Journal of AHIMA - February 2012

WHEN IT COMES to HIPAA transaction standards, healthcare organizations like to play by their own rules. Although the standards were intended to streamline the transmission of financial and administrative transactions, such as health plan eligibility requests and billing claims status checks, they left too much room for interpretation.

As a result, providers, vendors, clearinghouses, and health plans have developed their own rules for following the standards when exchanging information. The outcome has been disorganization and discrepancies between trading partners— hardly the simplification and efficiency envisioned when the standards were written.

But a mandate enacted by the Affordable Care Act requires the industry to adopt operating rules that dictate how HIPAA transaction standards are used. The first two operating rules pertain to transactions on health plan eligibility and claims status, and they must be implemented by the end of the year.

Simplification at Last?

The creation of mandatory operating rules for HIPAA transaction standards is years in the making—and will continue to 2016—but it should lead to reduced costs and simplified work processes within organizations and across the industry.

A History of the Problem

First drafted into HIPAA legislation in 2000, the transaction standards were intended to unify the healthcare industry on ways to exchange financial and administrative data. But differences in state laws, individual system complexities, proprietary software, variances in internal business operations, and a lack of federal enforcement led to large inconsistencies in how organizations employed the standards.

There has never been guidance on how to use the standards, says Dan Rode, MBA, CHPS, FHFMA, vice president of advocacy and policy at AHIMA. Once organizations began adopting their own ways of using the standards, simplification went out the window.

Trading partners would only use parts of the standard, including information specific to their needs but not other data that could be used for broader administrative simplification, Rode says. Health plans would agree to trade different information with different providers, further varying use of the standards. Other organizations would disregard the standards entirely and make up their own rules. One health plan may handle patient eligibility requests entirely differently than another, causing administrative headaches for providers and their vendors.