Without a doubt, the question that practitioners most frequently asked the Practice Directorate staff leading up to the Oct.15 Health Insurance Portability and Accountability Act (HIPAA) transaction rule compliance deadline was, "I don't submit any electronic claims. Do I still need to file the extension form?"
Technically, a psychologist who does not, and will not in the future, submit electronic claims will not have to worry about the standardized electronic claims format required by the transaction rule. However, given the few minutes necessary to file the extension form, the directorate (along with the APA Insurance Trust) advised psychologists to file the form to keep all future options open.
Similarly, we recommend that psychologists become compliant with the HIPAA privacy rule--an entirely separate rule from the transaction rule--prior to its April 14 deadline.
More on the history and reasons for our recommendations follows.
The transaction rule was first promulgated in October 2000 to create a uniform and standardized electronic claims process in the health-care system. Congress, through HIPAA, believed the administration of health care would be more efficient and less costly to the extent that all parties involved use a single electronic claims submission process. The transaction rule implements this congressional intent.
The deadline for compliance with this rule was originally Oct. 16, 2002, two years from the date the rule was issued. Late last year, Congress decided to provide additional time for compliance. It did so by enacting a law extending the compliance deadline by one year until Oct. 16, 2003, as long as a compliance extension form was filed by the original 2002 deadline.
The rule does not require psychologists to use electronic claims. Nor does the rule prevent third-party payers from requiring participating health-care professionals to submit claims electronically. Indeed, we anticipate that health-care payers that are equipped to receive electronic claims may require health professionals who participate in their program to file electronic claims.
Medicare, for example, is expected to require electronic claims from providers. Importantly, the law directing Medicare's use of electronic claims may create an exemption for certain solo and small-group practitioners, although the Center for Medicare and Medicaid Services (CMS) has not yet issued an implementing rule to confirm this exemption.
The fact that CMS has not yet issued such a rule and the relative ease of filing for the transaction rule extension led us to recommend that psychologists file the extension. The practical effect of filing is that if a psychologist submits an electronic claim between now and October 2003, the claim will not need to be in the HIPAA standardized format. By contrast, if a psychologist has not filed the extension and wanted to use an electronic claim before October 2003, the standardized format would be required.
The deadline for HIPAA privacy rule compliance is April 14. Compliance with this rule is required if a psychologist transmits identifiable health information in electronic form in connection with financial transactions related to health-services delivery.
Here, too, Members frequently ask: "I don't use computers and I don't take third-party payment. Do I need to comply with the privacy rule?"
Again, technically, a psychologist who does not use electronic transactions and who does not take third-party payment would not currently need to comply with the privacy-rule requirements. However, to the extent that the psychologist may wish to alter his or her practice at any point in the future by taking third-party payment in an increasingly electronic private market, privacy-rule compliance would be required at the very instant the practice is altered. No grace period to become compliant would be available, as is now the case.
It is also important to understand that there are circumstances under which the need for privacy-rule compliance may be triggered by actions outside of the psychologist's control. If, for example, a psychologist faxes a "paper claim" to a third-party payer, according to the rule, an electronic transaction technically has not occurred. However, if the insurer does not receive the fax in paper form but directs the communication into its computerized electronic system, an electronic transaction has occurred. Alternatively, if a billing service used by a psychologist con-verts from a paper to an electronic system, the psychologist would be required to be in compliance with the privacy rule to continue using the billing service.
For these reasons, we advise that psychologists get their practices into compliance before the April deadline. Information prepared by the APA Practice Organization and the Insurance Trust to help psychologists take the necessary steps is available at www.APAPractice.org.