HIPAA EDI: Efficiencies await, but challenges remain

MGMA Connexion, Aug 2005

e-Health Bulletin

The health care administrative simplification revolution was scheduled to arrive on Oct. 16, 2003 -the final compliance date for the electronic data interchange (EDI) standards of the Health Insurance Portability and Accountability Act (HIPAA). National standards for electronic transactions and code sets were designed to provide increased efficiencies by permitting medical practices and other clinical settings to:

* Submit payment requests electronically using one format;

* Track the status of those claims electronically;

* Communicate electronically with health plans to confirm patient eligibility and services covered; and

* Receive the payment remittance electronically.

This was the promise of HIPAA. Those administrative simplification provisions were expected to more than compensate for the compliance expenses incurred relative to HIPAA's complex and comprehensive privacy and security requirements. While it is true that some benefits have been gained with the standards, the industry has yet to fully embrace the new approach and significant barriers remain before the health care industry will fully realize the promised benefits. To take maximum advantage of those efficiencies, medical practices are encouraged to review the functionality of their electronic transactions and assess their critical trading partners. They should:

* Assess the current capabilities of practice management and billing system software. Does your software allow you to submit electronic claims and send and receive other transactions electronically? If you are looking to purchase new software, consider its ability to conduct the business of your organization electronically to increase efficiency.

* Assess use of clearinghouses. Are you routing all your claims and other transactions through a clearinghouse at your expense? Are you required to use a proprietary clearinghouse identified by your practice management system vendor? Look at options to decrease clearinghouse costs.

* Assess the capabilities of health plans. Do your plans allow a direct connection for electronic transactions? Do they offer the ability to conduct those transactions through their Web sites? Your payers may offer more functionality than you're aware of.

Is it time to file a complaint?

Although the Centers for Medicare & Medicaid Services (CMS) Office of HIPAA Standards (OHS) has reported receiving only a small number of official complaints, many practices have encountered difficulties with their HIPAA transactions. Are clearinghouses or health plans not accepting your HIPAA transactions? Are health plans chargingyou a clearinghouse fee to convert your HIPAA transaction to their proprietary format? Are you requesting electronic remittance and being denied? In some cases, actions (or inactions) on the part of your clearinghouses and health plans may violate HIPAA.

OHS offers the Administrative Simplification Enforcement Tool to assist health care providers and others in submitting complaints about all enforceable HIPAA provisions, except for privacy provisions (handled by the Office for Civil Rights at www.hhs.gov/ocr/hipaa/). This electronic tool enables individuals or organizations to fill out a complaint against an entity whose actions they believe violate an Administrative Simplification provision that is currently enforceable.

To learn more about the complaint process, or to file a complaint, goto https://htct.hhs.gov/aset/.>

Copyright Medical Group Management Association Publications Aug 2005

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