Jersey leads way on HIPAA

• By Dibya Sarkar
• Nov 18, 2001

HIPAA home page

While many health care providers and payers fret over meeting federal deadlines

regarding electronic sharing of health information, New Jersey seems well

ahead of the pack.

New Jersey officials began assessing back in 1993 how the state could

improve its health care system and save money by using electronic data interchange

technology and national standards for transmitting health care data. As

a result of a study by the Thomas Edison State College and New Jersey Institute

of Technology, they found that the state could save $760 million annually.

By doing such an analysis and having the state legislature pass laws

to simplify health care administration, New Jersey is ahead of other states

in helping providers and payers implement the rules set forth by the Health

Insurance Portability and Accountability Act of 1996.

The New Jersey study was presented during a one-day HIPAA conference

Nov. 16 in Washington, D.C., sponsored by Federal Sources Inc. and Potomac

Forum Ltd.

According to New Jersey's Healthcare Information Networks and Technologies

study, electronic claims are cheaper, more accurate and faster to process

than paper-based claims.

The study estimated that national health care expenditures for the 4.6

billion claims processed annually were about $1 trillion, of which $183

billion represented administrative costs. In New Jersey, the cost of processing

150 million claims was $30 billion annually, of which $5 billion went to

administrative costs.

As a result of the study, state laws mandated:

* Standardized health care enrollment and claims forms.

* Standardized electronic transmission of health care data using HIPAA

national standards.

* Continued monitoring of electronic data interchange technology and

its effectiveness.

* Prompt submission of claims by providers and prompt payment of claims

by payers.

Mark Gordon, director of special studies at Thomas Edison State College,

said he expected New Jersey to comply with the federal Transactions and

Code Sets rule by next October. By Oct. 16, 2002, providers and payers must

comply with the rule, which sets forth national standards for codes that

identify patients and describe diseases, injuries and other health problems.