HHS finalizes administrative standards for electronic claims submissions

The rules are expected to save the health care system $12 billion, but implementation could cost health professionals $800 million.

By Charles Fiegl — Posted July 7, 2011

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The Obama administration has set electronic standards for health plans exchanging insurance coverage information with physician practices and for the status of claims submitted for payment.

The Dept. of Health and Human Services published the new criteria on June 30 to standardize electronic health care transactions, administration officials said. Health plans, clearinghouses for claims and health professionals who transmit health information in electronic formats must adopt the new rules by 2013.

"The use of these operating rules is going to make the existing standards work better," said Denise Buenning, director of the administrative simplification group at the Centers for Medicare & Medicaid Services. "By making them work better, we're forecasting that the use of standards will expand and information will be streamlined so that the process will be faster, better and less expensive."

The new administrative simplification standards were outlined in the national health system reform law. HHS estimates the changes will save the overall health care system up to $12 billion during the next 10 years. But the department also estimates that health plans will need to spend $2.5 billion to $5 billion during the next 10 years to comply with the standards. Health professional implementation costs could total $800 million over the decade.

The operating rules provide specificity on how to format information so every entity in the health care system is utilizing the same standards, Buenning said. For instance, a rule could specify the order a patient's name is entered into a system (e.g., last name, first name, middle initial).

The regulations also would give physician practices the ability to determine the co-payment and deductible amounts, including how much of a patient's deductible has been met to date. Electronic transactions would keep administrative staff from having to look up the same coverage information manually.

"There's going to be no surprises at the point of service," Buenning said. Physician practices also would receive more detailed responses when checking the status of a submitted claim for payment.

The operating rules will have a positive impact on the health care system, said William Jessee, MD, president and CEO of the Medical Group Management Assn. Such electronic transactions will boost efficiency and help streamline claims processing at medical groups.

"We also hope CMS will show its leadership by adopting a machine-readable card for Medicare beneficiaries in place of the current paper cards which require manual data entry," Dr. Jessee said.

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