Standards for Electronic Transactions and Code Sets

II. Provisions of the May 31, 2002 Proposed Rules

In the May 31, 2002 Federal Register, we published two proposed rules, CMS-0003-P (67 FR 38044) and CMS-0005-P (67 FR 38050). The two proposed rules proposed to adopt as regulations certain modifications to adopted standards.

The first proposed rule is entitled "Modifications to Standards for Electronic Transactions and Code Sets" (67 FR 38044). Hereafter, for the purposes of this final rule, we refer to this proposed rule as CMS-0003-P. CMS-0003-P contained several proposed modifications that pertained exclusively to revisions to certain electronic data interchange (EDI) standards currently in effect for retail pharmacy transactions and a repeal of the designation of National Drug Codes (NDC) as the standard medical data code set for reporting drugs and biologics on non-retail pharmacy standard transactions.

The second proposed rule is entitled "Modifications to Transactions and Code Set Standards for Electronic Transactions" (67 FR 38050). Hereafter, for the purposes of this final rule, we refer to this proposed rule as CMS-0005-P. CMS-0005-P addressed proposals to adopt limited technical changes to implementation specifications for the transaction standards that were deemed necessary to implement industry-wide EDI standards.

Because both of these proposed rules proposed modifications or technical changes to standards that the Secretary of Health and Human Services (the Secretary) adopted in the August 17, 2000 final rule entitled "Health Insurance Reform: Standards for Electronic Transactions" (65 FR 50312), we are combining them in this final rule. Hereafter, for the purposes of this final rule, we refer to the August 17, 2000 final rule as the "Transactions Rule."

Specifically, in CMS-0003-P, we proposed to adopt the following:

• The National Council for Prescription Drug Programs (NCPDP) Batch Standard Batch Implementation Guide, Version 1, Release 1 (Version 1.1), January 2000, for retail pharmacy drug claims, eligibility, and coordination of benefits transactions, to replace the earlier version (Version 1.0) that we had previously adopted in error. In this final rule, we refer to this proposed standard as the "NCPDP Batch Implementation Guide Version 1.1."
• The National Council for Prescription Drug Programs (NCPDP) Batch Standard Batch Implementation Guide, Version 1, Release 1 (Version 1.1), January 2000, and the National Council for Prescription Drug Programs (NCPDP) Telecommunication Standard Implementation Guide, Version 5, Release 1 (Version 5.1), September 1999, for the referral certification and authorization transaction, to replace the ASC X12N 278 – Health Care Services Review standard. In this final rule, we refer to these two proposed standards as the "NCPDP Batch Implementation Guide Version 1.1" and the "NCPDP Telecommunication Guide Version 5.1," respectively.
• ASC X12N 835 – Health Care Claim Payment/Advice for the retail pharmacy health care payment and remittance advice transaction, to replace the NCPDP Batch Standard Batch Implementation Guide Version 1.0 and the NCPDP Telecommunication Guide Version 5.1.
• We also proposed to repeal the adoption of the National Drug Code (NDC) as the standard for reporting drugs and biologics on all transactions except retail pharmacy transactions, also termed "non-retail pharmacy" transactions below. This repeal would result in there being no standard in place for reporting drugs and biologics on non-retail pharmacy transactions.