New Rule Will Simplify Claims Processing for Physicians, Insurers

July 11, 2011

Physicians spend nearly 12 percent of every dollar they receive from patients to cover the costs of "excessive administrative complexity,” according to a study published in Health Affairs. But a new proposal may help doctors keep that money in their pockets.

Physicians spend nearly 12 percent of every dollar they receive from patients to cover the costs of "excessive administrative complexity,” according to a study published in Health Affairs. But a new proposal may help doctors keep that money in their pockets.

The Department of Health and Human Services recently released a rule that would require insurers to use standardized electronic formats when communicating with physicians.

“Doctors and health insurance companies waste thousands of hours and billions of dollars filling out forms and processing paperwork,” HHS secretary Kathleen Sebelius said in a statement. “The Affordable Care Act is helping doctors operate more efficiently and spend their time treating patients, not filling out papers. “

The proposed rule comes just weeks after the AMA released its 2011 National Health Insurer Report Card which found that claims processing errors had climbed to nearly 20 percent for commercial insurers.

While presenting the report card’s findings, AMA board member Dr. Barbara McAneny called the claims system “inefficient” and “unpredictable.”

Mark Rieger, CEO for the electronic billing company National Healthcare Exchange Services and a consultant to the AMA, said a key problem for physicians is the “inconsistency and confusion” resulting from each health insurer using different rules for processing and paying medical claims.”

The rule proposed by HHS is designed to help eliminate problems like these through streamlining claims processing by requiring uniform standards.

The hope is that physicians will be able to use one type of information request for all insurers when determining whether a patient is eligible for coverage, and when determining the status of a claim submitted to an insurer.

According to the HHS statement, a uniform claims processing system could save four hours per physician per week by eliminating unnecessary claims paperwork and phone calls with insurers to verify and check a claim’s status. The rule also proposes to lessen the amount of denied claims for physicians.

Under the proposal, health plans, healthcare clearinghouses, and health providers will need to comply with the final rule by January 1, 2013. HHS estimates that overall, the rule will save an estimated $12 billion over the next decade for physicians and insurers.

“These rules will help healthcare professionals operate more efficiently, lowering their costs and reducing hassle for consumers,” said CMS Administrator Donald Berwick.

The rule, entitled “Administrative Simplification: Adoption of Operating Rules for Eligibility for a Health Plan and Health Care Claim Status Transactions,” can be commented on until September 6, 2011.