CMS ISSUES MODEL PLAN TO EXTEND DEADLINE FOR COMPLIANCE WITH ELECTRONIC TRANSACTIONS RULE

03/29/2002

Department of Health & Human Services
Centers for Medicare & Medicaid Services
Room 303-D
200 Independence Avenue, SW
Washington, DC 20201

Public Affairs Office
MEDICARE NEWS

FOR IMMEDIATE RELEASE
Contact: CMS Public Affairs Office (202) 690-6145
Friday, March 29, 2002

 

The Centers for Medicare & Medicaid Services (CMS) today issued a model compliance plan that will allow health plans, health care clearinghouses and health care providers to receive a one-year extension to comply with the new rule governing electronic health care transactions.

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 required the Department of Health and Human Services (HHS) to adopt national standards for conducting health care transactions electronically. By ensuring consistency throughout the industry, these national standards will make it easier for health plans and for doctors, hospitals and other health care providers to process claims electronically.

The original deadline for compliance with the electronic transactions rule was Oct. 16, 2002 for all covered entities except small health plans, which by law had an additional year. Last year, in the Administrative Simplification Compliance Act, Congress authorized a one-year extension – to Oct. 16, 2003 – for those covered entities required to comply in 2002. To obtain the extension, a covered entity must submit a compliance plan on or before Oct. 15, 2002. Covered entities can use the model plan for this purpose.

“This model plan will help healthcare businesses prepare to meet these transaction standards while giving them until October 2003 to finish the job,” HHS Tommy G. Thompson said. “Once adopted, these national standards will make it less costly to process claims, reducing administrative costs nationwide.”

Today, different insurers require a wide variety of electronic and paper forms from health care providers filing claims. With the national standards, all health care providers – including physicians and other practitioners, hospitals and nursing facilities – will be able to use the new standards, and all health plans will be required to accept these standard electronic transactions.

“Implementing the electronic health care transactions standard is critical,” CMS Administrator Tom Scully said. “This extension will allow providers time to assess their compliance needs, thoroughly test their systems and be ready under the new standards.”

A covered entity will be able to submit its extension plan electronically through the CMS Web site, www.cms.hhs.gov/hipaa, and CMS will provide an electronic confirmation of receipt of the plan. Covered entities also have the option of submitting its own version of an extension plan that provides equivalent information and can submit a plan on paper. Instructions for filing a plan are available on the Web site.

Covered entities (except for small health plans) that do not submit a compliance plan must comply with the HIPAA electronic transactions rule by Oct. 16, 2002. Small health plans with less than $5 million in receipts already have until October 2003 to comply and do not need to submit a compliance plan.

Under the Administrative Simplification Compliance Act, health care plans and providers must submit information on their compliance activities, including budget, assessment of compliance concerns, whether a contractor or vendor might be used to help achieve compliance, and a schedule for testing to begin no later than April 16, 2003.

The model compliance plan, and instructions on how to complete it, is available at www.cms.hhs.gov/hipaa. Electronic submission capability will be available soon on the Web site. The model compliance plan and instructions also will be published in the Federal Register in the near future.

The electronic transactions standards are one of a series of national “administrative simplification” provisions included in HIPAA. More information on other standards, including health information privacy standards, is available at http://aspe.hhs.gov/admnsimp