HHS Seeks To Standardize Insurance Transactions

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In a move forecast to trim $12 billion in healthcare administrative costs over a 10-year period, the U.S. Department of Health and Human Services (HHS) has published an interim final rule to standardize certain electronic transactions.

This rule, the first in a series of planned moves to simplify administrative processes, sets so-called "operating rules" for electronically verifying patient eligibility for a health plan and for checking the status of insurance claims, starting in January 2013. Through the Centers for Medicare and Medicaid Services (CMS), HHS effectively has adopted the recommendations of the Council for Affordable Quality Healthcare's Committee on Operating Rules for Information Exchange.

"The new operating rules will provide greater uniformity of information and transmission formats so that physicians and other health care providers can use one type of information request for all insurers rather than being required to use multiple systems," HHS said in the interim final rule, which will appear in the Federal Register on Friday, triggering a 60-day public comment period.

"For example, if a physician submits an electronic inquiry to a health plan about a patient's eligibility, some plans may simply respond yes or no, while others provide information that the physician needs to know at the point of service, such as patient co-pays and deductibles. Under the proposed rules, physicians will get a more detailed response when they ask about the status of a claim they have submitted to a health plan."

The changes are required by the 2010 Patient Protection and Affordable Care Act, though HIPAA regulations that have been in effect since 2003 were supposed to have standardized these and many other healthcare transactions.

In releasing the rules, HHS Secretary Kathleen Sebelius cited an April 2010 study in the policy journal Health Affairs. That study found that physicians spend close to 12% of their revenue on "excessive administrative complexity," Sebelius noted. Simplifying administrative procedures could save each practicing physician four hours a week, plus five hours of staff time per week.

"As a pediatrician, I know how frustrating it can be to spend time dealing with paperwork instead of patient care," said CMS administrator Dr. Donald Berwick said in a statement. "These rules will help healthcare professionals operate more efficiently, lowering their costs and reducing hassle for consumers."

The Medical Group Management Association (MGMA), long an advocate of administrative simplification in healthcare, lauded the new rules, but called for more activity. "This is an important first step in realizing the simplification opportunities" included in the Affordable Care Act (ACA), Dr. William F. Jessee, the association's president and CEO, said in statement emailed to reporters.

"We urge CMS to expedite the process of designating entities that will develop the remaining ACA standards and operating rules for the health plan identifier, electronic funds transfer, claims attachments, and other critical initiatives and encourage their rapid development and deployment," Jessee added. "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."

Following official publication of the interim final rule later this week, HHS will accept comments through Sept. 6.

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