The cost burden is driven by lack of uniformity and fragmented processes that require far too much manual intervention. In our push to achieve interoperability, paper-based and nonstandard billing and claims transactions should be a thing of the past.
The American Health Information Management Association, or AHIMA, has long advocated for standardization of billing and coding practices as required by HIPAA. (Follow our coverage of the 81st AHIMA conference.) Payers do not uniformly abide by standards for proper application of medical code sets, but rather they add, modify or omit selected medical codes to reflect the plan or payer coverage or policies.
Some payers do not implement new versions of codes on the effective date. Individual health plans and different contractors for the same plan develop their own rules and definitions for the reporting of a given code. These practices drive up operating costs, undermine the integrity and comparability of administrative data and compromise the benefit of technology solutions. I would also argue that they contribute to the U.S. healthcare fraud problem, estimated at $200 billion per year.
Other areas ripe for administrative simplification are being addressed by variable requirements from the Healthcare Administrative Simplification Coalition, or HASC. Formed in 2005 by the American Academy of Family Physicians, AHIMA and the Medical Group Management Association, HASC's mission is to spotlight and advance opportunities to reduce administrative complexity, including but not limited to payment systems. Today, HASC is focusing on three payment-related processes for which solutions are available now without new regulation or legislation: practitioner credentialing, insurance eligibility and health identification cards.
Practitioner credentialing can be standardized through the use of the Universal Provider Datasource, or UPD, offered by the not-for-profit Council for Affordable Quality Healthcare, or CAQH. UPD meets the credentialing data requirements of health plans, hospitals and other healthcare organizations. It is electronic, offered free of charge, includes more than 750,000 physicians and is used by more than 500 health plans, networks and other organizations. CAQH estimates an additional $150 million to $200 million in savings if this application were used by all plans, payers and providers.
HASC encourages adoption of the operating rules for eligibility verification, benefits information and claims status developed by CAQH's Committee on Operating Rules for Information Exchange and standardization of health identification cards using the implementation guide approved by the Workgroup for Electronic Data Interchange. The latter might finally eliminate the practice of photocopying insurance cards. HASC's full recommendations can be found in a report of the recent HASC Summit.
Legislation also has been proposed by Congress as the part of health system reform that could result in a single user guide for other HIPAA transaction standards and replace the 1,000-plus guides currently in existence. Meanwhile, gaining traction is the understanding of the foundational role of standard terminologies and classification systems that capture, exchange and use health information. AHIMA and the American Medical Informatics Association have urged policymakers to consider a set of recommendations to improve development, coordination and maintenance of these data standards.
I urge a collaborative public-private process in tackling administrative simplification.
Everyone understands their piece of the mosaic, but few understand the entire end-to-end business process. It's past time for our industry to address administrative waste and focus our resources toward improving patient care and expanding patient access. Health reform will mandate administrative simplification, but solutions available today should be implemented now while the redesign of other wasteful administrative processes should be accelerated.
CEOAmerican Health Information Management AssociationChicago
A version of this story initially appeared in this week's edition of Modern Healthcare magazine.
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