Is Your Office HIPAA Compliant?

Humana is working hard to ensure that its systems and processes are HIPAA (Health Insurance Portability and Accountability Act) compliant. Since many aspects of HIPAA affect the exchange of information between health plans and physicians, it's important that all parties follow the privacy regulation that went into effect April 15. The transactions and code set standards go into effect Oct. 16, 2003.

The success of the compliance initiative depends on physician preparedness, too, said Bill Baldwin, Humana's director of information technology and HIPAA project director.

For example, physician offices must ensure that their practice management systems (PMS) have been updated as necessary to ensure compliance and prevent potential claims rejection. "What we're stressing to physicians is that they need to contact their PMS vendors now if those enhancements haven’t been made, rather than waiting," Baldwin said.

The pressing issue is that some physicians have the mistaken view that vendors and clearinghouses will handle all of the details. In fact, their PMS systems must be modified to ensure they are collecting the appropriate data before the clearinghouses can begin handling claims. "The clearinghouse can do the formatting, but they can't make up the data. That's why it's critical that physicians make sure their systems are collecting the right data," Baldwin said, adding that claims containing incorrect data won't pass the initial edit and therefore will be rejected. In addition, some vendors have indicated they won't update their practice management systems to meet HIPAA requirements, so physicians may have to change systems between now and October.

As a matter of policy and to streamline its HIPAA compliance, Humana will begin using only standard codes after Oct. 16, 2003. That means that all claims — even those submitted on paper — must use the HIPAA-standard codes. The use of a single set of codes for all claims will eliminate confusion from both a physician and payer perspective, and should result in smoother claims processing and fewer payment problems, Baldwin said. And because HIPAA eliminates the use of local codes (codes developed between physicians and payers to assist in special payment arrangements), Humana will be working with physician offices to modify contracts as necessary.

The implementation of the privacy and security regulations also affects Humana's communications with physicians. Humana has implemented secure messaging technology and has educated all associates on its privacy policies and practices. "Humana has been working diligently toward compliance with both the letter and the spirit of the HIPAA regulations," said Jim Theiss, Humana's privacy officer. Theiss noted that providers should be aware that all Humana associates have been trained on HIPAA requirements and instructed to request only what is minimally necessary when asking physicians for information. As a reminder, physicians who ask Humana to disclose protected health information to third parties, such as billing companies, must ensure that the required nondisclosure agreements are in place before information can be released.

Finally, the HIPAA privacy and transactions regulations are only two components of the sweeping legislation intended to streamline health care processes. In the near future, Health & Human Services (HHS) will release details on two other HIPAA regulations — development of unique National Provider Identification numbers and updating of the CPT and ICD coding systems. The single provider ID number, which goes into effect 26 months after HHS releases the final regulation, will replace the current system in which physicians work under multiple ID numbers depending on contractual and other issues. "This will affect the way physicians bill because it's common now for physicians to bill one claim under one tax ID number and another claim under a different tax ID number," said Baldwin. Humana will begin making necessary modifications to its systems as soon as the final regulation is published.

On the coding front, HIPAA regulations call for major changes. The CPT-4 codes will become CPT-5 codes, and ICD-9 codes will be replaced with ICD-10 codes. "The net effect of this for physicians is that they'll have to change their practice management systems again," Baldwin said. The CPT code changes are expected in late 2003 or early 2004, and ICD changes are likely to follow soon after that.

NOTE: Physician offices that have questions or concerns about HIPAA compliance as it relates to their working arrangements with Humana are urged to call their provider contracting representative.

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