HIPAA Strategy

1. HIPAA Strategy Methodologies and Tools

2. Presentation Agenda • Review of HIPAA Objectives • Overview and Update on the Status of HIPAA • Components/Objectives of a HIPAA Strategic Plan • Detailed Review of Each Planning Component • Questions • Resources

3. Review of HIPAA Objectives

4. Objectives of HIPAA • To reduce the administrative costs associated with the provision of health care services • To make the administration of health care services more efficient by: • Requiring some transactions to be supported electronically • Standardizing those transactions • To protect individually identifiable health information from: • Physical damage/destruction • Unauthorized access • Misuse or inappropriate disclosure • This is the first step toward a broader application of e-commerce in health care

5. HIPAA Overview HIPAA Title I Title II Title III Title IV Title V • Health insurance access, portability and renewal • Fraud and Abuse • Medical Liability Reform • Administrative Simplification • Medical Savings Accounts • Tax deduction provisions • Group health plan provisions • Revenue offset provisions • For 9 key payor transactions • Includes clinical code sets • Includes key identifiers Electronic Transaction Standards (EDI) Security Standards • For protecting electronic health information • To spell out permissible uses of patient identifiable healthcare information PrivacyStandards

6. HIPAA Overview • Each component of HIPAA has proceeded independently through a development, review and approval process • The lack of forward movement on any one element does not necessarily impede the implementation of others Review of Existing Regulations & Standards Public Input ProposedRule Released Public Comment Period Redraft of Rule Final Rule Published Regulations Enacted And Enforced 26 Months from Date of Publication Still Awaiting Action for Some Elements

7. Applicability • From the Act: “Sec 1172(a) Applicability. Any standard under this part shall apply, in whole or in part, to the following persons: • A health plan • A health care clearinghouse • A health care provider who transmits any health information in electronic form in connection with a transaction referred to in Section 1173(a)91.”

8. Provider Responsibilities • Providers governed under HIPAA must: • Comply with the regulations that impact them no later than the published implementation dates for those rules • Ensure that vendors are prepared to deliver applications that support EDI and security requirements • Hold those business partners (vendors and others) with whom patient-identifiable information is shared accountable for complying with the privacy and security regulations that apply to the covered entity • Develop EDI, Privacy and Security policies and procedures • Train staff on the Privacy policies and procedures • Document compliance with applicable regulations

9. Status of HIPAA Rules

10. Status of HIPAA Rules • The anticipated dates for HHS issuing new proposed or revised final HIPAA rules • The final Security Rule is expected to be released in August of this year • The Employer Identifier final rule has been drafted and sent to HHS for final review with release expected in June • The Provider and Payer Identifier final rules are expected around August • The Patient Information (Claims Attachment) NPRM is expected in August of this year

11. Updates • The anticipated dates for HHS issuing new proposed or revised final HIPAA rules (con’t) • A draft regulation for electronic medical records is being developed, which should be available for public review by the end of 2002 • The Doctors First Report of Injury NPRM is also expected sometime in 2002 • An Enforcement NPRM is expected to be released some time in 2002 • Two proposed revisions to the Transaction and Code Set standards are expected any time now • Changes in the Designated Standard Maintenance Organizations or DSMOs and • Removal of NDC codes as the standard for medications

12. Update Summary Compliance Date Proposed Rule Final Rule • 10/16/2002/03 • Released 5/98 • Released 5/98 • Released 6/98 • Expected 2001 • ON HOLD • Published 8/2000 • Expected 8/2002 • Expected 6/2002 • Expected 8/2002 • ON HOLD • Transactions& Code Sets • Provider ID • Employer ID • Payer ID • Patient ID Electronic Transaction Standards (EDI) • Released 8/98 • Expected August 2002 Security Standards • 26 months from date final rule is published • No action by Congress; draft regulation released 11/99 • Published 12/2000 • Reconfirmed 4/2001 • 4/14/2003 PrivacyStandards* • 7/6/01 received First Guidance (not changes) on the final privacy rule • First proposed changes to the Privacy Rule published on 3/27/02

13. Components of a HIPAA Strategic Plan

14. Steps to Compliance The key to achieving HIPAA compliance is to take it one manageable stage at a time… Stage 1: Organization and Planning Stage 2: Assessment and Design Stage 3: Implementation and Testing Stage 4: Compliance Monitoring • Organizational Structure • Education • Policies and Procedures • Establish Linkages • High-level Risk Analysis • Quick Hit Identification • Detailed Assessment • Prioritization • Project Definition • Budget Development • Programming/ System Upgrades • Policy/Process Development • Contract implementation • End User Education • System/Process Testing • Compliance Audits • Quality Assurance • Post Implementation Support • Regulatory Updates/Changes We will be discussing these…

15. Elements of a HIPAA Strategic Plan • Develop an organizational structure for implementing HIPAA • Review corporate initiatives in light of HIPAA • Educate organizational decision makers on the importance of HIPAA and its impact across the organization • Develop policies and procedures for Privacy and Security regulations • Determine links between HIPAA initiatives and organizational strategic initiatives

16. Elements of a HIPAA Strategic Plan • Determine which EDI standards to use electronically • Conduct a high level risk analysis • Conduct a detailed risk assessment • Prioritize and schedule tasks to accomplish • Develop a budget for implementing HIPAA

17. Stage 1 – Organizational Structure • Appointment of HIPAA coordinator • Appointment of Privacy Officer • Appointment of individual(s) to be responsible for implementing Security regulations • Provide staff time to prepare for HIPAA • Establish reporting mechanisms to Administration and the governing body

