HIPAA Transaction Standards Due Next Month Present Challenges for Nurses

By Suzi Birz, contributor

Just over a month ago, the Centers for Medicare and Medicaid Services (CMS) published the Guidance on Compliance with HIPAA Transactions and Code Sets, a reminder that the implementation deadline is Oct. 16, 2003. The guidance includes CMS’s enforcement approach. In addition, CMS published documents to help providers complete implementation on or before the deadline.

Recently, a number of organizations have taken surveys to determine provider, health plan and clearinghouse readiness to comply with the transactions and code sets standards. The groups range from the National Committee on Vital and Health Statistics (NCVHS) to the Office of the Inspector General. The organizations have published the results and written letters containing their findings and recommendations to Health and Human Services Secretary Tommy Thompson.

HIPAA transactions are specific and distinct activities involving the electronic transfer of health care information for particular purposes. Under HIPAA Administrative Simplification, if a covered entity engages in one or more of the identified electronic transactions, the entity must comply with the standard for that transaction. The standard electronic transactions used by providers are Claims, Remittance Advice, Eligibility Inquiry and Response, Prior Authorization and Referral, and Claims Status Inquiry and Response.

Therefore, a nurse practitioner submitting claims electronically, must comply with the standard for that transaction. Similarly, a nurse in a physician practice that submits claims electronically to a health plan must comply with the standard. The health plans and clearinghouses must be ready to accept HIPAA compliant transactions and those plans are only allowed to process compliant transactions.

Thomas Scully, administrator for CMS, said yes, "if you are not ready to use the HIPAA standard transaction and code sets by October 16, you may not get paid! You may have thought that you can still submit paper bills to Medicare, but in many cases this is not true."

CMS can impose financial penalties for noncompliance with the transaction standards. The fines are $100 per infraction, up to a maximum of $25,000 per year for each violated provision of the rule. According to the guidance, "HHS may not impose a civil money penalty where the failure to comply is based on cause and is not due to willful neglect, and the failure to comply is cured with a 30-day period. HHS has the authority under the statute to extend the period within which a covered entity may cure the noncompliance ‘based on the nature and extent of the failure to comply.’ "

The first challenge will be to understand the complex standards and the situational data elements. This is followed by the gap analysis between what data is currently provided and what will be required. This analysis provides the information needed to change current data collection and transactions to supply those data.

But nurses are not done there. You must test with your health plans and payers. While many of them are ready, there are many not ready to test. And remember, everyone has to test with all their health plans and payers. This will put quite a load on those partners.

If many practices "cash is king" and nurses should take a look at the number of days in accounts receivable. This number could rise during the transition period. Health plans might not be ready even if nurses are and that could delay payment. If not ready, non-compliant claims may be rejected, also delaying payment. With the number of rejected claims likely to rise, it could require more people or more time to look at the claims, edit them, and to resubmit. HHS [Department of Health and Human Services] encourages health plans to assess the readiness of their provider communities to determine the need to implement contingency plans to maintain the flow of payments while continuing to work toward compliance.

As mentioned at the beginning of this article, CMS has recently published several documents to help nurses understand the process. These not only present information on steps to take, but also outlines CMS’s enforcement approach.

CMS continues to state that good faith goes a long way. It is suggested that nurses get started as soon as possible, keep good documentation and get ready to send compliant transactions. And, just in case, they should have a contingency plan.

Suzi Birz is an independent consultant working in the area of health care technology and process engineering. Prior to consulting, she spent several years as the CIO in a provider organization. Throughout her career, she has worked to deploy computer applications in a health care environment, with most of her efforts being spent in academic medical centers. She has worked in institutions that provided her with experience in patient care, clinical research, academic medicine, health care reform initiatives, regulatory environments and application of commercial solutions. Birz’s consulting has focused on needs analysis, system selection, project management, sales support, achieving compliance with the Health Insurance Portability and Accountability Act (HIPAA), marketing and product design in health care delivery settings and a B2B exchange.

Updated Sept. 8, 2003

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