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Transactions and Code Sets Standards Implementation Strategy


The Centers for Medicare and Medicaid (CMS) has implemented a contingency plan to accept noncompliant electronic transactions after the October 16, 2003 compliance deadline. CMS made this decision based on surveys that demonstrated that the majority healthcare providers were not ready to carry out transactions using HIPAA compliant electronic transactions. The contingency plan permits CMS to continue to accept and process claims in the electronic formats now in use, giving providers additional time to complete the testing process. CMS will regularly reassess the readiness of its trading partners to determine how long the contingency plan will remain in effect. The contingency plan stated that covered entities that make good faith effort to comply with HIPAA transactions and code sets may implement contingencies to maintain operations and cash flow. The contingency requires that programs document the efforts that are being made to become compliant and provides examples of acceptable good faith efforts.

CMS Compliance Guidance [PDF - 82 KB]

The CMS encourages HIPAA compliant health plans to follow the same contingency plan but does not require that they do so.

Approximately 85 percent of Indian Health Service (IHS) collections are from Medicare and Medicaid and are therefore covered by the CMS contingency plan. The remaining 15 percent of collections are from private health plans and they may or may not follow the contingency plan of CMS.


Although the IHS had completed development of third party electronic billing forms in the HIPAA required X-12 electronic transaction format using HIPAA required code sets over a year ago IHS was not able to end-to-end test them because our trading partners had not finished development of their HIPAA compliant electronic transactions. With the exception of the Oklahoma Medicaid Program which was ready for testing in January 2003 health plans have been slow to complete HIPAA compliant electronic transactions. It was not until late June 2003 that other health plans were ready for testing. As of today the majority of health plans are not ready for testing. The testing process is very detailed due to the different formats each health plan or clearinghouse is requiring. The detail narrows down to the Header, Field and data element level for each transaction type. Mapping current RPMS fields to these different details has been different by each payer. This was unexpected because the format was expected to be X-12 standard across the nation. This "non-standard" problem has impacted on the national healthcare system and required the implementation of the CMS contingency plan to ensure continued processing of claims from thousands of providers who will not be able to meet the October 16 deadline and otherwise would have their claims rejected.


The IHS HQ HIPAA Transaction and Code Sets Coordinator, Office of Resource Access and Partnerships (ORAP) will lead the IHS effort to assurance compliance with the CMS contingency plan for meeting HIPAA Transactions and Code Sets Standards. Since this effort will require information and work products from the Division of Information Resources (DIR) and Business Office, the IHS CIO and the Director, IHS Business Office will work with the HIPAA Transaction and Code Sets Coordinator in a joint effort to provide the needed products in a timely manner. The responsibilities of each office are:

  • HQ HIPAA Transaction and Code Sets Coordinator - Will work with the IHS CIO and Business Office Director to help resolve any problems that affect the HIPAA Transactions and Code Sets compliance effort. Will keep the IHS Director, Area Directors and Tribal Leaders apprised of the compliance effort and respond to any questions from them on the status or problems related to the compliance effort.
  • Business Office - Will provide DIR the names and contact information for every health plan billed electronically by each IHS or Tribal Business Office supported by IHS. The list is to be in order of annual amount billed, starting with the plan being billed for the most funds. The HQ Business Office Director will work CMS, APNs, Clearinghouses and other nationwide health plans at the national level to resolve any billing issues that are adversely affecting the HIPAA compliance effort. The Director will also be responsible to work with and provide information to Area Office Business Office Directors in assuring that the HIPAA Transactions and Code Sets effort is carried out in a timely manner. The Business Office will work with the ITSC to provide them needed information from field Businesses Offices and in turn provide information and services related to the HIPAA effort to the local level Business Offices.
  • DIR - Will work with the IHS IT and Tribal IT supported by IHS to carry out the needed end-to-end testing with health plans they bill. The IHS CIO will work with CMS to resolve any questions/issues related to formatting and coding of electronic forms. The CIO will also work with and provide information to his counter parts in the Area Offices to assure that the HIPAA Transactions and Code Sets effort is carried out in a timely manner. The Information Support Services Center (ITSC) will make needed changes to the electronic billing forms so they are HIPAA compliant. DIR will work with Business Office staff to provide information, tools and IT services related to the HIPAA effort to the local level.

Working Towards Compliance

  1. Compile a comprehensive list of health plans billed by the IHS.
  2. Maintained the list in priority order from the highest billed payer to the less billed payer.
  3. Test and make compliant electronic transactions for the top payers first.
  4. Utilize clearinghouses (Qualvatics/NDS/WebMD {NEIC/Envoy}) to test and certify HIPAA compliant forms for private insurance claims. Area Offices will be allowed to choose the clearinghouse they wish to use for testing.
  5. HQ will establish a contract with the VA from which Business Offices can select one of several available clearinghouses to use.
  6. The Office of General Council will be a part of the HQ HIPAA Transaction and Code Sets Compliance Team, ORAP.
  7. A listing of the status of the transactions compliance effort by health plan will be maintained on the IHS HIPAA WEB site. This listing will be updated frequently to allow for field offices to keep apprised of progress of the project.
  8. Business Office and IT staff at all levels of the program will maintain a log of ALL HIPAA Transaction contacts for end to end testing with health plans as verification of their good faith effort to become HIPAA compliant.
  9. DIR and the Business Office will each develop a plan to carry out their part of the HIPAA Transaction and Code Sets Compliance Project which will demonstrate how they will share information.


All I/T/U Business Offices that receive technical assistance from the IHS and who bill health plans electronically and who want assistance in their effort to become HIPAA compliant will be provided that assistance so they will be compliant before the CMS mandated deadline. CONTACT If you have questions or concerns and/or need technical assistance, please contact:


Transactions and Code Sets Coordinator
Mr. John E. Rael
Acting Business Office/ORAP
Phone: 301-443-4250

IHS HQ Office of Resource Access and Partnerships (ORAP)
Mr. Carl Harper, Director
Phone: 301-443-1553