The Affordable Care Act requires the Department of Health and Human Services to issue regulations aimed at streamlining healthcare administrative transactions, encouraging standard operating practices of health care providers, and increasing patient care efficiencies. Congress recognized the importance of health providers exchanging information efficiently and transmitting health information uniformly. To initially address these concerns, the electronic transaction standards under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) were created. Health care reform amended HIPAA by adding electronic funds transfers to the electronic health care transactions that must be standardized.
Last week, the Department of Health and Human Services adopted operating rules for health care electronic funds transfers (EFT) and electronic remittance advice transactions (ERA). The new rule expands upon EFT standards adopted by the government in January. While this new rule does not place direct requirements on employers, it does govern the actual health plan operations with respect to how providers and plans will accept payments.
The cost savings and benefits resulting from the use of EFT for business and consumer payments are well established. The most common savings are in paper, printing, and postage costs, as well as savings in staff time to manually process and deposit paper checks. Despite these savings, the health care industry has been slow to adopt the use of EFT. The new guidance encourages the use of EFT, resulting in less time allocated to billing and more time devoted to delivering health care to patients.
In the new guidance, HHS adopts the Phase III Council for Affordable Quality Healthcare (CAQH) Committee on Operating Rules for Information Exchange (CORE) EFT & ERA Operating Rule Set. The Operating Rule Set includes best business practices on how electronic transactions are transmitted. For example, the rule requires insurers to offer a standardized, online enrollment for EFT and ERA so that physicians and hospitals can more easily enroll multiple health plans to receive those transactions electronically. The rule also requires health plans to send the EFT within a certain amount of days of the ERA, which helps providers reconcile their accounts more quickly.
For physician practices and hospitals, there is little to no cost to implement the health care EFT & ERA Operating Rule Set, because these providers are the receivers of the transaction, and not the senders. Health plans, on the other hand, will incur costs in analyzing the new rules and sending payments to providers and hospitals consistent with the new EFT requirements.
According to the Centers for Medicare and Medicaid Services, the previously issued EFT standards, when coupled with the new EFT/ERA operating rules, should save between $2.7 billion and more than $9 billion in administrative costs over ten years by reducing inefficient manual administrative processes for physician practices, hospitals, and health plans.
Covered entities must comply with the details of the rules by January 1, 2014.
