HIPAA Validation

What is HIPAA?

In 1996, in an effort to reduce Health Care costs, Congress passed the Health Insurance Portability and Accountability Act of 1996, commonly known as HIPAA. One part of this legislation requires health plans and providers to use a common format when electronically communicating health information. The Secretary of the Department of Health and Human Services (HHS) was put in charge of determining a standard that could accommodate this requirement. ASC X12 Insurance Subcommittee developed a set of implementation guides to meet these requirements and were ultimately approved by HHS as the common format to meet the electronic data requirements. These implementation guides were based off the Version 4 Release 1 of the ASC X12 North American Standards for Electronic Data Interchange. HIPAA legislation required compliance of these standards by October 16, 2002, for large providers and payers. In December 2001, the President signed into law the Administrative Simplification Compliance Act (ASCA). This act allowed a one year extension to the mandatory compliance date making compliance mandatory by October 16, 2003.

HIPAA Regulations regarding Transactions Validation

In this time of increasing financial, operational and regulatory pressures on health plans, payers and providers, executives are discovering that electronic transactions present as many challenges as they do opportunities.

HIPAA legislation mandated the use of standard transactions and code sets between trading partners, in an attempt to ease the burden of telephonic and paper communication between payers, providers, employers and other stakeholders. However, as almost everyone has discovered many backend processes and systems have very specific data content and format requirements, allowable under HIPAA, in order to achieve the highest possible levels of automation.

Contrary to the intent of the law, in many cases, automation rates have gone down, not up-creating unintended costs and negative impacts for payers, providers and consumers. HIPAA transactions are not the only standards that healthcare organizations must support to be effective and efficient. Other standards such as HL7, NCPDP, NSF, UB92 and even proprietary file formats must be supported, given the wide variety of trading partner requirements.

All these requirements have created a number of questions that organization leadership should address to be responsive to their markets. The answers to these questions can determine whether an organization can create and maintain a strategic advantage leveraging electronic trading relationships.

HIPAA Validation Complexities

As healthcare providers prepare for the HIPAA transactions compliance deadline on October 16, 2003, many are relying on clearinghouses to resolve the issues that surround reformatting, editing and transmitting of the new, standardized electronic transactions. These providers intend simply to continue a long-standing practice of passing claims and other transactions to a clearinghouse, which will transform, edit and forward the transactions to specified payers for processing and payment. However, though many healthcare CEOs, CFOs and CIOs may not understand all of the complexities of HIPAA validation, some are becoming increasingly concerned that reliance on their clearinghouses may not ensure continued positive cash flow after October 16th. In many cases, their concern is justified.

Succinctly stated, HIPAA transactions validation goes far beyond providing a transaction in an agreed-upon format. HIPAA validation also applies to several thousand combinations and permutations of correct data elements, and is subject to varying interpretation of the regulations by certifying organizations and participating trading partners. In light of these complexities, your organization leadership should pause and verify that your clearinghouse will accept the responsibilities and perform the role that you expect.

Should you trust your clearinghouse to ensure that each transaction is successfully validated before sending it to the payer for payment? Perhaps you do not feel as confident of the clearinghouse as you would like, but do not know what questions to ask in order to increase your comfort level.

HIPAA Validation in Action

There are several HIPAA Validation solutions on the market, however the most modern and rapidly developing one is HIPAA Vadalition service provided by HIPAAValidator.com.

HIPAA Compliance Validator is a complex online solution based on the Boost Clusters engine, proving data handling, validation, conversion, audit report generation. The main goal is to help our customers identify the problems with their HIPAA document at the early stages and to eliminate the costs related to errors and claim returns. HIPAA Compliance Validator is an intermediate step in between the creation of the document by Provider and receiving of this document by Payer. You can integrate the service on any step of this process - it can be used by Providers to ensure that the claims are valid and to reduce the looses and by Payers to make sure that claims, received from Providers are valid and can be sent for further handling to internal systems.

How it works

HIPAA Compliance Validator system contains of several layers: Front-end, Inbound security, De-identification, Validation and Conversion, Report creation, Outbound security. Data workflow is as below.

Front-ends - user submits the file either through the online form (convenient for single document submission) or using the In-Stream technology of Boost Clusters engine. After data is received it gets SSL encrypted with highest level possible within current industry standards. This is Inbound security layer. Such extreme pre-cautions are required to prevent any data leaks during the whole process. Due to the Inbound security layer, there is no need to worry about the data disclosures or leaks. As a part of the inbound security process, HIPAA Validator performs data de-identification to prevent any parts of the system from accessing the secure personal information that may be sent in the HIPAA document. After that, secured data comes to validation and conversion. All these steps are powered by Boost Clusters engine which provides full set of compliance validation procedures. For user's convenience it is possible to get the XML representation of the HIPAA file. This XML data can be then used in the wide variety of the XML routing and mapping engines to satisfy your trading partner agreements. Based on the validation results user gets the Audit report with the detailed explanations on all the errors current document contains with the recommendations on errors elimination. To prevent data from being lost or stolen on the outbound end, Outbound security layers has been added to finalize the security cycle.