HIPAA and Your Compliance Program

S I D L E Y & A U S T I N

HIPAA and Your Compliance ProgramHCCA’s 2000 Compliance Institute

New Orleans, Louisiana

September 25, 2000

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Presentation Agenda

• Introductions

• Overview and Background

• HIPAA Requirements and Provisions° Technology with Q&A

° Privacy with Q&A

° Security with Q&A

• Integration into Compliance Program


Overview and Background of HIPAA

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General Provisions

Group and Individual Insurance Reform• Limits on pre-existing exclusion

provisions• Portability of coverage,

guaranteed issue and renewal

Fraud and Abuse • Medicare integrity, data

collection, beneficiary incentive programs

• Increased penalties, sanctions, and exclusions

Tax-Related Health Provisions• MSAs, long-term care

insurance, taxation of insurance benefits

Administrative Simplification (AS)• Improve efficiency and

effectiveness of the healthcare system

• Define standards for electronic transmission - standard identifiers, transaction and code sets

• Protect the privacy and security of health information

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Applicability

Health Plans

Clearinghouses Providers

“…that transmitand receiveelectronicinformation.”

BusinessPartners

BusinessPartners

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Penalties and Fines

Non-Compliance with Requirements

• $100 per violation to a maximum of $25,000 per requirement per year

• Considering the proposed security rules contain more than 25 specific requirements, the maximum penalty can exceed $625,000 per year

Wrongful Disclosure of Health Information

• Simple disclosure – fines up to $50,000 and/or one year in prison

• Disclosure under false pretenses – fines up to $100,000 and/or five years in prison

• Disclosure with intent to sell or use – fines up to $250,000 and/or 10 years in prison


Technology Requirements

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Transactions, Code Sets and Identifiers

Transaction Standards for HIPAA: “Transactions” are the exchange of information between two parties carrying out financial and administrative activities with data elements in a single format.

Three Categories of Technology Requirements:

a) Transaction Sets

b) Code Sets

c) Identifiers

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Highlights

Standardized transaction formats and data elements for information that is transmitted and received electronically

Code Sets Standards Built on Current Coding Systems

• Major code sets characterize medical data (e.g. CPT, ICD-9)

• Code sets included in standard transaction sets

• Current national coding standards to be updated in 2002

Unique Identifiers

• “Intelligence-free” (will not contain any encoded information)

• “Single unique identification of providers”

• Apply to all persons furnishing healthcare services and supplies

• Reduce potential for fraud and abuse

• Creates considerable privacy/ confidentiality concerns

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Standard transaction sets are defined for the following:

• Health claims or equivalent encounter (X12N 837)• Enrollment and disenrollment in a health plan (X12 834)• Eligibility for health plan - inquiry/response (X12N 270-271)• Healthcare payment and remittance advice (X12N 835)• Health plan premium payments (X12 820)• Health claim status - inquiry/response (X12N 276-277)

• Coordination of benefits (X12N 837)• Referral certification (X12N 278)• Referral authorization (X12N 278)• First report of injury (open)• Health claims attachments (open)

Standard Transaction Record

Identifiers

ProvidersEmployersHealth plans (open)Individuals (open)

Code Sets

ICD-9-CM (diagnosis and procedures)CPT-4 (physician procedures)HCPCS (ancillary services/procedures)CDT-2 (dental terminology)NDC (national drug codes)


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Key Business Considerations

• Integration of new transactions into legacy systems

• Investment in new systems/channels

• Revision of Q/A testing and user acceptance processes

• Integration of technology requirements in contracts, accreditation

• Budget impact

• Return on investment

• Leverage investment in Y2K


Privacy Requirements

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• IIHI

• Uses and Disclosures

• Minimum Necessary

• Rights of Individual

• Business Partners

• Related Entities

• Internal process changes

• Privacy Official

• Training

• Complaint Handling

• Disclosure Accounting

Privacy Standards

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Permitted Uses and Disclosures

Protected Health Information

Authorization required for:

• Disclosures on request of individual, entity or third party

• Marketing, fund-raising purposes

• Disclosure to non-health related affiliates (e.g., life insurance)

• Underwriting or risk rating

• Employment determinations

• Sale, rental or barter

• Disclosure of psychotherapy notes or research information

Authorization not required for:

• Uses or disclosures relating to treatment, payment or health care operations

• Public health agency activities

• Health oversight and regulatory agencies

• Judicial proceedings and law enforcement investigations

• Health care fraud

• Research purposes (under rigorous criteria)

• Disclosure of “de-identified” health information

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Minimum Necessary Disclosure

• Reasonable efforts not to use or disclose more than the minimumamount of information needed to accomplish an intended purpose

• Entity designates staff to determine minimum necessary information

• Determination made on individual basis within limits of technology

• Pervasive throughout organization° Applies to both internal and external uses° “Minimum necessary” varies by function and department° Implications for information systems

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Administrative Requirements

• Designate privacy official

• Conduct privacy training program

• Verification procedures

• Maintain policies and procedures for PHI

• Notice of privacy practices

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Business Partners

• Contractors providing services to covered entities - that utilize or share IIHI

