I understand that, under the statute, if a health plan performs a business function covered by a standard transaction, it must be able to support the electronic standard for the transaction, regardless of whether, prior to the compliance date, it conducts the transaction electronically or not. Is the same true for a health care provider or the sponsor of a group health plan?

9/17/2001:

No, the rules do not apply in the same way to health care providers and plan sponsors.

It is correct that health plans must be able to support the standard transactions for which a standard has been adopted and which they conduct. This is based on section 1175(a)(1) of the Act, which provides that if a person desires to conduct a transaction with a health plan as a standard transaction, the health plan may not refuse to conduct the transaction as a standard transaction. Thus, if a health plan supports the transaction in any form, it must be prepared to accept it as a standard transaction.

The requirement of section 1175(a)(1) does not apply to health care providers. Thus, unlike health plans, health care providers are not required by the statute to have the capability to conduct electronically the transactions for which standards have been adopted and may instead conduct them by paper. However, once the applicable compliance date has occurred, if a provider elects to conduct electronically a transaction for which a standard has been adopted, it must conduct it as a standard transaction.

Sponsors of group health plans are not covered entities (entities described at section 1172(a) of the Social Security Act). They are legally distinct from the group health plans they sponsor, and it is only the latter entities that meet the statutory definition of "health plan." Since the requirement of section 1175(a)(1) applies only to health plans, it does not apply to the plan sponsors.