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CMS to focus on voluntary compliance, complaints for TCS

HIPAA Weekly Advisor, July 25, 2003

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The Centers for Medicare and Medicaid Services (CMS) intends to work with covered entities on their transactions and code sets compliance efforts, according to a guidance document released July 24. CMS, which is responsible for enforcing HIPAA's transactions rule, detailed the agency's enforcement approach in the document.

CMS will use a complaint-driven approach for enforcement and will utilize the flexibility granted in section 1176(b) of the Social Security Act to consider good faith efforts to comply when assessing individual complaints, according to the guidance. "Under section 1176(b), HHS may not impose a civil money penalty where the failure to comply is based on reasonable cause and is not due to willful neglect, and the failure to comply is cured within a 30-day period."

CMS will not impose penalties on covered entities that deploy contingency plans if they have made reasonable and diligent efforts to become compliant and, in the case of health plans, to facilitate the compliance of their trading partners, the agency says. "Specifically, as long as a health plan can demonstrate to CMS its active outreach/testing efforts, it can continue processing payments to providers."

When CMS receives a complaint about a covered entity, it will notify the entity in writing that a complaint has been filed. Following notification, the entity will have the opportunity to

• demonstrate compliance
• document its good faith efforts to comply with the standards
• submit a corrective action plan.

Covered entities can expect more detailed information on corrective action plans soon, according to the guidance.

CMS also recently posted the following other documents:

• "Questions to Ask Vendors, Third Party Administrators, or Clearinghouses"
• "Steps Toward HIPAA Compliance"
• "HIPAA Resources"

Go to http://www.hipaapro.com/news/hipaa_downloads.cfm to download a PDF of the guidance document. Go to http://www.cms.gov/hipaa/hipaa2/default.asp and look under "Latest News" to download the other documents.

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