ADMINISTRATIVE SIMPLIFICATION

 

— What are the HIPAA Administrative Simplification Provisions?

  1. National standards for electronic data transmission
  2. Unique health identifiers for providers, employers, plans, and individuals
  3. Security standards to protect electronically maintained health information
  4. Privacy and confidentiality provisions for individually identifiable health care data

— What are the objectives of the Administrative Simplification Provisions?

  1. Improve efficiency of national health system
  2. Reduce administrative overhead costs
  3. Reduce fraud and abuse
  4. Protect patient rights, including the privacy of patient health data
  5. Improve quality of care through access to consistent clinical data
  6. Improve information available for decision-making
  7. Establish security standards for Internet-based technology

— Electronic Data Interchange standards have been adopted for:

  1. Health claims/encounter information
  2. Enrollment/disenrollment in a health plan
  3. Eligibility for a health plan
  4. Health care payment and remittance advice
  5. Health plan premium payments
  6. Health claim status
  7. Referral certification and authorization
  8. Coordination of benefits

    Standards for claims attachments and first report of injury are required but have not yet been adopted.

  9. American National Standards institute (ANSI) ASC X12N standards have been adopted for most transactions
  10. For retail pharmacy, the National Council of Prescription Drug Programs (NCPDP) Telecommunications Standard Format Version 5.1 and equivalent NCPDP Batch Standard Version 1.0 both set the standards

— Code Sets

  1. ICD-9-CM, Volumes 1&2
  2. ICD-9-CM, Volumes 3
  3. Combination of HCPCS and CPT-4
  4. HCPCS (other substances, equipment, supplies, other items)
  5. National Drug Codes
  6. CDT-2 (dental services)

    NOTE: All local codes will be eliminated

— What do they mean for providers?

  1. All electronic transactions must be converted to the standard format
  2. DHHS cost estimates for non-hospital providers range from $0 (providers with no electronically processed patient claims or encounters) to $10,000 to cover software/system upgrades
  3. Additional provider costs not calculated in these estimates could include:

    • Personnel training
    • Possible payment delays while billers and payers convert to the new standardized system

  4. DHHS estimates savings per electronically processed claim at $1.49 for physicians and $0.83 for all others. Total savings for non-hospital providers are estimated to range from $0 to over $70,000 between 2002 and 2011
  5. Additional potential administrative savings not calculated in these estimates could include:

    • Elimination of multiple transaction formats
    • Common data sets which will facilitate data sharing among entities
    • Possible cash flow increase if providers' ability to electronically bill and collect is substantially improved

— HIPAA requires unique national health identifiers for employers, providers, health plans, and individuals:

  1. Employer Identifier: expected to be the Employer Identification Number (issued by the Internal Revenue Service)
  2. National Provider Identifier: developed by HCFA for use in the Medicare system
  3. Health Plan Identifier: expected to be the HCFA Medicare Payer ID assigned to all health plans nationwide
  4. Individual Identifier: development is on hold

— What do they mean for providers?

  1. If the National Provider Identifier (NPI) is selected, Medicare, Medicaid, and other federal health plan providers would be assigned an NPI automatically
  2. Other providers would have to apply to a federally directed registry for an NPI
  3. Providers will need to modify their billing and other systesms to include the new standard IDs