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.


  • IT Modernization
    Eisenhower Executive Office Building (Image: Wikimedia Commons)

    OMB's user guide to the MGT Act

    The Office of Management and Budget is working on a rules-of-the-road document to cover how agencies can seek and use funds under the MGT Act.

  • global network (Pushish Images/

    As others see us -- a few surprises

    A recent dinner with civil servants from Asia delivered some interesting insights, Steve Kelman writes.

  • FCW Perspectives
    cloud (Singkham/

    A smarter approach to cloud

    Advances in cloud technology are shifting the focus toward choosing the right tool for the job and crafting solutions that truly modernize systems.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.