TO: All Providers FROM: CareFirst of Maryland, Inc. DATE: August 30, 2001 SUBJECT: Health Insurance Portability and Accountability Act (HIPAA) Reminders This bulletin serves to provide important information concerning HIPAA. Providers are now urged to begin to prepare Background In 1996 Congress passed into law the Health Insurance Portability and Accountability Act (HIPAA). This Act is comprised of two major legislative actions: Health Insurance Reform and Administrative Simplification. The Administrative Simplification provisions of HIPAA, direct the federal government to adopt national electronic standards for automated transfer of certain health care data between health care payers, plans, and providers. This will enable the entire health care industry to communicate electronic data using a single set of standards thus eliminating all nonstandard formats currently in use. Once these standards are in place, a health care provider will be able to submit a standard transaction for eligibility, authorization, referrals, claims, or attachments containing the same standard data content to any health plan. This will simplify many clinical, billing and other financial applications and reduce cost The transaction Final Rule is the first of the Administrative Simplification requirements to be published in the Federal Register. It was published on August 17, 2000 and requires providers to use the applicable standards for electronic transactions such as: Querying patient eligibility; checking claim, status, requesting prior authorization where required for certain items of durable medical equipment; or requesting payment for the limited number of drugs covered by Medicare. These standards will be fully implemented October 16, 2002. When fully implemented, Medicare contractors and other health care payers will be prohibited from accepting or issuing transactions that do not meet the new standards. What can providers do now Health care providers and suppliers who conduct business electronically are urged to begin preparations for the implementation of HIPAA. Providers/suppliers will be responsible for taking the necessary steps to upgrade their software to conform to the new standards. This can be done either independently or through commercial vendors. Providers may also consider arranging for the services of a commercial clearinghouse or billing service knowledgeable about the new requirements to translate data on their behalf. Maryland Medicare Part A will be ready for testing in the near future. Additional information regarding testing will be forthcoming. How to Get More Information Providers may obtain more information about EDI under Medicare and HIPAA by consulting the following Web sites: EDI standards currently used by Medicare www.hcfa.gov/medicare/edi.edi.htm X12N version 4010 transaction implementation guides www.wpc-edi.com/HIPAA Text of Administrative Simplification law and regulations http:// aspe.os.dhhs.gov/admnsimp X12N meeting and workgroup meeting information and minutes www.disa.org Providers that would like to increase their use of EDI, including use of X12N transactions already implemented by Medicare, should contact our EDI department at (410) 561-4299 Kenya Mceachern (410) 561-4122 Ishwar Ravindranath Look for further important HIPAA information in upcoming bulletins. THIS BULLETIN SHOULD BE SHARED WITH ALL HEALTH CARE PRACTITIONERS AND MANAGERIAL MEMBERS OF THE PROVIDER/SUPPLIER STAFF. ALL BULLETINS ISSUED AFTER OCTOBER 1, 1999 ARE AVAILABLE AT NO COST FROM OUR WEB SITE www.marylandmedicare.com.