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HIPAA Consult: Answers to your questions about. . .


Submitting noncompliant claims; online transactions and vendors; improving efficiency; readying for the deadline


HIPAA Consult

Answers to your questions about . . .

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Choose article section...Submitting noncompliant claims Online transactions and vendors Improving efficiency Readying for the deadline

By Ronald Sterling, CPA

Submitting noncompliant claims

Q: Will health plans accept non-HIPAA-compliant electronic claims after the transaction rules go into effect on Oct. 16?

A: No. But some clearinghouses and billing services will take a CMS-1500 claim and turn it into a HIPAA-compliant claim. The problem is that some information required for a HIPAA-compliant claim isn't found on a CMS-1500. For example, there's a release-of-information field that asks about a patient's privacy status.

Also, the leading practice management vendors have upgraded their existing systems to allow offices to generate HIPAA-compliant claims, but many smaller firms aren't prepared.

Online transactions and vendors

Q:Besides claims, what other online transactions are covered by HIPAA rules?

A: The other transactions include eligibility, claims status, electronic remittance advice, and service review, which lets you request a preauthorization or referral authorization. Every software vendor currently offers some form (not necessarily HIPAA-compliant) of electronic claims, but few products currently support electronic EOBs or service review, and not many support claims status.

Improving efficiency

Q:Are the health plans I do business with obligated to supply this data?

A: HIPAA requires payers to be able to do these transactions. And if a payer invests in the necessary software, it wants practices to take advantage of it. The payers don't want to keep paying employees to handle questions about claims status or eligibility or service review, or to sit there stuffing envelopes with EOBs. Some payers have said that after Oct. 16, providers will have to request this information online.

This could prove to be a boon to physician offices. It's easier to check eligibility electronically, for instance, than to copy the insurance card and hope it's still valid. Online utilization management, similarly, will make test and surgical scheduling much more efficient.

Readying for the deadline

Q:What should I do to get ready for the Oct. 16 deadline?

A: You should contact your practice management software vendor and find out what changes were made to support the HIPAA transaction rules. Some vendors have just thrown up their hands and said, "We're not going to be ready." In that case, you might have to buy a new practice management system.

Other vendors have said they're ready, but the software provides default answers to questions in the new HIPAA data fields. For example, some software products plug a Yes answer for patients' permission to release information. If your office has exceptions, you will want the ability to override the standard answers.

You should also look at your own policies and procedures to figure out what will be needed to support HIPAA-compliant transactions. For instance, you'll have to instruct your staff to start entering the privacy information on each patient into the system. And if the vendor has added a screen next to the charge entry screen to collect the HIPAA information, make sure that your staff is filling it out, or your claims will be incorrect.


Ronald Sterling, CPA, is president of Sterling Solutions Ltd. in Silver Spring, MD. He can be reached at rbsterling@aol.com. This department answers common HIPAA-related questions. It isn't intended to provide specific legal advice. If you have a question, please submit it via e-mail to mehipaa@medec.com, or by regular mail to Medical Economics, 5 Paragon Drive, Montvale, NJ 07645, ATTN: HIPAA CONSULT. If we select your query, we'll address it in an upcoming issue. Your name will not be used.


Ronald Sterling. HIPAA Consult: Answers to your questions about. . .. Medical Economics Aug. 22, 2003;80:19.

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