HHS Final Rule to HIPAA

The Health and Human Services have announced the “final rule” to adding a number of provisions to strengthen privacy and security to the Health Information and Accountability Act of 1996 (HIPAA). The new provisions also strengthen the Health Information Technology for Economical and Clinical Health (HITECH). It was published to the federal register on January 25, 2013.


The final rule improves individuals privacy and protection of their health information and also enhances an individuals rights. The final rule added further limitations on the use of Protected Health Information (PHI) to be used for marketing, fundraising, and sale of health information without the individuals permission. It also restricts the release of information to a health plan on cash pay services without the individuals consent. Patients are also able to request copies of medical records in electronic form from providers.

The Final Rule also increases the liability for covered entities, business associates, contractors and sub contractors under HIPAA. Penalties for breaches and noncompliance have increased to a maximum penalty of $1.5 million per violation. The changes to HITECH identify when breaches of information must be reported to HHS and if a report is necessary to individuals affected by the breach.

The Final Rule went into effect on March 26, 2013. All covered entities under HIPAA (health care providers, health plans, business associates, contractors, sub contractors) should review contracts and any agreements for modification and implementation of the final rule. HHS as issued a 180 day compliance date for covered entities and business associates to implement the final rule, but has also given an extension of up to one year for covered entities and business associates to modify contracts and comply with the final rule.




What is that 141,000 number mean? That is just the total number of ever more specific diagnosis codes that comes along with the Tenth Edition of the International Classification of Disease (ICD-10). A little bit of an increase from the Ninth Edition (ICD-9) which totaled 17,000 codes. The department of Health and Human Services (HHS) extended the compliance date from what would have been October 1 of this year, to October 1, 2014. Although the date has been pushed back once again, HHS urges all covered entities under the Health Information Portability and Accountability Act (HIPAA) to continue, or start, preparations for the transition to ICD-10.

A transition of this magnitude requires extensive planning and preparation in all aspects of a medical practice and throughout the industry. It is recommended that timelines be established as soon as possible to help manage tasks and keep the transition from becoming too overwhelming.

The Centers for Medicare & Medicaid Services (CMS) have created an example timeline to help illustrate the process. Click the link below to view the timeline.


What does this mean for a physician?

Most changes will be on coding and coding staff becoming familiar with the new format of codes and the multiple options for a specific diagnosis. It will also take some coordination from physicians in being more specific with their diagnosis when charting. In ICD-9 there would typically be one option for a particular condition, where as in ICD-10 there may be multiple. Below is an example of of the differences of what is reported using ICD-9 and what will be required with ICD-10.

Example: 1                                      


784.0 – Headache


G441 – Vascular Headache Not elsewhere classified

R51 – Headache

Example: 2


784.59 – Speech Disturbances


R4702 – Dysphasia

R4781 – Slurred Speech

R4789 – Other Speech Disturbances

Note: ICD-10 will not affect CPT codes.

Although diligent efforts are being made industry wide for a smooth efficient transition, a change of this scale is not without it’s bumps and hiccups, foreseen and unseen alike. Payment, and claims processing delays are a major concern. With the 5010 transition last year which was the electronic claim file format upgrade from 4010, payment and claims processing delays did cause cash flow problems nationally. Cash flow is a major concern to any organization, group, private practice or covered entity under HIPAA. To help organizations prepare as best they can and avoid cash flow issues, it is being recommended that organizations begin preparations now! Some consultants have also suggested providers and organizations build a line of credit that can sustain them anywhere from two to six months after the compliance date to manage delays in payments.

Training of coding and other staff is also a vital component for preparations for the ICD-10 transition. Studies showed that after the ICD-10 transition in Canada, staff productivity dropped by 50 percent in the first six months. A drop in productivity means that fewer patient claims will be submitted timely and more money paid to staff for increased time thus affecting cash flow and the bottom line. It is imperative that physicians and organizations help staff to understand the importance of preparing for the transition to avoid productivity drops.

Contacting vendors is also another key cog in the wheel of preparation. Contact and follow up with, EHR/EMR vendors, billing software vendors, outsourced billing providers, electronic clearinghouses, and payers. Software testing with clearinghouses and payers will typically be handled through the software vendors, or outsourced service providers but none the less, providers and organizations should follow up to ensure preparation and timelines have been established.

