HIPAA Today: Electronic transactions deadline looms

September 15, 2003

This installment covers the deadline for meeting electronic claim submission requirements in health care and Medicare.

 

HIPAA Today

Electronic transactions deadline looms

By Walter L. Fitzgerald Jr., R.Ph., J.D.

The clock is ticking ... The deadline for the electronic submission of healthcare claims and the electronic submission of Medicare claims is approaching.

Electronic submission of healthcare claims

About four weeks remain until the Oct. 16 deadline for complying with the Health Insurance Portability & Accountability Act's electronic transactions and code sets requirements. In response to inquiries expressing concern over readiness of the healthcare industry, a "Guidance" was issued on July 24 by the Department of Health & Human Services, Centers for Medicare and Medicaid Services. The guidance states that while the Oct. 16 deadline will be enforced, CMS will be lenient for a short time after the deadline, but only if the covered entity made a "good-faith" effort to comply.

Enforcement by CMS will be "complaint-driven." If CMS receives a complaint, the covered entity will be notified and allowed to:

1. Demonstrate compliance by showing that the entity submitted compliant transactions;

2. Document good-faith efforts to comply, and the failure to comply is based on a reasonable cause and not due to willful neglect, and the failure is corrected within a 30-day period; and/or

3. Submit a corrective action plan to achieve compliance in a manner and time acceptable to HHS.

Three other CMS documents are useful for complying with the deadline. One of these provides several HIPAA resources, and another lists practical steps for compliance. The third advises healthcare providers that "it is important to communicate often with your software vendor about their progress toward HIPAA compliance. For instance, your vendor should supply you with upgraded software that will allow you to conduct electronic transactions according to HIPAA standards come Oct. 16." This document also contains questions, in the form of checklists, to ask a vendor. Directions to these documents on the CMS Web site are at the end of this column.

Electronic submission of Medicare claims

In the Aug. 15 Federal Register, CMS published an "interim final rule" requiring Medicare claims to be submitted electronically beginning Oct. 16. The rule implements the Administrative Simplification Compliance Act (ASCA) requirement that Medicare deny payment for Part A or Part B services "for which a claim is submitted other than in an electronic form." However, ASCA provides two categories of exceptions to the requirement.

The first category allows HHS to waive the requirement for "specific cases." These cases are divided into two types: when there is no method available for the submission of an electronic claim or when the entity submitting the claim is a small provider or small supplier.

Some Medicare beneficiaries still submit claims, and HHS recognizes that they likely do not possess the capability to submit claims electronically. Three additional cases of "no method available for electronic submission" are listed in the rule as follows:

1. Roster billing of vaccinations covered by Medicare

2. Claims for payment under Medicare demonstration projects

3. Claims where more than one plan is responsible for payment prior to Medicare

Regarding small providers or small suppliers, while electronic submission is waived for Medicare claims, they must still comply with the deadline as to other healthcare claims. The rule defines a small provider or small supplier as a "provider of services with fewer than 25 full-time equivalent employees" or a "physician, practitioner, facility, or supplier with fewer that 10 full-time equivalent employees."

The second category covers "unusual circumstances," which the rule deems to exist in the following situations:

1. Submission of dental claims

2. A service interruption in the mode of submitting electronic claims that is outside the control of the entity, but only for the period of the interruption

3. On demonstration satisfactory to HHS of other extraordinary circumstances precluding submission of electronic claims

Failure to submit Medicare claims electronically may result in claims denials, overpayment recoveries, and applicable interest on overpayments. If you provide Medicare services, access and review the rule as directed below.

Accessing CMS documents

Go to the Web site, www.cms.gov/hipaa/hipaa2/default.asp , and find the heading "Latest News." Documents related to preparing for Oct. 16 are under the subheading "HIPAA Electronic Transactions and Code Set Compliance Materials (New!)." The rule on Medicare claims is under the subheading "Electronic Submission of Medicare Claims Interim Final Rule."

The AUTHOR, a pharmacist-attorney, is a professor of pharmacy at the University of Tennessee College of Pharmacy and author of the NCPA HIPAA Compliance Handbook for Independent Pharmacy. To access the NCPA Web site, go to: www.ncpanet.org .

 

Walter Fitzgerald. HIPAA Today: Electronic transactions deadline looms. Drug Topics Sep. 15, 2003;147:56.