STATEWIDE NEWS RELEASE                           CONTACT: Gil Lawson, 502-564-6786

             FRANKFORT, Ky. (Sept. 26, 2003) – The Cabinet for Health Services’ Department for Medicaid Services is implementing a contingency plan to accept non-compliant electronic transactions from health care providers after an Oct. 16, 2003, compliance deadline.

             The Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires that health care providers comply with certain standards for electronic transactions. The federal Centers for Medicare & Medicaid Services announced Sept. 23 that it was implementing a contingency plan for Medicare after reviewing statistics showing low numbers of Medicare providers who were not ready to submit electronic claims under the new format.

             The Cabinet encourages Medicaid providers to continue their efforts to become fully compliant with HIPAA transaction standards by the Oct. 16 compliance date.  There are risks to both the Cabinet and the medical providers that are associated with maintaining two claims processing systems. The risk to providers can be minimized by submitting claims in the HIPAA compliant format.

             The Cabinet’s contingency plan will allow continued claims processing for Medicaid providers who are unable to meet the deadline. Medicaid will be able to process HIPAA-compliant transactions; however a significant portion of the provider community needs more time to complete the testing process.  Medicaid will monitor the situation so that the contingency plan is in place only as long as necessary.

             The authority for a contingency plan was provided by the U.S. Department for Health and Human Services on July 24. HHS said that covered entities making good faith efforts to comply with HIPAA transaction standards may implement contingencies to maintain operations and cash flow.

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