Health Insurance Reform: Standards for Electronic Transactions. 7. Applicability to Paper Transactions and Other Entities


Proposal Summary: Although there are situations in which the use of the standards is not required (for example, health care providers may continue to submit paper claims and employers and other noncovered entities are not required to use any of the standard transactions), we stressed that a standard may be used voluntarily in any situation in which it is not required (63 FR 25276).

a. Comment: The majority of commenters suggested that the transaction standards and their codes sets, in some manner, apply to paper transactions. They suggested that the required data elements in the standard transactions also be required for paper transactions and that any required identifiers also be required for use on paper transactions.

The commenters stated that there could be two consequences if the same data were not required on paper and electronic transactions. First, health plans would have to maintain two systems: one for the processing of electronic claims; and one for the processing of paper claims. The same argument was also applied to identifiers - it was argued that health plans would need to maintain two sets of identifiers: one for paper claims; and one for electronic claims. Second, many health care providers would revert to paper claims if the data requirements were less restrictive than those for electronic claims.

Response: These are powerful arguments from a cost benefit standpoint. While the HIPAA statute provides the Secretary with the authority to declare these standards applicable to all transactions, including those on paper, we chose at this point to focus on standards for electronic transactions. Most of the paper forms currently in use today cannot accommodate all of the data content included in the standard transactions. This does not prevent health plans from requiring the same data, including identifiers for paper transactions as is required by the HIPAA regulations with respect to electronic transactions.

b. Comment: Several commenters recommended that employers/sponsors who perform EDI should be required to use the standards because they play a critical role in the overall administration of health care. These entities are the major users of the enrollment and disenrollment in a health plan transactions, and are often major payers of health premiums.

Response: The administrative simplification provisions of HIPAA do not require noncovered entities to use the standards, but noncovered entities are encouraged to do so in order to achieve the benefits available from such use. For example, employers and sponsors play a key role in the administrative functions of health care, e.g. the enrollment and disenrollment of individuals in health plans. But because the legislation does not specifically require employers /sponsors to use the transaction standards, we are not extending the requirement to them in the regulation. Health plans are, however, free to negotiate trading partner agreements with employers and sponsors that require the use of standard transactions.