Enforcement of New CORE Data Standards for Providers, Insurers, Relaxed for 90 Days

On Jan. 2, the Centers for Medicare and Medicaid Services (CMS) announced a 90-day period of “enforcement discretion” for compliance with Eligibility and Claim Status Operating Rules, which appears in Section 1104 of the Administrative Simplification provisions of the Patient Protection and Affordable Care Act. Why should you care?

Because failure to comply can result in fines up to $1.5 million per year.

The Administrative Simplification program, an outgrowth of the Health Insurance Portability and Accountability Act of 1996 (HIPAA),  streamlines how data is transferred between providers, insurers, clearinghouses, and agencies such as Medicare and state Medicaid programs. For more than eight years several dedicated groups of those aforementioned stakeholders have been mapping out the best way to standardize and improve data communication via a joint organization known as Council for Affordable Quality Healthcare (CAQH).

Within CAQH is the Committee on Operating Rules for Information Exchange (CORE), which has mapped out the data standards and protocols required for electronic communication. In July 2011, the first round of standards were released by the sponsoring agency, CMS, covering the operating rules for eligibility for transactions dealing with a health plan and health care claim status.

Per CMS’s Office of E-Health Standards and Services (OESS), providers and other covered entities were required to be in compliance with those standards by Jan. 1. However, “Industry feedback suggests that HIPAA covered entities have not reached a threshold whereby a majority of covered entities would be able to be in compliance with the operating rules by January 1, 2013,” CMS announced in a statement on Jan. 2.

The announcement did not extend the effective date for compliance, but did give CMS the discretion to withhold enforcement of compliance until March 31. What exactly does the “effective date” entail? According to the announcement of the standards published in the National Register on July 8, 2011, –

The effective date of standards, implementation specifications, modifications, or operating rules is the date on which covered entities must be in compliance with the standards, implementation specifications, modifications, or operating rules. Here, the Act requires that the operating rules be effective not later than January 1, 2013. This means that covered entities must be in compliance with the operating rules by January 1, 2013. If we receive comments that compel us to change any of the policies we are finalizing in this interim final rule with comment period, we will seek to finalize any such changes by January 1, 2012, to allow sufficient time for industry preparation for compliance.

And what are “operating rules?” According to CAQH –

Section 1104(1) of the Patient Protection and Affordable Care Act (ACA) defines operating rules as “the necessary business rules and guidelines for the electronic exchange of information that are not defined by a standard or its implementation specifications.”

Operating rules build on existing standards to make electronic transactions more predictable and consistent, regardless of the technology … Beyond reducing cost and administrative hassles, operating rules foster trust among all participants. CAQH CORE Operating Rules are based on principles similar to those that govern ATM networks and direct deposit banking in the banking industry.

The 90-day period of “enforcement discretion” is important because fines for failing to be compliant can be $1.5 million per entity per year.

The effective date to be compliant with Eligibility and Claim Status Operating Rules is but one of several upcoming deadlines regarding CORE standards. You can download a chart of deadlines and key dates of HIPAA Administrative Simplification Compliance (PDF download) here:  (You must be logged in to download this file. Don't have an account? Register for free and you'll be returned to this page.)

For more information about the CORE standards, visit the CAQH website at http://caqh.org