(EMAILWIRE.COM, October 30, 2001 ) GREENWOOD VILLAGE, Colo. – While many healthcare organizations providing benefits are confident of their own HIPAA compliance, they are not as certain about their outsource partners. This was among the findings of a survey released today by HealthTrans and the National Council for Prescription Drug Programs.

Among the findings, while almost half the respondents believed they were compliant with current HIPAA guidelines, 43 percent of those that outsourced pharmacy claims processing believed their outsource partner had just begun planning for HIPAA, with an additional 16 percent unsure. More than 80 percent said that the same IT department responsible for running the production shop is also responsible for HIPPA compliance, leading almost half the respondents to cite time as their biggest concern.

The survey was co-sponsored by HealthTrans, the largest independent processor of pharmacy claims adjudication, and the National Council for Prescription of Drug Programs, an organization comprised of the top people from all facets of the pharmaceutical industry. HealthTrans announced recently that it will be HIPAA and Version 5.1 compliant by calendar first quarter, 2002.

"The survey confirms that claims processing is an integral link in the chain of trust that many organizations have been slow to address when it comes to HIPAA readiness," said HealthTrans CEO Jack McClurg. "As the implications of HIPAA become clearer, healthcare organizations will need to ensure not only that they are compliant, but that their outsource partners are up to speed as well."

"NCPDP is pleased with the progress on the implementation of our Telecommunication Standard. We will continue to be a resource for the industry as its moves forward with HIPAA implementation," said Lee Ann C. Stember, NCPDP president.

The survey, which consisted of telephone interviews with NCPDP's Health Maintenance Organization (HMO), Health Insurer and Pharmacy Benefits Manager (PBM) membership, was conducted by a third party on behalf of HealthTrans and NCPDP. Questions were asked about readiness for HIPAA and Version 5.1, standards for electronic handling of medical information scheduled to go into effect next year. Survey results include:


Many organizations believe they are ready for HIPAA: Forty-eight percent said they were already compliant with HIPAA standards and none said they had just begun planning, but 21 percent of respondents declined to answer.

There is much uncertainty about HIPAA compliance among outsource partners: Of those surveyed, 33 percent of the organizations outsourced to a PBM or claims processor for pharmacy claims processing. While many organizations felt they were in compliance with HIPAA, there was much less certainty about outsource partners, with 43 percent saying they believed their outsource partner had just begun planning and another 16 percent saying they were unsure about their outsource partner's HIPAA preparations.

The same IT department running the production shop is also responsible for HIPAA compliance, and is dedicating most of its time on HIPAA: Eighty-two percent of respondents said that the same IT staff working on HIPAA concerns was also responsible for running the production shop. Half are spending 50 to 75 percent of their time on HIPAA and 39 percent are spending more than 75 percent of their time on HIPAA. Time and cost were the most cited concerns, along with non-compliance. Of these factors, time is cited by almost half the respondents as their most important concern.

Organizations are taking multiple strategies for HIPAA compliance: Respondents were almost evenly divided about HIPAA strategy between upgrading current system, licensing a new system and outsourcing to a claims processor.

Version 5.1 is well received: The vast majority of organizations, 97 percent, intend to implement all segments of Version 5.1, and all expect it will save time.

"HIPAA has often been compared with Y2K, but HIPAA goes to the depth of business processes like Y2K never did," said McClurg. "As the HIPAA deadline gets closer, it will be increasingly important to concentrate on core competencies and work with outsource providers for the rest. But healthcare organizations need to conduct a thorough due diligence to ensure that the outsource partner does not become a HIPAA liability."

"It is good news for the industry that most organizations are implementing all segments of v5.1," said Stember. "In the long run, this will enable numerous improvements in the efficiency and quality of care that patients receive. NCPDP members have been working diligently on a document that further defines the specific situations to the fields included in v5.1.”


HIPAA, which stands for the federal Health Insurance Portability and Accountability Act of 1996, includes standards that are currently being finalized and supposed to come into effect as early as next year. These standards will affect the storage and transfer of all electronic healthcare data in the United States. Version 5.1 is NCPDP's Telecommunication Standard, designed to update electronic communications and add additional functionality in pharmacy transactions.

About NCPDP

Founded in 1977, NCPDP is a not-for-profit, ANSI-accredited, Standards Development Organization (SDO). With over 1300 members representing virtually every sector of the pharmacy services industry, NCPDP has made great strides over the last 25 years. The NCPDP Provider Identification Number provides over 70,000 pharmacies with a unique identifying number for interactions with federal agencies and third party processors. NCPDP has hosted several Educational Programs on issues pertaining to HIPAA, Version 5, Product Identification, the Internet's impact on pharmacy, and health care legislation. NCPDP has 11 active Work Groups dedicated to the technological advancement of pharmacy through standards development. On August 17, 2000, NCPDP's Telecommunication Standard Version 5.1 and Batch Standard Version 1.0 (to be revised to Batch 1.1) were named the official standards for pharmacy claims in the Health Insurance Portability and Accountability Act's Final Rule on transactions and code sets. For more information about NCPDP, visit its web site at
http://www.ncpdp.org.

About HealthTrans
A Business Solutions Provider, HealthTrans is the largest independent processor of pharmacy claims adjudication. The Greenwood Village, Colorado-based company offers to pharmacy payers a suite of Web-enabled business services for pharmacy claims processing, drug utilization review, financial reporting, billing and payments as well as manufacturer's rebate processing and reporting. For more information about HealthTrans, visit its Web site at http://www.healthtrans.com.

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