According to estimates in new rules published by theU.S. Department of Health and Human Services (HHS), the new standards for electronic fund transfers, required by the Affordable Care Act, will save up to $4.5 billion off administrative costs for doctors and hospitals, as well as private health plans, states, and other government health plans. The costs will accumulate over the next 10 years.
The standards build upon regulations published earlier this year that set industry-wide standards for how health providers use electronic systems to determine a patient’s eligibility for health coverage and check on the status of a health claim.
The two regulations implementing the Administrative Simplification provisions of the Affordable Care Act and the Health Insurance Portability and Accountability Act (HIPAA) are projected to save the health care industry more than $16 billion over the next 10 years according to HHS. The savings, HHS claims, comes from the adoption of electronic standards that will help eliminate manual processes.
The rule—the Adoption of Standards for Health Care Electronic Funds Transfers and Remittance Advice — has created streamlined standards for the format and data content of the transmission a health plan sends to its bank when it wants to pay a claim to a provider electronically (through an electronic funds transfer) and to issue a Remittance Advice notice. Remittance Advice is a notice of payment sent to providers that may or may not accompany the payment the provider receives.
Currently, when a provider submits a claim electronically for payment, a health plan often sends a Remittance Advice separately from the Electronic Funds Transfers payment. The disconnect, HHS says, between the two makes it difficult or sometimes impossible for the provider to match up the bill and the corresponding payment.
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