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HIPAA Helps Outsourcing Company

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NU Online News Service, May 17, 7:23 p.m. – Antares Management Solutions L.L.C. is one of the companies that really likes the Health Insurance Portability and Accountability Act of 1996.

Health insurers and health maintenance organizations are shaking their heads at the technology-related regulations pouring out of Washington as a result of HIPAA.

The carriers’ confusion represents a huge opportunity for Antares and other companies that administer claims for health carriers.

For health carriers, HIPAA “is more expensive than Y2K was,” says Edward Hartzell, the founder and chief executive of the Westlake, Ohio, company. “We’re starting to get a lot of calls.”

Congress enacted the technology-related sections of HIPAA in an effort to persuade doctors, hospitals and health carriers to move toward adopting a universal data communications system. Congress also added health data privacy and security provisions, to give consumers confidence in the health data communications system.

Lawmakers hoped the HIPAA technology provisions would help eliminate the billions of dollars the U.S. health finance system spends each year on shuffling paper claims.

The HIPAA privacy requirements tend to attract the most attention, but implementing the less controversial data standards is proving to be far more expensive, Hartzell reports.

HHS is putting the finishing touches on a standard data format. Originally, it told health carriers they would have to be capable of handling transactions submitted in the standard format Oct. 16. Now, HHS is saying carriers can push the deadline back to October 2003, if they file an acceptable HIPAA compliance plan by Oct. 16, 2002.

Hartzell has watched many carriers put off serious compliance efforts in the hope that the Bush administration would kill the requirements.

“That has not happened,” Hartzell says.

Now that the deadline for compliance is approaching, carriers have to take HIPAA seriously, because HIPAA gives the government the authority to impose stiff penalties for violations, Hartzell says.

Antares, a 4-year-old subsidiary of Medical Mutual of Ohio, Cleveland, is competing with computer companies and consulting companies of all sizes for a piece of the health outsourcing action.

The company now has 650 employees and $85 million in annual revenue, and its connections with a large, established health insurer have helped it compete against bigger vendors, Hartzell says.

Antares recently won a five-year contract to administer the individual health insurance business that’s still on the books at Prudential Financial Inc., Newark, N.J.

A midsize Northeastern managed care company Oxford Health Plans Inc., Trumbull, Conn., made headlines around the same time by announcing it was taking a five-year, $270 million outsourcing arrangement with Computer Sciences Corp., El Segundo, Calif., back in house after only two years.

But Hartzell calls the Oxford announcement an anomaly. He says he still sees plenty of opportunities for health outsourcing companies to get and keep new accounts.

“There are a lot of [health insurance] companies that are just trying to stay in the business by making a profit,” Hartzell says.

Once health carriers outsource, he says, they may be able to cut costs, and they no longer have to worry as much about Web interface technology, disaster planning, or HIPAA.


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