Administrative Simplification Compliance Act (ASCA)


The ASCA requires that every Medicare supplier submit claims electronically (with a few exceptions, discussed below). The Act was implemented to improve efficiency and reduce the costs associated with processing claims.

Supplier Responsibility

Suppliers are expected to self-assess to determine if they must submit claims electronically. If the supplier's self-assessment indicates that their claims fall into one of the eleven categories below or one of the four "unusual circumstances" exists, the supplier may submit claims on paper without requesting permission from the Medicare contractor.

Circumstances Allowing Submission of Paper Claims

The following claims may be submitted on paper rather than electronically:

  1. Claims submitted by small providers - A physician, practitioner, or supplier required to use a CMS-1500 (08/05) form when submitting claims on paper shall have fewer than 10 full-time equivalent employees (FTEs). A small provider can elect to submit all, some, or none of their claims electronically;
  2. Dental claims;
  3. Claims submitted by participants in a Medicare demonstration project for services or items covered under that demonstration project, when paper claim filing is required as a result of the inability of the HIPAA claim implementation guide to handle data essential for that demonstration;
  4. Roster claims for mass immunizations, such as flu or pneumonia injections - paper roster bills cover multiple beneficiaries on the same claim. This exception applies to providers who do not have an agreement in place with a Medicare contractor that commits them to electronic submission of mass immunization claims;
  5. Claims sent to Medicare when more than one other insurer was liable for payment prior to Medicare;
  6. Claims submitted by providers that rarely treat Medicare patients and that submit fewer than 10 claims a month to Medicare in total (total of all claims sent to all Medicare contractors including the Railroad Medicare Carrier);
  7. 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;
  8. Claims submitted by beneficiaries;
  9. Claims from providers that only furnish services outside of the United States;
  10. Claims from providers experiencing a disruption in their electricity or communication connection that is outside of their control and is expected to last longer than two days. This exception applies only while electricity or electronic communication is disrupted; and
  11. Providers that can establish that some other "unusual circumstance" exists that precludes submission of claims electronically.

CMS interprets an "unusual circumstance" to be a temporary or long-term situation outside of a provider's control that precludes submission of claims electronically and as a result, it would be against equity and good conscience for CMS to require claims affected by the circumstance to be submitted electronically. Examples of "unusual circumstances" include:

  1. Periods when a Medicare contractor's claim system might temporarily reject a particular type of electronically submitted claim, pending system modifications (individual Medicare claims processing contractors notify their providers of these situations if they apply);
  2. Documented disability of each employee of a provider prevents use of a computer to enable electronic submission of claims;
  3. Entities that can demonstrate that information necessary for adjudication of a type of Medicare claim that does not involve a medical record or other claim attachment cannot be submitted electronically using the claims formats adopted under the Health Insurance Portability and Accountability Act (HIPAA); and
  4. Other circumstances documented by a provider, generally in rare cases, where a provider can establish that, due to conditions outside of the provider's control, it would be against equity and good conscience for CMS to enforce the electronic claim submission requirement.

Again, if the supplier's self-assessment indicates that their claims fall into any of the eleven general categories listed above OR one of the four unusual circumstances, the supplier may submit paper claims without contacting their Medicare contractor.

Quarterly Review Process

CMS monitors the suppliers submitting paper claims on a post-payment basis. Each Medicare contractor produces a quarterly report listing every supplier submitting paper claims. Per CMS guidelines, a percentage of the suppliers appearing on that report will be part of the quarterly ASCA Review process. The Medicare contractor sends a letter to the supplier requesting documentation that the supplier meets one or more of the conditions necessary to be excused from submitting claims electronically. The subject line of the letter is "Exhibit C-Request for Documentation From Provider Selected For Review to Establish Entitlement to Submit Claims on Paper."

This letter outlines the circumstances under which a claim may be submitted on paper instead of electronically. The supplier is required to self-assess whether their claims meet any of the listed criteria. If so, the supplier is instructed to respond to the Medicare contractor by requesting an ASCA waiver, within 30 days of the Review letter and include documentation to support their response.

A reminder letter is sent around the 30th day from the date of the initial letter.

The Medicare contractor will evaluate the supplier's response to the Review letter and the supporting documentation. If the ASCA waiver is granted, the supplier is notified in writing. If the supporting documents are not sufficient to prove the supplier's position, the supplier is notified in writing and may provide additional documentation.

If the supplier does not submit a response to the Request for Documentation letter or doesn't include appropriate documentation, an ASCA denial will be assigned to the supplier's file on the 91st day after the date of the initial letter. From that date, all paper claims will be denied unless/until a waiver request and documentation are provided. The Medicare contractor will approve paper claims retroactively if a waiver is granted.

If a supplier is permitted to submit paper claims, the contractor will not review eligibility to submit paper claims again for at least two years.

Important Note: Suppliers do not need to send documentation to Noridian proving that an ASCA exception is met until an Exhibit C letter is received. Noridian will not accept such documentation until a supplier has been sent an Exhibit C letter.

Responding to or Requesting an ASCA Waiver

When responding to a request, mail or fax all applicable documentation:

Documentation examples include:

  • Small supplier - Copies of payroll records for all employees that list the number of hours worked
  • Quarterly worker's compensation or unemployment tax documents
  • If an office has no employees (sole proprietors), send a copy of the Schedule C used for federal income tax purposes. Identifying information, such as personal information or Social Security numbers, can be blacked out when submitting this documentation.

Claims Processing

When a supplier who has not been granted an ASCA waiver submits a paper claim, it will deny with remark codes M117 (Not covered unless submitted via electronic claim) and MA44 (No appeal rights. Adjudicative decision based on law).

If a supplier does not qualify for submission of paper claims, there are a number of alternatives to consider for electronic submission of claims to Medicare. The DME MAC can supply free HIPAA-compliant billing software for submission of Medicare claims or commercial software can be used to bill Medicare as well as other insurance companies. To learn more about electronic data interchange and how to get started billing claims electronically, go to the Common Electronic Data Interchange (CEDI) website.

Suppliers that submit paper claims to multiple Medicare contractors, including both Railroad and non-Railroad Medicare contractors, could have an ASCA Enforcement Review conducted by each of those contractors. If a non-Railroad Medicare contractor determines that a supplier does not meet any criteria which would permit submitting paper claims to Medicare and notifies a supplier that all paper claims submitted on or after a specific date will be denied, that same decision is to be applied to that supplier if submitting paper claims to Railroad Medicare.


Last Updated Sep 26 , 2022