The Administrative Simplification provisions of the Health Insurance Portability and Accountability Act (HIPAA) of 1996 (Public Law 104-191) require that the Secretary of Health and Human Services (HHS) adopt standards for electronic health care transactions by defining the standard data elements and code sets that must be used. In addition, the Secretary must adopt standards for unique health identifiers, guidelines for security safeguards and privacy standards to protect individually identifiable health care information.

The Administrative Simplification provisions for the Transactions and Code Sets Final Rule was originally mandated for compliance no later than October 16, 2002. On December 27, 2001, President Bush signed bill HR 3323. More commonly known as the Administrative Simplification Compliance Act (ASCA), this bill provides relief to HIPAA implementers by creating a process to request an extension of the current compliance date. This extension will move the deadline for compliance to October 16, 2003.

In order to receive the extension, organizations are required to submit a plan to HHS before October 16, 2002. The California Department of Health Services and Medi-Cal may be submitting an extension request. Organizations that are in compliance by the original deadline will be allowed to send or receive non-compliant transactions to or from trading partners that have requested the extension.

Organizations that are not in compliance with the Transactions and Code Sets Final Rule by October 16, 2002, and do not request an extension, may be subject to the penalties as defined in the original legislation. These organizations may also be excluded from participation in the Medicare program.

The ASCA does not allow for an extension of the October 16, 2003 compliance deadline for plans that qualify as small health plans, and it does not modify the April 14, 2003 (or April 14, 2004 for small health plans) compliance date for the Privacy Final Rule.

Communicating HIPAA Updates

Providers, submitters and software vendors will be notified as billing instructions and submission requirements are modified. Until they are notified of the effective dates of any HIPAA-related changes, existing policy and billing requirements will remain in effect.

Transaction Standards

Medi-Cal plans to implement the following standards* by October 16, 2003:

Transaction	Description	Standard Version
ANSI ASC X12N 837	Health Care Claims
	Professional	004010X098
	Institutional	004010X096
NCPDP	Retail Pharmacy Drug Claims	5.1 - online 1.1 - batch
ANSI ASC X12N 835	Health Care Claim Payment/Advice	004010X091
ANSI ASC X12N 276/277	Health Care Claim Status Inquiry and Response	004010X093
ANSI ASC X12N 270/271	Health Care Eligibility Inquiry and Response	004010X092

* American National Standards Institute (ANSI); Accredited Standards Committee (ASC X12N); National Council for Prescription Drug Programs (NCPDP).

Information about the Treatment Authorization Request (TAR) system, compliance to the mandated HIPAA transactions and Health Care Services Review (ANSI ASC X12N 278 version 004010X094) transactions will be released in a future Medi-Cal Update.

Health Care Claims

Medi-Cal will begin accepting the 837 standard transaction format for Professional (004010X098) and Institutional (004010X096) claims by October 16, 2003. Non-standard electronic claim formats will be phased out.

Code Sets

HIPAA establishes standard codes for transactions. These standard codes include National Drug Codes, ICD-9-CM, CPT-4 codes and HCPCS codes. State-only codes, such as the X and Z service codes and the S diagnosis codes currently applied within Medi-Cal will be phased out. Service code conversion will be similar to the annual HCPCS update process existing currently, whereby service code application is end-dated based on date of service.

In addition to service codes, other Medi-Cal specific codes will be replaced with national codes. These codes include the following:

• Modifiers
• Medicare status codes
• Condition codes
• Occurrence codes
• Value codes
• Family planning indicators
• Accident/injury codes
• Place of service codes
• Vision qualifier codes
• Billing limit exception codes
• Patient status codes
• Claim status codes

Medi-Cal is reviewing any correlation between state-only and national codes and will be seeking feedback later this year in an effort to minimize health care or operational impact.

Retail Pharmacy Claims

Medi-Cal began accepting retail pharmacy drug claims in the National Council for Prescription Drug Programs (NCPDP) Version 5.1 (Telecommunication) and Version 1.1 (Batch) on May 1, 2002. The current Version 3.2 (Telecommunication) and Computer Media Claims (CMC) Version (Batch) will be phased out. To correspond with the data element changes mandated by the NCPDP electronic standard, the paper Medi-Cal Pharmacy Claim Form (30-1) was also modified. The previous version of the claim form will be phased out gradually. For more information, see the March 2002 Pharmacy Bulletin 530.

Remittance Advice (Health Care Claim Payment/Advice)

Providers who elect to receive electronic remittance advice in the 835 standard transaction format will be able to download remittance advice from the Internet Bulletin Board System (IBBS) by October 16, 2003. Providers currently receiving electronic remittance advice via the Automated Remittance Detail Services (ARDS) will be able to receive the same information in the form of an electronic Supplemental Claims Processing Information (SCPI) report. There will be no change to the current paper remittance advice.

Health Care Claim Status Inquiry and Response

Medi-Cal will implement the 276/277 batch standard on the IBBS by October 16, 2003. The Automated Provider Services Web claims status application will be modified to accept the national claims status codes. A new Web page will allow providers to cross-reference the Medi-Cal claims status codes to national claims status codes. There will be no change to the claim status transactions on the Provider Telecommunication Network (PTN).

Health Care Eligibility Benefit Inquiry and Response

Medi-Cal currently uses the fields associated with the 270/271 standard transactions for the processing of eligibility information in real-time. The current Medi-Cal system was developed using the entire 270/271 transaction standard. The system will be updated to the 004010X092 implementation guide specifications and a new batch eligibility transaction will be developed.

No major changes will be made to the following interactive eligibility verification applications: Automated Eligibility Verification System (AEVS), Point of Service (POS) device, Claims and Eligibility Real-Time System (CERTS) software or Web application.

Please continue to check your provider bulletins and the Medi-Cal Web site for further updates.