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Health care organizations across the United States are gearing up for major new federal rules intended to reduce paperwork, and consultants and billing companies stand to cash in big. The 1996 Health Insurance Portability and Accountability Act (HIPAA) calls for hospitals, insurers and other health care companies to adopt standard formats for filing insurance claims and other medical forms electronically. The law’s requirements are so sweeping that many health care institutions are preparing for an overhaul of their information systems that some compare to the massive changes associated with Y2K compliance. Although the law was passed four years ago, the HIPAA regulations are just beginning to be implemented, and health care organizations will have two years to be in full compliance. The goal of the law is to eliminate administrative costs related to shuffling hundreds of different claim forms and other documents between hospitals, physicians and insurers. These costs currently represent nearly 20 percent, or $200 billion, of the $1.1 trillion spent on national health care. But the savings won’t come without a price tag. One South Florida company eyeing the pending boom in health care work is Miami-based Stratsys Corp., a technology consulting firm. “It is an opportunity for us to get new customers and increase business with existing customers,” says Arnie Girnun, a principal and managing partner for Stratsys, which counts Baptist Health Systems and Mercy Hospital in Miami-Dade among its clients. Girnun says consulting work for HIPAA begins in the $50,000 to $100,000 range, but could go higher. That’s because some organizations see HIPAA as warranting an overhaul of patient information systems. A $50,000 consulting job, he says, could lead to a $500,000 Web site project that allows a hospital to store and track patient data. Baptist Health Systems, for instance, will be able to share patient information among its four south Miami-Dade hospitals. Today, a patient at Baptist Hospital has to fill out a new patient form every time he or she goes in for treatment. A visit to South Miami Hospital, another Baptist-run hospital, requires yet another patient form. With the standard formats required under the new rules, Girnun says, Baptist hospitals will be able to adopt a single form that can be shared via an intranet and used for insurance claim filings as well. “This presents a very aggressive revenue opportunity for anybody involved in implementing [health care computer systems],” he says, “from software companies to pure health care consultants to technology consultants.” Insurance companies, though, may be trading one bureaucracy for another. Some will turn more and more to so-called clearinghouses, companies that now process insurance claims on behalf of physicians seeking payment for services. Beacon Health Plans of Coral Gables, Fla., plans to establish relationships with clearinghouses even though it will have a direct electronic link to its high-volume health care providers. “I think there will be an increase in demand for clearinghouses,” says Wilfredo Gonzalez, Beacon’s chief operations officer. “It would be impractical to do direct electronic filing with all our members because not everyone is going to have the technology to communicate directly.” One clearinghouse, Boca Raton, Fla.-based Diabco Billing Systems, is developing a scanner system that will allow clients to place bar codes on forms so information can be input electronically, says Diabco’s director of sales and marketing Karen Gantz. “The new rules are good for us because it gives us another mechanism to sell our services,” Gantz says. Health care providers like Baptist, the North Broward Hospital District, the public health trust that runs Jackson Memorial Hospital, and Mercy Hospital in Miami-Dade have set up HIPAA compliance teams, similar to those organized for Y2K, to make sure there is a smooth transition to the new standards. Mark Knight, corporate compliance officer of the four-hospital North Broward Hospital District, says the district has set aside $5 million for HIPAA compliance costs. He will not know what the final costs will be until the government publishes all the new regulations. “The figures could change if we need to bring in computer programmers to redesign entire systems,” Knight says. Mimi Taylor, Baptist’s corporate vice-president of information technology, says Baptist could spend up to $3 million on HIPAA compliance, but that it is a rough guess based on its Y2K spending. “I do think this is going to be a much larger effort than Y2K,” Taylor says. Girnun of Stratsys, which is also working with insurer AvMed, says his company is working with clients to update software. In some cases, he says, Stratsys will build new computer systems that will allow proprietary forms to be converted to the new standard forms automatically. It is hoped that HIPAA compliance will cut the time spent processing insurance claims and forms between hospitals, physicians and HMOs. At the same time, the numerous errors that result from having different codes assigned to the same medical procedures would be eliminated. “The forms filled out by Medicare and the managed health care plans are completely different from the forms filled out by the health care providers,” says Knight. “We have to accommodate numerous forms and billing types to get payment. Under these new rules, the guidelines will be the same for everyone, so we can generate one bill for [every health care plan].” “You save on the number of errors,” says Beacon’s Gonzalez. “When someone inputs information on hard copy, you have errors. That means you end up overpaying or underpaying, and then the claims have to be adjusted.”

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