HIPAA: WHAT'S IT ALL ABOUT?
The pervasive buzzword in healthcare is HIPAA, the Health Insurance Portability and Accountability Act, passed by Congress in 1996. Gradually, everyone in the healthcare business is hearing the word and learning that it's very, very important for everyone in the industry to know about and to "comply" with. The problem is, very few people are sure they know what HIPAA is really all about. Too bad, because it is about to become a very pervasive, and very, very expensive part of the business known as healthcare.

Expensive? The implementation of HIPAA is estimated to cost between $12 billion and $50 billion in healthcare cash. Some of that expense will be borne by every physician who is engaged in the delivery of medical care. While certain costs will be carried, reluctantly, by participating doctors, other laggards will pay their required costs plus very large fines and penalties for trying to avoid the inevitable. And what is the inevitable?

The law is aimed at reducing hospital administration costs and ensuring patient privacy by streamlining the electronic communications of every healthcare business. The law deals with three major issues:

• Standardizing communications
• Patient privacy
• Security

The communications regulation states that every healthcare provider, insurance company and electronic clearinghouse that deals with health records must send and receive information about payments, claims and diagnoses in the exact same way. Depending on the type of information they're sending, it must be delivered using one of three Electronic Data Interchange (EDI) standards. EDI is an electronic method long in use for business-to-business transactions.

This would eliminate the current mess of proprietary formats and diverse standards in use by contemporary participating companies.

Originally mandated for compliance by October 16, 2002, most companies will apply for the one-year extension recently voted by Congress.

The privacy aspect of the law specifies what personal health information is considered private, who can and cannot see that information and the minimum standards for protecting patients' privacy. It also grants patients the right to look at their own records, find out who else has looked at them and make addendums. Compliance is required by April 14, 2003.

The security part of HIPAA is less clear because Congress hasn't written it yet. When done, this part will specify the mechanisms, policies and procedures that organizations need to keep data (like medical records) secure.

When all these details are developed and implemented, one of the biggest cash bonuses to the medical profession will be the simplicity, reliability and reduced costs of medical billing. Everything will point to using a specialist here since all indicators will show that the benefits (consistent, cost-effective, full cashflow) can best be found in a specialized third party billing service. Do you know one?

Excerpt from "
Medical Billing Secrets: How to build a profitable home-based business"
by Merlin B. Coslick
Copyright 2002 Electronic Medical Billing Network, Inc.