October 25, 2000

Medi-850-00

TO: ALL MEDICARE PROVIDERS

SUBJECT: HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT

PRIMARY INTERESTS: BUSINESS OFFICE MANAGERS

The following message is from the Health Care Financing Administration.

If you haven’t heard of HIPAA, you have a lot of catching up to do!

In 1996 Congress passed into law the Health Insurance Portability and Accountability Act (HIPAA). This Act is comprised of two major legislative actions: Health Insurance Reform and Administrative Simplification. The Administrative Simplification provisions of HIPAA direct the federal government to adopt national electronic standards for automated transfer of certain health care data between health care payers, plans, and providers. This will enable the entire health care industry to communicate electronic data using a single set of standards thus eliminating all nonstandard formats currently in use. Once these standards are in place, a health care provider will be able to submit a standard transaction for eligibility, authorization, referrals, claims, or attachments containing the same standard data content to any health plan. This will "simplify" many clinical, billing, and other financial applications and reduce costs.

The Transaction Final Rule is the first of the Administrative Simplification requirements to be published in the Federal Register. It was published on August 17, 2000 and requires providers to use the applicable standards for electronic transactions such as: submitting claims; receiving remittance advice statements; querying patient eligibility; checking claim status; requesting prior authorization where required for certain items of durable medical equipment; or requesting payment for the limited number of drugs covered by Medicare. These standards will be fully implemented October 16, 2002 (October 16, 2003 for small health plans). When fully implemented, Medicare contractors and other health care payers will be prohibited from accepting or issuing transactions that do not meet the new standards.

Health care providers and suppliers who conduct business electronically are urged to begin considering what steps they may need to take to upgrade their software to conform to the new standards. This can be done either independently or through commercial vendors. Health providers can also consider arranging for the services of a commercial clearinghouse or billing service knowledgeable about the new requirements to translate data on their behalf.

A copy of the Transaction and Code Set Final Rule, as well as more information on the full range of Administrative Simplification requirements (including identifiers, security and privacy of health information proposed rules) can be obtained from the following web site: http://aspe.hhs.gov/admnsimp/.

Look for further important HIPAA information in upcoming newsletters.

THIS BULLETIN SHOULD BE SHARED WITH ALL HEALTH CARE PRACTITIONERS AND MANAGERIAL MEMBERS OF THE PROVIDER STAFF. NO COST COPIES ARE ALSO AVAILABLE FROM OUR WEB SITE AT riverbendgba.com

Please refer any questions to our office at (423) 755-5950.