Some helpful hints to plan for the ICD-10 transition:

  • Start a plan
  • Establish a timeline
  • Contact vendors
  • Staff Training
  • Build a line of credit

If you’re asking yourself, “when do i start planing for ICD-10?”. THE TIME IS NOW!


Medicare Claim Hold

CMSTechnical issues with certain parts of the quarterly system release have been identified by The Centers for Medicare & Medicaid Services (CMS). Claims that were affected were, Home Health final claims, outpatient Critical Access Hospital (CAH) and Rural Health Clinic (RHC) where money was applied to beneficiary deductible, and the remittance advice summary payment amount for Medicare Advantage inpatient prospective payment system (IPPS) with indirect medical education. However, actual payments and the claim level payment amounts on remittance advices were correct, Claim dates that were affected were dates of service or “Through Dates” on or after April 1, 2013. Final Home Health, CAH, RHC and IPPS claims with dates of service “Through Dates” prior to April 1, 2013 were unaffected.

CMS has instructed all Medicare claims administrators to hold these specific claim types until April 14, 2013. CMS expects to have the fixes for these claims issues implemented by that day. The affected claims will then be released for processing on April 15, 2013. The claim hold is expected to have minimal impact on provider cash flow. web change alert Due to current law, clean electronic claims are not paid sooner than 14 calendar days after the date of receiving the claim. Paper claims are held 29 days after the date of receiving the claim.

Physician Quality Reporting System (PQRS)

stethoscope notepadThe Physician Quality Reporting System (PQRS), formerly the Physician Quality Reporting Initiative (PQRI), is designed to create incentives and also adjustments for eligible professionals to report quality information back to the Centers for Medicare & Medicaid Services (CMS).

For what purpose???

CMS intends PQRS to create a “quality standard” of satisfactory reporting. In doing so the hope is to lower the possibility of fraudulent claims and maximize the level of payment to providers.

Eligible professionals who successfully report the quality measures required to CMS on at least 50 percent of Medicare Part B and Railroad Medicare covered services, are eligible to receive a 0.5 percent payment incentive on their total estimated allowed charges to the Medicare Part B Physician Fee Schedule (PFS) during the reporting period (calendar year). The estimated Allowed charges of course are based on covered professional services under the PFS. Eligible professionals who do not meet the required 50 percent of the Physician Quality Reporting System during the specified reporting period, will be subject to a 2 percent adjustment of their total allowed covered charges to the PFS, meaning a 2 percent reduction in Medicare Part B and Railroad Medicare eligible payments.

To begin reporting quality measures for the Physician Quality Reporting System requires no registration or forms. Quality measures are reported to CMS on Medicare Part B and Railroad Medicare covered services one of four ways. The first (1) being on Medicare Part B and Railroad Medicare claims. The second (2) being, a qualified physician quality reporting registry. The third (3), transmission to CMS through a qualified electronic health records (EHR/EMR) software or product. Fourth (4), transmission through a qualified Physician Quality Reporting System vendor.

The Physician Quality Reporting System is in effect for 2013 for eligible professionals to receive incentive payments of 0.5 percent for successfully reporting quality measures on 50 percent of their Medicare Part B and Railroad Medicare patients in 2014. The adjustment or payment reduction of 2 percent is also in effect for eligible professionals who do not report quality measures on at least 50 percent of Medicare Part B and Railroad Medicare patients.

Physician Quality Reporting System eligible professionals include:


Doctor of Medicine

Doctor of Osteopathy

Doctor of Podiatric Medicine

Doctor of Optometry

Doctor of Oral Surgery

Doctor of Dental Medicine

Doctor of Chiropractic


Physician Assistant

Nurse Practitioner

Advanced Practice Registered Nurse

Clinical Nurse Specialist

Certified Registered Nurse Anesthetist

Certified Nurse Midwife

Clinical Social Worker

Clinical Psychologist

Registered Dietitian

Nutrition Professional



Physical Therapist

Occupational Therapist

Qualified Speech – Language Therapist