Banks Should File HIPAA Extension By October 16th

Banks Should File HIPAA Extension
By October 16th
By Christopher C. Gallagher, Esq., Susan B. Hollinger, Esq., and Susan N. LeDuc, CRCM

Banks that process payments for the healthcare industry could be subject to the requirements of HIPAA, the Health Insurance Portability and Accountability Act of 1996, by functioning as a "healthcare clearinghouse" under the law. HIPAA requires all healthcare clearinghouses to file a compliance plan with the Department of Health and Human Services (HHS) by October 16, 2002. If a healthcare clearinghouse is not able to timely file the compliance plan, it must request an extension of the October 2002 deadline in writing, which will result in the compliance deadline being extended to October 16, 2003.

The Banking Industry HIPAA Task Force, a joint initiative of the American Bankers Association (ABA) and NACHA -- the Electronic Payments Association, has prepared a summary and white paper on bank compliance with HIPAA. The stated purpose of the white paper is to provide (unofficial) guidance for the banking industry and its customers in the healthcare industry on the impact of HIPAA requirements on the banking industry.

As noted in the white paper, a healthcare clearinghouse can have healthcare providers or health plans as customers. Although the Task Force believes that no bank is a healthcare clearinghouse under HIPAA by mere origination or receipt of an ACH transaction for such standard transactions as premium and claim payments, those banks that provide additional services for their healthcare customers, such as lockbox services, may be >
The HIPAA Task Force has prepared a sample extension letter that a bank can use to request an extension of the October 16, 2002 deadline. See their one-page summary, which discusses why they recommend that banks request an extension.

Sample extension letter -- Word .doc format (Right click the link, save the file, then open in Word)
One-page summary -- Word .doc format (Right click the link, save the file, then open in Word)

We concur with the recommendations of the HIPAA Task Force and encourage all banks that might be considered a healthcare clearinghouse to file for an extension before the October 16, 2002 deadline.

Copyright, 2002, Gallagher, Callahan & Gartrell, Professional Association, 214 N. Main Street, P.O. Box 1415, Concord, NH 03302-1415. Telephone: 603-228-1181 or 800-528-1181.

First published on BankersOnline.com 10/04/02