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Administrative Simplification
Compliance Act Enforcement (ASCA)

The Administrative Simplification Compliance Act (ASCA) prohibits payment of initial health care claims not sent electronically as of October 16, 2003, except in the following limited situations:

  • Carrier small providers - To qualify, a supplier that bills Medicare must have fewer than 10 full time equivalent employees;
  • Participants in a Medicare demonstration project where paper claim filing is required by that demonstration due to the inability of the applicable implementation guide adopted under HIPAA to report data essential for the demonstration;
  • Providers that submit claims to Medicare where more than one other insurer was liable for payment prior to Medicare;
  • Providers of home oxygen therapy claims for which the CR5 segment is required in an X12 837 version 4010A1 claim but for which the requirement notes in either CR513, CR514 and/or CR515 do not apply, e.g., oxygen saturation is not greater than 88%, arterial PO2 is more than 60 mmHg;
  • Those few claims that may be submitted by Medicare beneficiaries;
  • Providers that only furnish services outside of the United States;
  • Providers experiencing a disruption in their electricity or communication connection - In the event of a major storm or other disaster outside of a provider's control
  • Providers that can establish that an "unusual circumstance" exists that precludes submission of claims electronically. (An example of an unusual circumstance would be a provider that submits fewer than 10 claims per month to a Medicare contractor on average.)

Note: For a complete list of situations that apply to all Medicare providers can be found in MLN Matters 3440.

The process for enforcement of the ASCA regulations is as follows:

  • NHS analyzes quarterly reports displaying the number of paper claims that all providers submitted.
  • Selected Medicare providers who have submitted the highest numbers of paper claims will be reviewed.
  • Medicare contractors will send these providers a “Request for Documentation” letter that will ask these providers to provide information that establishes the exception criteria listed above.
  • If you, as one such Medicare provider, do not respond to this initial “Request for Documentation” letter within 45 days of receipt, NHS will notify you by mail that Medicare will deny and not pay any paper claims that you submit beginning 90 days after the date of the initial request letter.
  • If you do respond to this initial “Request for Documentation” letter, and your response does not establish eligibility to submit paper claims, NHS will notify you by mail of your ineligibility to submit paper claims. This Medicare decision is not subject to appeal.
  • In these letters, NHS will also tell you how to obtain free and commercially available HIPAA-compliant billing software packages.
  • If you respond with information that does establish eligibility to submit paper claims, NHS will notify you by mail that you meet one or more exception criteria to the requirements in Section 3 of the ASCA, PL107-105, and the implementing regulation at 42 CFR 424.32, and you will be permitted to submit paper claims. However, you will be cautioned that if your situation changes to the point that you no longer meet the exception criteria, you will be required to begin electronic submission of your claims.
  • If you are permitted to submit paper claims, NHS will not review your eligibility to submit paper claims again for at least two years. When responding to the “Request for Documentation” letter, Medicare providers will be expected to include evidence to establish qualification to continue submitting paper claims under that situation. Per the CMS Medicare Claims Processing Manual (Chapter 24, section 90.5):

Evidence needed to meet exceptions:

  • If you are a small provider, evidence might consist of copies of the payroll records for all of your employees that list the number of hours each worked that quarter. Another option would be tax documentation indicating number of employees paid in previous quarter or tax documentation indicating no wages were paid in the previous year.
  • If you are a dentist, evidence might be a copy of your license.
  • If you are in a Medicare demonstration project, evidence might be a copy of your notification of acceptance into that demonstration.
  • If you are a mass immunizer, evidence might be a schedule of immunization locations that indicates the types of immunizations furnished.
  • If you experienced an extended disruption in communication or electrical services, evidence might consist of a copy of a newspaper clipping addressing the outage.
  • If your continuing submission of paper claims is the result of medical restrictions that prevent your staff from submitting electronic claims, evidence would consist of documentation from providers other than yourself to substantiate the medical conditions.
  • If you obtained an unusual circumstance waiver, evidence would be a copy of your notification to that effect from NHS or the CMS.

Contact Information

  • For questions call the EDISS helpdesk at:

    Jurisdiction E (JE) Part B: 855-609-9960
    Jurisdiction F (JF) Part B: 877-908-8431

  • Fax all documentation to 1-701-277-7850