CMS said today that it will continue to accept electronic transactions in existing non-HIPAA formats after the Oct. 16 HIPAA transaction compliance deadline in order to prevent a massive slowdown in Medicare payment processing.
"Implementing this contingency plan moves us toward the dual goal of achieving HIPAA compliance while not disturbing providers' cash flow and operations, so that beneficiaries can continue to get the healthcare services that they need," CMS Administrator Thomas Scully says in a written statement.
The move opens the door for commercial payers to implement similar contingency plans, as healthcare providers, transaction software vendors and clearinghouses have been calling for, to head off a financial crisis for untold thousands of medical practices, hospitals and health systems.
"I think most of them, will, in fact, do this," says Tom Wilder, vice president for market regulation at the American Association of Health Plans, which represents the managed care industry.
According to the CMS statement, the agency decided to activate its previously disclosed contingency plan "after reviewing statistics showing unacceptably low numbers of compliant claims being submitted."
CMS says only about 14% of the Medicare claims it currently receives are in the HIPAA-mandated X12 837 code set, though that figure is up from 12% in August.
Under the plan, physician practices still may send electronic Medicare claims in the "legacy" HCFA 1500 format and hospitals may continue to bill for Medicare services with the electronic version of the UB92 form.
However, CMS does not back away from an earlier pronouncement that it will no longer pay Medicare claims submitted on paper beginning Oct. 16, except from very small practices and in a few other limited circumstances. A public comment period on that rule runs until Oct. 14.
In July, the Medicare agency said that it would allow covered entities to make contingency plans in order to maintain operations and cash flow, as long as there is a "good-faith" effort to move toward HIPAA compliance.
As with other parts of the HIPAA administrative simplification regulations, HHS says its enforcement efforts will be driven by third-party complaints.