HHS is setting up an automatic approval process, no questions asked, for healthcare organizations seeking a year's grace period to comply with federal insurance-transaction standards.
The procedure outlined last week makes it easy to apply for extra time to address data-management requirements of the Health Insurance Portability and Accountability Act of 1996. But things could get difficult for providers, payers and medical trading partners whose compliance efforts drag past the extended deadline of October 2003, industry experts warn.
HHS posted a model form online for requesting the extension, the first milestone of a law enacted in December 2001 granting the healthcare industry more time to work out how to convert business processes and synchronize swaps of information with trading partners.
The law requires providers and others seeking the extension first to declare why they cannot comply by the original October 2002 deadline and to go on record with the steps they'll take to be ready by the next year.
In its online instructions, HHS said the requests would be routinely granted and filed away.
Healthcare organizations can fill out and transmit their requests using an electronic form on a Web site maintained by the Centers for Medicare and Medicaid Services. Those filing online will get a confirmation number as their only acknowledgment of the extension.
Despite the ease of the process, it requires healthcare organizations to make declarations they'll have to back up or be vulnerable to exclusion from Medicare, said William Braithwaite, former senior HHS adviser on health policy.
Among other requirements, providers have to tell the government their reasons for not being ready and commit to a workplan and budget for accomplishing the job, said Braithwaite, now a consultant with PricewaterhouseCoopers.
"If you fail to meet any of those requirements after you have described to the federal government what your plans are, that could increase the liability of your organization," he said.
The compliance-extension law prohibits HHS from paying Medicare claims that are not submitted electronically after Oct. 16, 2003, the day the extension ends. It also gives HHS authority to exclude from Medicare any organization subject to HIPAA that does not submit a compliance-extension plan or achieve compliance by October 2002.