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To: sammaster who wrote (11980)	2/26/1998 1:29:00 PM
From: Hardrocker	Respond to of 31646

Year 2000 Problem and New Data Standards A Double Whammy for Health Care Industry BETHESDA, Md., Feb. 26 /PRNewswire/ -- The clock is ticking for health care providers and employers to meet emerging federally imposed standards on the privacy, confidentiality and electronic transmission of health data, according to Watson Wyatt Worldwide, a leading management and employee benefits consulting firm. Pursuant to section 264 of the Health Insurance Portability and Accountability Act (HIPAA), the Department of Health and Human Services has established new rules for employers, managed care companies, health care providers and data warehouses to standardize data formats and electronic data transmission, while protecting health data from illicit use. For all but the smallest employer-sponsored health plans, these standards will become effective February 2000. "For companies that already have a Year 2000 problem, these HIPAA requirements add a whole new layer of difficulty," says Randall K. Abbott, Eastern region health care practice leader for Watson Wyatt. "Employers should immediately start asking their HMOs and health care providers how they intend to comply with these requirements. In fact, we are suggesting to our employer clients that they carefully question their vendors and, where needed, demand performance guarantees for any health services contract starting after January 1, 1999." Watson Wyatt estimates that 25-40 percent of all claims are now processed electronically, with best-in-class organizations achieving upwards of 50 percent. The numbers are rising every year and Watson Wyatt expects that by 2002 nearly all claims will be processed and adjudicated electronically. Managed care companies and health care providers that cannot receive, process and pay claims electronically will ultimately become less competitive. Not only is manual processing significantly more expensive than electronic processing and adjudication of claims, it is also more difficult to keep paper records secure under the new privacy and confidentiality strictures. "HIPAA may not actually mandate that health care companies process claims electronically," says Mr. Abbott. "However, real world competition soon will drive out of business those companies who can't make the shift." Watson Wyatt Worldwide is a leading global management consulting firm with more than 5,000 associates in 36 countries. SOURCE Watson Wyatt Worldwide CONTACT: Andrew Sandor, 301-581-4693, or Gretchen Ace, 301-581-4538, both of Watson Wyatt Worldwide