HHS to standardize medical e-transactions

The Department of Health and Human Services issued a regulation last week

that will standardize — and encourage — electronic health care transactions,

saving billions of dollars in the long term.

The regulation, released Aug. 17 in the Federal Register, affects federal

and private health care programs such as Medicare and Medicaid by requiring

the use of standard formats and standard procedure codes whenever medical

claims are processed electronically.

Health insurers currently require health providers to use many different

paper and electronic forms to file claims.

Providers will still be able to use paper forms, but HHS expects that

the new electronic standards will encourage more electronic filing, saving

the health care industry $29.9 billion in 10 years, according to the department.

However, there may be some "short-term pain" and initial "significant

cost" for companies that transmit and process electronic claims that do

not comply with the new national standard, said Mark Leavitt, chairman

of Medica-Logic/Medscape Inc., which provides systems to manage clinical

records.

MedicaLogic/Medscape is not directly affected because the regulation

applies to administrative claims, not clinical records, Leavitt said. But

he said he does expect some concrete benefits. "I think it's a precursor

to more" standardization and more requirements to "submit things in digital

format whether they're claims or clinical records," he said. The move should

also "facilitate the development of software or applications that work more

broadly," he said. "That always makes them less expensive." The regulation

was mandated under the Health Insurance Portability and Accountability Act

of 1996 (HIPAA).

The regulation also includes these provisions:

n Health plans will be able to pay providers, authorize services, certify

referrals and coordinate benefits using a standard electronic format for

each transaction.

n Providers will be able to use a standard format to determine eligibility

for insurance coverage, inquire about claim status, request authorizations

for services and receive electronic remittance to post receivables.

n Employers that provide health insurance to their workers will be able

to use a standard electronic format to enroll or unenroll employees and

to submit premium payments to any health plan for which they have a contract.

An HHS spokesman made no one available to comment on the regulation.

But HHS Secretary Donna Shalala said in a statement that the rule is being

released under the assumption that privacy protections will be in place

at about the same time the rule takes effect in October 2002.

HHS said it expects to release a final rule pertaining to the privacy

of medical records later this year.

Last month, before an HHS advisory committee, Donald Bechtel, strategic

adviser for Healthcare Data Exchange Corp. and Shared Medical Systems Corp.,

both subsidiaries of Siemens Corp., said the companies have implemented

several transactions required by HIPAA.

"The bottom line is: These transactions work, they're efficient, they

reduce the cost of these business transactions, they reduce errors in data

and free people to do other important work," he testified. "Providers will

be positively affected in terms of return on investment because of the standard

transaction formats and the efficiencies they make possible."Related links