Industry Survey Finds Uncertainty with HIPAA in Pharmacy Claims Processing

GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--Oct. 30, 2001-- A survey released today by HealthTrans and the National Council for Prescription Drug Programs finds that while many healthcare organizations are confident of their own HIPAA compliance, they are not as certain about their outsource partners.

Almost half the survey's respondents believed they were compliant with current HIPAA guidelines, 43 percent of those that outsourced pharmacy claims processing believed their outsource partner had just begun planning for HIPAA, and an additional 16 percent were unsure. More than 80 percent said that the same IT department responsible for running the production shop is also responsible for HIPPA compliance, leading almost half the respondents to cite time as their biggest concern.

The survey was co-sponsored by HealthTrans, the largest independent processor of pharmacy claims adjudication, and the National Council for Prescription of Drug Programs, an ANSI-accredited Standards Development Organization whose standards are used billions of times each year to enable electronic transmissions in pharmacy. HealthTrans announced recently that it will be HIPAA and Version 5.1 compliant by calendar first quarter, 2002.

"The survey confirms that claims processing is an integral link in the chain of trust that many organizations have been slow to address when it comes to HIPAA readiness," said HealthTrans CEO Jack McClurg. "As the implications of HIPAA become clearer, healthcare organizations will need to ensure not only that they are compliant, but that their outsource partners are up to speed as well."

"NCPDP is pleased with the progress on the implementation of our Telecommunication Standard. We will continue to be a resource for the industry as its moves forward with HIPAA implementation," said Lee Ann C. Stember, NCPDP president.

The survey, which consisted of telephone interviews with NCPDP's Health Maintenance Organization (HMO), Health Insurer and Pharmacy Benefits Manager (PBM) membership, was conducted by a third party on behalf of HealthTrans and NCPDP. Questions were asked about readiness for HIPAA and the NCPDP Telecommunication Standard Version 5.1 based on the HIPAA Transactions and Code Sets regulations. Survey results include:

• Many organizations believe they are ready for HIPAA:
  

  Forty-eight percent said they were already compliant with HIPAA standards and none said they had just begun planning, but 21 percent of respondents declined to answer

• There is much uncertainty about HIPAA compliance among outsource partners: Of those surveyed, 33 percent of the organizations outsourced to a PBM or claims processor for pharmacy claims processing. While many organizations felt they were in compliance with HIPAA , there was much less certainty about outsource partners, with 43 percent saying they believed their outsource partner had just begun planning and another 16 percent saying they were unsure about their outsource partner's HIPAA preparations.
  
  
• The same IT department running the production shop is also responsible for HIPAA compliance, and is dedicating most of its time on HIPAA : Eighty-two percent of respondents said that the same IT staff working on HIPAA concerns was also responsible for running the production shop. Half are spending 50 to 75 percent of their time on HIPAA and 39 percent are spending more than 75 percent of their time on HIPAA . Time and cost were the most cited concerns, along with non-compliance. Of these factors, time is cited by almost half the respondents as their most important concern.
  
  
• Organizations are taking multiple strategies for HIPAA compliance: Respondents were almost evenly divided about HIPAA strategy between upgrading current system, licensing a new system and outsourcing to a claims processor.
  
  
• Version 5.1 is well received:
  

  The vast majority of organizations, 97 percent, intend to implement all segments of Version 5.1, and all expect it will save time.

" HIPAA has often been compared with Y2K, but HIPAA goes to the depth of business processes like Y2K never did," said McClurg. "As the HIPAA deadline gets closer, it will be increasingly important to concentrate on core competencies and work with outsource providers for the rest. But healthcare organizations need to conduct a thorough due diligence to ensure that the outsource partner does not become a HIPAA liability."

"It is good news for the industry that most organizations are implementing all segments of v5.1," said Stember. "In the long run, this will enable numerous improvements in the efficiency and quality of care that patients receive. NCPDP members have been working diligently on a document that further defines the specific situations to the fields included in v5.1."

HIPAA includes standards that are currently being finalized and supposed to come into effect as early as next year. These standards will affect the storage and transfer of all electronic healthcare data in the United States. Version 5.1 is NCPDP's Telecommunication Standard, designed to update electronic communications and add additional functionality in pharmacy transactions.

The HIPAA final standards for electronic health care transactions, and for code sets, adopts the NCPDP Telecommunication Standard Format, Version 5.1 and the NCPDP Batch Standard, Version 1 Release 0 for pharmacy claims. Health plans, health care clearinghouses and health care providers who utilize electronic transactions will be required to use these standards beginning October 2002.

The NCPDP SNIP Liaison Special Committee has created documents that have been approved by the NCPDP Board of Trustees. These documents are recommendations for implementation of NCPDP Telecommunication Standard Version 5.1 based on the HIPAA Transactions and Code Sets regulations. The documents include a recommended timeline for implementation, recommendations on phased development with accompanying spreadsheet, and a payer template. The NCPDP highly recommends reviewing the documents and begin using them in your implementation plans. Review the documents.

Read more about the pharmacy industry and HIPAA, including white papers on Billing for Supplies and Professional Pharmacy Services.

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