June 29, 2001
The Honorable Tommy Thompson
Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, D.C. 20201
Dear Secretary Thompson:
The National Committee on Vital and Health Statistics (NCVHS) recognizes the importance of the appropriate application of health information technology as a means to improve the quality, efficiency and effectiveness of health care while lowering costs. Accordingly, implementation of the administrative simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) is essential. On May 31, 2001 the Subcommittee on Standards and Security held hearings on the subject of industry readiness relating to Administrative Simplification and implementation of HIPAA regulations. Testimony was heard from a number of industry representatives and advisory bodies including the Association for Electronic Healthcare Transactions (AFEHCT), Blue Cross Blue Shield Association (BCBSA), Medical Group Management Association (MGMA), National Council for Prescription Drug Programs (NCPDP), Accredited Standards Committee X12N (ASC X12N), Health Level Seven (HL7), American Medical Association (AMA), the Workgroup on Electronic Data Interchange (WEDI), and state Medicaid agencies. From these testimonies as well as written statements and letters, the Committee concluded the following:
1. There was overall agreement that HIPAA standards are necessary and viable. In all the testimony and comments heard by the committee, there was strong support for the administrative simplification provisions of HIPAA and for the efforts of HHS to promulgate the implementing regulations. Any concerns expressed related primarily to the speed and timing of the regulations and the time frames for compliance.
2. There was general agreement that all the final rules, especially those for Security, Claims Attachments, and Provider Identifiers, should be published as soon as possible. The reasons for this position were different for each entity, and included:
- The final Security Rule is necessary to properly implement the final Privacy Rule.
- The final Provider Identifier Rule is necessary to allow payers to design changes to or replacement of claim processing systems so they are not dependent on the intelligence currently incorporated into multiple payer assigned provider- identifiers.
- The final Health Care Claims Attachment Rule is needed to increase the percentage of claims that can be processed electronically and to reduce subsequent paperwork.
3. There was testimony from a number of industry sources for a delay in HIPAA standard compliance dates as well as from a number of others that oppose a delay. The NCVHS has not heard a delay proposal that we can support. A delay that is not coupled with a strategy to productively utilize the additional time is unlikely to contribute to a successful implementation. Supportable proposals for delay must include a rationale and a sequence of measurable events that would lead to successful implementation for the whole health care industry.
The NCVHS recommends that you take a leadership role in providing for orderly transition and implementation. This role could include:
1. Providing early guidance. HHS could provide early guidance to the industry through letters or white papers revealing the directions being taken by HHS. For example, a letter or white paper illustrating the size, format and rules for assignment for the National Provider Identifier (NPI) could help covered entities make progress on system changes before the final rules were issued.
2. Allowing flexibility in enforcement. Realizing that the administrative simplification subtitle of HIPAA requires compliance within 24 months, the NCVHS recommends that HHS explore the flexibility available for enforcement under section 1176 of HIPAA and publish the intent to utilize this flexibility in enforcement to ameliorate industry concerns. HHS may do this by monitoring the implementation situation in the industry and granting criteria-based leniency in enforcement as deemed necessary.
3. Opposing delays. The NCVHS opposes any of the proposed delays in the compliance dates for the HIPAA standards. The Committee particularly opposes open-ended delays of compliance dates, such as that currently found in Senate bill 836, as being detrimental to the industry and the possibility of a successful implementation process. It is imperative that we continue to promote the urgency of working on the implementation of standards and not undermine current implementation efforts.
The NCVHS heard testimony that a fixed delay up to one year would not result in significant stoppage and would allow the industry to continue on an orderly implementation schedule. Any delay greater than one year would incur the risk of significant stoppage and disruption. Because most entities in the healthcare system must comply with the standards in order to provide the benefits for all, this is a critical point. If a delay is considered, we recommend that it be accompanied by a schedule of intermediate accomplishments so that the industry continues to move forward towards an orderly and successful implementation. For example:
- Health care claims and remittance advice transactions could continue on the current timetable, and other transactions could be delayed to support a phased implementation; or
- All transactions could be required to be ready for implementation by the compliance date, but additional time could be given for implementation and testing with trading partners; or
- All transactions could be required for implementation by the compliance date, but the requirements for implementing adopted code sets and/or identifiers could be delayed; or
- All transactions could be required for implementation by the compliance date, but statutorily authorized extensions in limited cases could be granted based on demonstration of significant progress and a plan for full implementation.
4. Promulgating and implementing rapidly. The Committee recognizes that to achieve rapid publication of the final rules it is essential that you apply the necessary resources to reaching this goal. This would include devoting the required means to promulgating the rules and implementing the identifiers. Prolonging the process of assigning identifiers will cause increased expenses to those who must run parallel systems to accommodate the old and new numbering systems simultaneously. The NCVHS recommends that, once the system for assigning provider identifiers is ready, identifiers should be issued very rapidly to all providers so that transition time is limited.
5. Supporting changes. The Committee believes that HHS should expedite the HIPAA change process so that changes in standards that are voted on by the industry and recommended by NCVHS are promulgated in final rules as soon as possible. To assure this process, the NCVHS recommends that you provide the necessary leadership and resources to have these changes advanced as soon as industry consensus is reached.
6. Exploring consistent standards for paper. Because the data requirements of the HIPAA standards for electronic claims are not identical to those used on the current paper claim forms, the NCVHS recommends that HHS ask the National Uniform Claim Committee (NUCC) and the National Uniform Billing Committee (NUBC) to explore ways, such as issuing an implementation guide for each paper form, to make the data used on paper forms consistent with the HIPAA standards.
We appreciate the opportunity to advise you on these issues.
John Lumpkin, M.D., M.P.H.
Chair, National Committee on Vital and Health Statistics
c.c. Data Council Co-chairs