HIPAA 2012, A Compliance Odyssey

January 1, 2012 has come and gone. Are you compliant with the new regulations? Most may have met the January 1, 2012 deadline, some may not. CMS released a reminder last week relaying the importance of maintaining focus on compliance with Version 5010 while beginning to plan for the transition to ICD-10.

Although the Version 5010 deadline was on January 1, 2012, because of the 90-day enforcement discretion period for all HIPAA-covered entities upgrading to Version 5010 (ASC X12 Version 5010), CMS’ Office of E-Health Standards and Services (OESS) revealed that it will not initiate enforcement action prior to April 1, 2012. CMS decided on the 90-day enforcement period due to the number of submitters, the volume of transactions, and other testing data used as indicators of the industry’s readiness to comply with the new standards have been low across some industry sectors. CMS also understands that there are many providers who have not yet had their practice management system software upgraded by their vendor and have not been able to test it with your key trading partners. 

OESS will, however, accept complaints associated with compliance with Version 5010, NCPDP D.0 and NCPDP 3.0 transaction standards during the 90-day period beginning January 1, 2012, as enforcement is mainly complaint-driven. CMS has indictatedthat, upon receipt of a complaint, it will notify the filed against entity of the complaint, and provide them with an opportunity to demonstrate compliance, or to submit a corrective action plan. CMS has the discretion to conduct compliance reviews or on-site evaluations of covered entities’ procedures and practices, to verify that they are compliant in how they exchange the standard transactions or use the national identifiers. CMS also has the authority to impose financial penalties on any entity that is non-compliant and has failed to correct their violations. HIPAA legislation permits civil monetary penalties of not more than $1.5 million per calendar year for a violation of an identical provision.

 CMS commented that version 5010, NCPDP Telecom D.0 and NCPDP Medicaid Subrogation 3.0 standards represent significant improvement over the current standard versions. CMS further noted that NCPDP Telecom D.0 addresses certain pharmacy industry needs, while NCPDP Medicaid Subrogation 3.0 allows state Medicaid programs to recoup payments for pharmacy services in cases where a third party payer has primary financial responsibility. According to CMS, version 5010 in particular provides more functionality for transactions such as eligibility requests and health care claims status “Implementation of Version 5010” also is a prerequisite for using the updated ICD-10 CM diagnosis and ICD-10-PCS inpatient procedure code set in electronic health care transactions effective October 1, 2013.

Providers are encouraged to continue with internal testing and external testing of Version 5010 transactions with trading partners to ensure compliance for Version 5010. CMS has made clear that although enforcement action will not be taken prior to April 1, 2012, it is important that organizations continue to move forward to meet Version 5010 requirements as soon as possible. Therefore, if you have not yet created a plan for Version 5010, that should be in the works so that the compliance deadlines may be met.

Upgrading to Version 5010 is a critical first step for the nationwide transition to ICD-10 that will take place on October 1, 2013. It is important that this process is completed, so that providers may continue to prepare their organizations for the ICD-10 transition in October, 2013.