Section 1104 of the Patient Protection and Affordable Care Act (ACA) mandates that all HIPAA covered entities comply with healthcare operating rules. The roles and responsibilities of covered entities vary based upon organization type. However, providers at small practices through large hospitals should be able to gain efficiencies through implementation of the operating rules.
Three administrative transaction sets come into play under the operating rules: (1) eligibility and claim status; (2) electronic funds transfer (EFT) and electronic remittance advice (ERA); and (3) additional transactions including referral/ authorization and health claims/ encounter information.
PhysBizTech recently talked to Robert Tennant, senior policy advisor at the Medical Group Management Association, about some of the key areas in which the operating rules will impact small physician practices.
Q: How do the operating rules come into play in the day-to-day business of running a small practice?
A: When I go to my doctor's office, I present my healthcare card. How does the practice know that my card is valid, and how does the practice know whether the insurer will cover the service that will be provided to me?
Well, the practice has to check eligibility. Right now, the vast majority of the time, the practice will be forced to go to the web portal of a health plan -- and, of course, each health plan has its own. Each one is different; it asks different things. Or, instead of going online, the front desk picks up the phone and calls the plan, and that entails going through an automated system. It takes a long time.
Of course, some practices don't check it at all. They just cross their fingers and submit the claim, and hope it gets paid.
Section 1104 says that health plans must return patient eligibility and benefits information to the provider within 20 seconds. That's in real time. So the practice can find out almost immediately that a patient hasn't yet met his deductible, for example. That's an opportunity to let the patient know that the practice takes credit cards.
That alone is going to save practices potentially hundreds if not thousands of dollars every year. It's a wonderful addition to practice automation. It does away with having to bill patients and incur the costs. And, frankly, many patients don't pay promptly -- or at all -- when they get billed. That's lost money to the practice.
Q: Is that rule in effect now?
A: It went into effect in January 2013. However, CMS issued a 90-day delay in enforcement. So the enforcement on health plans will not kick in until the end of March.
After that, the health plan is liable for very significant fines if they don't adhere to the standard.
Q: Let's talk about the EFT and ERA standards, which will be going into effect a little further down the road, in January 2014.
A: In its essence, electronic funds transfer, means that you see the patient, submit the claim, and then you get paid from the health plan electronically -- rather than having to wait for the health plan to cut a paper check and mail it.
You can imagine the cost to the practice of opening the mail, pulling out the check, and trying match it up with the right patient. The number on the claim might be 12345, but the remittance coming back with the check is a different number. And the plan may bundle it, so that all patients for a given week may be grouped into one amount. Well, somebody on the practice staff has to go through the remittances and figure out: Were we paid accurately? Do we need to appeal? Do we need to go back into the system and determine what happened?
All that takes time and effort. So the new standards will require the health plan to offer EFT, first of all, which is a change. And the plan has to adhere to the national standard, which uses trace numbers that conform to the remittance advice. The number matches to the payment, so you can reconcile the two much easier. That's a wonderful change.
Q: What about communications between the practice and the health plan in regard to enrollment information?
A: One of the pieces of the operating rule told the health plans that there are only certain data elements they can ask for when enrolling a provider in their program. So, for example, the plan would need the ABA routing number, the bank account number, the tax ID number. But they can't ask everything under the sun. It used to be that every health plan asked a different set of questions. Even small practices may have contracts with dozens of different health plans. It was another hassle factor for the practices.
In addition, the private group that develops the operating rules, CAHQ, recently announced that they are producing an enrollment module. The provider will be able to go into the module, give the required information, and have it sent to United, Cigna, Aetna, the Blues…any plan the provider deals with. It's one stop. It's not going to change the world, but it drives out a little bit of the waste that practices face. It's an opportunity to automate another piece of the revenue cycle.
Q: What else should small practices anticipate in regard to the operating rules?
A: There are other operating rules and standards coming down the pike. A little bit further out is a rule for electronic claim attachments. Currently, when a practice submits a claim, the health plan sometimes sends the claim back saying "we can't pay this until you give us additional information."
So the idea is, Why can't the practice get the request electronically from the health plan for claim XYZ. Let's have a standard that would allow the request from the health plan to come electronically, and our answer with the information would flow electronically as well.
The National Committee on Vital and Health Statistics, the statutory advisory body to HHS has held hearings on this matter and they will be issuing recommendations over the next several months. MGMA submitted testimony along with the American Medical Association saying we need this, we need it fast, and we need it in a flexible way, because there are lots of different ways to move the data.
Eventually, HHS will promulgate a rule. It could be an interim final rule or a proposed rule. They have the prerogative of doing either one.
Q: So where does that leave practices in the interim?
A: The only way for a practice to take advantage of these rules is if they have the appropriate technology in the practice. If practices are using paper claims, or they are getting on a website to check eligibility, or they're calling the health plan, they are not going to realize any of the benefits I described earlier.
This is a unique time in healthcare. You've got the convergence of a number of rivers. You've got all these new administrative simplification pieces, you've got meaningful use and then ICD-10, you've got quality programs and ACOs, and a lot of these other things are going to require technology.
It's a good time to do an internal assessment. Is it in your practice's best interest to invest on the front end in a system that will allow you to automate your claims revenue cycle?
The practice has to do its due diligence. Look at your ROI for things like EFT and eligibility, or to be able to participate in meaningful use, and then weigh it against the operational and startup costs, and make the decision. Is this right for your practice…and for the culture within the practice?
For example, if you're recruiting young physicians to join the group, it's going to be difficult to get them to go from the electronic system they used in residency to a clipboard. Or if you're in a less desirable area of the country, how do you convince a physician to join your practice.? One incentive may be technology.
On the other hand, if you have older physicians who may be retiring in a couple years, maybe it's not a good investment. Each practice has to make that determination.