High administrative costs affect everyone involved in the health care system. To reduce these costs through the use of electronic data interchange, the industry asked Congress to pass legislation that would establish national data standards to support administrative and financial transactions in health care. In August 1996, Congress enacted the Health Insurance Portability and Accountability Act (HIPAA). Title II, Subtitle F of Act, Administrative Simplification, directly addresses the adoption of electronic health data standards in the health care system.
The Administrative Simplification provisions require the Secretary of Health and Human Services (HHS) to adopt standards to support the electronic exchange of administrative and financial health care transactions within 18 months of enactment. These standards are to include data elements and code sets for those transactions; unique health identifiers for health care providers, health plans, employers, and individuals for use in the health care system; and security standards to protect individually identifiable health information. Within 24 months of their adoption, i.e. by mid-2000, the standards would be required for use by health plans, providers and clearinghouses. Small plans would have another 12 months to comply.
Privacy protections play a prominent role in the law as well. Recognizing the importance of protecting the privacy of individually identifiable health information, the law also requires the Secretary to submit recommendations for federal health privacy legislation to the Congress. Secretary Shalala forwarded these recommendations to the Congress on September 11, 1997.
In addition, the statute gives expanded responsibilities to the National Committee on Vital and Health Statistics (NCVHS), including advising the Secretary on health information privacy and on the adoption of health data standards. The Committee is further directed to submit an annual report to Congress on the status of implementation of the Administrative Simplification effort. This report is the first of those annual reports on implementation. Because of its extensive consultation with the industry and the research and public health communities, its close involvement with the Department and its intense focus on administrative simplification issues during this past year, the NCVHS is well positioned to comment on the progress of the implementation effort as well as related health information policy. The Committee is committed to improvements in the national health information infrastructure that will enhance quality, lower costs, and facilitate access to care.
Given the implementation steps and schedule outlined in the law, HHS and NCVHS efforts during the past year necessarily focused on the identification and evaluation of the potential standards to be adopted, as well as the development of health information privacy recommendations to Congress. Accordingly, this first report focuses on these efforts, as well as on the development of privacy recommendations. Subsequent reports will describe progress on later stages of implementation.
To address the requirements of the law during the past year, HHS developed an implementation strategy that assured coordination among HHS agencies, participation by other Federal departments, and extensive interaction with the private sector. This strategy afforded many opportunities for interested and affected parties to participate in and influence the standards development and adoption processes, by participating with standards development organizations, providing testimony at NCVHS public meetings, inviting HHS representatives to speak at various meetings, and providing comments on proposed rules. As an integral part of this strategy, the HHS Data Council, the Department's senior level internal data policy body, played a critical role in the implementation of administrative simplification and worked closely with the NCVHS. As required by the statute, the Department also consulted with the National Uniform Billing Committee, the National Uniform Claim Committee, the Workgroup for Electronic Data Interchange, the American Dental Association, and a number of other private sector organizations.
The NCVHS has been an active partner with the Department in every aspect of the standards adoption process. As the Department's primary liaison with the private sector, the NCVHS held a number of public hearings to obtain the views, perspectives, and concerns of organizations and individuals, as well as their input and advice on health data standards and privacy. As required by the statute, the NCVHS has submitted recommendations to the Secretary for standards to be adopted and on privacy guidelines and has commented on HHS draft data standards proposals. These recommendations are described in this report. The full text of the recommendations is available from the NCVHS web site at http://www.ncvhs.hhs.gov. In its privacy recommendations, the NCVHS recommended that the Administration assign the highest priority to the development of a strong position on health privacy and that the 105th Congress enact a health privacy law before it adjourns in the fall of 1998.
Based on the results of the analyses performed by HHS Implementation Teams, the recommendations received from the NCVHS, the extensive consultation and input received from the industry, and the public testimony provided at the NCVHS hearings during the past year, proposed regulations to adopt the standards are being prepared by HHS for public review and comment in the Federal Register. Those standards relate to the administrative and financial transactions and related code sets; for national identifiers for health care providers, health plans, and employers; and for security standards. The proposed regulation for claims attachments is scheduled to be published in the summer of 1998. The public will have sixty days to provide comments to HHS on the proposed standards. Based on the comments, HHS will issue final regulations.
Because of the controversy and lack of consensus surrounding the selection of a unique health identifier for individuals, the Department has decided to issue a Notice of Intent to maximize public involvement in the process. The Notice of Intent will seek public input on several options for individual health identifiers without presenting a specific option as the preferred direction. The NCVHS has identified a number of special privacy and security concerns that relate to the adoption of a unique individual identifier. These include the importance of Congressional action on privacy legislation, the linkage of the individual identifier standard to privacy protections, the need for privacy protections to deal with fair information practices as well as antidiscrimination provisions, and the need for better implementation of security standards. The Committee will continue to examine this issue with public hearings, and it is likely that additional recommendations will be forthcoming.
HHS and the NCVHS, in partnership with private sector organizations, are also developing an integrated communication strategy to ensure that the industry will continue to receive all the information and assistance that it needs to implement the proposed standards. Once the standards have been adopted, the health care community will be encouraged to notify the Department or the NCVHS of any issues or concerns with the implementation of the standards.
During the next several years, the NCVHS plans to conduct public hearings to obtain additional input from a broad cross section of users in both the public and private sectors. The NCVHS will also seek input from the public on additional standards that may be appropriate, as well as the need to modify existing standards, and will provide timely recommendations to the Secretary.
In later stages of the standardization effort, the Committee plans to obtain information on the extent to which the adopted standards are being implemented, and to solicit reports on the progress of standards implementation from the industry as well as federal and State agencies for the health care programs under their jurisdictions. These agencies, as well as industry representatives, will be asked to provide public testimony at NCVHS hearings, where appropriate. The Committee will also make substantial use of industry data sources to assess major trends in the application of information technology in health care.
To date, the process of adopting health data standards has been extremely open, collaborative, and productive. The success of the process up to this point bodes well for the success of the ultimate implementation of these standards.