PUBLIC LAW 107–105—DEC. 27, 2001 115 STAT. 1003

Public Law 107–105

107th Congress

An Act

To ensure that covered entities comply with the standards for electronic health

care transactions and code sets adopted under part C of title XI of the Social

Security Act, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Administrative Simplification

Compliance Act’’.

SEC. 2. EXTENSION OF DEADLINE FOR COVERED ENTITIES SUBMITTING COMPLIANCE PLANS.

(a) IN GENERAL.—

(1) EXTENSION.—Subject to paragraph (2), notwithstanding

section 1175(b)(1)(A) of the Social Security Act (42 U.S.C.

1320d–4(b)(1)(A)) and section 162.900 of title 45, Code of Federal Regulations, a health care provider, health plan (other

than a small health plan), or a health care clearinghouse shall

not be considered to be in noncompliance with the applicable

requirements of subparts I through R of part 162 of title 45,

Code of Federal Regulations, before October 16, 2003.

(2) CONDITION.—Paragraph (1) shall apply to a person

described in such paragraph only if, before October 16, 2002,

the person submits to the Secretary of Health and Human

Services a plan of how the person will come into compliance

with the requirements described in such paragraph not later

than October 16, 2003. Such plan shall be a summary of the

following:

(A) An analysis reflecting the extent to which, and

the reasons why, the person is not in compliance.

(B) A budget, schedule, work plan, and implementation

strategy for achieving compliance.

(C) Whether the person plans to use or might use

a contractor or other vendor to assist the person in

achieving compliance.

(D) A timeframe for testing that begins not later than

April 16, 2003.

(3) ELECTRONIC SUBMISSION.—Plans described in paragraph

(2) may be submitted electronically.

(4) MODEL FORM.—Not later than March 31, 2002, the

Secretary of Health and Human Services shall promulgate a

model form that persons may use in drafting a plan described

in paragraph (2). The promulgation of such form shall be made

42 USC 1320d–4

note.

42 USC 1305

note.

Administrative

Simplification

Compliance Act.

Dec. 27, 2001

[H.R. 3323]

115 STAT. 1004 PUBLIC LAW 107–105—DEC. 27, 2001

without regard to chapter 35 of title 44, United States Code

(commonly known as the ‘‘Paperwork Reduction Act’’).

(5) ANALYSIS OF PLANS; REPORTS ON SOLUTIONS.—

(A) ANALYSIS OF PLANS.— (i) FURNISHING OF PLANS.—Subject to subparagraph (D), the Secretary of Health and Human Services

shall furnish the National Committee on Vital and

Health Statistics with a sample of the plans submitted

under paragraph (2) for analysis by such Committee.

(ii) ANALYSIS.—The National Committee on Vital

and Health Statistics shall analyze the sample of the

plans furnished under clause (i).

(B) REPORTS ON SOLUTIONS.—The National Committee

on Vital and Health Statistics shall regularly publish, and

widely disseminate to the public, reports containing effective solutions to compliance problems identified in the plans

analyzed under subparagraph (A). Such reports shall not

relate specifically to any one plan but shall be written

for the purpose of assisting the maximum number of persons to come into compliance by addressing the most

common or challenging problems encountered by persons

submitting such plans.

(C) CONSULTATION.—In carrying out this paragraph,

the National Committee on Vital and Health Statistics

shall consult with each organization—

(i) described in section 1172(c)(3)(B) of the Social

Security Act (42 U.S.C. 1320d–1(c)(3)(B)); or

(ii) designated by the Secretary of Health and

Human Services under section 162.910(a) of title 45,

Code of Federal Regulations.

(D) PROTECTION OF CONFIDENTIAL INFORMATION.—

(i) IN GENERAL.—The Secretary of Health and

Human Services shall ensure that any material provided under subparagraph (A) to the National Committee on Vital and Health Statistics or any organization described in subparagraph (C) is redacted so as

to prevent the disclosure of any—

(I) trade secrets;

(II) commercial or financial information that

is privileged or confidential; and

(III) other information the disclosure of which

would constitute a clearly unwarranted invasion

of personal privacy.

(ii) CONSTRUCTION.—Nothing in clause (i) shall be

construed to affect the application of section 552 of

title 5, United States Code (commonly known as the

‘‘Freedom of Information Act’’), including the exceptions

from disclosure provided under subsection (b) of such

section.

