Practice Management Alert

What billing offices need to know about HIPAA contingency plans

Physician practices breathed a huge sigh of relief when the Centers for Medicare & Medicaid Services decided to take a lenient approach to the Health Insurance Portability and Accountability Act (HIPAA) electronic filing rule.
 
The rule went into effect Oct. 16, but CMS implemented a contingency plan to accept noncompliant claims - at least for a while - and urged other payers to do the same.
 
But practices can't afford to stay behind the HIPAA curve forever, since no one knows when HIPAA enforcement will be in full force. While there's no word at press time that HIPAA-related denials are coming down the pike, it's still early in the game. If you're not ready when HIPAA is definitively enforced, your practice could face a cash-flow disaster.

"We're waiting for the other shoe to drop," says consultant L. Michael Fleischman with Gates Moore & Co. in Atlanta.
 
And billing offices can be on the front lines in coming to terms with HIPAA crunch time.
 
Budget for potential problems. Billing managers should be sure their practices budget for HIPAA glitches. That means putting aside a reserve of funds to pay the practice's basic expenses for two months in case there is a drop in receivables, says Catherine A. Brink, CMM, CPC, president of Healthcare Resource Management Inc. in Spring Lake, N.J.
 
You need to figure out how much money you need to get by for two months - focusing on payroll first, then monthly expenses that can't be skipped without a penalty, she says.
 
This is especially important for smaller practices because, in general, they aren't quite as up to speed on HIPAA and they're more likely to get by week-to-week.
 
Indeed, budgeting for HIPAA is something that you should have done to anticipate the Oct. 16 deadline - but if you haven't done it yet, be sure to do so right away, experts say.
 
Of course, only the most prosperous practices are going to have two months' worth of cash at hand. Don't despair if you're not among them - but get to the bank. "If you can't set aside cash reserves, then make sure you have a line of credit in place to help operate the practice for a couple months," Fleischman says.
 
Watch for HIPAA snafus. "Be on the lookout for unusual claims denials," Fleischman says. He says that carriers should use standard language making it clear that a claim is denied because of HIPAA transaction-standard noncompliance. If you get one of these denials, act quickly to rectify the situation.
 
Fleischman says that the government's approach to HIPAA enforcement will be educational rather than punitive - good news for physician practices. But no one wants to deal with cash-flow delays, and the sooner the problem gets fixed, the better.
 
Rev up your billing meetings. Your billing department may have had monthly meetings in the past, but that's not good enough now, Brink says. Billing departments should meet weekly or even daily with managers to keep close tabs on the revenue stream. If the money coming in starts to fall off, frequent meetings - and robust communication between the billing department and management - will allow you to respond quickly and minimize the damage.