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CMS to cease processing of noncompliant transactions

HIPAA Weekly Advisor, August 8, 2005

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Organizations not ready to submit HIPAA-compliant electronic Medicare claims will be out of luck as of October 1, 2005. CMS announced last week that, as of that date, it will not process incoming non-HIPAA-compliant electronic Medicare claims submitted for payment.

Prior to October 1, 2005, CMS will continue to pay claims in a noncompliant electronic format. But as of October 1, 2005, CMS will return noncompliant claims to the filer for resubmission as compliant claims. CMS will not process noncompliant claims.

CMS reported that as of June 2005, only about 0.5% of Medicare fee-for-service providers submitted non-HIPAA-compliant electronic claims. The highest rate of noncomplaint claims as of May was from clinical laboratories-1.72%. Only 1.45% of claims from hospitals and 0.45% of claims from physicians were noncompliant.

The action ends a portion of a CMS' HIPAA contingency plan in effect since October 16, 2003, under which Medicare continued accepting noncompliant electronic claims after the deadline. The contingency plan continues for other electronic healthcare transactions, but CMS expects to end the contingency plan for these transactions in the near future. The remittance advice transaction is the next HIPAA transaction for which CMS expects to end its contingency plan.

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