The Patient Protection and Affordable Care Act signed into law by President Obama on Tuesday closes a number of loopholes in the Health Insurance Portability and Accountability Act of 1996.
Reform law closes some HIPAA loopholes
Arguably the most publicized HIPAA gap to be closed by the massive health insurance reform law is its broadening of a ban on discrimination against individuals with pre-existing health conditions.
HIPAA protected employees of large firms that offered group health insurance to their workers, but not to workers insured at small companies and individuals. Protection for the latter two groups.
On the health information technology front, the health reform law has an entire section on “administrative simplification,” as did HIPAA. The section in the new law deals with the technology of medical claims processing and other insurance-related transactions—and it addresses other HIPAA loopholes.
For example, HIPAA required the major actors in the healthcare industry to have and use unique identifiers; the ID requirement was applied to employers in 2004 and providers in 2008. Privacy advocates, however, fought off a national patient identifier.
Similarly, health insurance carriers had delayed imposition of a final rule for a national payer identifier, despite lobbying by provider groups such as the American Medical Association and the Medical Group Management Association, which claimed adoption of a uniform payer ID would save the entire healthcare system time and money.
Finally, for health plans, it's time to number up.
The new law requires HHS to issue a final rule to establish a “unique health plan identifier” through an interim final rule, effective no later than Oct. 1, 2012.
The law also calls on HHS to promulgate a standard for electronic fund transfers on an interim final rule basis by Jan. 1, 2012, effective no later than Jan. 1, 2014; and both standard and operating rules for health claims attachments, via interim final rule, by Jan. 1, 2014, effective by Jan. 1, 2016. The law also requires the standard and operating rules for attachments should be consistent with the X12 Version 5010 transaction standard.
Plans must certify by Dec. 31, 2013, that their data and information systems are in compliance with federal rules for the handling of “electronic funds transfers, eligibility for a health plan, health claim status, and healthcare payment and remittance advice.” Plans must certify by the end of 2015 that their IT systems comply with standards and rules for “health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, health claims attachments, and referral certification and authorization.”
Penalties begin to kick in on April 1, 2014, for plans not in compliance with those new administrative simplification rules then in effect and the penalties could be severe, starting at $1 per member per day of noncompliance, capped as high as $40 per member if there is misrepresentation of a plan's status.
Wes Rishel, vice president and distinguished analyst for Gartner, a technology market consultant, and a member of the federally chartered Health IT Standards Committee, an advisory panel to the Office of the National Coordinator for Health Information Technology at HHS, says new rules requiring electrification of claims attachments, particularly, will afford the healthcare industry “the ability to actually cut back on the administrative dollar.”
In the paper world, a claim attachment typically would be just that—additional information on paper physically attached to a paper claim, Rishel explained. But in the electronic world, the lack of standards and requirements for attachments has led to a patchwork system of both electronic claims and either paper or scanned attachments. In some cases, Rishel said, the providers end up sending more documentation than necessary, adding to the administrative burden.
“They tell you they're not going to pay the claim unless you send us more information,” Rishel said. “If it's a claim for rehab, it may be the rehab plan, what kinds of drugs are going to be used. If it was a claim for a surgical procedure, it might be for the diagnostic information. If it's a claim for dialysis, it might be the blood chemistry for pre-dialysis and post-dialysis to see whether the treatment is effective.”
“What happens now is, providers tend to use paper claims instead of electronic because they know they need an attachment, and they tend to over-attach, because they don't want the claim suspended, to have the claim sent back. It's sort of a passive-aggressive thing,” Rishel said.
Part three: IT for long-term care
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