18. Information Systems (Policy and Procedure Web Based Distribution) HR (Policy Development Oversight, Enforcement) External Stakeholders (Trading Partners & Business Associates) Compliance (Compliance Monitoring and Coordination) Legal (Policy Development, “source of truth”) Privacy Officer (Policy Development Oversight, Training ) Others (Other Departments or Functions) HIM (Regulation Impact Analysis) Sample HIPAA Governance Structure HIPAA Coordinator (oversight for assessment, implementation and ongoing monitoring) Security Responsibility(Policy Development Oversight, Training )

19. Stage 2 – Corporate Initiatives • Identify strategic initiatives that HIPAA will impact • These initiatives should be divided into two primary categories; information technology (IT) and business initiatives • The HIPAA regulations will touch most major clinical, financial and administrative areas within the health system. As such, most of the strategic initiatives will require modification or consideration of the new HIPAA regulations • Develop a plan for transaction implementation • Initiate cost/benefit analysis to determine which standards will yield most positive results • Determine resources required for implementation • Submit request for EDI extension

20. Stage 3 – Education • HIPAA 101 - Overview of HIPAA • HIPAA 201 - Advanced Topics on EDI, Codes Sets and Identifiers • HIPAA 202 - Advanced Privacy Course • HIPAA 203 - Advanced Security Course

21. Stage 4 – Policies and Procedures • Develop policies and procedures for: • Privacy • Material from Michael Best and Friedrich to customize • EDI • Dependent upon standard transactions to be used • Security • Health Future IT task force to develop sample policies • Address HIPAA compliance in organizational HR policies • Background checks • Sanctions for non-compliance • General policies on confidentiality

22. Stage 5 – Linking Initiatives • Identify trading partners/business associates • Develop contractual assurances of HIPAA compliance • Evaluate vendor preparedness to support HIPAA

23. Stage 6 – Selection of EDI Standards to Implement • Develop a plan for transaction implementation • Initiate cost/benefit analysis to determine which standards will yield most positive results • Develop a schedule for implementation • Determine resources required for implementation • Submit request for EDI extension • Prior to October 16, 2002

24. Stage 7 – Risk Assessment • Conduct a high level risk analysis and initiate “quick hit” remediation • Assign responsibility for EDI, Privacy and Security assessments • Conduct detailed assessment tool training • Perform assessments • Define the boundaries of “acceptable risk”

25. High-level Risk Analysis • A high-level analysis of the current environment from an EDI, Privacy, and Security perspective to see where the largest gaps are would include questions like those below: • What electronic systems are in place for billing/clinical/medical records? • How many clearinghouses (if any) are used? • Are business associates/trading partners HIPAA compliant? • Which of the 7 approved standard transactions are being done? • What is the make-up of the IT infrastructure? • Are security policies in place that meet the categories outlined in the proposed rule? • How much data sharing is currently allowable in the system? • Are there system access controls and audit functions? • What is the level of complexity of systems across the network? • Do users have unique ID’s and passwords and do they share?

26. Stage 8 – Preliminary Budget • Summarize compliance gaps identified through the risk assessment • Develop operating budget for incremental labor costs and savings • Develop capital budget for HIPAA compliance

27. Stage 9 – Project Definition • Review results of compliance assessment • Prioritize tasks to achieve compliance • Assign responsibility for compliance projects

28. Stage 1 - Project Timeline July August Sept June May Oct Nov Dec Education Corporate Initiatives Policies and Procedures Establish Linkages Transaction Selection Risk Assessment Budget Project Definition

29. Initiate Prioritization

30. How to Prioritize HIPAA Initiatives • HIPAA activities need to be prioritized using several factors, for example: • Compliance deadlines • Potential for enforcement • Budget constraints (cost/benefit) • Resource constraints/requirement for external resources • Organizational readiness • Organizational impact • Integration with other projects • Enterprise-wide importance

31. Sample Immediate Initiatives • HIPAA Governance Model • Solidify organizational responsibility for the development of regulatory policies and procedures, approval processes, enforcement and oversight of all organizational HIPAA initiatives • Policy and Procedure Documentation • Initiate the development of, and update policies and procedures to meet HIPAA requirements and establish the organization’s “defensible position” • Business Associates • Inventory contracts and identify organizations that are business associates and trading partners with whom protected health information is shared

32. Sample High Priority Initiatives • Implement/Update Standard Transaction Sets • Transition to HIPAA-compliant versions of those transactions being performed electronically today • Implement/Update Standard Code Sets • Clean-up proprietary Clinical Codes to align with HIPAA code sets • Purchase additional code sets if needed • Remediate Applications • Remediate applications to HIPAA compliant versions

33. Sample Medium Priority Initiatives • Staff Education • Conduct general and detailed HIPAA education • Privacy Documentation Requirements • Develop documents required to comply with Privacy regulations • Utilize documents developed by the WSHA and other business partners that are recommended for use statewide • Focused Strategy & Assessment • Determine strategic approach to HIPAA and complete focused HIPAA assessments to determine compliance gaps and scope implementation efforts • Communication Plan • Establish communication methods and begin to distribute HIPAA education and strategic documentation

34. Ranking Definitions

35. Initiatives Prioritization Matrix

36. ? ? ? ? ? ? ? ? Questions and Discussion

37. Resources

38. Resources

39. Resources (cont.)

40. Resources (cont.)