FOR IMMEDIATE RELEASE
CMS Public Affairs Office
June 30, 2004

MEDICARE TAKES FURTHER STEPS TO PROMOTE THE USE OF HIPAA  STANDARDS FOR
ELECTRONIC CLAIMS

Electronic Medicare claims that do not meet Health Insurance
Portability and Accountability Act (HIPAA) standards will be treated as
paper claims and paid more slowly than HIPAA-compliant electronic claims
beginning July 1next week, Mark B. McClellan, M.D., Ph.D., administrator
of the Centers for Medicare & Medicaid Services (CMS) reminded today.

"The great majority of electronic claims we are receiving meet the
required HIPAA standards," McClellan said, "but for the those still not
in compliance there is going to be a delay in getting their money.  We
are hoping this will motivate more filers to get into compliance soon."

Under a modification to its HIPAA contingency plan announced in
February, non-compliant electronic claims will still be accepted by
Medicare, but their payment will take 13 additional days.  The
modification has an effective date of July 1, but CMS has said it will
begin delaying payments for non-compliant claims submitted on July 6 and
thereafter.

"By working collaboratively with health care providers on the use of
standard electronic claims, we've been able to reach 90 percent
compliance," McClellan said.  "Now, a two-week payment delay is an
important further incentive to get to 100 percent."

HIPAA requires that health care claims submitted electronically be in a
format that complies with the applicable electronic transaction standard
adopted for national use.  While the HIPAA electronic transaction
standards that were adopted apply to all covered transactions by covered
entities, this modification to the CMS compliance plan will only affect
covered entities submitting Medicare claims to a Medicare contractor.

By law, Medicare pays compliant electronic claims no earlier than the
14th day after the date of receipt.   Non-electronic claims cannot be
paid earlier than the 27th day after the date of receipt.  By treating
non-compliant electronic claims as paper claims, Medicare will pay them
13 days later than compliant electronic claims.

The deadline for compliance with HIPAA electronic transaction standards
passed on Oct. 16, 2003, but Health and Human Services Secretary Tommy
G. Thompson announced prior to that date that payers would be allowed to
implement contingency plans allowing additional time for members of the
health care community to come into compliance with the HIPAA electronic
claims standards.  CMS implemented a contingency plan for electronic
Medicare claims and urged private payers to adopt similar plans.

The contingency plan has assured a cash flow to Medicare providers
while they worked to meet HIPAA standards.

Filers needing additional help are encouraged to contact their fiscal
intermediaries (FIs) or carriers, the private contractors that process
and pay Medicare claims.

Additional help can be found on the CMS website.

*     A listing of Medicare FIs and carriers can be found at
www.cms.hhs.gov/contacts/incardir.asp.
*     Information on free billing software is at
www.cms.hhs.gov/providers/edi.
*     More information on HIPAA is available at
www.cms.hhs.gov/hipaa/hipaa2/default.asp