• Business partner contracts must contain specific privacy provisions ° Appropriate safeguards of records° Report any unauthorized disclosures to entity° Books and records available for inspection° Material breach by partner grounds for termination, constitutes violation

by entity° Member/patient is third party beneficiary

• Extension of liability

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Rights of Individuals

• With the exception of treatment, payment or health care operations, most uses and disclosures are permitted only with authorization

• Individuals may revoke their authorization(s)

• May request restriction of uses and disclosures by providers

• Access to health information

• Amendment and correction of health information

• Accounting for disclosures of health information

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Protected Health InformationAdministrative

ProceduresPhysical

SafeguardsTechnical Security

ServicesTechnical Security

Mechanisms

Research

and Marketing

Research and

Clinical T

rials

Marketing and

Other U

ses of Data

Across O

pen Netw

ork

Treatm

ent, Paym

ent and O

perationsO

ver Open N

etwork

Treatm

ent, Paym

ent and O

perationsO

ver Secure N

etwork

Patient A

ccess, Correction,

Accounting of U

se

Authentication

Minimum Necessary

Patient Authorization

IRBEncryption

Business Partner Agreement

Anonymization

The Intersection of Privacy and Security Standards


Security Requirements

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Security Standards

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Security Challenges

Authentication of users/partners

System vulnerabilities

Web security

Evolving technologies

Failure to plan for growth

No Internet reliability guarantees

User privacy

ConfidentialityIntegrity

Availability

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Administrative Procedures

• Certification

• Chain of Trust Partner Agreement

• Contingency Plan

• Formal Mechanism for Processing Records

• Information Access Control

• Internal Audit

• Personnel Security

• Security Configuration Management

• Security Incident Procedures

• Security Management Process

• Termination Procedures

• Training

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Physical Safeguards

• Assigned Security Responsibility

• Media Controls

• Physical Access Controls

• Policy/Guideline on Workstation Use

• Secure Work Station Use

• Security Awareness Training

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Technical Security Services

• Access Control

• Audit Controls

• Authorization Control

• Data Authentication

• Entity Authentication

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Technical Security Mechanisms

Required If Using Open Networks• Alarm• Audit trail• Entity authentication• Event reporting• Integrity controls• Message authentication

Plus, At Least One of the Following:• Access controls• Encryption


HIPAA Compliance Framework

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Operation andMaintenance


Assessmentand Analysis


SolutionImplementation


Solution Designand Development


EVALUATEEVALUATE

APPLYAPPLY

SUSTAINSUSTAIN FORMULATEFORMULATE

• EVALUATE Critical business and system functions

• FORMULATE Plans and solutions

• APPLY Solutions to process, data, and systems

• SUSTAIN Compliance through time

HIPAA Lifecycle

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Health Care OrganizationHIPAA Steering Committee

Project Office

Privacy Work Group

Departmental HIPAA Liaisons

Security Work Group Technology Work Group

Pro forma HIPAA Project Structure

General Counsel

Department 1 Department 1 Department 1Department 1Department 1 Department 1

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Solution Designand DevelopmentOperation and

Maintenance


EVALUATE critical businessand system functions across the enterprise to determine the actions required to achieve HIPAA compliance

Phase 1: Assessment and Analysis

TasksUnderstand the existing environment

• Mission/vision

• Organization

• Strategic, Organizational and IT plans° Inventory existing systems and operations

° Evaluate existing policies and procedures

° Perform operational and technical reviews and assessments

° Align HIPAA requirements against existing systems

° Identify potential compliance gaps

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Maintenance


FORMULATE plans and solutions to respond to HIPAA and business requirements identified in the Assessment and Analysis phase

Phase 2: Solution Design and Development

Tasks

• Identify both technical and non-technical solutions

• Evaluate effect on business partners

• Assess alternative approaches° Integration with Compliance Program

° Consider outsourcing

• Identify risks and mitigation strategies

• Create prioritized project plans

• Identify resources required to complete plans

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Maintenance


APPLY solutions developed to those business and system functions necessary to ensure compliance with HIPAA regulations

Phase 3: Solution Implementation

Tasks

• Implement communication strategy

• Execute project plans

• Perform testing and quality assurance

• Provide end user training

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SUSTAIN a compliant environment through ongoing initiatives

Phase 4: Operation and Maintenance

Tasks

• Keep documentation current as changes occur° New systems and technology

° Organizational (i.e., mergers and acquisitions)

• Periodically test system vulnerabilities

• Institutionalize ongoing HIPAA compliance

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• Enterprise-wide planning

• Align HIPAA initiatives with corporate strategy(s) and integrate into operations

• Secure management support and awareness

• Leverage historic and on-going initiatives and accumulated knowledge (Y2K, E-Business, Business Transformation, etc..)

• Build HIPAA into existing change initiatives (do it once)

• Integrate with current Compliance Program activities

Critical Success FactorsCritical Success Factors

• Establish clear governance structure to manage complexities and interdependencies among business units and the technology, security and privacy requirements of HIPAA

• Ensure on-going communication channels for HIPAA specific initiatives

• Raise corporate awareness of HIPAA and its potential impacts on the origination and its stakeholders

• Incorporate HIPAA into existing compliance program

Documents

HIPAA and Your Compliance Program