15 Working Days Until Next HIPAA Deadline:
Physicians Already Reporting Cash Flow Disruption
[Posted 09/25/03]

Is your practice ready for HIPAA’s transactions and code sets deadline? Are you sure?

Your cash flow is in jeopardy if you are not certain that your practice is ready to make the transition to HIPAA-compliant billing systems. The danger is not hypothetical. Even though the October 16 deadline is still three weeks away, CMA has received reports from two physician practices whose cash flow has been interrupted.

Because of clearinghouse and software errors and insufficient “early warning” systems, both physicians have experienced interruptions in their cash flow severe enough that they had to take out lines of credit to meet their payroll obligations.

These physicians reported that they had worked hard to comply with the HIPAA transactions rule. They thought their HIPAA-compliant systems were in place and were surprised when their clearinghouses/practice management systems did not perform properly. In both cases, claims failed to reach the payers. It was only when payments stopped coming in that the errors were detected.

CMA is working with these practices and has contacted their clearinghouses, payers, and system vendors to figure out what went wrong and troubleshoot to avoid further problems.

The new HIPAA formats will require changes in physician office work flow. Not only do you need to make sure that the technology is in place, but you also need to make sure your staff is up to speed as well. CMA encourages physician offices to verify that their claims are indeed reaching the intended payers. (Clearinghouse agreements generally specify that a claim will be transmitted to the payer within 24 to 72 hours of submission.) And plan ahead for possible disruptions in cash flow and keep an emergency cash reserve, just in case.

Contact: CMA’s legal information line, 415/882-5144 or legalinfo@cmanet.org.