HIPAA extension offers a mixed blessing

February 18, 2002

The government's recent announcement it would extend the Health Insurance Portability and Accountability Act implementation deadline, granted under the authority of the Administrative Compliance Act (Pub. L. 107-105, Dec. 27, 2001, 115 STAT. 1003),

The government's recent announcement it would extend the Health Insurance Portability and Accountability Act implementation deadline, granted under the authority of the Administrative Compliance Act (Pub. L. 107-105, Dec. 27, 2001, 115 STAT. 1003), seemed at first like good news.

The compliance extension could serve to provide a false sense of comfort, however, to those institutions not yet actively involved in compliance efforts, according to Kris K. Hughes, a Rockledge, FL, healthcare attorney.

Health facilities should not view the extension as a reprieve from the current storm of compliance efforts, she said.

"Instead, the healthcare delivery industry should view the extension as a reality check on the significance of HIPAA's impact and the costs and benefits of administrative simplification," Hughes said.

Originally, the deadline for HIPAA implementation was October 2002. The new law pushes that date back to October 2003, but only under certain conditions.

The one-year extension is granted only with respect to the electronic transaction standards and extends only to those facilities that file the following information with the Department of Health and Human Services:

?indication of why covered entity is not in compliance
?budget, schedule, implementation strategy, and work plan for achieving compliance
?covered entity's plan to use contractor or other vendor to achieve compliance
?testing time frame beginning prior to April 16, 2003


"This extension was not intended to delay the impact of HIPAA's administrative simplification efforts but to allow more time for covered entities to adequately prepare for compliance deadlines," Hughes said.

The extension does not affect the April 14, 2002, privacy compliance deadlines.

Most healthcare organizations supported the extension.

"The extension should be a great benefit to physician practices and other healthcare facilities by providing more time for these entities to work with their computer vendors," said Scott Jauch, a practice management associate at the American College of Physicians-American Society of Internal Medicine. "ACP-ASIM supported the extension law to eliminate the possibility that medical software companies would not be able to supply the necessary software updates by October 2002. This could have forced physicians to purchase new computer systems in a short amount of time."