As the microchip has transformed almost every aspect of daily living in the last decade and a half, so too does it promise to revolutionize the health care field and the practice of medicine.

Backed by large computer and data processing businesses that foresee huge profits in the emerging field of medical information systems, computerization of claims_and perhaps of entire medical records_is coming.

It is a growth industry supported by public health claims that computerized aggregation of data will assist in research and improve knowledge about treatment outcomes. Yet along with this revolution come grave concerns about privacy and confidentiality.

Jay Cutler, director of APA's Division of Government Relations, told Psychiatric News that APA has been lobbying to persuade lawmakers that the rights of patients and doctors must be protected as Congress, and now the Administration, addresses the issue of computerization standards_referred to in legislative argot as "administrative simplification."

Emerging most recently as part of the recently enacted Health Insurance Portability and Accountability Act of 1996 (the "Kassebaum-Kennedy" legislation), "administrative simplification" first appeared as part of the Clinton Administration's proposed overhaul of the nation's health care system. At that time, it was envisioned as a way to streamline the health care system and cut down on waste and fraud while saving health care dollars.

As such, administrative simplification was a "mom and apple pie" issue, a hugely popular feature of what was to be a brand new national health care system under which everyone received access to care.

Clinton's plans for the nation's health care system died, Cutler said, but "administrative simplification" survived.

With the backing of businesses that see huge profits in the emerging field of medical information systems, "administrative simplification" is no longer a visionary ideal but a reality driven by economics and the microchip revolution.

Since "administrative simplification" was first introduced as part of the Clinton health reform package, the issue has had a convoluted legislative history in which APA has consistently lobbied to protect the privacy of doctors and patients.

Throughout legislative debate, APA has been able to defeat attempts to require all providers and patients to submit personally identifiable information in computerized form, Cutler said.

Instead of mandates on all physicians and patients, APA has succeeded in getting Congress to agree to "standardization" of transactions for those health plans that file insurance claims electronically, Cutler said.

"This is not all we would have wished to achieve, but it is an identifiable modicum of legislative success," Cutler said.

The Kassebaum-Kennedy legislation incorporated this language on "standardization."

The law requires the Secretary of Health and Human Services to develop "standards and requirements for the electronic transmission of certain health information."

Cutler reiterated that the legislation does not require computerization; rather it calls for standards and regulations to determine how information should be properly transmitted electronically.

The new standards, to be developed by the Secretary of Health and Human Services (HHS) within 18 months and complied with 24 months later, will apply to a range of transactions, including health care claims and "equivalent encounter information."

What is to be included in "equivalent encounter information" is still to be determined by HHS; the term is intended to refer to information related to a health claims, but may be interpreted either broadly or narrowly.

Cutler said that while "equivalent encounter information" is still troublesome language, it is superior to earlier legislative efforts that were amended in direct response to APA's concerns about confidentiality.

In addition, the new law calls for the Secretary of HHS to submit detailed recommendations on medical record privacy to Congress.

Cutler said this is another improvement stemming from APA's lobbying, since earlier versions granted the Secretary of HHS the sole authority to develop regulations safeguarding privacy without input from Congress.

"APA has argued that Congress is the appropriate body to deal with the confidentiality issue," Cutler said.

If Congress does not act in two years, the Secretary can promulgate regulations on privacy of electronic transactions, Cutler said.

Finally, APA worked with allies to ensure that if regulations on patient privacy are developed by the Secretary of HHS, they will not preempt state regulations already on the books_especially those that are more stringent than the Secretary's.

Cutler pledged that APA will continue to lobby to protect the confidentiality of patient records, as Congress and the Administration continue to address the issue.

More information about the Kassebaum-Kennedy law or about provisions regarding administrative simplification is available by calling APA's Division of Government Relations at (202) 682-6060.

(Psychiatric News, October 18, 1996)