CMS Will Continue To Accept Noncompliant Claims After HIPAA Deadline

CMS officials on Tuesday said that the agency will continue to accept and process health care claims that do not meet the requirements of a new electronic system mandated under the Health Insurance Portability and Accountability Act after the rule's Oct. 16 compliance deadline, the Chicago Sun-Times reports. The measure applies to providers who are making a "good-faith effort" to comply with the new law (Knowles, Chicago Sun-Times, 9/24). The new HIPAA billing standard requires health insurers, hospitals, physicians and claims administrators to use a uniform electronic billing system designed to simplify the claims process (California Healthline, 9/12). CMS officials did not set a new compliance deadline but said they will "regularly reassess the readiness" of providers to determine when providers must come into full compliance with the HIPAA regulations (CMS release, 9/23). Jared Adair, director of the CMS Office of HIPAA Standards, on Tuesday said in testimony before the Senate Special Committee on Aging that the agency decided to institute its contingency plan for the claims provision because an "unacceptably low" number of claims have been submitted to Medicare under the new system. Although Medicare has for several months been set to accept and pay electronic claims in the new format, only about 14% of claims received in the first two weeks of September were HIPAA-compliant, CongressDaily reports (Rovner, CongressDaily, 9/23). The temporary policy will give health care providers extra time to test their new billing systems, as required under the rule (Chicago Sun-Times, 9/24).

Senate Aging Committee Chair Larry Craig (R-Idaho) said that money spent to comply with the new billing rules may be "diverting resources from quality patient care." Healthcare Leadership Council President Mary Grealy, speaking at the hearing, agreed, saying that the new regulations "sap resources from health care providers ... that might otherwise be devoted to treating patients and pursuing improvements in health care quality." However, Richard Campanelli, director of the HHS Office of Civil Rights, said the cost savings from having a uniform transaction system -- estimated at $30 billion over 10 years -- are greater than the compliance costs, which are estimated at $17.6 billion over 10 years (CongressDaily, 9/23).