Hammer Coming Down for HIPAA Compliance

UPDATED: The Centers for Medicare and Medicaid Services has extended its deadline by five days, but providers that don't meet it will face a delay in their payments.

Medicare providers have only a few days left to file electronic claims that do not contain all of the information required by HIPAA, the Health Insurance Portability and Accountability Act.

The Centers for Medicare and Medicaid Services (CMS) had said it would treat electronic claims that dont comply with HIPAA as paper claims starting July 1, but has extended the compliance deadline to July 6.

Lawrence Hughes of the American Hospital Association (AHA) said he doesnt think health care providers will be immediately impacted by the shift. "It will take until the end of the month until you see something," he said.

In an attempt to motivate providers to adopt the standards more quickly, the CMS will treat noncompliant electronic claims as paper claims, paying them 13 days later than compliant electronic claims.

By law, Medicare pays compliant electronic claims no earlier than the 14th day after receipt, and now, both paper and noncompliant electronic claims will be paid no earlier than the 27th day after receipt. The change applies only to covered entities submitting Medicare claims to a Medicare contractor.

In April, the AHA and other groups asked the Department of Health and Human Services not to delay Medicare or Medicaid payment to providers even if they do not submit claims in the HIPAA format, provided that they are actively testing filing systems for compliance with CMS, the largest payer in the country. The coalition said penalties fell on providers even though some of the intermediaries themselves were not HIPAA-compliant.

Mark McClellan, administrator of CMS, said the payment delay was an industry-friendly way to push for compliance. "By working collaboratively with health care providers on the use of standard electronic claims, weve been able to reach 90 percent compliance. Now, a two-week payment delay is an important further incentive to get to 100 percent."

CMS urged filers that need help with compliance to contact their fiscal intermediaries (FIs) or carriers, the private contractors that process and pay Medicare claims.

For the CMS listing of Medicare FIs and carriers, click here.

HIPAA legislation, passed in 1996, aims to ensure that health insurance claims are submitted electronically and securely. In general, electronic claims require less time and money to process, but a report in May—eight years after the legislation—found that just over half of health care providers forms and processes are HIPAA-compliant.

/zimages/2/28571.gifClick here to read eWEEK.coms story about elusive HIPAA compliance.

Another deadline for HIPAA compliance was set for Oct. 16, 2003, but CMS began a contingency plan so that cash flow to providers was not interrupted. While HIPAA requires that claims are submitted electronically according to a national electronic transaction standard, many providers have not been able to meet the goals on time.

More recently, health care providers and claims processors have found that the security measures required by HIPAA have been difficult and costly.

Editors Note: This story was updated to include background information and a quote from an industry group.

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