Medicare is announcing that they are wiggling on an October 16th deadline to accept HIPAA non-compliant electronic transactions. Full text of the announcement is within.

MEDICARE NEWS

FOR IMMEDIATE RELEASE
CMS Public Affairs Office
September 23, 2003

MEDICARE ANNOUNCES PLAN TO ACCEPT HIPAA NON-COMPLIANT ELECTRONIC
TRANSACTIONS AFTER OCTOBER 16 COMPLIANCE DEADLINE

The Centers for Medicare & Medicaid Services (CMS) announced today that
it will implement a contingency plan to accept noncompliant electronic
transactions after the October 16, 2003 compliance deadline. This plan
will ensure continued processing of claims from thousands of providers
who will not be able to meet the deadline and otherwise would have had
their Medicare claims rejected.

“Implementing this contingency plan moves us toward the dual goals of
achieving HIPAA compliance while not disrupting providers’ cash flow
and operations, so that beneficiaries can continue to get the health
care services they need,” said CMS Administrator Tom Scully.

CMS made the decision to implement its contingency plan after reviewing
statistics showing unacceptably low numbers of compliant claims being
submitted.

“Medicare is able to process HIPAA-compliant transactions,” said
Tom Grissom, director of CMS’ Center for Medicare Management, “but
we need to work with our trading partners to increase the percentage of
claims in production.”

The contingency plan permits CMS to continue to accept and process
claims in the electronic formats now in use, giving providers additional
time to complete the testing process. CMS will regularly reassess the
readiness of its trading partners to determine how long the contingency
plan will remain in effect.

The authority to implement a contingency plan was provided by guidance
issued by HHS on July 24. CMS recognized that transactions often
require the participation of two covered entities and that
non-compliance by one covered entity may put the second covered entity
in a difficult position. The guidance stated that covered entities that
make a good faith effort to comply with HIPAA transactions and code set
standards may implement contingencies to maintain operations and cash
flow.

CMS announced its contingency plan on September 11, but at that time
had not made a decision on whether the plan would be implemented.
Today’s announcement means the CMS plan will be implemented on October
16, 2003.

“We encourage other plans to assess the readiness of their trading
partners and implement contingency plans if appropriate,” Grissom
said.
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Cathy C. Benoit, HIPAA Coordinator – Atlanta
Centers for Medicare & Medicaid Services (CMS)
61 Forsyth Street SW Suite 4T20 -DFMPI
Atlanta, GA 30303-8909
404.562.7305
404.562.7350 (Fax)
CMS HIPAA Hotline: 866-282-0659
OCR HIPAA Hotline: 866.627.7748 (Questions Related to Privacy)