PHILADELPHIA - While much attention has been given to the security and privacy provisions of the Health Insurance Portability and Accountability Act (HIPAA), the transaction standards bring their own concerns. And with the October 16 compliance deadline looming, the countdown is on, said James Wieland, legal counsel for the Radiology Business Management Association (RBMA).
Wieland discussed the implications of the transaction standards Monday during an update on recent legal developments affecting radiology at the fall educational conference of the RBMA, under way this week in Philadelphia.
The law requires all healthcare claims to be submitted in an electronic format that complies with HIPAA standards by October 16. However, many healthcare experts -- including officials with the Center for Medicare and Medicaid Services -- have expressed doubts as to whether the industry is prepared to make the leap to electronic claims submission.
There’s been a fair amount of industry speculation that the October 16 deadline will trigger a "train wreck" scenario, with dramatic payment slowdowns, said Wieland, who also is a shareholder in the Baltimore-based healthcare law firm of Ober, Kaler, Grimes & Shriver.
"The train wreck scenario would not necessarily be solely because some payors are unable to process transactions in a HIPAA transactions standard-compliant way as of October 16," he said. "What would really happen is, if there were enough payors that did that, practices and other billers would revert to paper claims in order to get paid. That would cause the kind of meltdown we’re talking about."
A deadline extension is not likely to come from the Department of Health and Human Services or from Congress, Wieland said. In any event, it’s important to keep in mind what the transaction standards actually require during the planning process for HIPAA compliance.
If you have a trading-partner agreement with payors, pay some attention to it, Wieland said. Usually contained in a section on participating rules for participating providers, there will be rules and procedures that delineate how to submit claims in order to get paid, Wieland said.
"You have to read these alongside HIPAA, but HIPAA doesn’t necessarily overrule things like that," he said.
The transaction standards don’t require perfection in claims, he said. But the law does require that a functionally described claim be filed as a standard transaction using a specified format. It is not necessary to file claims absolutely error-free to be HIPAA-compliant, he said.
Wieland also said that, in his judgment, HIPAA does not preempt various "clean claim" state laws in place, in which payors must pay valid claims within a certain period of days or pay interest.
"You can have a clean claim under state law, even if it contains immaterial errors under the HIPAA transaction standard," he said.
In its guidance for compliance with the standards on July 24, the government attempted to address industry concerns regarding a serious disruption of service. CMS has indicated that they will focus on voluntary compliance and utilize flexibility in enforcement, Wieland said.
This will be viewed as a variable standard, with an enforcement environment favoring a more rigorous investigation of payors, as opposed to small providers, when complaints are received, Wieland said.
The government also said it would announce its decision on or before September 25 on implementing a contingency plan for Medicare transactions. As defined in the frequently asked questions (FAQs) section on the HHS Web site, an acceptable contingency plan is whatever is appropriate for each health plan to ensure smooth flow of payments.
What would Medicare’s contingency plan be, if deployed? According to another FAQ posted on September 8, Medicare would continue to accept and send transactions in a legacy format in addition to HIPAA-compliant transactions while trading partners work through issues related to the HIPAA regulations. This plan would be the same for all Medicare fee-for-service contracts.
Practical planning
Wieland suggested some practical steps for providers to take at this late date, including being familiar with the contractual requirements necessary to file a claim. In addition, it’s important to be aware of the government’s Medicare contingency-plan decision on September 25, as that will be highly influential with private payors.
Also, if third-party billing companies are used, acquaint yourself with the state of their preparation for compliance.
"It could be very important to know whether you have a clear contractual guarantee, if you have indemnification and limitation of damages," he said. "If you find that there’s a problem, it may be too late to fix it, but at least you’ll see and know what’s coming and know what your legal basis is."
Once that’s completed, facilities need to consider what steps to take to keep the cash flowing in the event of payment-cycle disruptions, he said.
"A lot of conservative and well-thinking practices are making plans for lines of credit and otherwise viewing this as a significant slowdown in the payment cycle," he said. "You need to conduct a thorough assessment, and maybe sit down with your doctors and say ‘Look, here’s what could happen, here’s what we’re going to have to do, and here’s my plan for how to deal with it if there’s a problem.’"
By Erik L. RidleyAuntMinnie.com staff writer
September 16, 2003
Related Reading
U.S. health officials warn of potential payment "train wreck", September 12, 2003
X-ray film recycling raises HIPAA concerns, July 10, 2003
Separating HIPAA facts from fiction, May 12, 2003
Medical privacy rules face bumpy road, April 12, 2003
Patient notification letters: How to keep them hush-hush and HIPAA-compliant, April 2, 2003
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