During the HIPAA Open Door Forum on July 24, 2003, the Centers for Medicare and Medicaid Services (CMS) issued a guidance document outlining how it will approach enforcing the Health Insurance Portability and Accountability Act’s (HIPAA) Transactions and Code Sets (TCS) provisions after the October 16, 2003, implementation deadline.

There will be no delay or formal grace period for this implementation date. However, CMS also has stated that it would not impose penalties on covered entities (e.g., insurance companies and physicians) that deploy contingencies (e.g., insurance companies using dual claims processing systems) to ensure the smooth flow of payments if they have made a reasonable and diligent effort to become compliant and, in the case of health plans, to facilitate the compliance of their trading partners, e.g., physicians. Translated, this means that CMS will not penalize health plans that pay claims that do not meet the transactions and standard rule, but that it also will not force them to do so.

This may provide a period of transition for those physicians and health plans that can demonstrate that they are engaged in testing transactions but are not able to exchange HIPAA-compliant billing information by October 16.  Still, health insurers will not be required to accept non-HIPAA compliant claims.  Plus, there is no evident relief from potential fines if you can not provide proof of testing, whether successful or not, with insurers.

The ACFAS participated in the drafting of the June 30, 2003, letter to the Secretary of HHS, ultimately endorsed by a total of 35 national health care physician-specialty organizations, asking the government to take steps that would reassure physicians who were making good faith efforts to meet the HIPAA deadline that they would continue to be paid for their services after October 16.  The letter explained to HHS that many payers, software vendors and clearinghouses are simply not ready to start testing claims submissions from physicians.  Many are unlikely to be ready until shortly before the October deadline—thus preventing physicians from completing the lengthy testing process in time.  Therefore, it is unreasonable that physicians should be penalized for the failure of others upon whom they are completely dependent to become compliant.

Click here to access CMS HIPAA TCS Guidance document.