Tuesday, September 30, 2003

Not ready for prime time HIPAA?
With Corrine Parver

Q: What will happen if my DMEPOS company isn’t prepared by Oct. 16th to comply with new HIPAA Standards?

A. While payor industry support remains strong for the HIPAA transaction and code set standards, provider support and readiness are lagging. Many companies report being ill-prepared, without time for adequate testing.

CMS recently announced that it’s working on the possibility of implementing a “contingency plan” for companies that contract with Medicare. The plan would allow Medicare’s partners time to make needed changes to their business operations to ensure that any disruptions in operations are minimal. HHS recognizes that transactions often require the participation of two covered entities, and that non-compliance by one covered entity may put the second in a difficult position. HHS’ guidance clarified that covered entities, which made a good faith effort to comply with HIPAA standards, may implement contingencies to maintain operations and cash flow.

CMS has stated it is actively assessing the readiness of its trading partners to make sure that cash flow to Medicare providers will not be disrupted. Nonetheless, the agency’s contingency plan is to continue to accept and process transactions submitted in “legacy formats” while their trading partners work through issues related to implementing the HIPAA standards. Medicare will have made a decision on whether to deploy this contingency no later than Sept. 25.

In reviewing whether to deploy its contingency plan, CMS will assess the number of Medicare submitters who are testing and in production with its contractors. If Medicare deploys this contingency, it will be for all Medicare fee-for-service contractors.

Corrine Parver is a healthcare partner with Dickstein Shapiro et al: 202-775-4728 or