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Health Insurance
Portability and Accountability Act of 1996
(HIPAA)
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identify the need for HIPAA
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At times the need for
healthcare legislation is identified and comes directly from
Congress. A leader in addressing healthcare needs of the U.S.
population is Senator Edward Kennedy from Massachusetts. He
has spearheaded healthcare legislative processes for the past 25
years. Recently he was recognized by the Harvard School of
Public Health for his health policy reform efforts. In his
acceptance speech, Kennedy said "Spiraling health care and insurance
premium costs have driven the increased number of the uninsured.
Reducing administrative costs by using information technology could
save billions of dollars a year." Kennedy was the leader in
introducing and steering to passage the Health Insurance Portability
and Accountability Act of 1996 (HIPAA). |
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Focus of HIPAA
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The two major focuses of HIPAA
are health insurance reform (Title I) and administrative
simplification (Title II). The Centers for Medicare and
Medicaid Services (CMS), located in Baltimore, is charged with
responsibility for implementing the legislation and accompanying
regulations. Title I is designed to
protect workers and their families when a worker changes or loses
his/her job. Many people find themselves with no health
insurance coverage during times of job transition or unemployment.
If a family member has a pre-existing condition, many insurance
companies will not cover this person when offering health insurance
to a new employee. Therefore many families feel trapped.
Workers are restricted from seeking new job opportunities with new
companies because their loved one will loose all healthcare
insurance coverage. Title I addresses pre-existing conditions.
It also provides provision for portability of health insurance
coverage.
Title II requires CMS to establish national
standards for electronic healthcare transactions. This section
of the law also requires the development of a single, unique
identifier for all providers, health plans and employers.
Patients' rights to security and privacy of their health data is a
major part of this legislation. With these new requirements,
we should see increased improvement in the efficiency and
effectiveness of all our healthcare delivery systems. With
electronic data interchange, a person should be able to access
critical health information no matter where he or she is traveling
throughout the U.S. Image: good information (that is
quickly available) leads to good patient evaluation and decision
making. Also with security and privacy protections, persons
should feel confident in sharing pertinent healthcare information
with their provider. Image: comfort in knowing that
one's most private and confidential information will be treated as
private and confidential. |
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Mandated timetables for
implementation of HIPAA
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The compliance deadlines set
for HIPAA administrative simplification are:
- October 15, 2002: deadline to
submit a compliance extension form for electronic healthcare
transactions and code sets
- October 16, 2002: electronic
healthcare transactions and code sets - all covered entities
except those who filed for an extension and are not a small health
plan
- April 14, 2003: privacy - all
covered entities except small health plans
- April 16, 2003: electronic
healthcare transactions and code sets - all covered entities must
have started software and systems testing
- October 16, 2003: electronic
healthcare transactions and code sets - all covered entities who
filed for an extension and small health plans
- October 16, 2003: Medicare will
only accept paper claims under limited circumstances
- April 14, 2004: privacy - small
health plans
- July 30, 2004: employer
identification standard - all covered entities except small health
plans
- April 21, 2005: security standards - all
covered entities except small health plans
- August 1, 2005: employer identifier
standard - small health plans
- April 21, 2005: security standards
- small health plans
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Submission of Medicare claims |
A major deadline in HIPAA
implementation is October 16, 2003. On that date, Medicare
intermediaries and carriers will accept ONLY claims (bills)
electronically submitted and meeting all the reporting requirements.
If a patient needs to submit a claim himself or herself, the
Secretary of Health and Human Services has stipulated that these
claims may be submitted in paper format. Providers and
healthcare plans may comply with the new standards by securing the
appropriate equipment and systems in their offices or they may elect
to use a healthcare billing clearinghouse. |
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Penalties |
There are both civil and
criminal penalties for failing to be in compliance with HIPAA.
Civil penalties mean payment of money fines while criminal penalties
mean prison terms. The government is taking a strong stand on
health insurance reform and administrative simplification
(electronic transmission of data, national identifiers, privacy and
security) |
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