August 2006 Newsletter

Ten Year Anniversary:
HIPAA Lessons Learned

By: Compliance Officer

Michael Leavitt, the Secretary of the Department of Health and Human Services (HHS), received a letter from the National Committee on Vital and Health Statistics (NCVHS) making some preliminary observations and recommendations regarding the adoption and use of transactions and codes as adopted under HIPAA. In his letter, Dr. Simon P. Cohn, the Chairman of the NCVHS, gave the following remarks and advice:

Observation 1: Implementations. HIPAA implementation has taken longer than anticipated in the HIPAA legislation. The causes for this are numerous and include the fact that actual publication of the rules has taken much longer than expected, as well as the fact that while payers were required to implement all standards, adoption by providers was not required.

• Recommendation 1.1: HHS should undertake a comprehensive evaluation of HIPAA implementation in order to identify barriers to timely, efficient and effective implementation, as well as areas for future improvements.

Observation 2: The process for changing versions or updating versions of HIPAA standards is slow and cumbersome. The HIPAA final rule requires covered entities to use a particular version of a standard, without modification. It does not permit voluntary adoption of new versions; in contrast, this is permitted under the electronic prescribing final rule.

• Recommendation 2.1: The Department should immediately explore ways to facilitate quicker updates and implementations of HIPAA transaction standards in a manner that can reduce or eliminate areas of redundancy in this process, including the possibility of not requiring HHS notice and comment rulemaking for a version update of an already existing HIPAA transaction standard. 
• Recommendation 2.2: The Department should expedite issuance of the NPRM on current HIPAA modifications.
• Recommendation 2.3: The Department should determine what would be necessary to facilitate synchronization of the timing of implementation of changes to HIPAA code sets (including medical and non-medical data code sets) to minimize the scope and quantity of changes experienced by the providers, payers, clearing houses, and vendors. 

Observation 3: Return on Investment (ROI). The testifiers who were using only the HIPAA health claims transactions indicated that they were not yet able to show a positive ROI. 

• Recommendation 3.1: HHS should take additional steps to increase the adoption and use by providers and payers of all those HIPAA transaction standards beyond the health claims transactions, such as eligibility (270 / 271), claim status (276 / 277), payment and remittance (835), and referrals (278). 
• Recommendation 3.2: HHS should actively work with payers to facilitate inclusion of enough information in their responses (eligibility standard 271 and claim status standard 277) to allow providers to use the information to actually improve their processes. 
• Recommendation 3.3: HHS should actively work with vendors to encourage their inclusion of the aforementioned non-claim transactions in practice management software used in provider offices.
• Recommendation 3.4:  HHS should continue to support ongoing work by the industry and SDOs [Standard Development Organization] to reduce unnecessary variability of business rules, as currently documented in companion guides.
• Recommendation 3.5: HHS should facilitate and encourage the adoption of one of the currently non-mandated acknowledgement transactions (e.g., 997 or 999) to standardize the acknowledgement process between providers, payers, clearinghouses and vendors
• Recommendation 3.6: HHS should continue the use of pilot testing new HIPAA standards, such as the pilot conducted with the proposed claims attachment standard, to obtain a real look at the actual benefits, issues, business impacts and system changes surrounding the proposed standard.

Additional information and recommendations on HIPAA implementation will be included in the NCVHS’ annual report, due later in the year. Dr. Cohn’s entire letter is available at http://www.ncvhs.hhs.gov/060622lt2.htm.