With health care exchanges dominating the news with regard to the Affordable Care Act (ACA), another piece of the health care reform legislation that will affect more people than the individual mandate or the public exchanges is being implemented with much less fanfare and media attention.
Those are the sections of the law that require administrative simplification and the development of standards for financial and administrative transactions. Sections 1104 and 10109 of ACA will impact nearly everyone who uses, pays for or delivers health care.
Essentially these sections of the law are aimed at bringing the health care industry (hospitals, health plans and other stakeholders) to a place that the financial services industry has been for years. That is having universal standards in place that allow financial institutions to communicate with one another in the same electronic language. It is what allows someone to use an ATM at a bank branch or at a gas station.
In a healthcare setting, these standards are intended to streamline the way eligibility/benefits and claim status is exchanged electronically making for easier, more reliable access to this information at the point of care. It is hoped that this will reduce the amount of time providers and health plans spend on administration by improving the accuracy of claims submitted, providing enhanced information on patient financial responsibility and checking the status of patient claims electronically.
The process of getting all the healthcare stakeholders to use this same standard language is taking place over three years. New operating rules for eligibility and claim status transactions became effective on last January. By January 1, 2014, operating rules for Electronic Fund Transfer (EFT) and claim payment/remittance advice transactions will be effective. Finally, by January 1, 2016, operating rules for health claims or equivalent encounter information, health plan enrollment/disenrollment, health plan premium payment, referral certification and authorization transactions, are to go into effect.
When fully implemented, a health care provider will have the ability to learn the following about a patient within 20 seconds of entering some basic identifying data into their web browser:
- Does the carrier cover the patient?
- Are certain services covered by the health plan?
- What are the patient’s co-pay, coinsurance and deductible amounts?
The system is intended to dramatically reduce provider and payer workloads by:
- Increasing electronic inquiries
- Decreasing the need for telephone inquiries
- Ensuring data accuracy and consistency
This reduction in workload is projected to take some of the administrative overhead costs out of the health care system – as much as $15 billion over ten years. That would be the carrot extended to garner participation by health plans.
Of course there is also a stick if the carrot is not enough motivation. Effective April 1, 2014, CMS will begin assessing penalties against health plans that failed to file, by December 31, 2013, a certification statement with HHS certifying that their data and information systems are in compliance with the standards and operating rules for EFT, eligibility, claim status and health care payment/remittance advice transactions. The penalty is a fee in the amount of $1 per covered life that will be imposed for each day the plan is not in compliance.
According to the CAQH® Committee on Operating Rules for Information Exchange (CORE®), which is the not-for-profit entity responsible for developing the rules, nearly 70 organizations and products have now achieved one or more phases of certification.