CMS to stop paying non-HIPAA-compliant Medicare claims

The Centers for Medicare and Medicaid Services will stop paying electronic Medicare claims that do not comply with standards under the Health Insurance Portability and Accountability Act. CMS will return noncompliant claims to the filer to re-submit correctly beginning Oct.1. Until that date, CMS will continue to pay such claims.

“We are firmly committed to an interoperable electronic health care system, and the close-to-100-percent compliance with HIPAA standards for claims shows that the health care industry shares this commitment,” said CMS Administrator Mark McClellan in a statement last week.

As of June, only about 0.5 percent of Medicare fee-for-service providers, such as hospitals and physicians, submitted non-HIPAA-compliant electronic claims. The highest rate of noncomplaint claims was from clinical laboratories at 1.7 percent, while 1.45 percent of claims from hospitals and 0.45 percent from physicians were noncompliant.

CMS will work with providers between now and October to get to 100 percent compliance, McClellan said. CMS continues to make available free and low-cost software through Medicare carriers and intermediaries to accelerate compliance.

HIPAA required the Health and Human Services Department, of which CMS is a division, to adopt standards for health care claims and other financial and administrative transactions used by the health care industry. When fully implemented, HIPAA standards are expected to streamline the processing of health care claims, reduce the volume of paperwork and cut costs.

The submission of HIPAA-compliant claims allows the same software to be used to generate identical claims for all payers using standard formats and coding. The use of all the HIPAA transactions will allow interoperability among payers and providers for health care administration.

The law required all payers to conduct HIPAA-compliant transactions no later than Oct. 16, 2003. However, only about 31 percent of Medicare claims were compliant at that time. CMS established a contingency plan that allowed its trading partners to submit claims in electronic formats currently in use while they put the required software in place.

About the Author

Connect with the GCN staff on Twitter @GCNtech.


  • Workforce
    Shutterstock image 1658927440 By Deliris masks in office coronavirus covid19

    White House orders federal contractors vaccinated by Dec. 8

    New COVID-19 guidance directs federal contractors and subcontractors to make sure their employees are vaccinated — the latest in a series of new vaccine requirements the White House has been rolling out in recent weeks.

  • FCW Perspectives
    remote workers (elenabsl/

    Post-pandemic IT leadership

    The rush to maximum telework did more than showcase the importance of IT -- it also forced them to rethink their own operations.

Stay Connected