Frequently asked questions about the proposed HIPAA standards

1)    Why are national standards for electronic health care transactions being proposed?

Both Congress and the health care industry agree that standardization of electronic data exchange for administrative and financial health care transactions would improve efficiency and effectiveness of the health care system.  Standards would achieve cost and time savings on administrative handling by instituting one format for all health care providers.

2)    Who is affected by these standards?

All health plans, including Medicare and State Medicaid programs, all health care clearinghouses, and any healthcare provider choosing to submit electronic transactions.

3)    How were the standards chosen?

HIPAA required the Secretary to consult with the National Uniform Claim Committee (NUCC), the National Uniform Billing Committee (NUBC), the American Dental Association and the Workgroup for Electronic Data Interchange (WEDI).  Advice was also received and considered from the National Committee on Vital and Health Statistics.

Using criteria established to determine a standard’s suitability, the overwhelming majority favored use of X12N standards for all but the retail pharmacy claims, which would maintain the National Council for Prescription Drug Programs (NCPDP) standard already in widespread use.

These standards were adopted from the private sector, as required by HIPAA.

4)    What transactions are covered by these proposed rules?

The following administrative and financial health care transactions would be affected:

·        Health claims or equivalent encounter information

·        Enrollment/disenrollment in a health plan

·        Eligibility for a health plan

·        Health care payment and remittance advice

·        Health plan premium payments

·        Health claim status

·        Referral certification and authorization

·        Coordination of benefits

5)    What is the effect on State law?

The federal standards will preempt state laws that are contrary (impossible to comply with both the State and federal requirements) or “less protective” of privacy. 

Exceptions will be allowed where the Secretary deems necessary such as in cases of fraud and abuse prevention, in regulating controlled substances, and relative to the privacy of individually identifiable information.  Additional areas of State authority to be maintained are issues regarding public health and related reporting and reporting and access to records for the purpose of regulation.

6)    How will the standards be enforced?

The Secretary has the authority to impose up to $25,000 in fines per year for each violation of a standard ($100 per violation).  Those found guilty of wrongful disclosure of health information can receive a criminal fine of up to $250,000 and/or a prison term of ten years.

7)    Are implementation guides and data dictionaries for these standards available?

The Washington Publishing Company has copies of the X12N implementation guides available for downloading at www.wpc-edi.com/hipaa/ or for printed copies, contact them at (310) 949-9740.  Information regarding the NCPDP guides is available at their web site at www.ncpdp.org.

8)    When will these standards go into effect?

The effective date will be 60 days after the final rule is published in the Federal Register.  The following is a timeline of implementation requirements:

·        Health plan (other than small health plan)

Would have to comply no later than 24 MONTHS after the effective date of the final rule.

·        Small health plan

Would have to comply no later than 36 MONTHS after the effective date of the final rule.

·        Health care providers and health care clearinghouses

Would be required to begin using the standard by 24 MONTHS after the effective date of the final rule