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Are your clearinghouses ready for HIPAA compliance?

WHAT IF you are a health care provider and you utilize a third-party billing company to process payments from insurance carriers and patients – must the third-party billing company abide by the HIPAA privacy rule?

Absolutely "yes." In short:

• The billing company is acting as your agent. Even if the billing company is not considered a clearinghouse under HIPAA (a public or private entity that "processes or facilitates the processing of health information received from one entity in a non-standard format or containing nonstandard data content into standard data elements or a standard transaction"), the billing company will, at a minimum, be considered a business associate.
• As the billing company processes payments and provides the remittance data to the health care provider, protected health information is exposed from the explanation of benefits data.
• Most billing companies key in the data from the explanation of benefits in order to create an electronic file. The resulting electronic data is protected under HIPAA.

Be sure to address HIPAA compliance with your third-party billing company as you prepare for the April 2003 deadline for HIPAA compliance.

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