On December 12, 2001, the Senate unanimously passed the Administrative Simplification Compliance Act (H.R. 3323), which the House had passed unanimously on December 4, 2001. The Act would extend the deadline for complying with the electronic data interchange (EDI) requirements of the Health Care Portability and Accountability Act (HIPAA) for one year, to October 16, 2003, for covered entities, including health plans, but only if they have made serious efforts to comply that are documented in a Compliance Plan to be filed with the Department of Health and Human Services (HHS). The Act is a one-time-only extension and reinforces the need to develop HIPAA-Compliant operations now. The Act also contains additional requirements, some of which are noted below.

Key Provisions

In addition to extending the HIPAA EDI compliance deadline, the Administrative Simplification Compliance Act would, among other things, require:

• Submission of a Compliance Plan Before October 16, 2002, health plans and other "covered entities" would have to give HHS a Compliance Plan detailing the extent of noncompliance and an explanation of the reasons for noncompliance; a budget, schedule, work plan and implementation strategy for achieving compliance; whether the plan intends to or might use a contractor or other vendor to achieve compliance; and a specific, six-month period of testing to begin no later than April 16, 2003. If no Compliance Plan is filed, the covered entity would be subject to penalties under HIPAA if it engages in non-compliant health care transactions.
• Electronic Submission of All Medicare Claims Effective October 16, 2003, claims submitted to Medicare would have to be submitted electronically. The requirement would be waived if there is no electronic format for the claim or if the person submitting the claim is a small provider - or at discretion of the secretary of HHS.