42 Cfr Part 2 Compliance In Sud Billing: What You Need To Know

By Author: 247 medical billing
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On February 16, 2024, the U.S. Department of Health and Human Services (HHS), in collaboration with SAMHSA and the Office for Civil Rights (OCR), issued a Final Rule updating 42 CFR Part 2.

These changes align Part 2 privacy protections with HIPAA under the CARES Act, making it easier to share health information for coordinated care while safeguarding patient confidentiality.

The new rule takes effect April 16, 2024, with full compliance required by February 16, 2026.

If you handle Substance Use Disorder (SUD) billing, understanding these updates is essential for protecting your patients and avoiding costly penalties.

What is 42 CFR Part 2?
42 CFR Part 2 is a federal privacy law that protects the records of individuals receiving SUD treatment.

It was designed to encourage people to seek help without fear of discrimination, stigma, or legal issues.

It applies to federally assisted programs that diagnose, treat, or refer patients for SUD care — also known as “Part 2 programs.”

Who Must Comply with 42 CFR Part 2?
Your clinic is considered a Part 2 program if:

You ...
... are federally assisted (receive federal funds, hold a DEA registration for controlled substances, or have a federal license/certification).

You provide SUD services (diagnosis, treatment, or referrals) and publicly present yourself as doing so.

Special Note: Even if you’re not a Part 2 program, if you receive Part 2 records, you must safeguard them and cannot redisclose without patient consent.

Key 2024 Compliance Updates Affecting SUD Billing
The Final Rule brings important billing-related changes that certified medical coders and billing specialists must follow:

1. Single TPO Consent
Patients can now give one written consent for their records to be used for Treatment, Payment, and Healthcare Operations (TPO).

This eliminates multiple consent requests, streamlining SUD billing workflows.

2. Redisclosure Rules
If a HIPAA-covered entity or SUD billing company receives records under valid TPO consent, they can redisclose them per HIPAA — but not for legal purposes without new consent or a court order.

3. Updated Notice of Privacy Practices (NPP)
Your NPP must match HIPAA’s format and clearly explain how billing and insurance data is handled.

4. No Record Segmentation
Electronic health record (EHR) systems no longer need to separate SUD records from other medical records, making claim processing and billing simpler.

5. Separate Consent for Counseling Notes
SUD counseling notes require separate consent and must be stored securely, accessible only to the originating clinician.

6. Sharing De-identified Data
You may disclose de-identified SUD records to public health authorities without patient consent if HIPAA de-identification standards are met.

7. New Patient Rights
Right to request a list of all disclosures (including billing-related).

Right to request restrictions on use/sharing of records.

8. Breach Notification
Any breach involving SUD billing data must follow HIPAA’s Breach Notification Rule.

9. Civil Penalties
Violations carry penalties similar to HIPAA, making compliance a financial necessity.

Steps to Ensure Compliance in SUD Billing
1. Determine If You’re a Part 2 Program
Use SAMHSA’s guidance or CoE-PHI’s decision tree to confirm your status.

2. Review and Update Consent Forms
Include broad TPO consent and separate consent for counseling notes.

3. Train Your Team
Ensure all staff — especially certified medical coders and billing specialists — understand new rules, consent requirements, and handling procedures.

4. Optimize Your EHR Workflows
Work with your electronic health record (EHR) systems vendor to manage consents, redisclosures, and secure access controls.

5. Update Policies and Privacy Notices
Align your internal manuals and NPP with updated Part 2 and HIPAA requirements.

6. Track Disclosures and Patient Requests
Maintain logs and be ready to respond to patient rights requests.

7. Consider Outsourcing
Partner with a SUD billing company experienced in 42 CFR Part 2 and HIPAA compliance to reduce risks and improve revenue.

To lower compliance risks and boost billing accuracy, many providers are turning to outsourcing SUD billing and coding to trusted experts like 24/7 Medical Billing Services. Our certified team is trained in the latest 42 CFR Part 2 and HIPAA regulations, ensuring sensitive patient data is protected at every stage of the billing cycle. With our tailored solutions, you can streamline operations, reduce compliance errors, and maximize overall revenue performance.

FAQs
Q1. Are SUD mobile apps covered under Part 2?

Some may qualify based on funding and services.

Q2. Does Part 2 apply to peer support specialists?

Yes, if they work in a federally assisted program.

Q3. Are Medicare or Medicaid billing systems Part 2 compliant?

Yes, when processing Part 2 records under proper consent.

Q4. Can patients revoke consent?

Yes, at any time in writing.

For More Information:
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