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Now, we'll explore the next level of HIPAA - specifics that, for many of us, cause more confusion than clarity. Let's try to make "Administrative Simplification" simple! HIPAA's "Administrative Simplification" provision is composed of four parts, each of which have generated a variety of "rules" and "standards." Many of the rules and standards are still in the "proposed" (by DHHS) stage; however, most ara expected to become "final" rules within the year 2000. Even more confusing, the rules, when final, will often have different compliance deadlines. The four parts of Administrative Simplification are: I. ELECTRONIC HEALTH TRANSACTIONS STANDARDS II. UNIQUE IDENTIFIERS III. SECURITY & ELECTRONIC SIGNATURE STANDARDS IV. PRIVACY & CONFIDENTIALITY STANDARDS I, ELECTRONIC HEALTH TRANSACTIONS STANDARDS The term "Electronic Health Transactions" includes health claims, health plan eligibility, enrollment and disenrollment, payments for care and health plan premiums, claim status, first injury reports, coordination of benefits, and related transactions. Today, health providers and plans use many different electronic formats. Implementing a national standard will mean we will all use one format, thereby "simplifying" and improving transaction efficiency nationwide. The proposed rule requires use of specific electronic formats developed by ANSI, the American National Standards Institute, for most transactions except claims attachments and first reports of injury. Proposed regulations for these exceptions are not yet out. Virtually all health plans will have to adopt these standards, even if a transaction is on paper or by phone or FAX. Providers using non-electronic transactions are not required to adopt the standards; although if they don't, they will have to contract with a clearinghouse to provide translation services. Health organizations also must adopt STANDARD CODE SETS to be used in all health transactions. For example, coding systems that describe diseases, injuries, and other health problems, as well as their causes, symptoms and actions taken must become uniform. All parties to any transaction will have to use and accept the same coding. Again, in the long run, this is intended to reduce mistakes, duplication of effort and costs. Fortunately, the code sets proposed as HIPAA standards are already used by many health plans, clearinghouses and providers, which should ease the transition. II. UNIQUE IDENTIFIERS FOR PROVIDERS, EMPLOYERS, HEALTH PLANS and PATIENTS The current system allows us to have multiple ID numbers when dealing with each other, which HIPAA sees as confusing, conducive to error and costly. It is expected that standard identifiers will reduce these problems. III. SECURITY OF HEALTH INFORMATION & ELECTRONIC SIGNATURE STANDARDS The new Security Standard will provide a uniform level of protection of all health information that is 1. housed or transmitted electronically and that 2. pertains to an individual. In addition, organizations who use Electronic Signatures will have to meet a standard ensuring message integrity, user authentication, and non-repudiation. The Security standard mandates safeguards for physical storage and maintenance, transmission, and access to individual health information. It applies not only to the transactions adopted under HIPAA, but to