Medicare Compliance & Reimbursement

Providers can submit non-compliant claims through September.

The Centers for Medicare and Medicaid Services announced Aug. 4 that as of Oct. 1, 2005, it will no longer process incoming electronic Medicare claims that do not comply with standards required by the Health Insurance Portability and Accountability Act of 1996.

Prior to Oct. 1, claims in a non-compliant electronic format will continue to be paid. After that date, non-compliant claims will have to be re-submitted. CMS Says Providers Can Comply According to CMS administrator Mark McClellan, as of June 2005, only about 0.5 percent of Medicare fee-for-service providers submitted non-HIPAA-compliant electronic claims. The highest rate of non-complaint claims as of May was from clinical laboratories, 1.72 percent. Only 1.45 percent of claims from hospitals were non-compliant and 0.45 percent from physicians.

CMS points to the high percentage of compliance among all provider types and sizes as evidence that all providers can meet the law's requirements. "We are firmly committed to an interoperable electronic health care system," McClellan said, noting that the health care industry shares that commitment.

"We'll be working with the non-compliant providers between now and October 1 with the goal of getting as close to 100 percent [compliance] as possible before then," according to McClellan.

The deadline to cease accepting non-HIPAA compliant claims marks the end to contingency plans put into place in October 2003 that allowed CMS to continue accepting non-compliant electronic claims after an earlier deadline proved to be problematic for the health care industry.

Despite a law requiring all payers to conduct HIPAA-compliant transactions no later than Oct. 16, 2003, only about 31 percent of Medicare claims were compliant at that time. Other payers had even lower numbers of compliant claims.

The federal government was concerned that implementation of the compliance law would cause major disruptions in the health-care industry by impacting the cash flow of hospitals, doctors and others.