HIPAA Consult

November 4, 2005

Submitting Medicare claims

Q. My partner and I are in the process of establishing a family practice that we anticipate will have more than 10 full-time employees. Will we be required to file Medicare claims electronically in a HIPAA-compliant format?

In January of this year, CMS started to tighten things up. The agency notified providers that, as of July 5, 2005, it would no longer accept paper claims, unless one of several exceptions applies. Among the exceptions:

To monitor physician compliance with the rule, CMS will review doctors who submit a high number of paper claims. As part of these quarterly reviews, the Medicare carrier/contractor will request that these physicians document that they do, in fact, fall into one of the exempt categories. Doctors who are unable to establish their exempt status-or who fail to respond-will face penalties. Specifically, compliance officials will deny their claims and may recover any payments CMS has already made, along with interest.

On the second issue-submitting electronic claims in a HIPAA-compliant format-be aware that, as of this Oct. 1, CMS has stopped processing noncompliant claims. However, there's still a grace period for other administrative and financial transactions, such as checks on insurance eligibility and authorization requests. If you contract with a billing company, it will assure that your electronic claims are submitted in the proper format. But if you plan to submit claims on your own, it's worth your while to get a copy of CMS claims-submission software. It's available from your Medicare carrier, which offers the software free or for a nominal price.

Keep in mind that all of the above applies only to Medicare claims. Generally speaking, if you can't or don't wish to submit claims electronically, many private payers still accept paper claims, although that's gradually changing. The government's rules are, in part, laying the groundwork for something known as "national provider identifiers" or NPIs. In the near future, each provider will apply for and be assigned an NPI or unique identifier, which will replace the separate identifiers that health plans now assign to physicians they conduct business with. By May 23, 2007, the government will require that all health plans accept and use NPIs.

Margaret M. Davino (mdavino@kbrny.com
) is a healthcare attorney with Kaufman Borgeest & Ryan, in New York City.

This department answers common HIPAA-related questions. It isn't intended to provide specific legal advice. Please submit questions via e-mail to mehipaa@advanstar.com
, or by regular mail to Medical Economics, 5 Paragon Drive, Montvale, NJ 07645, ATTN: HIPAA CONSULT. If we select your query, we'll address it in an upcoming issue. Your name will not be used.