Administrative simplification not a completely impossible task

Key Points

TODAY THERE ARE more than 400 different ways to submit a claim. Administrative simplification provisions in the Patient Protection and Affordable Care Act (PPACA) seek to create uniformity of standards for several types of electronic health information transactions and mandate the creation of specific operating rules.

"If the rules work as intended, they should make it possible to determine an individual's eligibility and financial responsibility for special healthcare services in real time, that is, prior to or at the point of care," says John Garner, principal of California-based Garner Consulting.

The secretary of the U.S. Department of Health and Human Services (HHS) has until Jan. 1, 2012, to solicit input on electronic standardization of enrolling healthcare providers and transparency and consistency in claims processing. Starting at the end of 2013, health plans must file a statement with HHS certifying compliance with these standards, as well as provide documentation showing that compliance. Starting April 1, 2014, penalties will be assessed against health plans that have not met the certification and documentation requirements.

After analyzing the billing system of a physician's group affiliated with a large, urban, academic teaching hospital, the researchers discovered 12.6% of claims are initially rejected.

With considerable staff time and effort, 81% of these claims eventually are paid. They also found that standardizing the medical billing system-using a single set of payment rules for multiple payers, a single claim form and standard submission rules-saved significant staff time and could save U.S. physicians about $7 billion annually.

Medical Group Management Association (MGMA) President and Chief Executive Officer William F. Jessee, MD, says whittling down the processes of more than 1,000 different insurers and agents into one set of standards will be difficult because of the number of entities involved.

With no final rules in place to date, health plans are reluctant to offer electronic claim attachment options, vendors have not produced supporting software products, and providers cannot move forward.

The benefits of adopting a single set of electronic standards, according to MGMA, include eliminating lost paper attachments, accelerating the claim adjudication process, reducing follow-up time and eliminating the cost of paper and stamps. MGMA estimates a potential $9.4 billion in savings over 10 years, just for electronic claim attachment.

"I think it's just human nature; everyone would rather get up and do the same thing they did yesterday," says Dr. Jessee. "Trying to get an industry as large as the healthcare industry to all agree on the particular change is complicated. There's everything from fear that someone will accuse us of antitrust violations to having to change a computer system."