The healthcare universe may not be entirely paperless, but it’s getting there.
Doctors, hospitals, and health plans in New Jersey will benefit from a new rule issued by the federal Department of Health and Humans Services (HHS) that will streamline the processing of electronic healthcare claims.
The federal Centers for Medicare & Medicaid Services (CMS) reports that 28 percent of administrative staff time spent on billing and insurance-related tasks in a doctor’s office goes to receiving and posting payments, follow-up, and payment reconciliation.
CMS’s interim final rule, which became effective August 10, requires that medical practices adopt electronic funds transfer (EFT) and electronic remittance advice (ERA). The compliance date is January 1, 2014.
The Affordable Care Act requires the federal government, through HHS, to issue a series of regulations over the next five years that are intended to simplify healthcare administrative transactions, encourage greater use of standards by providers, and make current standards work more efficiently.
The shift to electronic claims processing will also result in savings by reducing paper, printing, postage, and manual processing, as well as time spent depositing checks.
Anne Goodwill Pritchett, vice president of Patient Financial Services at Hackensack University Medical Center, concurred. She indicated that savings accrue because payment and denial postings can be automated; manual interventions can be eliminated; and the accuracy of payment and denial postings can be increased.
CMS reports that when health plans and physician practices implement its regulations, the industry should save between $300 million and $3.3 billion over the next decade.
Setting the Standard
The rule requires health plans to offer standardized, online enrollment for services like EFT and ERA, enabling doctors and hospitals to easily enroll with multiple health plans. It also spells out the specifications for the initial setup for electronic communication.
Another new requirement calls for health plans to transmit an electronic funds transfer within a prescribed number of days of receiving an electronic remittance advice, making it easier for doctors and hospitals to reconcile their accounts.
The new regulations were welcome news for hospitals, where the most significant benefit will be the ability to send claim attachments electronically.
One example, explained Pritchett, will be the opportunity to “send a copy of the Primary Payer’s Explanation of Benefits” to anyone who needs it to consider a secondary claim.
Another benefit of the online approach is that hospitals and health plans should see payments sooner. Pritchett said that 99 percent of Hackensack’s payments are currently received electronically.
Thomas W. Rubino, director and public affairs and advertising for Blue Cross Blue Shield of New Jersey, also said that electronic claims payments save time and money because there’s no need to mail out a check. He added that the new rules are simply an expansion of a more cost-effective and efficient system.
Doctors Playing Catch-Up
New Jersey’s largest physicians organization responded positively to the new rules, but cautioned that not all doctors are up to speed when it comes to electronic claims payments.
Larry Downs, CEO and general counsel for the Medical Society of New Jersey, said that there shouldn’t be multiple transaction standards as there are now. “They don’t exist in any other industry,” he said, adding that he supports CMS’s standardizing those transactions because physicians wont have to be familiar with or understand the nuances of different transactions standards used by different payers.
Downs said that although many physician practices in the state are already doing electronic transactions with private payers, there are a substantial number of practitioners who haven’t yet made haven’t yet made those upgrades.
“We’re trying to find some solutions for them because sometimes there can be a significant investment in order to make those transaction happen.”
Downs asserted that although EFT is not widespread yet, but as with any new technology there are early adopters and there are people who adopt later.