Two-week payment penalty threatens as HIPAA claims deadline looms

Beginning July 1, doctors will see a reimbursement delay if they or their claims processor isn't complying.

By Joel B. Finkelstein, AMNews staff. May 17, 2004.

Washington -- Tens of thousands of doctors will soon see their Medicare payments postponed for two weeks if they don't begin meeting federal electronic transaction standards.

To avoid the cash crunch, physicians need to contact their software vendors and clearinghouses to check whether those firms are submitting electronic claims that conform to the rules, said federal and American Medical Association officials.

"It's really important that physicians realize that the only people who are going to pay the penalty are the physicians themselves," said AMA Trustee Joseph M. Heyman, MD. "They really need to make certain that they are working with a reliable partner."

The payment delay for noncompliant claims, known as "legacy" claims, will kick in on July 1. Anything received in legacy format will be treated like paper claims and reimbursed in no sooner than 28 days. By comparison, electronic claims that meet the standards, a result of the Health Insurance Portability and Accountability Act, are reimbursed after 14 days.

Doctors and others subject to HIPAA were supposed to begin following the electronic transaction standards in October 2003. But realizing that many practices would be unable to meet that deadline, the Centers for Medicare & Medicaid Services developed a contingency plan that allowed Medicare payment for noncompliant claims to continue. The reimbursement delay is a new step intended to spur more doctors to comply.