Medicare Compliance & Reimbursement

Medicare contingency plan will permit non-compliant claims.

Health care providers who feared the Oct. 16 compliance deadline for the Health Insurance Portability and Accountability Act transactions and code sets rule would result in a cash flow disaster can breath a sigh of relief. The Centers for Medicare & Medicaid Services Sept. 23 conceded that too many providers simply weren't ready to submit HIPAA compliant claims. The agency says it will implement a contingency plan to accept noncompliant electronic claims for an as-yet undetermined period after the HIPAA transactions rule deadline. "Implementing this contingency plan moves us toward the dual goals of achieving HIPAA compliance while not disrupting providers' cash flow and operations," says CMS Administrator Tom Scully. CMS revealed that it was considering a contingency plan on Sept. 8. It decided to move forward with the plan after analyzing data that showed "unacceptably low numbers of compliant claims being submitted." CMS says the contingency plan will give providers more time to complete the testing process, and that the agency will "regularly reassess the readiness of its trading partners to determine how long the contingency plan will remain in effect."    Providers Calling For Contingency Plans  The big question now: Will other payers follow suit? "We encourage other plans to assess the readiness of their trading partners and implement contingency plans if appropriate," says Tom Grissom, director of CMS' Center for Medicare Management. Even before CMS' announcement, providers began pressuring private insurers to make the move. In a Sept. 12 letter to the Health Insurance Association of America, the American Association of Health Plans and other groups, the coalition of providers argues that since CMS had announced that it would make a decision Sept. 25, private payers should do the same. The coalition - which includes the American Hospital Association, the American Clinical Laboratory Association, the American Medical Association and dozens of medical specialty associations - notes that CMS guidance suggests a proper contingency plan "would ensure the smooth flow of payments to providers and could include, for example, maintaining legacy systems, flexibility on data content, or interim payments." Lesson Learned: Providers now have some breathing room when it comes to HIPAA transactions rule compliance - but they should act quickly to get their houses in order, since the contingency plan won't remain in effect forever.