Expressing both cautious optimism and concern that they won't be able to comply, providers are bracing for a deadline this week to submit Medicare claims in standard but rigorously detailed form-or face payment delays that could severely disrupt cash flow.
For more than a year the industry has complained that the standard guides for following the transaction rules aren't truly standard. "Looking at it on its face, this is a system that cannot be complied with," said Jim Hauge, vice president of the North Carolina Hospital Association.
Despite years of work on the regulation that produced hundreds of pages of implementation guides, there are still enough gray areas to leave hospitals and physician practices uncertain that their best efforts will result in acceptable claims, he said. "If it's really standard, then we shouldn't be talking about it like this," Hauge said. "Somebody's got to say there's one way to do this."
The CMS ordered payment delays of at least 27 days for noncompliant claims, versus the 14-day wait now observed for electronic claims. Moreover, failure to include specific data elements could cause a claim to be rejected.
The new CMS payment policy, which is effective July 1 but won't be enforced by fiscal intermediaries until July 6, is the first step in phasing out a contingency plan that has allowed providers more time to comply with standardization requirements of the Health Insurance Portability and Accountability Act of 1996.
Regulations adopting standard formats for the data contained in claims-as well as for other transactions involved in scrutinizing claims and paying them-were proposed in 1998 and published in final form in 2000, after which providers and payers had two years to bring their payment systems into compliance.
Alarm about the sheer complexity of the task and the time needed to test and retest data exchanges between providers and payers led first to an additional year's grace period and then a contingency period of indeterminate length during which providers could still send claims in noncompliant formats while continuing to hone the standard methods required by the CMS (Sept. 29, 2003, p. 14). In late February, the CMS announced the plan to slow down payment as a way to encourage progress toward completing the transition.
Impeding progress is not a lack of resolve to finish the job but an inability to gather the required data and be sure the right data elements are included in a particular type of claim, said Marcy Wilder, a partner in the Washington law firm Hogan & Hartson and spokeswoman for a coalition called the HIPAA Implementation Working Group.
Even using "standard" transaction formats, hundreds of factual details have to be represented correctly for the transaction to go through. And the required facts are different depending on the type of care rendered, the care setting and other variables in the many types of claims that are part of a healthcare business operation. To top it off, payers have imposed an additional set of guides to follow based on data required for different plan contracts. It's an insurmountable task for some providers, Wilder said, because of inadequate information systems and a lack of adequate guidance on what constitutes a perfectly clean claim.
At deadline, the CMS had not returned requests for comment.
The American Hospital Association has seen enough concerted activity to have "cautious optimism" that hospitals will get their claims through successfully, said Lawrence Hughes, the AHA's regulatory counsel.
"I don't know if standardized content is achievable," Wilder said. "But I think we need more time to figure that out." In the meantime, she said the CMS should shift emphasis to work on other money-saving transactions included in the standards.
A more "rational migration" to standards, said Hughes, would emphasize fixing the process of claims submission, concentrating on other HIPAA standards that streamline the process instead of adding to providers' costs. Those include formats to automatically determine eligibility, keep close track of a claim for early notice of problems, and computerize posting of payments with automatic remittance advice.