Ha! Option E is clearly a trick question. Of course state Medicaid programs need to meet the same requirements as private health plans. They're not some special snowflake.
Option D seems the most reasonable to me. A covered entity can submit non-standard transactions to a clearinghouse, but the covered entity still needs to store its data in transaction standard formats.
I think option C is the correct answer. The data stored by a covered entity must meet the transaction standards if the covered entity is directly submitting standard transactions.
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