Scully, Congressional Staffers Speak on HIPAA "Delay"

July 15, 2001 -- At the Association For Electronic Health Care Transactions' (AFEHCT) recent Annual Washington Policy Forum, Tom Scully, new CMS (formerly HCFA) Administrator, spoke about HIPAA "delay" proposals. It is the only time the Bush administration has spoken in public and on the record on the subject. Three Congressional staffers very close to the situation also addressed the subject of HIPAA delay.

The following is reprinted from AFECHT's "Washington Wire:"

Tom Scully, New CMS Administrator, on HIPAA “Delay”

Tom Scully, CMS’s (formerly HCFA) new Administrator, made news at AFEHCT’s Annual Washington Policy Forum, on July 10th. He shared with the attendees that he had had many years experience with government, both in government and lobbying government. He addressed a number issues, including the implementation of the administrative simplification provisions of HIPAA.

Among Scully’s remarks:

• "At this time, I don’t see any reason to 'delay' the implementation of (administrative simplification)."
  
  
• Given his long experience in government during the Reagan Bush I years, it always takes longer to change the way government does things than what one expects.
  
  
• If a delay is granted, he would not expect to see administrative simplification/HIPAA again.
  

Congressional Staff on HIPAA “Delay”

At AFEHCT’s Annual Washington Policy Forum on July 10th, the possibility of a “delay” in the implementation of administrative simplification/HIPAA was discussed by three Congressional staffers very close to the situation on Capitol Hill. Because of a certain serendipity in Tom Scully’s schedule, Scully’s presentation interrupted the presentation of the three Congressional staffers.

The Congressional background, in which these presentations took place is somewhat cloudy.

The ”delay" proposal in the Senate supported by the Blues is S. 836 and the proposal in the House is H.R. 1975. Basically, under these proposals, covered entities would not be required to begin implementation of all administrative simplification provisions (except the privacy provision) until all the remaining standards and the enforcement regulation had been published in final form. The attachment standards ready for publication are only a small number of the attachment standards that are expected to be published over time. The beginning of the implementation of administrative simplification, under the Blues' proposal, could therefore be five to ten years out. Thus “killing” administrative simplification/HIPAA.

Although the Blues' proposal purports not to delay the implementation of the privacy rule, HHS staff claims that the applicability sections of the privacy final rule applies to providers who transmit the standard transactions. No transaction standards, no privacy rule. This interpretation has caused several Senators, such as Kennedy and Leahy who vigorously support the privacy rule, to actively oppose the Blues “delay” proposal.

Senator Baucus, (D-MT), Chairman of the Senate Finance Committee, is up for reelection 2002. It is expected to be a rough race. The Montana state Medicaid program has very strongly pressed the case for “delay." Given the tough race he faces, Sen. Baucus would like to be responsive. Sen. Grassley, lead Republican on the Senate Finance Committee, has been under heavy pressure from Iowa Blue Cross.

At the AFEHCT July 10th meeting, the presentation by staffers from the Senate Finance Committee provided the following information:

• Sen. Grassley is concerned about the readiness of Iowa providers and is exploring ways to provide relief without jeopardizing privacy protections or diminishing too substantially the savings associated with standardization and simplification.
  
  
• Staff to Sens. Baucus, Dorgan, Craig and Kennedy have been working together since June to understand the problem, to hear stakeholders' concerns, and to assess compromise legislation.
  
  
• The duration of any delay in any compromise is still in question, but agreement exists among all staff that an open-ended delay timeframe (like that in S. 836) would defeat the goals of HIPAA. Any compromise would have to include provider compliance incentives, would have to attract wide support in the Senate and would probably be targeted for the unanimous consent calendar.
  
  
• The staffers indicated action in the Senate on a compromise proposal before the August recess.
  

Rep. David L. Hobson (R-OH) has been administrative simplification’s/HIPAA’s strongest defender in Congress. Recently the Blues have been increasing the pressure they put on him. His staff indicated that Hobson is amenable to providing some relief, but not at the expense of savings or the original timetable of the transaction standards.

Bottom Line: The Blues are not going to get what they want in the way of a “delay” proposal. But there is some serious movement in the Senate. Movement in the House is less sure. The Blues are pushing for Senate action on their proposal by August 3.

Thomas J. Gilligan
Executive Director & Washington Representative
Association For Electronic Health Care Transactions (AFEHCT)

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