(6) ENFORCEMENT THROUGH EXCLUSION FROM PARTICIPATION IN MEDICARE.— (A) IN GENERAL.—In the case of a person described

in paragraph (1) who fails to submit a plan in accordance

with paragraph (2), and who is not in compliance with

the applicable requirements of subparts I through R of

part 162 of title 45, Code of Federal Regulations, on or

after October 16, 2002, the person may be excluded at

PUBLIC LAW 107–105—DEC. 27, 2001 115 STAT. 1005

the discretion of the Secretary of Health and Human Services from participation (including under part C or as a

contractor under sections 1816, 1842, and 1893) in title

XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).

(B) PROCEDURE.—The provisions of section 1128A of

the Social Security Act (42 U.S.C. 1320a–7a) (other than

the first and second sentences of subsection (a) and subsection (b)) shall apply to an exclusion under this paragraph

in the same manner as such provisions apply with respect

to an exclusion or proceeding under section 1128A(a) of

such Act.

(C) CONSTRUCTION.—The availability of an exclusion

under this paragraph shall not be construed to affect the

imposition of penalties under section 1176 of the Social

Security Act (42 U.S.C. 1320d–5).

(D) NONAPPLICABILITY TO COMPLYING PERSONS.—The

exclusion under subparagraph (A) shall not apply to a

person who— (i) submits a plan in accordance with paragraph

(2); or

(ii) who is in compliance with the applicable

requirements of subparts I through R of part 162 of

title 45, Code of Federal Regulations, on or before

October 16, 2002.

(b) SPECIAL RULES.—

(1) RULES OF CONSTRUCTION.—Nothing in this section shall

be construed—

(A) as modifying the October 16, 2003, deadline for

a small health plan to comply with the requirements of

subparts I through R of part 162 of title 45, Code of

Federal Regulations; or

(B) as modifying—

(i) the April 14, 2003, deadline for a health care

provider, a health plan (other than a small health

plan), or a health care clearinghouse to comply with

the requirements of subpart E of part 164 of title

45, Code of Federal Regulations; or

(ii) the April 14, 2004, deadline for a small health

plan to comply with the requirements of such subpart.

(2) APPLICABILITY OF PRIVACY STANDARDS BEFORE COMPLIANCE DEADLINE FOR INFORMATION TRANSACTION STANDARDS.—

(A) IN GENERAL.—Notwithstanding any other provision

of law, during the period that begins on April 14, 2003,

and ends on October 16, 2003, a health care provider

or, subject to subparagraph (B), a health care clearinghouse, that transmits any health information in electronic

form in connection with a transaction described in subparagraph (C) shall comply with the requirements of subpart

E of part 164 of title 45, Code of Federal Regulations,

without regard to whether the transmission meets the

standards required by part 162 of such title.

(B) APPLICATION TO HEALTH CARE CLEARINGHOUSES.—

For purposes of this paragraph, during the period described

in subparagraph (A), an entity that processes or facilitates

the processing of information in connection with a transaction described in subparagraph (C) and that otherwise

would be treated as a health care clearinghouse shall be

115 STAT. 1006 PUBLIC LAW 107–105—DEC. 27, 2001

treated as a health care clearinghouse without regard to

whether the processing or facilitation produces (or is

required to produce) standard data elements or a standard

transaction as required by part 162 of title 45, Code of

Federal Regulations.

(C) TRANSACTIONS DESCRIBED.—The transactions

described in this subparagraph are the following:

(i) A health care claims or equivalent encounter

information transaction.

(ii) A health care payment and remittance advice

transaction.

(iii) A coordination of benefits transaction.

(iv) A health care claim status transaction.

(v) An enrollment and disenrollment in a health

plan transaction.

(vi) An eligibility for a health plan transaction.

(vii) A health plan premium payments transaction.

(viii) A referral certification and authorization

transaction.

(c) DEFINITIONS.—In this section—

(1) the terms ‘‘health care provider’’, ‘‘health plan’’, and

‘‘health care clearinghouse’’ have the meaning given those terms

in section 1171 of the Social Security Act (42 U.S.C. 1320d)

and section 160.103 of title 45, Code of Federal Regulations;

(2) the terms ‘‘small health plan’’ and ‘‘transaction’’ have

the meaning given those terms in section 160.103 of title 45,

Code of Federal Regulations; and

(3) the terms ‘‘health care claims or equivalent encounter

information transaction’’, ‘‘health care payment and remittance

advice transaction’’, ‘‘coordination of benefits transaction’’,

‘‘health care claim status transaction’’, ‘‘enrollment and

disenrollment in a health plan transaction’’, ‘‘eligibility for a

health plan transaction’’, ‘‘health plan premium payments

transaction’’, and ‘‘referral certification and authorization transaction’’ have the meanings given those terms in sections

162.1101, 162.1601, 162.1801, 162.1401, 162.1501, 162.1201,

162.1701, and 162.1301 of title 45, Code of Federal Regulations,

respectively.

