October 16, 2003, was the deadline for complying with the transactions and code sets provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and Greater New York Hospital Association (GNYHA), through its HIPAA Transaction Sets Workgroup, has been working intensively with its member institutions and major payers to achieve compliance and minimize provider cash flow disruption.

Background
The administrative simplification contained in HIPAA has three separate components: transaction standards and code sets, privacy, and security. They require health plans to accept standard formats for all transactions related to enrollment, pre-certification, claims processing, and payment remittance, and require providers that submit these transactions electronically to use those standard formats. It was expected that many hospital and long term care providers, however, may not have been ready to submit claims in the new HIPAA-prescribed format as of October 16, 2003, and were at risk for some disruption in cash flow due to an elongated payment cycle. Several initiatives are available to hospitals and nursing homes to mitigate this negative cash flow impact, including ensuring payer support of a transition period during which providers might send claims as they do today.

Payer Support of Transition Period
GNYHA has been advocating with commercial and governmental payers for a transition period to ensure there is no disruption in cash flow while implementing these HIPAA transaction requirements. The Centers for Medicare & Medicaid Services (CMS) gave payers permission to implement such contingency plans, including accepting claims in current formats, in July 2003.

Several payers have agreed to such a transition period including Medicare and the NYS Medicaid program. In August 2003, Medicaid announced its contingency plan, which includes a four-month transition period during which providers can send claims in the current format while working toward HIPAA compliance. CMS similarly will accept transactions (e.g., claims) in the current format on and after October 16. CMS will evaluate provider implementation progress on an ongoing basis to determine how long its contingency plan will remain in place. Other payers, including HIP and GHI, have also agreed to a transition period.

A transition period will facilitate a smoother transition to HIPAA compliance with less disruption in payer and provider operations. Providers, however, have continued to work diligently toward compliance since many payers have not announced support of a transition period.

Medicaid Postpones HIPAA Implementation
As noted earlier, Medicaid announced a four-month transition period in August 2003 during which providers may submit claims as they do today. More recently, Medicaid announced that due to unanticipated systems issues, it will not be able to accept HIPAA-compliant claims—that is, providers must submit claims as they do today, until otherwise notified.