Noncompliant transactions to be accepted by CMS

The Centers for Medicare & Medicaid Services (CMS) has implemented a contingency plan to accept noncompliant electronic transactions. This plan will ensure continued processing of claims from thousands of providers who were not able to meet the deadline and otherwise would have had their Medicare claims rejected.

"Implementing this contingency plan moves us toward the dual goals of achieving HIPAA [Health Insurance Portability and Accountability Act] compliance while not disrupting providers’ cash flow and operations, so that beneficiaries can continue to get the health care services they need," says CMS Administrator Tom Scully.

CMS made the decision to implement its contingency plan after reviewing statistics showing unacceptably low numbers of compliant claims being submitted. Tom Grissom, director of CMS’ Center for Medicare Management, says that Medicare is able to process HIPAA-compliant transactions, but CMS needs to work with providers to increase the percentage of claims in production. The contingency plan permits CMS to continue to accept and process claims in the electronic formats now in use, giving providers additional time to complete the testing process. CMS regularly will reassess the readiness of providers to determine how long the contingency plan will remain in effect.

According to CMS representatives, the contingency plan does not change the requirement that all claims be submitted electronically. Institutional providers with 25 or fewer employees and non-institutional providers with 10 or fewer employees are the only providers that can still bill Medicare on paper after Oct. 16, 2003.