Healthcare providers now have a one-stop spot to enroll and provide health plans with their electronic banking information, but the rollout of this new service is only another step in a long slog toward full automation and digitization of healthcare claims processing.
CAQH, a not-for-profit alliance of health plans, healthcare networks and trade associations, has launched what it's calling a “universal electronic funds transfer enrollment tool for providers.” The group was formerly known as the Council for Affordable Quality Healthcare.
Once a sufficient number of health plans sign up—Aetna and Cigna Corp. are already on board—the new system could eliminate the need for providers to enroll separately with each payer to provide a bank routing number, bank account number and other identifying information. The system also allows a provider to update its information online.
The service is funded by payers through an annual fee, so providers that sign up can use the service free of charge, according to a CAQH statement
To further catalyze the use of electronic claims processing, the Patient Protection and Affordable Care Act mandates that payers provide electronic funds transfer by Jan. 1, 2014. According to CAQH, only 32% of healthcare claims were paid electronically in 2010.
The federal mandate breaks a deadlock between health plans and developers of computerized practice-management systems over who goes first, according to Robert Tennant, senior policy adviser for the MGMA, which has lobbied for a decade-old wish list
of electronic transaction simplifications.
“It's been a chicken-and-egg issue,” Tennant said. Plans didn't want to build systems to electronically pay claims and transmit notices—called remittance advices—because sufficient numbers of providers didn't have systems that could handle them. Many vendors didn't build systems that could receive the electronic transmissions because plans weren't sending them.
Now, with the ACA mandate, “the health plans have to do it,” Tennant said. “If they fail, they face millions of dollars in fines.” But they didn't have to settle on common enrollment rules. Some plans had invested in their own EFT enrollment systems with their own unique rules, Tennant said. “It was a herculean lobbying effort on the part of CAQH to get the large health plans to move in this direction, so kudos to them.”
“With the plans forced to do it, we are cautiously optimistic that the software developers will create the products” to handle electronic claims transactions from the provider side, he said. “We're hoping this will create a tipping point. It's not going to change the world, but it's one more step toward increased automation.”
In 2007, CAQH launched the Committee on Operating Rules for Information Exchange
, known as CORE, which developed a set of common rules for providers and payers as well as testing and compliance certification to simplify eligibility and benefits transactions.
CAQH has since developed its Universal Provider Datasource to share credentialing information with health plans and hospitals, a big timesaver, Tennant said.
Last year, CORE was anointed by HHS as the operating rule authority for electronic fund transfers and the related transmissions of electronic remittance advices—notices that providers receive that a claim has been approved by a health plan—which is required by the ACA.
Last month, the CMS granted plans, claims clearinghouses and providers a 90-day extension on enforcement of its rule
under the Health Insurance Portability and Accountability Act of 1996 on the use of new electronic transaction standards for insurance eligibility and claims status.
The ACA also mandated by Jan. 1, 2014, that plans electronically produce remittance advices, which specify the amount of payment to be made and the needed identifier to link the notification with the actual payment via electronic funds transfer. But the second half of financial transaction standardization, agreement on common rules for electronic remittance advices, remains a work in progress.
“We're looking at it,” said Atul Pathiyal, a consultant with CAQH, “We know it's an important part of the puzzle, for revenue cycle in particular. We're taking stock of the situation and that is on our short list.”
Also on the MGMA's wish list are machine-readable insurance ID cards, which are not among the ACA requirements, but could solve a vexing problem for providers, according to Tennant.
Imagine if you went into a restaurant, he said, and when it came time to pay the bill, the waiter came and made a photocopy of your credit card. The photocopies would be mailed to the credit card companies and the restaurant would wait on them to determine whether or not they'd be paid.
“The restaurant would be out of business in a week,” Tennant said, but that's still how business is done in healthcare. “You go into your doctor and I'll bet you next week's salary they'll still photocopy your health plan ID card.”