HIPAA/LAW:
August 2003
"Enforcement of the Transactions and Code Sets Standards"
by Steve Fox & Rachel Wilson, Esqs., Pepper
Hamilton LLP
The Department of Health and Human Services (HHS) recently provided
insight into how the electronic transactions and code set standards
(the "Standards") mandated under HIPAA will be enforced
(in the form of another in its continuing "Guidance" series).
Covered entities are required to be in compliance with the Standards
by October 16, 2003 (the "Compliance Date").
Covered Transactions
The Standards are applicable to electronic transactions involving
the following: (a) health care claims or equivalent encounter information;
(b) health care payment and remittance advice; (c) coordination
of benefits; (d) health care claim status; (e) enrollment and disenrollment
in a health plan; (f) eligibility for a health plan; (g) health
plan premium payments; and (h) referral certification and authorization
(collectively, the "Transactions").
Applicability
Health plans are required to support all of the Standards for
the Transactions regardless of whether they conduct any particular
electronic Transaction in the normal course of their business. Although
the Standards do not technically require providers to conduct electronic
Transactions, as a practical matter, most providers will have little
choice. In line with HIPAA's goal to promote greater efficiency
industry-wide, HHS has prohibited most covered entities, except
for small providers (those under 10 full-time employees or if it
is impossible to do electronic filing) from submitting paper claims
to Medicare after the Compliance Date. With limited exceptions,
payment will be conditioned upon electronic submission of HIPAA-compliant
claims to HHS’ Centers for Medicare & Medicaid Services
(CMS).
Enforcement
CMS has been charged with responsibility for enforcing the Standards.
CMS will focus on voluntary compliance and enforcement will be complaint-driven
(necessitated in part by a fortuitous lack of resources). A covered
entity will receive written notification of any complaint filed
against it. The covered entity will then have an opportunity to:
- demonstrate that it is in compliance with the Standards,
- document its good faith efforts to comply with the Standards,
and/or
- submit a corrective action plan.
As long as the compliance failure is based upon reasonable cause
and is not due to willful neglect, HHS is not likely to impose a
penalty – assuming the failure is corrected within 30 days
or such longer period as CMS may authorize.
Good Faith Compliance Effort
CMS is cognizant of the fact that any single Transaction may involve
more than one covered entity. Noncompliance by one entity may negatively
impact the compliance efforts of another. For that reason, CMS has
indicated its intent, during the period immediately following the
Compliance Date, to look at the good faith compliance efforts of
each of the covered entities that are party to a Transaction in
order to determine whether there is reasonable cause for the noncompliance.
Covered entities are encouraged to intensify their efforts towards
compliance. As it relates to health plans, HHS has suggested that
part of this focused initiative should include an assessment of
future trading partners in the provider community to determine the
need, if any, for contingency plans so that the flow of payments
and other information is not interrupted while provider partners
continue to work toward compliance. CMS has stated that it will
not impose penalties on covered entities that deploy such contingencies
if those entities have made reasonable and diligent efforts to become
compliant. In making a determination whether such an effort has
been made, CMS will place strong emphasis on demonstrable progress.
So, essentially, the government's message seems to be, "Work
hard, do the best you can, and if that doesn't work, keep trying."It
sounds as if someone at CMS used to be our third-grade teacher.
Read past HIPAA Legal Q/A articles.
Steve Fox, Esq., is a partner at the Washington, DC office of Pepper
Hamilton LLP, www.pepperlaw.com.
This article was co-authored by Rachel H. Wilson, Esq., an associate
of Pepper Hamilton LLP. They may be reached at foxsj@pepperlaw.com.
Disclaimer: This information is general in nature and should
not be relied upon as legal advice.
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