Today the Centers for Medicare & Medicaid Services' Office of E-Health Standards and Services (OESS) announced that it would not initiate enforcement action until March 31, 2012, with respect to any HIPAA covered entity that is not in compliance with the ASC X12 Version 5010 (Version 5010), NCPDP Telecom D.0 (NCPDP D.0) and NCPDP Medicaid Subrogation 3.0 (NCPDP 3.0) standards. Notwithstanding OESS' discretionary application of its enforcement authority, the compliance date for use of these new standards remains January 1, 2012 (small health plans have until January 1, 2013 to comply with NCPDP 3.0).

CMS' Office of E-Health Standards and Services is the U.S. Department of Health and Human Services' component that enforces compliance with HIPAA transaction and code set standards.

OESS encourages all covered entities to continue working with their trading partners to become compliant with the new HIPAA standards, and to determine their readiness to accept the new standards as of January 1, 2012.

While enforcement action will not be taken, OESS will continue to accept

complaints associated with compliance with Version 5010, NCPDP D.0 and NCPDP 3.0 transaction standards during the 90-day period beginning January 1, 2012. If requested by OESS, covered entities that are the subject of complaints (known as "filed-against entities") must produce evidence of either compliance or a good faith effort to become compliant with the new HIPAA standards during the 90-day period.

OESS made the decision for a discretionary enforcement period based on industry feedback revealing that, with only about 45 days remaining before the January 1, 2012 compliance date, testing between some covered entities and their trading partners has not yet reached a threshold whereby a majority of covered entities would be able to be in compliance by January 1.

Feedback indicates that the number of submitters, the volume of transactions, and other testing data used as indicators of the industry's readiness to comply with the new standards have been low across some industry sectors. OESS has also received reports that many covered entities are still

awaiting software upgrades.