BALTIMORE--Beginning Oct. 1, CMS will no longer process claims not compliant with the Health Insurance Portability and Accountability Act, Administrator Mark McClellan announced Thursday.

The original deadline for HIPAA-compliant transactions--designed to allow for interoperability among payers and providers by generating identical claims using standard formats and coding--was Oct. 16, 2003. But CMS put the enforcement plan on hold because only about 31 percent of Medicare claims were compliant at the time.

On July 5, the agency stopped accepting paper claims, except for those meeting certain exemption criteria, but will continue to accept claims with non-HIPAA compliant code sets until October.

Now it appears that most health care providers are on board. As of June, only about 0.5 percent of Medicare fee-for-service providers submitted non-HIPAA compliant electronic claims, according to CMS.

"We are firmly committed to an interoperable electronic health care system, and the close-to-100-percent compliance with HIPAA standards for claims shows that the health care industry shares this commitment," McClellan said.

A survey released Aug. 1 by the Healthcare Information and Management Systems Society indicated lower levels of HIPAA compliance overall in the health care industry. The survey found that 78 percent of health care providers and 90 percent of payers are compliant with HIPAA transactions and code sets. The same number are compliant with the law's security rule, which took effect two years ago, the study said. An average of 55 percent of both groups said while their information systems can produce transactions, their trading partners can't accept or transmit them.

For more information, visit www.cms.hhs.gov/hipaa.