When the federal government granted the healthcare industry some breathing room to comply with new claims-processing standards late last month, the extension came saddled with paperwork requirements.
In fact, the onerous process of applying for extra time may act as an incentive for healthcare organizations on the brink of compliance to hurry up to try to meet the original deadline, some experts say.
President Bush on Dec. 27 signed legislation that delays until Oct. 16, 2003, the date by which healthcare plans and providers must use standard electronic forms for 10 types of transactions (Dec. 24/31, 2001, p. 4). The original deadline was October 2002.
The legislation, called the Administrative Simplification Compliance Act, requires health plans and providers to report by this October whether they are in compliance with standards set forth in the Health Insurance Portability and Accountability Act of 1996. Those not in compliance must spell out steps they will take to comply (See box).
Holt Anderson is executive director of the North Carolina Health and Communications Alliance, which has been working for three years on standardizing transactions among hospitals, health plans and state agencies. He said the application process can be difficult, and some organizations might have to hire consultants to form a compliance plan.
Besides the cost and effort, submitting a plan may require an organization to provide the government with internal information that it wouldn't otherwise disclose.
Executives at Memorial Health Services, a four-hospital system based in Long Beach, Calif., plan to meet the original deadline, even though some breathing room might be useful, said Scott Joslyn, senior vice president and chief information officer. "We'd rather do that than go through the planning submission, which is a quid pro quo for getting an extension," Joslyn said.
Melinda Hatton, Washington counsel for the American Hospital Association, said the trade group will be working to prevent the extension process from becoming too burdensome, especially for those well on the way to compliance.
During congressional negotiations on the extension bill last fall, healthcare industry groups including the AHA worked to make the legislation "rational and nonpunishing" for organizations that have been working to comply, said Jon Zimmerman, general manager of HIPAA and data-exchange initiatives at Siemens Medical Solutions Health Services Corp.
Yet despite those industry efforts, the extension application process doesn't differentiate between organizations that are close to compliance and those that have miles to go. "If you're almost there, well, hurry the hell up," Zimmerman said.
Still, the extension may serve to keep HIPAA compliance on the back burner at some organizations. Many hospitals are struggling with low operating margins, staffing shortages and other issues.
Anderson said, "I've had a hospital CEO of a moderately large healthcare system tell me, `Well, the pressure's off. We've got another year to think about these things. I've got more important things to worry about."'
That response, Anderson said, was "not the right answer."