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HIPAA Transactions & Code Sets: Extension
Procedures For New Compliance Deadline Announced
By Richard Marks, Rebecca Williams, Gerald Hinkley
[April 2002]
On Thursday, March 28, 2002, the U.S. Department of Health & Human
Services (DHHS) released the model form for covered entities under
the Health Insurance Portability & Accountability Act of 1996 (HIPAA)
to request a year's extension in complying with the HIPAA Transaction
& Code Set (TCS) rules. This extension is the result of the Administrative
Simplification Compliance Act passed by Congress in late 2001 and
signed into law by President Bush in January 2002. The present TCS
compliance deadline is October 16, 2002 (except for small health
plans). With the extension, the new deadline will be October 16,
2003; however, the extension is not automatic. A covered entity
must submit an extension request by October 15, 2002 to receive
the extension.
FILING PROCEDURE
The model form (or a similar form) must be filed with DHHS to obtain
the extension. Filing is sufficient to obtain the extension - there
is no approval process with respect to the submitted form. Since
DHHS has an electronic filing system in operation, the form can
be filed electronically. DHHS will send an electronic acknowledgement
of an electronic filing. The model form also may be filed by mail.
In that case, DHHS will not acknowledge receipt. DHHS recommends
that covered entities filing by mail use a return receipt, so they
will have proof of filing.
COMPLETING THE FORM
The form and DHHS's instructions for filling it out can be found
at www.cms.gov/hipaa/hipaa2/default.asp. The form requires each
covered entity to furnish information about its implementation strategy
and budget for complying with the HIPAA TCS rules. DHHS expects
every covered entity to have a TCS implementation strategy and budget.The
DHHS extension form divides the implementation plan into three phases:
(1) HIPAA Awareness
(2) Operational Assessment
(3) Development and Testing
The form features a series of short questions. Some are "yes-no"
or multiple choice (from a menu of choices).Others require supplying
a date (such as when a phase of TCS compliance was or will be completed)
or a short answer.
SHOULD COVERED ENTITIES FILE FOR THE TCS EXTENSION
In most cases, the answer will be "yes."
The simple fact is that DHHS and various "Designated Standards
Maintenance Organizations" or "DSMOs" still are refining the implementation
guides to the TCS standards. Changes to the TCS implementation guides,
often referred to as the "addenda," are expected to be issued by
DHHS in the coming months. It will be more efficient and less expensive
for covered entities to implement and test the standards after the
next round of changes.Those changes, however, are unlikely to be
made before the current deadline in October 2002. That is one reason
why an extension makes sense.
Moreover, a covered entity's compliance with the TCS standards
is dictated to some degree by the compliance of its business associates
and trading partners. Because the TCS standards are going to change
and because most of the industry will seek the extension, chances
are good that many business associates and trading partners will
not, in fact, meet the TCS standards in October 2002. A covered
entity likely will not be able to accurately represent to DHHS that
it is in compliance with the TCS rules, if its trading partners
apply for the extension and require the covered entity to submit
or accept noncomplaint transactions. If a covered entity planned
to rely on a clearinghouse to meet the TCS standards and that clearinghouse
will be filing for an extension, then the covered entity will need
to request an extension as well.
Finally, DHHS made every attempt to simplify the extension process.The
form is streamlined and easy to complete.There is no filing fee
for submitting an extension request. And grant of the extension
occurs upon filing.
Any covered entity (other than a small health plan) that does not
request an extension must be in compliance with the existing TCS
standards as of October 16, 2002 - fewer than seven months away.
It seems likely most covered entities will seek the extension.
THINGS TO KEEP IN MIND
This extension is for Transaction & Code Sets only. It does not
change the compliance date for the HIPAA Privacy compliance, which
is April 14, 2003.
To obtain the TCS extension, a covered entity is required to begin
testing its TCS implementation no later than April 16, 2003, six
months before the extended TCS compliance deadline of October 16,
2003.Therefore, covered entities should not use the extension as
an excuse to procrastinate.
Finally, a covered entity that files the form and obtains the TCS
compliance extension is representing to DHHS that it has a HIPAA
TCS implementation plan and budget. A covered entity should be very
careful in filling out the form, to ensure the responses accurately
reflect the entity's TCS plan and budget.
CONCLUSION
Ready or not for TCS, a covered entity should seriously consider
taking advantage of the opportunity to request a compliance extension.
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