Areas of Practice - Healthcare
Healthcare Practice Group Publications
Overview Transaction Standards Regulations Under HIPAA
The Transaction Standards which were adopted under HIPAA on August 17, 2000, mandate standardization of certain electronic transactions primarily relating to submission of information to health plans.<1> Healthcare clearinghouses<2> , health plans and those healthcare providers<3> who choose to receive or submit the specified transactions electronically are covered by the Transaction Standards. The Transaction Standards are very "IT-oriented". The American National Standards Institute (ANSI) Accredited Standards Committee (ASC) X 12N Standards, Version 4010 apply to all but retail pharmacy transactions.<4> Covered Entities are required to use standard medical data code sets when transmitting information electronically. Trading Partners (e.g., payors and providers who submit transactions electronically to them) cannot change these standards by agreement.<5> Health plans must accept standard claims submitted electronically and they cannot require providers to change or add to the standard transactions.
The covered transactions are as follows:
1. Claims and Encounters. [45 CFR §162.1101]
These transactions are defined as the transmission of either of the following:
(a) A request to obtain payment, and the necessary accompanying information from a healthcare provider to a health plan, for health care; or
(b) If there is no direct claim, because the reimbursement contract is based on a mechanism other than charges or reimbursement rates for specific services, the transaction is the transmission of encounter information for the purpose of reporting health care.
2. Enrollment and Disenrollment. [45 CFR §162.1501]
The enrollment and disenrollment in a health plan transaction is the transmission of subscriber enrollment information to a health plan to establish or terminate insurance coverage.
3. Eligibility. [45 CFR §162.1201]
The eligibility for a health plan transaction is the transmission of either of the following:
(a) An inquiry from a healthcare provider to a health plan, or from one health plan to another health plan, to obtain any of the following information about a benefit plan for an enrollee:
- Eligibility to receive health care under the health plan.
- Coverage of health care under the health plan.
- Benefits associated with the benefit plan.
(b) A response from a health plan to a healthcare provider's (or another health plan's) inquiry described in paragraph (a) above.
4. Health Plan Payments and Remittances. [45 CFR §162.1601]
The healthcare payment and remittance advice transaction is the transmission of either of the following for health care:
(a) The transmission of any of the following from a health plan to a healthcare provider's financial institution:
- Payment.
- Information about the transfer of funds.
- Payment processing information.
(b) The transmission of either of the following from a health plan to a healthcare provider:
- Explanation of benefits.
- Remittance advice.
5. Health Plan Premium Payments. [45 CFR §162.1701]
The health plan premium payment transaction is the transmission of any of the following from the entity that is arranging for the provision of health care or is providing healthcare coverage payments for an individual to a health plan:
(a) Payment.
(b) Information about the transfer of funds.
(c) Detailed remittance information about individuals for whom premiums are being paid.
(d) Payment processing information to transmit healthcare premium payments including any of the following:
- Payroll deductions.
- Other group premium payments.
- Associated group premium payment information.
6. Coordination of Benefits. [45 CFR §162.1801]
The coordination of benefits transaction is the transmission from any entity to a health plan for the purpose of determining the relative payment responsibilities of the health plan, of either of the following for health care:
(a) Claims.
(b) Payment information.
7. Health Claim Status. [45 CFR §162.1401]
A healthcare claim status transaction is the transmission of either of the following:
(a) An inquiry to determine the status of a healthcare claim.
(b) A response about the status of a healthcare claim.
8. Referral Certification and Authorization. [45 CFR §162.1301]
The referral certification and authorization transaction is any of the following transmissions:
(a) A request for the review of health care to obtain an authorization for the health care.
(b) A request to obtain authorization for referring an individual to another healthcare provider.
(c) A response to a request described in paragraph (a) or paragraph (b) above.
The proposed HIPAA Regulations also reference two (2) additional transactions that may be covered in the future as well as such "other transactions as the Secretary [of DHHS] may prescribe by regulation", although there has been no final rule issued with respect to these transactions. They include:
1. First Report of Injury- a transaction used to report information pertaining to an injury, illness or incident to entities interested in the information for statistical, legal, claims and risk management processing requirements. (This is the definition included in the proposed regulations - the final regulations did not include a definition.)
2. Health Claim Attachments - the transmission of healthcare service information such as subscriber, patient, demographic, diagnosis or treatment data for the purpose of a request for review, certification, notification or reporting the outcome of a healthcare services review. (This is the definition included in the proposed regulations - the final regulations did not include a definition.)
Please keep in mind that all electronic transmissions of the specified transactions must comply with the promulgated standards. Electronic transmissions include transmissions using all media, even when it is transmission by the physical movement from one location to another using a magnetic tape, disk or CD. Any transmission over the Internet, Intranets, lease lines, dial-up lines, private networks, etc., would be included.
The deadline for compliance with the Transaction Standards is October 16, 2002 (October 16, 2003 for small health plans). However, you may obtain an extension of this deadline for one year (to October 16, 2003) if you submit a request for an extension and a compliance plan by October 15, 2002. Even if you file for an extension, you still must begin testing no later than April 16, 2003. Your compliance plan must include:<6>
(1) the name of the covered entity and contract information;
(2) reasons for filing the extension (these can be as simple as needing more money, needing more staff, needing more time for testing, having problems implementing the code set changes, etc.);
(3) an estimate cost implementation budget for compliance with the Transaction Standards; and
(4) the status of the three phases of your implementation strategy, which are:
- Phase I - HIPAA Awareness
- Phase II - Operational Assessment, and
- Phase III - Development and Testing.
HIPAA Awareness (Phase I) should include:
- obtaining information regarding the Transaction Standards,
- discussing this information with your vendors, and
- conducting preliminary staff education.
Operational Assessment (Phase II) should include:
- inventorying the Transaction Standards gaps in your organization,
- identifying internal implementation issues and developing a work plan to address them, and
- considering and deciding whether or not to use a vendor or other contractor to assist you in becoming compliant with the Transaction Standards.
Development and Testing (Phase III) should include:
- finalizing development of applicable software and installing it,
- completing staff training on the proper use of the software, and
- starting and finishing all software and system testing.
Footnotes
1. A proposed technical amendment to the Transaction Standards was published on May 31, 2002.
2. The Regulations define a healthcare clearinghouse as follows: "a public or private entity including a billing service, repricing company, community health management information systems or community health information systems, and "value-added" networks and switches that does either of the following functions: (1) Processes or facilitates the processing of information received from another entity in a nonstandard format or containing nonstandard data content into standard data elements or standard transactions. (2) Receives a standard transaction from another entity and processes or facilitates the processing of information into nonstandard format or nonstandard data content for the receiving entity".
3. Healthcare provider includes individual physicians, physician group practices, dentists, other healthcare practitioners, hospitals, nursing facilities, etc.
4. Implementation Guides for "transaction sets" are available at www.wpc-edi.com/hipaa or 1-800-972-4334.
5. Clearinghouses may accept and translate non-standard to standard and vice versa.
6. You can complete a simple model compliance plan and file for an extension at www.cms.gov/hipaa/hipaa2/ascaform.asp
Michael J. Compagni, Esq.
Scolaro, Shulman, Cohen, Fetter & Burstein, P.C.
315-471-8111
