PRACTICE RESOURCES > Regulation/AUA Positions, Letters, and Talking Points > Alliance Comments to CMS on Electronic Claims

Alliance Comments to CMS on Electronic Claims


October 14, 2003

Mr. Thomas A. Scully, Administrator
Centers for Medicare and Medicaid Services
Department of Health and Human Services
Room 445-G
Hubert H. Humphrey Building
200 Independence Avenue, SW
Washington, DC 20201

RE: CMS-0008-IFC

Dear Administrator Scully:

The undersigned medical specialties welcome the opportunity to comment on the Centers for Medicare and Medicaid Services' (CMS) interim final rule with comment on Electronic Submission of Medicare Claims, 68 Fed. Reg. 158 (August 15, 2003). Although we appreciate CMS' efforts to clarify several of the more confounding issues regarding submission of electronic claims within the context of satisfying the administrative simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), we would like to comment on challenges that continue to exist in fully implementing the rule.

CMS Underestimates the Burden of Mandatory Electronic Billing on Physicians

In the interim final rule, CMS asserts that it would take an average of ten hours per entity to complete the transition to the mandated electronic billing process. We believe this estimate is extremely low. CMS has neglected to account for the multitude of variables that influence the amount of time that any individual practice would require for such a major operational overhaul. Such variables would include, but not be limited to, the size of the practice and whether the practice would require upgrades to an existing system or a completely new system. Additionally, the ten-hour estimate does not take into account the time needed to complete the mandatory testing of claims required by the HIPAA Transaction and Code Set (TCS) standards or the time necessary to train staff members on the electronic processing process or on the gathering and recording of new data elements that have not been required heretofore.

Furthermore, CMS estimates the hardware and software costs for a physician as follows:

A recent review of ads in Sunday newspapers indicated the personal computers sufficient to meet the mandatory electronic claim requirement could be obtained for between $500 to $1000 for hardware (personal computer, monitor, printer and modem). Billing software is available free or at low cost (less than $25 for shipping and handling) from Medicare.

This estimate does not adequately consider that the majority of physicians now filing paper claims already utilize billing software, however, they choose to print claims on paper prior to submission to Medicare because they do not have access to high speed phone lines that can transmit electronic claims batches, or are not able to afford the costs of utilizing a clearinghouse, which charges a significant amount per claim. Thus, the costs are significantly higher to convert to electronic billing than simply buying a personal computer and installing free software.

CMS Should Establish Waiver Certification Process

Section 3 of the Administrative Simplification Compliance Act (ASCA), Pub. L. 107-105, has the general effect of requiring most Medicare providers to submit their Medicare claims electronically. ASCA also identifies exceptions to the mandatory submission of electronic Medicare claims, including allowing small practices with 10 or fewer FTEs to opt out of the electronic billing requirement.

In Section II (D), the rule states that "entities will not generally need to make a special request to determine whether an exception applies that would make them eligible for a mandatory waiver under §424.32(d)(3). However, Section II (E) states that "no payment may be made under Part A or Part B of the Medicare program for any expenses incurred for items or services for which a claim is submitted in a non-electronic form. Consequently, absent an applicable exception, paper claims submitted to Medicare will not be paid." CMS has not announced an intention to establish a waiver certification process in which a small provider could assert its current number of FTEs to CMS and continue to file paper claim claims without disruption. Without such a process in place, CMS will be forced to expend already limited financial resources to conduct post review audits of practices, many of which will be determined to have qualified for the waiver.

Section II (E) (2) of the Electronic Submission Rule states that the Secretary has the discretion to audit entities that bill Medicare non-electronically and such entities may be subject to claim denials, overpayment recoveries, and applicable interest on overpayments. This implies that even those entities entitled to billing Medicare non-electronically may face disruptive and unnecessary audits. Those entities that quality for a mandatory waiver should not be subject to audits simply because they are small. CMS should specify how entities will be selected for audits and clarify that it will not target small practices simply because they happen to choose to bill Medicare non-electronically, which is within their right under the law.

Compliance Deadlines Should be Staggered

We believe that the ASCA requirement that all practices with ten or more FTEs be required to start submitting claims electronically as of October 16, 2003 is not the optimal way of ensuring that practices with large numbers of Medicare claims are billing electronically. In order to eliminate the need for post review audits completely, we encourage CMS to establish a schedule whereby practices submitting a significant number of claims be required to become compliant first, followed by those offices submitting a smaller number of claims. Under this scheme, those offices submitting relatively few claims would be allowed to continue submitting claims non-electronically but would be strongly encouraged, and perhaps rewarded, for converting to electronic submission of Medicare claims. This approach would effectively decrease the level of simultaneous testing among providers and payers, while at the same time, increasing the number of providers in compliance by giving them the time to complete the necessary testing process.

We welcome the opportunity to work with the CMS staff on addressing our concerns in this interim final rule on Electronic Submission of Medicare Claims. Please contact Patrice Drew at or at 202-548-4148 should you need additional information.

Thank you for considering our views.


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