Claims payment rule aims to cut red tape, save $9B

Health and Human Services Secretary Kathleen Sebelius released a new rule she says will cut red tape for doctors, hospitals and health plans. In combination with a previously issued regulation, she estimates the rule will save up to $9 billion over the next 10 years.

The regulation adopts operating rules for making healthcare claim payments electronically and describing adjustments to claim payments.

[See also: Electronic funds transfer for healthcare to save U.S. $4.5B.]

“These new rules will cut red tape, save money, and ensure doctors spend more time seeing patients and less time filling out forms,” said Sebelius.

Studies have found that the average physician spends three weeks a year on billing and insurance related tasks, and, in a physician’s office, two-thirds of a full-time employee per physician is necessary to conduct these tasks. Many physician practices and hospitals receive and deposit paper checks, and manually post and reconcile the healthcare claim payments in their accounting systems.

By receiving payments electronically and automating the posting of the payments, a physician practice and hospital’s administrative time and costs can be decreased.

[See also: Payer-to-provider e-pay business models emerge.]

The operating rules build upon industry-wide healthcare electronic fund transfer (EFT) standards that HHS adopted in January of this year. Together, the previously issued EFT standards and the EFT and electronic remittance advice (ERA) operating rules announced today are projected to save between $2.7 billion and more than $9 billion in administrative costs over 10 years by reducing inefficient manual administrative processes for physician practices, hospitals, and health plans.

Operating rules include best business practices on how electronic transactions are transmitted and often target obstacles that physician practices and health insurers have with using electronic transactions.

For instance, the rule announced Aug. 7 requires insurers to offer a standardized, online enrollment for EFT and ERA so that physicians and hospitals can more easily enroll with multiple health plans to receive those transactions electronically.  The rule also requires health plans to send the EFT within a certain number of days of the ERA, which helps providers reconcile their accounts more quickly.