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HIPAA/LAW:
Legal Q/A
November/December 2002
"Do Assisted Living Facilities Qualify as Covered Entities?"
by Steve Fox, Esq., & Rachel Wilson, Esq.,
Pepper Hamilton LLP
QUESTION: Are Assisted Living Facilities covered under the
HIPAA regulations?
ANSWER: It depends upon the circumstances, as is so often
the case with HIPAA. Assisted living facilities can vary widely
in their billing practices and in the array of services they provide.
Such facilities do not qualify as "health care clearinghouses"
and are not likely to fall under the definition of a "health
plan" under HIPAA. However, an assisted living facility may
engage in certain activities or functions sufficient to qualify
as a "health care provider," subject to regulation under
HIPAA.
"Assisted Living Facility" is a generic term used to
describe facilities that bridge the gap, primarily, though not exclusively,
for senior citizens, between independent living and residence in
nursing homes. The term refers to many different types of care arrangements
including help with meal preparation, bathing, dressing, performing
household chores,
and in many instances, providing some form of medical care. Certain
of these facilities may be eligible for Medicaid reimbursement while
others are not. Assisted living facilities may be part of a retirement
community, nursing home or elder-housing facility or they may stand
alone.
Regardless of the title or structure, the status of any assisted
care facility as an entity subject to HIPAA regulation can be determined
by utilizing a three-part analysis.
- First, does the facility furnish, bill, or receive payment
for health care in the normal course of business?
"Health care" is defined as care, services, or supplies
related to the health of an individual. It includes, but is not
limited to, preventive, diagnostic, rehabilitative, or maintenance
care, counseling, or assessment services with respect to the physical
or mental condition of an individual as well as the sale or dispensing
of a drug in accordance with a prescription.
- Second, does the facility conduct covered transactions?
A "covered transaction" is the transmission of information
to carry out certain administrative and financial activities including,
but not limited to, health care claims or equivalent encounter
information and coordination of benefits. If an assisted living
facility uses another entity to conduct covered transactions on
its behalf, the facility is treated no differently than if it
conducted the transactions directly as opposed to conducting them
indirectly through an intermediary.
- Finally, are any of the covered transactions conducted in electronic
form?
Covered transactions conducted by transmitting information over
the Internet, an Extranet, leased lines, dial-up lines, private
networks, as well as those transmissions that are physically moved
from one location to another using magnetic tape, disk or CD media
all qualify.
If the answer to all three of the preceding questions is "yes,"
then the assisted care facility is a "health care provider"
as defined under HIPAA.
For further reference, a decision tree of this analysis, along
with other decision trees regarding qualification as a "health
care clearinghouse" or "health plan" under HIPAA,
is posted on the Center
for Medicare and Medicaid Services' web site.
Read past HIPAA Legal Q/A articles.
Steve Fox, Esq., is a partner at the Washington, DC office of Pepper
Hamilton LLP. This article was co-authored by Rachel H. Wilson,
Esq., of Pepper Hamilton LLP. www.pepperlaw.com
Disclaimer: This information is general in nature and should not
be relied upon as legal advice.
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