Medicare warns of payment delays for claims that don't meet HIPAA rules

Federal officials are anxious to spur the implementation of electronic standards.

By Joel B. Finkelstein, AMNews staff. March 22/29, 2004.

Washington -- Doctors have been slow to comply with federal electronic health transaction standards. But the government plans to give them a jolt by holding noncompliant Medicare claims an extra two weeks.

As mandated by the Health Insurance Portability and Accountability Act, physicians filing electronic claims with Medicare were supposed to be using the standard format as of Oct. 16, 2003. At that time, the Centers for Medicare & Medicaid Services implemented a contingency plan allowing physicians to continue submitting noncompliant claims, known as legacy claims, as long as they were moving toward meeting HIPAA standards.

The agency is now preparing to launch the next phase of its contingency plan.

Physicians' offices that are still sending in legacy claims after July 6 will get paid, but the claims will be treated as if they were submitted on paper.

Paper claims are reimbursed no sooner than 27 days after they are received, compared with 14 days for HIPAA-compliant electronic claims.

CMS is continuing to follow advice from industry watchers who warned that stopping the flow of reimbursement could have devastating effects on the medical community, especially small practices. Under the law, the agency could be imposing fines on noncompliant entities, a route it has chosen not to take.

According to the latest numbers, close to 70% of the health care industry is now submitting electronic claims in HIPAA-standard format. However, large entities, such as hospitals, health plans and other medical institutions, appear to constitute the bulk of that number.