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By Amanda Greenwood
Associate News Editor
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The Centers for Medicare & Medicaid Services (CMS) has finalized a sweeping new change for the U.S. health care claims process, which it says will save taxpayers nearly $782 million a year while reducing administrative burdens for providers.
Announced on March 20, the rule—formally titled the Administrative Simplification; Adoption of Standards for Health Care Claims Attachments Transactions and Electronic Signatures Final Rule—aims to eliminate fax machines and "snail" paper mail from large portions of the U.S. health care claims process in favor of electronic transactions.
CMS officials say the change will modernize a system that still relies heavily on decades‑old technology to transmit and process critical patient information.
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Under the new rule, health care providers, insurers, and clearinghouses (the middleman that collects patient information and helps process health claims) covered by the Health Insurance Portability and Accountability Act (HIPAA) will be required to use standardized electronic transactions to submit documents such as medical records, X‑rays, clinical notes, laboratory results, and telemedicine visit documentation.
The rule also adopts standards for electronic signatures to ensure that documents are transmitted securely and can be authenticated digitally.
CMS Administrator Dr. Mehmet Oz framed the change as long overdue. "The 1980s called, and they want their fax machines back," Oz said in the official statement published by the CMS, adding that the health care system’s administrative infrastructure has failed to keep pace with advances in medical technology.
He argued that reducing paperwork would allow providers to spend more time caring for patients rather than navigating inefficient claims processes: "Every minute providers save on paperwork is another minute they can spend caring for patients."
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Why the CMS Is Eliminating Paper Mail and Fax Machines
According to the CMS, the health care industry exchanges billions of pages of faxed documents each year, a practice that often leads to delays, lost information, and higher administrative costs.
The agency says reliance on manual submissions has slowed claims processing and created unnecessary expenses for both providers and insurers. By standardizing electronic claims attachments, CMS expects to create a more consistent and efficient system nationwide.
The CMS estimates that the new rule will save the health care industry nearly $782 million a year by standardizing electronic claims documentation and reducing reliance on manual processes.
The move aligns with the agency’s broader effort to reduce administrative burden and modernize health care delivery systems, as outlined in its Optimizing Care Delivery Framework.
Implementation of the New Rule
The regulation is scheduled to take effect May 26, 2026, which is 60 days after its publication in the Federal Register. Covered entities will then have a two-year transition period, with full compliance required by May 26, 2028.
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