[Federal Register Volume 67, Number 72 (Monday, April 15, 2002)]
[Notices]
[Pages 18216-18227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9197]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-0007-N]
Health Insurance Reform: Standards for Electronic Transactions;
Announcement of the Availability of a Model Compliance Plan
AGENCY: Centers for Medicare & Medicaid Services, HHS.
ACTION: Notice.
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SUMMARY: This notice announces the availability of instructions for,
and a model of, a compliance plan that covered entities may use to
request an extension to the compliance deadline for standards for
electronic transactions and code sets that covered entities must use
for those transactions.
FOR FURTHER INFORMATION CONTACT: Elizabeth Holland, (410) 786-1309.
SUPPLEMENTARY INFORMATION:
I. Background
On August 21, 1996 the Congress enacted the Health Insurance
Portability and Accountability Act of 1996 (HIPAA), Pub. L. 104-191,
which included provisions to address the need for standards for
electronic health care transactions and other administrative
simplification issues. Through subtitle F of this law, the Congress
added to title IX of the Social Security Act (the Act) a new part C
(consisting of sections 1171 through 1179 of the Act), entitled
``Administrative Simplification.'' The purpose of this part is to
improve the Medicare program, the Medicaid program, and the efficiency
and effectiveness of the health care system, by encouraging the
development of a health information system through the establishment of
standards and requirements to enable the electronic exchange of certain
health information.
Section 1172 of the Act makes any standard adopted under part C of
the Act applicable to the following entities as defined in section 1171
of the Act:
All health plans.
All health care clearinghouses.
Any health care provider who transmits any health
information in electronic form in connection with transactions referred
to in section 1173(a)(1) of the Act.
Section 1175(a)(3) of the Act establishes that each person to whom
a standard or implementation specification applies is required to
comply with the standard no later than 24 months (or 36 months for
small health plans) following its adoption. With respect to
modifications to standards or implementation specifications made after
initial adoption, compliance must be accomplished by a date designated
by the Secretary. This date may not be earlier than 180 days after the
Secretary adopts the modification.
In the August 17, 2000 Federal Register (65 FR 50312), we published
a final rule entitled ``Health Insurance Reform: Standards for
Electronic Transactions'' that implemented the provisions of sections
1171 through 1179 of the Act. These provisions established new national
standards with which all covered entities must comply. The effective
date of these standards for all covered entities, with the exception of
small health plans is October 16, 2002, and the effective date for
compliance by small health plans is October 16, 2003. In addition, the
August 17, 2000 final rule established a definitions section at 45 CFR
160.103 that includes definitions for the following terms-- (1) Covered
entities; (2) health plans; (3) small health plans; (4) health care
clearinghouses; and (5) health care providers.
However, on December 27, 2001, the Administrative Simplification
Compliance Act (ASCA) (Pub. L. 107-105) provided for a 1-year extension
of the deadline for compliance with the electronic health care
transactions standards and code sets for all covered entities, with the
exception of small health plans, that request an extension on or before
October 15, 2002. Covered entities that submit a request by the
deadline will have until October 16, 2003 to come into compliance with
the standards.
In addition, Pub. L. 107-105 required the Secretary to develop a
model compliance plan by no later than March 31, 2002. In developing
this model compliance plan, the Secretary consulted with organizations
described in sections 1172(c)(3)(B) and (f) of the Act as organizations
to be consulted in developing national electronic health care
standards. One of these organizations, the Workgroup for Electronic
Data Interchange (WEDI), developed a series of recommendations for the
model plan. On February 7, 2002, these recommendations were discussed
at a public hearing of the National Committee on Vital and Health
Statistics (NCVHS).
II. Provisions of the Notice
This notice provides information to covered entities, with the
exception of small health plans, that will not be compliant with the
electronic health care transactions and code sets standards by October
16, 2002. As required by Pub. L. 107-105, we are providing a model
compliance plan that covered entities may use to submit to request an
extension. These entities may use one of the following options to file
for a 1-year extension (that is, until October 16, 2003):
Submit the on-line compliance plan, which is available on
our website at www.cms.hhs.gov/hipaa.
Submit a paper copy of the on-line compliance plan via
mail.
Submit their own version of a compliance plan that
provides equivalent information.
