Converting interim HIPAA fixes into long-term strategies: HIPAA still represents an opportunity for MCOs to strengthen their financial efficiency, but
Health Management Technology

Following years of anxiety, a sense of urgency and increased expenditures on information technology, the final deadline for healthcare organizations to be compliant with the Health Information Portability and Accountability Act (HIPAA) is days away. Oct. 16, 2003, marks the deadline for compliance with the transaction and code sets standards mandated by HIPAA.

Unlike Y2K preparations that had a definite endpoint, HIPAA is an ongoing effort for organizations to maintain compliance with the privacy standards as well as the transaction standards that come into play during infrastructure upgrades and implementation of new systems. In addition, the transaction standards themselves may become a moving target, as the industrywide adoption of them is likely to uncover areas where the standards need to evolve. With the deadline date nearly here, most organizations are now formulating the next steps in their long-term HIPAA strategies.

While many organizations are prepared for the final transaction and code sets deadline, numerous managed care organizations (MCOs) are still wrestling with becoming compliant or going back to fix the interim solutions that helped them achieve compliance. In fact, a recent report from Forrester Research ("Will Web Services Kill WebMD?" June 2003) surveyed 27 health plans and found that, as of June, 51 percent were still configuring systems to accommodate HIPAA transaction and code sets.

HIPAA compliance is more than just a regulatory issue for MCOs; it is a business driver and an opportunity to implement increased efficiencies. Managed care organizations must realize that noncompliance with any aspect of HIPAA is likely to result in lost business and decreased revenues. Healthcare providers and business partners, also regulated by HIPAA mandates, will be pressured to conduct business with compliant organizations. As a result, providers will shift their business to the MCOs that can deliver timely and accurate reimbursements for claims that are submitted using HIPAA-compliant transaction formats. In essence, the HIPAA-compliance challenges of an organization become a business opportunity for its competitors.