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Toeing the line: health data, rate and form filing are insurers' top electronic compliance issues.

For insurers dealing with technology-related compliance issues, these days it all comes down to two acronyms: HIPAA and SERFF.

HIPAA refers to the Health Insurance Portability and Accountability Act of which mandates how an insured's private health data are handled SERFF is the propriety electronic rate and form filling system promoted by the National Association of Insurance Commissioners.

The NAIC's System for Electronic Rate and Form Filing has been around in some form since 1997 and saw voluntary adoption in all 50 states and Washington, D.C., only in February. As the name implies, it is a Web-based rate and form-filing system. Though it might seem to make those filings easier, there's still some resistance, according to James V. McMahan III, deputy commissioner of the Maryland Insurance Administration.

"I know there are companies out there that can't stand SERFE I know it because I'm hearing from them directly," McMahan said. "I don't think anybody has any problems with filing electronically, because I hear companies ask us, 'Is there any way we can file (electronically) without using SERFF?' ... I know there are people out there who love it and people out there who hate it."

Though slow to take off, SERFF has seen its use accelerate. Technically, it doesn't do anything that couldn't be accomplished through e-mail, but NAIC's proprietary software is secure and encrypted, and it allows insurers to send their filings to as many states as they want. The standardized format also gives insurers the uniformity for which they have been lobbying. Use picked up when the NAIC dropped the licensing fees companies paid to use the system in 2001; as of late July 2004, the NAIC reported that nearly 72,000 rate and form filings had been submitted so far during the year, with 11,700 of those filings in June alone.

"It's a very valuable tool in my view," said Lawrence H. Mirel, commissioner of the District of Columbia Department of Insurance, Securities and Banking. "It seems to me as though the more companies use it and the more states encourage its use, the more valuable it will become."

SERFF is not mandatory, but some states that accept electronic filings will do so only through the SERFF system.

And while SERFF may not be mandatory, complying with HIPAA is. The federal government enacted new rules in October 2003 focusing on the technical aspects of the electronic billing process and requiring certain standard formats when health-care transactions are transmitted electronically. Companies that handle claims electronically, whether insurers or providers, need to use certain software or else use some other third party to turn the information into a HIPAA-compliant format.

Confusion about the HIPAA regulations has spawned a cottage industry. The U.S. Department of Health and Human Services has a suboffice devoted to compliance issues, while a number of companies have popped up offering to help providers, insurers and other entities covered under the law comply with the law when dealing with patients' private data electronically. Some insurers also offer premium discounts on their professional liability policies to doctors, psychologists and other providers who take continuing education courses on how to comply with new HIPAA privacy rules.

Key Points

* Insurers are struggling to be sure their electronic handling of policyholders' private health data complies with HIPAA regulations.

* Although the NAIC's System for Electronic Rate and Form Filing is designed to make filings easier, some insurers resist using the system.

* Several agencies have been created to help insurers comply with HIPAA.

Speaker Spotlight

James V. McMahan III

Deputy Commissioner, Maryland Insurance Administration

"On the Regulatory Horizon"

Lawrence H. Mirel

Commissioner of the District of Columbia

Department of Insurance, Securities and Banking "State and Local Regulatory Hot Spots: What to Know, What to Prepare or Now"

Hyatt Regency Hotel, Inner Harbor


Oct. 17-19, 2004
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Article Details
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Title Annotation:E-Fusion 2004
Author:Grier, Chris
Publication:Best's Review
Geographic Code:1USA
Date:Sep 1, 2004
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