New ACA streamlining requirement will cost insurance plans, but benefit medical providers

More advantages from the Patient Protection and Affordable Care Act (ACA) are trickling in. One of the latest was announced by the HHS on April 9. It's a proposed regulation that conforms to the  ACA's requirement that a series of regulations designed to streamline health care administrative transactions be issued over a five-year period. The regulations are meant to encourage greater use of standards by health care providers and make existing standards work more efficiently. The proposed regulation announced on April 9 would establish a unique health plan identifier (HPID), according to standards for electronic health care transactions found the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Commenting on the new proposed regulations, HHS Secretary Kathleen Sebelius stated, "The new health care law is cutting red tape, making our health care system more efficient and saving money."

The proposed rule would also adopt a data element that will serve as an other entity identifier (OEID) for entities that are not health plans, health care providers, or individuals, but that need to be identified in standard transactions. It also proposes an addition to the National Provider Identifier (NPI) requirements, and would delay, to October 1, 2014, the compliance date for the International Classification of Diseases, 10th Edition diagnosis and procedure codes (ICD-10).

HHS expects the HPID to benefit medical providers (to the tune of $700 million to $4.6 billion over a ten-year period) and to cost commercial and governmental health plans about $650 million to $1.3 billion. The HHS has given two sources of the expected financial benefits to medical providers: a decrease in the administrative time physician practices currently spend interacting with health plans, and automation of processes for every transaction that is changed from a manual to an electronic one. The compliance date for the HPID is October 1, 2014 for all but small health plans, which have until October 1, 2015.

Medical providers are, apparently, frustrated by the fact that health plans are now identified in standard transactions by multiple identifiers of varying lengths and formats. This leads to rejection of transactions due to insurance identification errors and difficulty in determining patient eligibility. HHS states that "the most significant benefit of the HIPD and the OEID is that they will increase standardization within the HIPAA standard transactions."

Other streamlining provisions from the ACA include an interim final regulation published July 8, 2011, which adopted operating rules for two electronic health care transactions to facilitate both a patient's eligibility for coverage and the status of a health care claim submitted to an insurer, and a regulation, published January 10, 2012, that adopted standards for electronic funds transfers (EFTs) and remittance advice transactions between health plans and medical providers.

The HHS plans to issue more simplification rules under the ACA, including standards for claims attachments and requirements for certification of health plans' compliance with all HIPAA standards and operating rules. Sebelius commented on April 9 that, "These important simplifications will mean doctors can spend less time filling out forms and more time seeing patients."

The new proposed regulation implements Social Security Act Sec. 1173(b)(1), as amended by ACA Sec. 1104(c).


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