HIPAA Administrative Simplification Optimization Project

The Centers for Medicare Medicaid Services (CMS) announced it will implement a HIPAA Administrative Simplification Optimization Project to conduct proactive compliance reviews for administrative simplification electronic transaction standards.

“Our proactive approach implements a progressive penalty process with the goal of remediation, not punishment,” according to a CMS statement. “Enforcement actions such as corrective action plans (CAPs) and HHS technical assistance are possible and may be included.”

Prior to implementing the project, CMS will conduct a pilot program with a small group of health plan and clearinghouse volunteers. The pilot program will allow participating health plans and clearinghouses to verify their compliance and will inform CMS’ rollout of proactive compliance reviews. Volunteers will undergo reviews of transactions for compliance with adopted standards, code sets, unique identifiers and operating rules.

Reviews will begin in January 2018. Pilot program participants will submit electronic transaction files to CMS for review and testing, as well as attest to compliance with operating rules. CMS estimates transaction submissions should take less than 10 hours.

Background on Administrative Simplification:

Under HIPAA, the U.S. Department of Health and Human Services (HHS) adopted national standards for certain transactions involving the electronic exchange of healthcare data. These transactions include:

  • Claims and encounter information
  • Payment and remittance advice
  • Claims status
  • Eligibility
  • Enrollment and disenrollment
  • Referrals and authorizations
  • Coordination of benefits
  • Premium payment

In 2010, the Affordable Care Act included additional provisions that addressed the use of transactions, building upon the requirements already in place through HIPAA. Together, the provisions are referred to as administrative simplification, because their purpose is to simplify the business of healthcare.