The Patient Protection and Affordable Care Act, which the Senate will begin debating after the Thanksgiving holiday, requires health plans to adopt a single set of operating rules for the most common transactions with providers. These include insurance eligibility and claims status; electronic fund transfers, payment and remittance; enrollment and disenrollment; premium payments; and provider referral certification and authorization. The deadlines for adopting the standards fall between 2012 and 2014.
Under the Senate bill, health plans must document compliance with these standards or face a penalty of no more than $1 per covered life, effective April 1, 2014. The penalty would be assessed per beneficiary covered by the plan for which its data system for major medical policies is not in compliance, for each day that the health plan fails to be in compliance, according to the bill text.
The HHS secretary can raise the penalty annually, based on the annual percentage increase in total national healthcare expenditures, according to the bill. The ceiling on the penalties cannot exceed $20 per covered life under each plan, or $40 per life under the plan if the insurer knowingly provided inaccurate or incomplete information, according to the bill.
The penalties would be collected by the Treasury Department.
Standardizing the most common transactions between health plans and providers is important, said Robert Zirkelbach, spokesman for America's Health Insurance Plans, the leading lobbying group for insurers.
“We do have concerns about the way the penalties are currently structured,” he said. “It's pretty unrealistic.”
The House healthcare reform bill, which passed on Nov. 7, includes similar administration simplification rules and adoption of standard electronic transactions between plans and providers. The bill requires the HHS secretary to issue relevant rules no later than two years from the bill's enactment. Within five years of enactment, the HHS secretary would be required to issue to Congress a specific plan on implementation and enforcement. No specific penalties are set in the bill for noncompliance.
According to the Congressional Budget Office, the simplification of administrative processes as proposed under the Senate bill would save the federal government about $11 billion annually in Medicaid and reduced subsidies paid through the proposed insurance exchanges. The standards would also boost revenue by about $8 billion by lowering the cost of private health insurance plans, the CBO reported.
Upgrading standards for electronic administrative transactions as proposed in the House bill would save the federal government about $6 billion in Medicaid costs, and boost revenue by about $13 billion by lowering costs of private health plans, according to the CBO.
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