Article_Hipaa_Federal Mandates

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New Federal Mandates Help Providers
Get An Upper Hand
by Ann Geyer

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) offer providers welcome relief from the chaos of electronic communication with health plans.   Effective in 2000, the HIPAA legislation requires that all health plans must accept and respond any information request from providers that is delivered via one of the designated industry standard EDI formats. Because of this new must accept provision, providers now have a means to demand information from health plans which must respond in a timely manner. The legislation also places strict limitations on the information that health plans can require as a conditiion of re-imbursement. However, to trigger these must accept & respond conditions, providers will need to understand their new statutory rights to complete and timely data reqarding eligibility, claims status, and claim reimbursement.
Background
For those who may not be familiar with EDI, the term refers to the use of electronic mail to exchange highly structured messages about a particular business transaction. For EDI to work, the two parties exchanging messages must adhere to an agreed upon standard that is used to create the structured messages. EDI standards define the information that will be exchanged, and how it will be coded, organized, and electronically communicated. EDI standards are used to automate the transmission of large data files that contain information about purchase orders, invoices, payments, remittances and many other types of business transations. The new HIPAA legislation sets the stage for a set of EDI standards that cover the routine patient services transactions: enrollment, enrollment premium, coordination of benefits, eligibility, referral authorization,   claim/encounter, attachments, claim status, claim payment, and first report of injury.
Health Care EDI
Most health plans promote the use of electronic data exchange (EDI) because of the advantages they gain for their internal claims processing operations. These advantages can amount to significant dollar savings. Estimates by Deloitte and Touche suggest that every claim submitted electronically saves the health plan $5-7. Even plans with modest claim volume stand to reap enormous benefit from electronic data exchange.
Health plans have in the past taken many different routes in their attempts to get providers to submit claims electronically. They have been largely successful with hospitals and woefully unsuccessful in most other segments of the industry. A not so surprising result that is duplicated in every other industry. EDI works best for trading partners that have very large transaction volume of a predictable and consistent nature.
Good News for Providers
Overwhelmed with the burden of implementing EDI in a uniquely different way for each health plan, providers can now look forward to a single common implementation for each of the 10 health care transactions mentioned above. Health plans must abide by the mandated EDI standard; they can make no local adaptations. This means no changes to content requirements or coding systems.
Even more important, health plans must respond to all data requests as long as the request is submitted using the appropriate EDI standard. This means that, starting in the year 2000, health plans will have to respond to providers making queries for eligibility, claim status, referral authorization, and payment remittance information. Providers can request health plans for any information specified as permitted content by the EDI standard.
EDI is no longer just for claims and encounters. The HIPAA legislation initially cover ten transactions.   However, the legislation is already motivating the health care standards setting bodies to accelerate the development of new transactions and revise their methods for standards review and modification.
Providers Take Note
The federal mandates apply only to health plans. Providers retain the choice of whether to use EDI and whether to implement the HIPAA standards or to use an EDI clearinghouse. The choice applies to each transaction independently. One can elect to use EDI for eligibility verification but continue to submit claims through a paper-based billing service.
HIPAA requires health plans to route non-standard data transactions to a third-party clearinghouse for translation into the HIPAA standard. Whenever a provider chooses to send or receive information that is not HIPAA compliant, the provider gives up the options of determining what information to request and what form the response will take.
When providers use proprietary formats and protocols health plans control what questions can be asked. Plans may also specify which EDI clearinghouses must be used for connectivity. Clearinghouses are free to charge software and transaction fees.
Take Back Control
It's not too soon to begin your EDI planning. Most existing practice management systems will require an software upgrade in order to support the standard data contents and the EDI message format. Here are some concrete steps that you can take in order to recognize real value from HIPAA:

Ask your PMS vendor to certify that software supporting electronic billing, eligibility verification, referral and so forth will be compliant to the HIPAA standards. If the vendor’s products do not currently satisfy these standards, ask for an upgrade plan that assures compliance in 2000 or shortly thereafter.

Ask your PMS vendor how its products will support direct EDI submission to any health plan. Many PMS vendor products rely on EDI clearinghouses for connectivity to plans. All health plans will have to accept standard transactions from EDI clearinghouses.

Ask your health plan representatives about options for submitting HIPAA compliant data directly to the plan and when you can begin doing so. Plans must provide you with reasonable access alternatives. Ask about support for Internet access to the plan’s secure EDI system, an email address, or dial-in capability through other types of networks.

Plans cannot require you to use their software or network if you are sending HIPAA compliant data. If the plan requires your to use an EDI clearinghouse, ask the representative to certify that the clearinghouse will not limit or otherwise compromise your ability to submit HIPAA compliant data.