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Medical / Legal Q&A:
OCTOBER 16, 2003:
DEADLINE FOR
HIPAA TRANSACTIONS
& CODE SETS
by
Dan Groszkruger, JD, MPH
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Q:
Does HIPAA require that physicians’ offices file electronic claims by mid-October? I heard that if I
have fewer than 10 employees, my office may be exempt.
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A:
Yes. HIPAA’s electronic transmission standards (i.e., the “Transactions & Code Sets” part of
Administrative Simplification) require that by October 16, 2003, all covered entities (defined as “a
health care provider who transmits any health information in electronic form”) will be required to
submit all bills in HIPAA-compliant standard electronic format.
If your office qualifies as a “covered entity” (and all but a few small practices will), there is no
exception from compliance with Transactions & Code Sets! The special rule for “small practices”
(i.e., fewer than 10 employees) applies only to billing Medicare. The “small practice” provision
applicable to Medicare does not relieve “covered entities” from complying with other HIPAA regulations.
If your practice will not be ready to comply, (1) adopt a written plan to convert to standard electronic transactions, and (2) describe your “good faith efforts” to achieve compliance. “Good faith efforts” may include:
- A record of increased external testing with trading partners;
- Documentation that trading partners could not, or would not, cooperate with electronic tests; or
- Contact trading partners (started well before 10-16-03) to set up testing opportunities. If your
office can show “good faith efforts” to comply, you are less likely to be fined for non-compliance.
On the other hand, failure to describe your efforts to comply may be grounds for “willful neglect”
(i.e., fines and penalties).
The Center for Medicare and Medicaid Services (“CMS”) recently announced a contingency plan
under which it will continue to accept non-compliant electronic Medicare claims.1 So, if you bill Medicare,
but have not yet switched over to all HIPAA-compliant transactions, you will continue to be paid for as
long as CMS’s contingency plan remains in effect. Also, CMS has adopted a complaint-driven approach
to enforcement. If CMS gets a complaint that your office is not in compliance, you should receive
written notification. At that point, you can: (a) demonstrate compliance, or (b) show a good faith effort
to comply, and/or (c) submit a corrective action plan that includes the actions listed above.
1 “We encourage other plans to assess the readiness of their trading partners and implement contingency plans if appropriate,”
said Tom Grisson, director of CMS’ Center for Medicare Management. For details visit http://cms.hhs.gov/media/press/
release.asp?Counter=879.
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