What is HIPAA?

HIPAA is the acronym for the Health Insurance Portability and Accountability Act of 1996. The Centers for Medicare & Medicaid Services (CMS) is responsible for implementing various unrelated provisions of HIPAA, therefore HIPAA may mean different things to different people.

On August 21, 1996 President Clinton signed into law the Health Insurance Portability and Accountability Act (HIPAA) also known as the Kennedy-Kassebaum Act, Public Law 104-191. This law impacts all areas of the health care industry and was designed to provide insurance portability, to improve the efficiency of health care by standardizing the exchange of administrative and financial data, and to protect the privacy, confidentiality and security of health care information.

HIPAA is comprised of two major legislative actions: Health Insurance Reform and Administrative Simplification. The Health Insurance Reform provisions have been in effect for some time and require implementation of certain practices by health plans and insurers regarding portability and continuity of health coverage. Administrative Simplification mandates standards for electronic data interchange (EDI) and code sets, seeks protections for the privacy and security of patient data and establishes uniform healthcare identifiers.

Does HIPAA apply to you and your practice?

YES, HIPAA applies to Healthcare Providers, Billing Agencies, Hospitals and clearinghouses, to read more visit: http://www.HIPAA.org

Are small providers exempt from HIPAA?

No. If a provider transmits any of the designated transactions electronically, it is subject to the HIPAA Administrative Simplification requirements regardless of size.

Small providers are exempt from the ASCA provision that excludes paper claims from Medicare coverage effective October 16, 2003. Small providers will be able to continue to submit paper claims. ASCA defines a small provider or supplier as:

1. A provider of services with fewer than 25 full-time equivalent employees or...
2. A physician, practitioner, facility or supplier (other than provider of services) with fewer than 10 full-time equivalent employees.

Misunderstandings about HIPAA.

Although HIPAA helps protect you and your family in many ways, you should understand what it does NOT do:

1. HIPAA does NOT require employers to offer or pay for health coverage for employees or family coverage for their spouses and dependents;
2. HIPAA does NOT guarantee health coverage for all workers;
3. HIPAA does NOT control the amount an insurer may charge for coverage;
4. HIPAA does NOT require group health plans to offer specific benefits;
5. HIPAA does NOT permit people to keep the same health coverage they had with their old job when they move to a new job;
6. HIPAA does NOT eliminate all use of pre-existing condition exclusions; and
7. HIPAA does NOT replace the State as the primary regulator of health insurance.
8. Does the law require Medicare claims to be submitted electronically after October 2003?

ASCA prohibits HHS from paying Medicare claims that are not submitted electronically after October 16, 2003, unless the Secretary grants a waiver from this requirement.

It further provides that the Secretary must grant such a waiver if there is no method available for the submission of claims in electronic form or if the entity submitting the claim is a small provider of services or supplies.

Beneficiaries will also be able to continue to file paper claims if they need to file a claim on their own behalf. The Secretary may grant such a waiver in other circumstances.

We will publish proposed regulations to implement this new authority as they arise.

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