HIPAA Transaction Extension (Compliance Plan)

April 19, 2004

HIPAA Transaction Extension (Compliance Plan)

The Health Insurance Portability and Accountability Act's first compliance date is scheduled for October of this year for the Transaction Standard. The Centers for Medicare and Medicaid Services (CMS) recently published a Extension Form (Model Compliance Plan) that covered entities should use in requesting a one year extension for compliance with the Transaction and Code Set Standards final rule that is scheduled to go into effect in October of this year. The compliance plan is the result of congressional action taken in December of last year. The compliance plan legislation provides an additional year (until October 2003) for those covered entities (physicians, hospital, health plan, and clearinghouses) to come into compliance with the Transaction and Code Set Standards. Those entities needing additional time need only to file the on-line form or facsimile. The Extension Form/Model Compliance Plan form can be accessed by going to the AMA HIPAA website or by visiting the CMS HIPAA website. The deadline for submission of the compliance plan is October 15, 2002.

The information needed to complete the model compliance plan is relatively simple information. Physicians and other providers need to understand there are no right or wrong answers to get the extension. Congress specifically required the filing of the extension form to get providers and other covered entities to recognize that there was work to do and costs to incur in order to make their practices/businesses ready for the new Transaction Standard.

Our assessment of the Extension Form/Model Compliance Extension leads us to suggest that all physicians/groups should consider filing for the extension and to do so as quickly as possible. There are several reasons for doing so.

  1. Filing for the extension is a relatively simple process that can be done on-line or by using a paper form. There are no right or wrong answers on the extension form. There is no approval process. Submitting the form is all that is necessary to obtain the extension.
  2. CMS has yet to publish promised proposed modifications to the Transaction Standard. Those modifications will further alter the data that needs to be submitted by the covered entity. Covered entities will not know how to change their practices to accommodate the Transaction Standard modifications until the proposed modifications have been published as final rules. The revised final standards will likely not be published until after the October 16, 2002 deadline.
  3. We anticipate that most health plans/insurers and other covered entities will also be asking for the extension. They will be seeking the extra time to be certain that their changes work with their provider communities.
  4. Filing for the extension will not preclude the physician from becoming compliant prior to the October 2003 extension date.
  5. Covered entities that are not compliant with the Transaction Standard requirements by October 2002 and have not filed for the year's extension can be excluded from the Medicare program.

For these reasons we believe physicians would be best served by filing the request for the extension. Questions regarding the HIPAA Extension (Compliance) Form should be directed to the Medicare contractor serving your area. Questions regarding this memo can be directed to Jack Emery of the AMA Washington Office at 202 789-7414 or jack_emery@ama-assn.org.