HPII Regulatory Alert: Workgroup urges patience on HIPAA compliance

Entities making good-faith effort,’ WEDI says

The Workgroup for Electronic Data Interchange (WEDI), which advises the Department of Health and Human Services (HHS) on issues related to administrative simplification under HIPAA, says the agency should show continued patience as covered entities continue to make progress in implementation of the HIPAA transactions and code sets (TCS) requirements.

WEDI chairman Ed Jones gave HHS Secretary Tommy Thompson results of a December 2003 session at which WEDI took testimony on TCS standards implementation status, data content requirements, and implementation sequencing.

In general, Jones said in a March 8 letter, hearing testimony indicated that:

  1. Covered entities are making good-faith efforts to move toward standard claim compliance under HHS’ July 2003 contingency guidelines.
  2. HHS guidance to implement contingency plans has helped ease the transition.
  3. Most covered entities are focusing on implementing compliant claims rather than on other TCS standards.
  4. Cost benefit from TCS has not been fully realized.
  5. A small number of large payers and providers account for a large but unknown volume of compliant transactions.
  6. A large but unknown number of covered entities have not yet achieved TCS standards compliance with their trading partners because of difficulties in completing testing with them.
  7. Payment disruptions to providers, providers dropping claims to paper instead of sending noncompliant electronic transactions, and health plans rejecting noncompliant claims have occurred during the transition.
  8. Covered entities are experiencing some data content challenges that require further guidance from the federal government.
  9. Covered entities need rapid deployment of standard provider and health plan identifiers to achieve interoperability.

Based on that testimony, WEDI made recommendations in four areas — continue the HHS policy of allowing contingency plans, enhance the implementation process, revise and enhance the standards development process, and validate costs and benefits of TCS implementation.

WEDI says it recommends HHS continue its contingency plans with an emphasis on moving health plans and clearinghouses into full compliance while providers complete testing and implementation. Until a number of issues identified in the December testimony are resolved, the organization says, covered entities only may be able to implement the standard format without supplying all of the required data content.

To enhance the implementation process, a major consensus that emerged in the testimony is that the TCS implementation is trying to do too much at one time. "For example," the WEDI letter says, "the current TCS rule mandated several transactions at one time, even though each transaction represented a significant amount of effort. Claims status, eligibility, and authorization/referral can be separated from the claim and payment transactions and implemented on unique timelines."

WEDI recommended that future rules consider and establish realistic timelines for completing all required actions for successful implementation. If it appears that an implementation can’t be accomplished in a reasonable period, it says, the implementation should be divided into component parts that can be completed separately.

WEDI also supports the concept of a staged implementation and recommends that software vendors be considered in staging, since most providers, payers, and clearinghouses use translators and other purchased software and are unable to be ready without availability of compliant software.

Revision and enhancement of the standards development process could be helped by reaching out for provider input in the standards development process, WEDI says. Also, business decision makers should be encouraged to participate in standards development.

According to the WEDI letter, the cost of implementing the HIPAA TCS has exceeded industry expectations. It recommends that realistic cost and benefit studies be conducted to validate proposed savings and encourage industry movement toward cost-effective solutions.

It also recommends that HHS schedule follow-up studies to determine the effectiveness of the implementation, and that the health care industry continue to identify ongoing opportunities to drive costs from the systems and simplify administration of the health care system.