The model compliance plan and instructions for its completion and
submission are available via the Internet
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on our website. Completion and timely submission of the model
compliance plan by covered entities satisfies the ASCA requirement for
requesting an extension.
A. Electronic Submissions of the Model Compliance Plan
Covered entities can submit this model compliance plan
electronically via the Internet at www.cms.hhs.gov/hipaa. In order to
obtain an extension, electronic submissions must be completed on or
before October 15, 2002. Covered entities that complete their
compliance plan electronically will receive an electronic confirmation
number as their response. The confirmation number serves as the covered
entity's approval notice. For additional information regarding
electronic compliance plan submissions, see Appendix A of this notice.
To view a copy of the electronic form, see Appendix B of this notice.
B. Paper and Alternative Submissions of a Compliance Plan
Covered entities also have the option of submitting a paper copy of
the model plan. This paper submission can be a duplicate of the form in
Appendix B of this notice or a printed copy of the electronic form
available on our website.
In addition, a covered entity has the option to submit its own
version of a compliance plan (paper copy), that must include the
following:
An analysis of the reasons for noncompliance.
A budget for achieving compliance.
A work plan and implementation strategy for achieving
compliance.
A decision regarding whether a contractor or vendor may be
used to help achieve compliance.
A testing timeframe that begins on or before April 16,
2003.
All paper and alternative submissions must be postmarked by October
15, 2002 and sent to the following address:
Attention: Model Compliance Plans, Centers for Medicare & Medicaid
Services, PO Box 8040, Baltimore, Maryland 21244-8040.
We will not acknowledge receipt of these submissions. Therefore, we
suggest that covered entities submitting their plans via mail use a
method that provides proof of delivery. For additional information on
paper or alternative submissions, see Appendix A of this notice.
III. Collection of Information Requirements
In accordance with section 1175(b)(1)(A) of the Act as amended by
section 2 of Pub. L. 107-105, the form included as Appendix B of this
notice is exempted from the requirements of the Paperwork Reduction Act
of 1995. Consequently, neither the form nor the notice need to be
reviewed by the Office of Management and Budget under the authority of
the Paperwork Reduction Act of 1995 (44 U.S.C. 35).
IV. Regulatory Impact Statement
We have examined the impacts of this notice as required by
Executive Order 12866 (September 1993, Regulatory Planning and Review),
the Regulatory Flexibility Act (RFA) (September 19, 1980 Pub. L. 96-
354), section 1102 (b) of the Social Security Act, the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any given year). We have
determined that this notice is not a major rule because it does not
impose an economically significant impact on covered entities or the
Medicare program.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and government agencies. For
purposes of the RFA, most covered entities (that is, health plans,
health care clearinghouses, and health care providers) are considered
to be small entities, either by nonprofit status or by having revenues
of $5 to $25 million or less annually. (For details, see the Small
Business Administration's regulation that set forth size standards for
health care industries (65 FR 69432).) Individuals and States are not
included in the definition of a small entity. Covered entities will be
able to assess their own progress toward HIPAA compliance and determine
whether or not to request an extension. Covered entities that obtain
the extension will have the added flexibility to schedule the
activities needed to implement the standards and they will have
additional time to conduct thorough testing with their trading
partners. We are unable to quantify the impact of the 1-year extension,
but we will be able to analyze the data that we receive from covered
entities that submit compliance extension plans.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. Currently we are unable
to quantify the impact of the provisions of this notice on small rural
hospitals, but we believe that we will be better able to assess the
impact of the 1-year extension through the analysis of the data
submitted by covered entities requesting the extension.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that may result in expenditure in any 1 year by State,
local, or tribal governments, in the aggregate, or by the private
sector, of $110 million. This notice will not mandate any requirements
for State, local or tribal governments.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. We have reviewed this notice under these requirements and
have determined that it will not impose substantial direct requirement
costs on State or local governments. We also note that the option to
obtain a 1-year extension will give States or local governments more
flexibility in several areas which may include--(1) Additional time to
conduct testing; (2) additional time for implementation; and (3)
additional time to consult with vendors. In accordance with Executive
Order 12866, this notice was not reviewed by the Office of Management
and Budget.
Authority: Section 1175 of the Social Security Act (42 U.S.C.
1320d-4)
Dated: April 8, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
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[FR Doc. 02-9197 Filed 4-12-02; 8:45 am]
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