NAII Lauds HIPPA Change on Workers’ Comp in Final Rule

August 15, 2002

The Department of Health and Human Services (HHS) recently released its final privacy standard that has been modified to recognize that the rule should not impede administration of state workers’ compensation claims.

The National Association of Independent Insurers (NAII) said it is pleased the Health Insurance Portability and Accountability Act (HIPPA) under HHS now provides that in cases where an insurer has authorization from a claimant, the minimum standard does not apply. NAII believes the HHS modification will expedite workers’ compensation claims and prevent fraud and other abuses of the system.

The final rule, as mandated by the Health Insurance Portability and Accountability Act (HIPPA), provides exemptions for health information providers on the amount of health history information shared. By eliminating the “minimum necessary” rule for workers’ compensation claims, health providers would be permitted to share more comprehensive health information.

NAII had requested that HHS provide an overall exemption from the application of the minimum necessary standard for workers’ compensation claims. Although the department did not include an exception in the HIPPA final for workers’ compensation cases, it made clear in its preamble that HHS does not intend for the standard to be used to impede administration of workers’ compensation claims and that the department, as well as state regulatory oversight agencies, will carefully monitor the situation to ensure that problems don’t arise that could affect the state workers’ compensation systems.

“Comprehensive health information history is critical to the accurate and timely settlement of workers’ compensation claims,” Kathleen Jensen, NAII insurance services counsel, said. “Although we would have preferred an exemption, NAII believes that this modification will be workable and will help to expedite workers’ compensation claims in a manner that will benefit both the worker and the insurer.”

The HIPPA privacy rule permits disclosure of protected information that is reasonably necessary for workers’ compensation claims and is intended to operate to permit information to be shared to the full extent permitted by state or other law. HHS and state agencies will actively monitor the application of the minimum necessary standard and if it is misused or misapplied to the extent that there is an impact on the smooth operations of workers’ compensation systems, HHS will consider modifications. NAII intends to work with member companies and HHS to monitor the impact of the provision.

The HHS final privacy rule covers health plans, health care clearinghouses and health care providers who conduct financial and administrative transactions electronically. Although the privacy rule is not intended to cover workers’ compensation insurers or other property/casualty coverages, provisions restricting the information sharing practices of “covered entities” indirectly impact property/casualty insurers. Covered entities must be in compliance with the HIPPA Privacy Rule by April 14, 2003.

Topics Workers' Compensation

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