HIPAA Compliance Requires Coding, Processes Update

Michael H. Smith, for HealthLeaders Media, October 11, 2010

The passing of the healthcare reform bill has sounded the drumbeat of change, bringing greater access to healthcare to U.S. citizens. For payer organizations, this will result in a greater number of enrollments, increased claims processing and additional customer service requirements. Other changes payer organizations have to contend with include operational challenges, such as conversion to standards and changes in medical coding.

The result: healthcare payer organizations will need to upgrade software and systems and have the resources to evaluate, implement, test and manage these new systems. Additionally, they'll need to implement new processes to facilitate compliance with the latest standards.

As the deadline for compliance approaches, the big question on everyone's tongue is what is the greatest path to compliance and efficiency? The options include managing the process in-house, taking a blended approach using internal resources and external support or electing to fully outsource to a Business Process Outsourcing (BPO) provider.

Going it alone: For many organizations it doesn't make sense to manage claims processing and compliance conversion in-house. In addition to diverting resources from core responsibilities and other strategic initiatives, organizations don't necessarily possess the expertise and knowledge to ensure compliance with increasing regulatory complexities. Managing claims processing in-house also requires maintaining and training staff as well as devoting significant physical space to house equipment and documentation ? real estate that could be devoted to primary profit-generating activities.

Partial outsourcing: Some organizations may elect a hybrid or blended approach to achieve ICD-10 and HIPAA 5010 compliance. That is, retaining some processes in-house with third-party support or employing a multi-vendor strategy. For example, a BPO provider might provide a Software-as-a-Service (SaaS) infrastructure for claims processing and the internal operations staff would handle the data entry. This allows for the sharing of cross-industry and cross-organizational knowledge and can provide insight to benchmarking and opportunities for streamlining processes. It offers the advantage of flexibility, but it also places more responsibility on the payer organization, requiring them to manage multiple processes and increases the risk of oversight while requiring additional staff to manage the relationship.

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