The Purpose of HIPAA and ASCA
The Health Insurance Portability and Accountability Act (HIPAA) is a federal health privacy law that provides patients with certain rights concerning their personal health information. The Administrative Simplification Compliance Act (ASCA) is a federal law that allows the Centers for Medicare & Medicaid Services (CMS) to deny payment for claims that are not submitted electronically.
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HIPAA Purpose
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HIPAA was enacted in part to streamline health insurance coverage and medical records in an effort to combat fraud and abuse. HIPAA was also enacted to promote more efficient long-term care health services and coverage.
HIPAA Application
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HIPAA applies to health plans, health care clearinghouses and health care providers who submit electronic transactions. Health plans include insurers and HMOs. HIPAA defines a health care clearinghouse is a business or organization that processes nonstandard data into standard data or vice versa. A health care provider is a general term referring to a provider of health care services pursuant to HIPAA.
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ASCA Purpose
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ASCA was enacted in part to provide a uniform system of financial transactions within the Department of Health & Human Services. Because ASCA required providers to submit electronic claims instead of paper, more medical providers are considered covered entities under HIPAA and must meet the privacy rule requirements.
ASCA Application
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Beginning in October 2003, Medicare was prohibited from paying providers for initial health care claims that were not submitted electronically. Initial health care claims are claims submitted to a Medicare carrier, Durable Medical Equipment Regional Carriers,or Fiscal Intermediary for the first time and may include previously rejected claims.
ASCA Exceptions
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Small provider claims are exempt from the electronic billing requirement. A small provider is defined as a provider with fewer than than 25 full-time equivalent employees. Dental claims and claims submitted by a Medicare beneficiary are also exempt from ASCA requirements.
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