September 2003 AAOS Report

AAOS advises: Minimize payment disruptions after October 16

The HIPAA Transactions and Code Sets (TCS) regulations become effective on October 16, when all but the smallest orthopaedic practices must submit insurance claims electronically and in accordance with new regulations. In fact, practices should have started sending TCS-compliant test claims to their payers in April so that vendors and payers could fine-tune their transmission protocols before October. Even now, however, few orthopaedists are in a position to do this because most have to depend on vendors to update their computer software to become TCS-compliant. Vendors, however, say they cannot make needed upgrades until payers implement their own changes. Payers in turn assert they are behind schedule because the final amendments to the regulations were not published until February 2003. They also say the final requirements are confusing and that as a result, making software upgrades is a very complex process.

The window of opportunity for orthopaedic offices to start testing their claim transactions is closing. HIPAA experts agree that as October 16 approaches, and more covered entities do start testing, a massive backlog is likely. Practices that try to catch up too late may not be able to generate TCS-compliant electronic claims by the deadline and will be in technical violation of the law. Moreover, non-compliant claims submitted by such practices to payers including Medicare may not be reimbursed. Six recommended steps are set forth in the Academy's Web site at

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