Computer Technology


Coming October 1: New HIPAA and CMS requirements

An annual rite of fall is the arrival of new government requirements for nursing homes. October 1 will bring new assessment, payment, and HIPAA challenges for providers to contend with. Providers must anticipate these changes and ensure that their supporting software and systems are ready.

Why the timing? October 1 is the start of the federal government’s fiscal year. This is always the time for rate adjustments and code-set changes. This year there will also be changes to the MDS and the beginning of the long-anticipated HIPAA-related innovation, the National Provider Identifier program.

Let’s start with the latter.

National Provider Identifier Number
The National Provider Identification number (NPI) implements a HIPAA Admin-istrative Simplification requirement that will, in fact, benefit all providers; providers will be identified by a single identification number for all payers. The NPI will be a unique ten-digit number that does not contain any information about the owner. Both organizations and individual providers may apply for an NPI, and they have until May 23, 2007, to obtain it.

Although there will be a transition period (see below), providers may request an NPI now at or by calling (800) 465-3203 to request a paper application.

After May 23, 2007, all standard transactions will require that the NPI be used. All covered entities (including insurance companies, clearinghouses, fiscal intermediaries, and Medicaid agencies) will be required to accept a provider’s NPI in all standard transactions (claims, eligibility inquiries and responses, claim status inquiries and responses, referrals, and remittance advices). Other identification numbers (e.g., UPIN, Blue Cross and Blue Shield numbers, CHAMPUS number, Medicare and Medicaid numbers, etc.) will not be permitted after that date. (A company’s Employer Identification Number may be required in some cases for tax purposes.)

The Centers for Medicare & Medicaid Services (CMS) plans to transition to the NPI in the fee-for-service Medicare program on the following schedule:

  • Between May 23, 2005, and January 2, 2006, CMS claims-processing systems will accept an existing legacy Medicare number and reject as “un-processable” any claim that includes only an NPI.
  • Beginning January 3, 2006, and through October 1, 2006, CMS systems will accept an existing legacy Medicare number or an NPI that is accompanied by an existing legacy Medicare number.
  • Beginning October 2, 2006, and through May 22, 2007, CMS systems will accept an existing legacy Medicare number and/or an NPI. This will allow for seven months of provider testing before the NPI-only approach begins on May 23, 2007.

Providers should start working with their billing software vendor to validate that their plans will meet their needs. Providers should also be proactive in making sure that covered entities with which they do business have their NPI implementation instructions.

MDS Section W
A new MDS section will become effective for all MDS assessments with assessment reference dates of October 1, 2005, or later. Section W contains supplemental items to document the resident’s influenza and pneumococcal immunization status. The final version of the section was scheduled to have been posted on August 22, 2005 (see Although software vendors should already be preparing for Section W, they will not be able to complete their implementation until the final version is released.

The draft instructions require documenting each resident’s influenza immunization status during each flu season. The resident’s pneumococcal vaccine status has a more complex algorithm that considers the resident’s age and the time since the first dose. Once the resident is in “current” vaccination status and is at least 65 years old, no further vaccination is indicated. The facility’s MDS coordinators will need training on this and will need to develop systems to monitor residents’ immunization status.

Code Sets
October 1 is the required date for using the FY 2006 ICD-9-CM diagnosis codes and the 2006 HCPCS codes. In past years, CMS provided a three-month window during which Medicare would accept either the legacy or new codes. The current policy as determined by HIPAA requires that the new codes be used as of October 1. Check with your vendors to ensure you have the proper codes and whether there are any transition issues that clinical or billing staff should be aware of. From a clinical perspective, October 1 is a good date by which to review all residents’ ICD-9-CMs to make sure they are current and accurate, especially since claims can be delayed or denied if incorrect codes are used.

Computer software essential to business operations cannot be static; it must always be adaptable to changing conditions. This is particularly true in long-term care, which must deal with many regulations that are changing constantly. It pays to be aware of the changes, the timing involved, and technology vendors’ responses to them.

David Oatway, RN, a long-term care IT consultant based in Key West, Florida, was the Department of Defense Project Officer for the initial clinical requirements phase of the Composite Health Care System (CHCS-I). He worked with HCFA/CMS on the Prospective Payment System for SNFs and contributed to the development of MDS 2.0. He developed one of the first clinical/MDS systems (CHAMP). He is the Chair of the Healthcare Information and Management Systems Society (HIMSS) Long Term Care and Post Acute Special Interest Group and a member of the American Health Information Management Association (AHIMA) and the Health Level Seven (HL7) organization. He was the vice-chair for the American Association of Nurse Assessment Coordinators. To send your comments to the author and editors, please e-mail To order reprints in quantities of 100 or more, call (866) 377-6454.

NOTE: The views expressed in this article are the author’s and do not necessarily represent the official views of any organization.

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