SEC. 3. REQUIRING ELECTRONIC SUBMISSION OF MEDICARE CLAIMS.

(a) IN GENERAL.—Section 1862 of the Social Security Act (42

U.S.C. 1395y) is amended—

(1) in subsection (a)—

(A) by striking ‘‘or’’ at the end of paragraph (20);

(B) by striking the period at the end of paragraph

(21) and inserting ‘‘; or’’; and

(C) by inserting after paragraph (21) the following

new paragraph:

‘‘(22) subject to subsection (h), for which a claim is submitted other than in an electronic form specified by the Secretary.’’; and

(2) by inserting after subsection (g) the following new subsection:

‘‘(h)(1) The Secretary—

‘‘(A) shall waive the application of subsection (a)(22) in

cases in which—

PUBLIC LAW 107–105—DEC. 27, 2001 115 STAT. 1007

‘‘(i) there is no method available for the submission

of claims in an electronic form; or

‘‘(ii) the entity submitting the claim is a small provider

of services or supplier; and

‘‘(B) may waive the application of such subsection in such

unusual cases as the Secretary finds appropriate.

‘‘(2) For purposes of this subsection, the term ‘small provider

of services or supplier’ means—

‘‘(A) a provider of services with fewer than 25 full-time

equivalent employees; or

‘‘(B) a physician, practitioner, facility, or supplier (other

than provider of services) with fewer than 10 full-time equivalent employees.’’.

(b) EFFECTIVE DATE.—The amendments made by subsection

(a) shall apply to claims submitted on or after October 16, 2003.

SEC. 4. CLARIFICATION WITH RESPECT TO APPLICABILITY OF

ADMINISTRATIVE SIMPLIFICATION REQUIREMENTS TO

MEDICARE+CHOICE ORGANIZATIONS.

Section 1171(5)(D) of the Social Security Act (42 U.S.C.

1320d(5)(D)) is amended by striking ‘‘Part A or part B’’ and inserting

‘‘Parts A, B, or C’’.

SEC. 5. AUTHORIZATION OF APPROPRIATIONS FOR IMPLEMENTATION

OF REGULATIONS.

(a) IN GENERAL.—Subject to subsection (b), and in addition

to any other amounts that may be authorized to be appropriated,

there are authorized to be appropriated a total of $44,200,000,

for—

(1) technical assistance, education and outreach, and

enforcement activities related to subparts I through R of part

162 of title 45, Code of Federal Regulations; and

(2) adopting the standards required to be adopted under

section 1173 of the Social Security Act (42 U.S.C. 1320d–2).

(b) REDUCTIONS.—

(1) MODEL FORM 14 DAYS LATE.—If the Secretary fails to

promulgate the model form described in section 1(a)(4) by the

date that is 14 days after the deadline described in such section,

the amount referred to in subsection (a) shall be reduced by

25 percent.

(2) MODEL FORM 30 DAYS LATE.—If the Secretary fails to

promulgate the model form described in section 1(a)(4) by the

date that is 30 days after the deadline described in such section,

the amount referred to in subsection (a) shall be reduced by

50 percent.

(3) MODEL FORM 45 DAYS LATE.—If the Secretary fails to

promulgate the model form described in section 1(a)(4) by the

date that is 45 days after the deadline described in such section,

the amount referred to in subsection (a) shall be reduced by

75 percent.

(4) MODEL FORM 60 DAYS LATE.—If the Secretary fails to

promulgate the model form described in section 1(a)(4) by the

date that is 60 days after the deadline described in such section,

42 USC 1395y

note.

115 STAT. 1008 PUBLIC LAW 107–105—DEC. 27, 2001

LEGISLATIVE HISTORY—H.R. 3323 (S. 1684):

CONGRESSIONAL RECORD, Vol. 147 (2001):

Dec. 4, considered and passed House.

Dec. 12, considered and passed Senate.

Æ

the amount referred to in subsection (a) shall be reduced by

100 percent.

Approved December 27, 2001.