Client Bulletin No. 342
September 24, 2002

HIPAA’S ELECTRONIC DISCLOSURE REQUIREMENTS
October 16, 2002 - ARE YOU READY?

The electronic disclosure requirements under the Health Insurance Portability and Accountability Act ("HIPAA") will become effective for most covered entities on October 16, 2002. Health plans with more than $5 million in premium payments, health care providers and health care clearinghouses must have the capacity to electronically process eight types of transactions using the code set designated by federal regulation. Small health plans (those with $5 million or less in annual premium payments) have an additional year -- until October 16, 2003 -- to comply.

The following transactions are subject to the electronic disclosure rules:

1. Requests to obtain payment, and the necessary accompanying information from a health care provider to a health plan for health care.
   

2. An inquiry from a health care provider to a health plan, or from one health plan to another health plan, to obtain eligibility information.
   

3. A request for authorization for health care including a request to refer an individual to another health care provider.
   

4. An inquiry to determine the status of a health care claim.
   

5. The transmission of participant information for enrollment or to terminate coverage.
   

6. The transmission from a health plan to the health care provider’s financial institution of a payment, information about the transfer of funds or payment processing information, as well as the transmission from a health plan to a health care provider of explanation of benefits.
   

7. The transmission from the entity arranging health coverage (employer) to the health plan of a payment, information about the transfer of funds, as well as transmission of payment processing information, including payroll deductions and detailed remittance information about individuals for whom payment is being made.
   

8. The transmission from an entity to a health plan to determine the relative responsibility of the health plan for claims and payment information.

Even the entities subject to the 2002 deadline can obtain a one-year extension of the deadline for meeting these rules by filing a Compliance Statement with the Department of Human Services no later than October 15, 2002. This extension can be filed electronically at: www.cms.hhs.gov/hipaa/hipaa2/ascaform.asp.

As most employers know, the HIPAA privacy rules take effect April 14, 2003, for health plans with more than $5 million in annual premium payments as well as for health care providers and health care clearinghouses. By this date these covered entities must have appointed a privacy officer, trained employees who have access to personal health information about the privacy rules, designed and implemented policies and procedures designed to safeguard personal health information, amended plan documents, and prepared and distributed notices to plan participants advising them of their privacy rights.

If we can assist your company in complying with these rules or requesting an extension of the effective date, please contact Ira Friedrich (404-230-6714) or Carl Cannon (404-230-6717) in Constangy’s Atlanta, Georgia, office or Dana Thrasher (205-252-9321) in Constangy’s Birmingham, Alabama, office.