With the stroke of a pen Tuesday, Colorado Gov. Bill Ritter cleared the way for physicians to reduce their administrative headaches with the swipe of a carda standardized, electronically enabled health plan patient ID card to be exact.
What Ritter signed was state Senate Bill 135, which puts in motion a process that should result in Colorado health plans issuing to their members ID cards they can use for real-time data exchange on benefits eligibility, coverage determination and other "appropriate provider-carrier transactions."
The concept is one that has been pushed for years by William Jessee, president and chief executive officer of the Englewood, Colo.-based Medical Group Management Association, as part of his crusade for healthcare administrative simplification.
Jessee said he spoke about the electronic ID cards while giving testimony to Colorado's Blue Ribbon Commission for Health Care Reform, and the panel included his idea in its report to the Legislature, and it was an idea lawmakers felt they could tackle before moving on to more-complex healthcare reform issues.
"If you can't get it all done at once, get it done one piece at a time," Jessee said of his success at getting one state to adopt one piece of his simplification strategy. "This is not a major overhaul of the system, but it's an important one. It's a small victory in the war on administrative waste."
Typically, someone in a physician's office now photocopies a patient's ID card and, when it comes time to submit a claim, the person enters the patient's name and number from the piece of paper into a practice-management program. Jessee said it's a very error-prone procedureespecially more recently as health plans have begun to incorporate more colors and graphics onto their cards, making the paper photocopies more difficult to read.
John Hallock, spokesman for Athenahealth, a provider of Web-based business services and electronic medical-record systems to physician offices, said his company's research shows that 6% of "first-pass" claim rejections are linked to transcription errors.
Jessee said that magnetic cards will eliminate "99.99%" of these mistakes that lead to rejected claims, thereby improving cash flow and boosting efficiency.
Margaret Jarvis, a spokeswoman for Blue Cross and Blue Shield of Texas, said that this was one reason why her company launched a magnetic-stripe ID-card pilot program last September.
"Reduction of errors for physicians is certainly one of the reasons why we expect this to be good for our industry," Jarvis said. She added that other business reasons for doing so include time savings and member convenience.
Jessee said his only concern now is that Colorado's new law doesn't specifically call for adhering to standards developed by the American National Standards Institute. These standards were completed in 1997, but they were never implemented, Jessee said. They were revised in 2004 and, last November, the federal Workgroup for Electronic Data Interchange, or WEDI, published a 46-page guide for implementing them.
"My worst nightmare will be for Colorado to have a different standard than the rest of the country," Jessee said. "What practices and hospitals hate is having to do things differently for different patients. They want consistency."
What the law does include are plans for establishing a diverse work group to recommend technical and informational standards to the state insurance commissioner. The commissioner then has until Oct. 31 to issue rules that the state's carriers will follow in issuing cards to their members by July 1, 2010.
Jessee said the bill received token opposition from the insurance industry, which argued that it was moving in this direction anyway and, consequently, didnt need a government mandate to issue such cards.
"The legislators said, 'That's great that you're all moving in that direction. Why don't you all move there by July 2010?'" Jessee said. "The health plans just don't like having anyone telling them what to do."
Robert Zirkelbach, spokesman for the insurance industry trade group America's Health Insurance Plans, said the industry wasn't necessarily opposed to the intent of the Colorado bill, but "we just thought they were doing too much too fast."
Michael Huotari, executive director of the Colorado Association of Health Plans, said his organization ended up supporting the bill after being satisfied that its three concerns were addressed.
Those concerns were: adhering to national standards rather than creating standards unique to Colorado, requiring that physicians and hospitals use the technology after the health plans invest in implementing it, and allowing flexibility to adopt the latest technology as it becomes available.
To that end, Huotari said he was pleased to see "electronically enabled" replace "magnetic stripe" in the bill's language. "It may be a swipe, it may be something else," Huotari said. "It could be a Web portal."
Although the law may not specifically mandate using the ANSI's standards, Huotari said he was confident that's the direction the state would go.
He downplayed the significance of the program, however, saying it will get more attention if it fails than if it succeeds.
"I suppose, if it doesn't work, people will point to it," Huotari said. "If it works smoothly, it might not be much of a story."
While acknowledging that Colorado was in the forefront on this concept, he noted that Texas is a little further ahead.
Last May, Texas Gov. Rick Perry signed a bill that also called for health plans to provide their members with cards that have magnetic stripes.
The bill was heartedly endorsed by the Texas Medical Association as a way of "eliminating the middle man" standing between doctors and patients, association spokesman Brent Annear said.
"What we'd hear from our members is, 'Our patients don't know if they've met their deductible' and 'I don't know if they've met their deductible. It would be great if we had the same information the insurance companies have,'" Annear said.
While testifying March 5, 2007, on behalf of the Texas association in support of the bill, Corpus Christi ophthalmologist Jerry Hunsaker noted that "critical patient information such as the patient's deductible, medical services that are covered, and the contracted list of physicians and hospitals available to the patient is dynamic, changes constantly, and frequently is hidden from patients and their physicians."
The Texas bill called for a pilot to begin no later than May 1, 2008, but the project has yet to get off the ground.
Blue Cross and Blue Shield of Texas, however, launched its own on Sept. 24, 2007, independently of what the state was doing.
"We're ahead of the curve," Jarvis said.
The Texas Blues distributed 160,000 magnetic-stripe member ID cards to its members in Austin for use at 51 physician offices in the University of Texas System and two locations in the Seton Healthcare Network.
John Greeley, a spokesman for the Texas Department of Insurance said in an e-mail that the department has held nine advisory committee meetings to address the requirements of the law and that it has "a pilot study in the works, but it has not been finalized yet pending the determination of federal standards for these types of programs."
Doug Danzeiser, deputy commissioner for regulatory matters in the Texas Department of Insurance's Life, Health & Licensing program, explained thatalthough the WEDI standards are finalthey are still missing an important piece.
"There is one lingering issue with those rules in that their standard requires the use of a payer/plan identification number, but there is not yet any widely accepted, centralized entity issuing those numbers," Danzeiser said in an e-mail. "It makes it much more difficult to set up a useful system of card swiping without having those payer ID numbers standardized."
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