Next HIPAA deadline rests on 'good faith' all around

FRAMINGHAM (09/25/2003) - With fewer than one in five providers submitting electronic claims to the government in the HIPAA-compliant form that is slated to become the legal standard next month, the government announced Tuesday it would continue to accept older claim formats even after the Oct. 16 deadline passes.

The move was widely expected, and it further reduces the chance of severe financial disruptions that would have occurred if the government had refused to pay non-compliant claims. Private payer groups, too, are beginning to implement contingency plans designed to keep cash flows normal, with all 42 Blue Cross and Blue Shield companies announcing they would also accept non-compliant formats.

"Implementing this contingency plan moves us toward the dual goals of achieving HIPAA compliance while not disrupting providers' cash flow and operations, so that beneficiaries can continue to get the health care services they need," said Tom Scully, administrator of the government's Centers for Medicare and Medicaid Services (CMS), which is overseeing the so-called transactions and code set rules, in a statement.

While the designation of contingency plans will likely keep Oct. 16 from prompting a healthcare "train wreck," the new policies make it unclear when the rules, which require providers using electronic submissions to follow a detailed new standard, will effectively take hold.

CMS has not set a new date by which covered entities will have to submit in HIPAA format. The government has maintained that it'll continue to wield enforcement power, though it has pledged not to use it against any entity that shows "good faith" in moving toward compliance.

Still, health plans know that enforcement power means there's a "club being held over their heads," according to American Association of Health Plans spokesman Mohit Ghose. He said that the existence of a government contingency plan won't keep payers and providers from moving into compliance as soon as possible. "I think there's enough of an implicit threat."

Payers that have announced contingency plans, too, have suggested that they are not willing to accept non-compliance forms over the long term. "This is temporary," said David Boucher, assistant vice president of healthcare services at BlueCross BlueShield of South Carolina.

Still, the move to back away from the deadline was celebrated by lawmakers, including Larry Craig, the Idaho Republican who serves as chairman of the Senate's Special Committee on Aging. "Today's decision will give doctors and other healthcare providers some breathing room to meet the new regulations," Craig said at a hearing Tuesday. "With just over three weeks left before the deadline, it comes not a moment too soon."

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