August 2005

CMS ends contingency for non-HIPAA- compliant claims

The Centers for Medicare & Medicaid Services (CMS) has announced that CMS will not process incoming non-HIPAA-compliant electronic Medicare claims submitted for payment beginning October 1, 2005.

Prior to October 1, claims in a non-compliant electronic format will continue to be paid. After October 1, claims that do not meet standards required by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) will be returned to the filer for re-submission as compliant claims.

This action, affecting claims for services provided under fee-for-service Medicare, ends a portion of a CMS’ HIPAA contingency plan in effect since Oct. 16, 2003, under which Medicare continued accepting non-compliant electronic claims after the deadline.

HIPAA required the Secretary of Health and Human Services to adopt standards for healthcare claims and other financial and administrative transactions used by the healthcare industry. The law required all payers to conduct HIPAA-compliant transactions no later than Oct. 16, 2003.

However, only about 31 percent of Medicare claims were compliant at that time. Other payers had even lower numbers of compliant claims.

To address this problem, in accordance with enforcement guidance issued on July 24, 2003, CMS established a contingency plan that allowed its trading partners to submit claims in electronic formats currently in use. The guidance, however, directed covered entities to make reasonable and diligent efforts to come into compliance and, in the case of health plans, to assist their trading partners to come into compliance.

To enable electronic submission of HIPAA-compliant claims, CMS continues to make available free/low cost software through Medicare carriers and intermediaries. This is one part of the extensive campaign by CMS to help filers become compliant through extensive outreach to the remaining non-compliant providers/submitters.

Source: Center for Medicare & Medicaid Services, www.medicare.gov

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