Would you like to get paid faster and devote less staff time to billing and collections? Both goals could be achieved if you had a better method of checking the insurance eligibility of patients and of estimating their financial responsibility. The key to doing that — and to eliminating repetitive, error-prone front-desk work — might be a “smart” patient ID card.

The Medical Group Management Association is promoting the use of these smart cards through its new Project SwipeIT. The association aims to persuade payers, software vendors, and practices to “initiate processes to adopt standardized, machine-readable patient ID cards by Jan. 1, 2010.”

Most of the more than 100 million patient ID cards in use have no machine-readable elements, and front-desk personnel must now photocopy the cards for their records. Many cards are hard to read, and the only benefit information they typically include are copay amounts. Staffers sometimes make errors when entering demographic and insurance information from these cards into their billing systems, causing denials and resubmissions.

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MGMA estimates that machine-readable patient ID cards could save physician offices and hospitals as much as $1 billion a year by eliminating unnecessary administrative work and denied claims. In addition, some insurers, including Humana and UnitedHealthcare, now offer real-time claims adjudication that can be more easily triggered by using their smart cards. Offices that take advantage of this capability can speed up plan payments and determine what patients owe before they leave the office. That can help reduce self-pay A/R and bad debt.

The Humana and United cards also enable practices to obtain detailed information about benefits, such as a patient’s deductible (in and out of network), how much of the deductible has been met, and the yearly out-of-pocket maximum. When the United card is swiped, the demographic and benefit information populates a computer screen. With Humana, the benefit data can be obtained in real time via a Web portal or a clearinghouse. Connecting the card to the portal or the EDI network eliminates manual data entry, and the card swipe also populates the claim form for real-time processing at the end of a patient visit.

Standards wanted

Some other health plans also have machine-readable cards. The problem is that each plan’s cards have had technical differences that make it impossible for any single card reader to understand them all. MGMA is asking all insurers to issue cards that use a standardized format created by the Workgroup for Electronic Data Interchange (WEDI). United and Humana plan to issue the standard-format cards to their millions of members by the end of the year.

Yet other payers have been slow to come around despite an endorsement by their trade association, America’s Health Insurance Plans. Blues plans in Florida and Texas are the only other plans with WEDI-compliant machine-readable patient ID cards; some plans have cards that do not yet meet the WEDI standard, but most payers have lagged in adopting machine-readable cards of any kind. The lack of insurer adoption does not seem related to cost: the cards cost only 50 cents each to produce, hardly any more than the non-machine-readable plastic or paper cards that most plans now give their members.

Physician adoption also remains low, even though card readers can be purchased for as little as $50. United is processing about 70,000 claims a week in real time — a small percentage of its overall claims volume.

One way to interest physicians is to get multiple payers aboard. Kenneth Willman, director of provider interface for Humana, says that, since launching a multipayer pilot in 2007 with United and Blue Cross Blue Shield of Florida, his company has distributed 7,300 free card readers in that state. In another multi-payer experiment in Texas that started late last year, Humana passed out 2,000 card readers, and Blue Cross and Blue Shield of Texas gave its members WEDI-compliant cards, so practices can use the readers with a higher percentage of their patients. “The key to adoption is multi-payer participation,” Willman says.

Vendor help needed

Many practices don’t want to use multiple plan Web portals to seek eligibility and other information. They’d prefer to have their billing systems send electronic requests to many payers through a single clearinghouse, and they’d like the data to come directly back into those billing systems so they don’t have dual data entry. But to use smart cards as part of that process, the card readers must be interfaced with practice management software. So far, few vendors have provided those interfaces.

Rob Tennant, senior policy advisor to the MGMA, points out that it wouldn’t cost much for the vendors to create these programs. But they don’t see any need to do so yet. “If the [payers] start to issue a standard, machine-readable card, the vendors will develop the products to support that,” he says. “And then providers can take full advantage of it. The problem up to now has been that so few plans offered these cards that it didn’t make sense for vendors to produce the products or for providers to move forward.”

The use of smart cards could also enable physicians to obtain some basic clinical information on patients. A United member can already use her card to give her doctor access to her personal health record on the Optum Health site. The record includes the member’s latest claim information, as well as lab and prescription data and self-entered data.

Smart cards in other countries, such as Germany and Taiwan, carry clinical information on embedded chips, notes Tennant. “We’re not there yet, partly because of privacy concerns, but it’s not out of the realm of possibility,” he says.

Ken Terry is a New Jersey-based freelance writer and the author of the book “Rx for Health Care Reform.” He can be reached via physicianspractice@cmpmedica.com.

This article originally appeared in the June 2009 issue of Physicians Practice.