© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 1 McGraw-Hill Chapter 1 The Goal of HIPAA: Administrative Simplification HIPAA for Allied Health Careers

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 2 McGraw-Hill LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Discuss the reasons for passage of the Health Insurance Portability and Accountability Act (HIPAA). 2.Differentiate between the two major provisions of HIPAA, Title I and Title II. 3. Discuss the improvements to health insurance coverage under Title I. 4.Identify the five key provisions of HIPAA Administrative Simplification. 5.Define the concept of preemption. 6. List the four areas in which standards under HIPAA Administrative Simplification have been legislated. 7.Describe the HIPAA rule-making process. 8.Describe the types of facilities and health care professionals who are considered covered entities under HIPAA. 9.Differentiate between a covered entity and a business associate. 10.Describe how allied health personnel can keep up with HIPAA standards and enforcement in their careers.

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 3 McGraw-Hill Key Terms Administrative Simplification business associate (BA) Centers for Medicare and Medicaid Services (CMS) clearinghouse Consolidated Omnibus Budget Reconciliation Act (COBRA) covered entity (CE) creditable coverage Department of Health and Human Services (HHS) direct provider electronic data interchange (EDI) Federal Employees Health Benefits (FEHB) program Federal Register group health plan (GHP)

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 4 McGraw-Hill KEY TERMS (cont’d) Health Insurance Portability and Accountability Act (HIPAA) of 1996 health insurance reform health plan indirect provider Notice of Proposed Rule-Making (NPRM) Office for Civil Rights (OCR) preemption provider small health plan Title I (health insurance reform) Title II (Administrative Simplification) transaction

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5 McGraw-Hill What Is HIPAA? HIPAA is the Health Insurance and Portability Act of HIPAA has two parts: Title I and Title II The three main purposes of HIPAA are: 1. Increase health care efficiency and effectiveness. 2. Protect and enhance patient rights. 3. Restore trust in the health care system.

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 6 McGraw-Hill Title I: Health Insurance Reform Insurance Background –Private insurance includes Employer-sponsored group health plans Federal Employees Health Benefits Program (FEHB) Individual Plans –Federal programs, such as Medicare and Medicaid are also covered by other federal laws.

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 7 McGraw-Hill Title I: Health Insurance Reform (cont’d) Portability and Required Coverage: COBRA and HIPAA. Title I: –Limits exclusions for preexisting conditions and prohibit discrimination based on health status. –Employees with creditable coverage get special enrollment opportunities. –After exhausting COBRA, some individuals may purchase individual plans.

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 8 McGraw-Hill Title I: Health Insurance Reform (cont’d) Additional Laws Affecting the Availability of Insurance Coverage –Newborns’ and Mothers’ Health Protection Act—covers length of hospital stays after childbirth. –Women’s Health and Cancer Rights Act—covers hospital stays and breast reconstruction after cancer. –Mental Health Parity Act—provides parity for mental health benefits (except for substance abuse or chemical dependency).

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 9 McGraw-Hill Title II: Administrative Simplification Purpose and Extent of Administrative Simplification –Cut costs by using electronic data interchange (EDI) –Each exchange is a transaction.

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 10 McGraw-Hill Title II: Administrative Simplification (cont’d) Administrative Simplification Standards –HHS had to establish standards. Five provisions are: 1.Standards for electronic health transactions. 2.Mandated use of standards. 3.Privacy regulations. 4.Preemption of state law. 5.Penalties for violation.

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 11 McGraw-Hill Title II: Administrative Simplification (cont’d) HIPAA standards have three main areas: 1.Privacy standards 2.Security standards 3.Electronic transactions The Office of Civil Rights (OCR) is responsible for HIPAA enforcement. Centers for Medicare and Medicaid (CMS) is the federal agency responsible for health care.

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 12 McGraw-Hill Title II: Administrative Simplification (cont’d) Rule-Making Process 1.Rule is drafted and reviewed. 2.A Notice of Proposed Rule-Making (NPRM) is released. 3.Public comment time is set. 4.Rule is revised by HHS. 5.Final rule is published in the Federal Register.

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 13 McGraw-Hill Covered Entities: Complying with HIPAA A covered entity is: –An organization or professional who provides health care –An organization or professional who transmits health information electronically

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 14 McGraw-Hill Covered Entities: Complying with HIPAA (cont’d) Covered Entities: Health Plans, Providers, and Clearinghouses Three types of covered entities must adhere to HIPAA 1. Health plans 2. Providers 3. Clearinghouses

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 15 McGraw-Hill Covered Entities: Complying with HIPAA (cont’d) Health plans include: –Group health plans –Health insurance issuers –Most parts of Medicare –Medicaid –Issuers of Medicare supplemental policies –Issuers of most long-term care policies –Employee benefit plans that include health care –Tricare –Champva

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 16 McGraw-Hill Covered Entities: Complying with HIPAA (cont’d) Health plans (cont’d) –The Indian Health Service –The Federal employees Health Benefits Program (FEHB) –Approved state child health plans –State high-risk pools –Other plans paying for medical care under the Public Health Service Act

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 17 McGraw-Hill Covered Entities: Complying with HIPAA (cont’d) Providers –Hospitals –Critical access hospitals –Skilled nursing facilities –Comprehensive outpatient rehabilitation facilities –Hospices –Home health agencies –Pharmacies

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 18 McGraw-Hill Covered Entities: Complying with HIPAA (cont’d) Providers (cont’d) –Physician practices –Dental practices –Chiropractors –Podiatrists –Osteopaths –Therapists –Laboratories

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 19 McGraw-Hill Covered Entities: Complying with HIPAA (cont’d) Clearinghouses –Companies that help providers with electronic transactions and recordkeeping –Convert health information to meet HIPAA standards

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 20 McGraw-Hill Covered Entities: Complying with HIPAA (cont’d) Business Associates –Law firms –Accreditation agencies –Accountants –IT contractors –Medical transcription companies –Independent contractors working for CEs –Collection agencies –Third-party claim administrators (TPAs)

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 21 McGraw-Hill Staying Up to Date HIPAA outreach Listserv HHS home page The National Committee on Vital and Health Statistics (NCVHS) The Accredited Standards Committee (ASC X12) The National Council for Prescription Drug Programs (NCPDP)

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 22 McGraw-Hill Staying Up to Date (cont’d) Designated Standard Maintenance Organizations (DSMO) X12 implementation guides Workgroup for Electronic Data Interchange (WEDI) Strategic National Implementation Process (SNIP) Medicare Electronic Data Interchange (EDI)