authorizations and certifications, and claim status. (For more on the rule, see "Tips to help comply with the first HIPAA regulation.")

The transactions rule was originally scheduled to take effect last Oct. 16. Practices that filed for an extension got an extra year to comply, but they must begin testing HIPAA-compliant transactions by April 16. Everyone must start using the new format by Oct. 16 of this year, when Medicare will start accepting only electronically submitted claims from practices with more than 10 employees.

While some software vendors are giving or selling physicians HIPAA-ready products, analysts say others may not offer upgrades for their software until after the compliance deadline. Even worse, analysts predict, some vendors may simply decide to not offer a HIPAA-ready solution.

Still other vendors have already announced that they will not upgrade customers' software for direct transactions but will instead require them to use a clearinghouse (often owned by the software company) to transmit HIPAA-compliant transactions. Clearinghouses eliminate the need to test transactions with hundreds of potential payers, but there is one downside: They may charge a small fee.

Instead of waiting for your vendors to contact you about obtaining HIPAA-ready software, you should contact them in writing as soon as possible. (See, "Your software ready for HIPAA? Ask your vendor these questions.") If you discover that your vendor will not provide any upgrades to help your practice comply, you need to identify alternative software as soon as possible to meet the October deadline.

If your vendors say they will help, remember that the only way to make sure your practice is truly HIPAA-compliant is to complete "end-to-end testing" yourself. You can do this by sending electronic claims to all of your payers and requesting confirmation that they received the information without error.

To help guide you, the College's Practice Management Center is offering ACP-ASIM members the "HIPAA Transactions Manual." This free online publication explains the federal law in simple terms and provides sample letters you can send to software vendors and clearinghouses to determine how they can assist your compliance efforts. The Practice Management Center has also compiled a list of frequently asked questions about the HIPAA transactions rule. (Both resources are online.)

ACP-ASIM also has collaborated with more than a dozen medical specialty organizations to create a Web site to help physician practices quickly assess the HIPAA-readiness of many software vendors. This site also offers information on how to contact particular vendors about existing and upcoming products.

The site contains information about which HIPAA transactions each product will support, the name of the clearinghouse that the vendor uses (if applicable) and what third-party company certified the product as HIPAA-ready.

You should look for products that say they have been certified. However, the site's information is self-reported by vendors, so you should ask your vendor for written confirmation that the information is accurate.

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

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Your software ready for HIPAA? Ask your vendor these questions

When you contact your software vendor to ask about solutions to make your practice's software HIPAA-compliant, you need to get specifics. The following questions from the College's "HIPAA Transactions Manual" (available online) can help:

  • Will the current version of my software be able to send to all payers a claim/encounter form (the old HCFA 1500 form) in the HIPAA standard 837 content and data format?

  • Have your transactions been tested and certified by a third-party as offering a "HIPAA-ready" solution?

  • On what date will you be ready to upgrade my system?

  • Will system upgrades require a new version of my software or additional hardware? If so, how much will this cost?

  • When will you be sending me a schedule of testing that includes:

    • internal testing;
    • testing with a clearinghouse (if applicable);
    • testing with Medicare; and
    • testing with commercial payers?

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