Executing a balancing act: with the advent of electronic claims transactions, insurers and hospitals say they are working to streamline the medical claims management process to cut costs, while at the same time maintaining patients' privacy and data security.
Ever since the passage of the Health Insurance Portability & Accountability Act There are a number of piece of legislation known as the Accountability Act:
pertaining to data that have been submitted to standardization procedures.
standardized morbidity rate
see morbidity rate.
standardized mortality rate
see mortality rate. format for handling claims. A key provision of HIPAA (Health Insurance Portability & Accountability Act of 1996, Public Law 104-191) Also known as the "Kennedy-Kassebaum Act," this U.S. law protects employees' health insurance coverage when they change or lose their jobs (Title I) and provides standards for patient health, , titled Administrative Simplification, calls for improved efficiency in health-care delivery by standardizing EDI (Electronic Data Interchange) The electronic communication of business transactions, such as orders, confirmations and invoices, between organizations. Third parties provide EDI services that enable organizations with different equipment to connect. , or electronic data interchange See EDI.
(application, communications) electronic data interchange - (EDI) The exchange of standardised document forms between computer systems for business use. EDI is part of electronic commerce. , and protecting the confidentiality and security of health-care data through setting and enforcing standards.
In response to HIPAA, along with growth in new technology designed to automate the medical claims management process, an increasing number of health-care providers have begun accepting electronic claims transactions from providers, health-care clearinghouses, billing entities and other third parties involved in the claims-handling process. As a result, the claims management process is growing increasingly more streamlined, as payers aim to reduce administrative expenses and promote partnerships with providers.
"There has been a great deal of effort invested in the last five to six years by health-care payers assessing the capabilities of their current systems regarding the privacy, security and administrative simplification provisions of HIPAA," says Laurie Ringlein, director, health industries advisory practice, at PriceWaterhouseCoopers in Portland, Ore.
"As the medical claims management process becomes more automated," she says, "health-care organizations are developing their system strategies around enhanced protection regarding personal health information. Many are looking at ways to mask personal health information to protect members from identity theft and maintain privacy, such as rising coding other than Social Security numbers on member identification cards. In addition, payers are putting security protocols in place around EDI and electronic claims submission to comply with HIPAA and protect sensitive information."
Adds Jim Clark Jim Clark - Dr. James H. Clark , president of Soft-Aid Inc., a Miami-based provider of medical management and electronic medical records software for the healthcare community, "Security is now a major focus of health-care payers and providers. A growing number of payers and providers are moving into an Internet realm for streamlined connectivity across multiple sites, providing real-time access to patient information, which needs to be appropriately protected."
Security provisions may include data encryption data encryption, the process of scrambling stored or transmitted information so that it is unintelligible until it is unscrambled by the intended recipient. Historically, data encryption has been used primarily to protect diplomatic and military secrets from foreign , electronic firewalls, access controls for confidential data and data activity monitoring.
"Payers are now beginning to (request) and receive claims in an electronic format as the preferred method of submission," says John Sarich, head of insurance industry marketing management at FileNet, a provider of enterprise content and business process management solutions, based in Costa Mesa Costa Mesa (kŏs`tə mā`sə), city (1990 pop. 96,357), Orange co., S Calif., on the Pacific south of Santa Ana; inc. 1953. It is a transportation, residential, and light industrial center. , Calif. "The challenges lie in tracking individuals with multiple claims, limits on the medical provider's side--particularly in small practices--consolidation of faxed information into a single system, and the ability to process claims without manual intervention."
In the past, health plans and providers have used many different electronic formats to transact An earlier e-commerce system for the Web from Open Market that included order capture and secure order fulfillment using credit cards, ecash and other payment systems. It included customer service and subscription administration capabilities as well as an integrated database for reporting medical claims and related business activities. Under HIPAA, standards for electronic transactions are now being implemented to create one format, designed to simplify and improve the efficiency of such transactions nationwide. In addition, coding systems Noun 1. coding system - a system of signals used to represent letters or numbers in transmitting messages
code - a coding system used for transmitting messages requiring brevity or secrecy that describe diseases, injuries and other health problems, along with their causes, symptoms and actions taken, will become uniform.
"HIPAA's standardization of electronic claims transactions has helped health plans automate the claims management process and opened them up to accepting transactions via the Internet," says Gail Knopf, vice president, product strategy at the TriZetto Group, a Newport Beach Newport Beach, residential and resort city (1990 pop. 66,643), Orange co., S Calif., on Newport Bay and the Pacific Ocean; inc. 1906. It is a popular seaside resort and yachting center. Manufactures include electrical and medical equipment, computers, boats, and adhesives. , Calif.-based provider of software, outsourcing and consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.)
service - work done by one person or group that benefits another; "budget separately for goods and services" for health-care payers. "Many payers are now moving toward point-of-service adjudication The legal process of resolving a dispute. The formal giving or pronouncing of a judgment or decree in a court proceeding; also the judgment or decision given. The entry of a decree by a court in respect to the parties in a case. of claims, which will greatly reduce administrative costs administrative costs,
n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. and streamline the payment of claims."
The Internet is increasingly facilitating the sharing of information between health-care payers and providers.
"We're seeing a significant acceleration in health-care providers' interest in the direct submission of claims to insurance companies," says Marjorie O'Malley, president of Post-N-Track Corp., a software developer and services company specializing in Web-based transaction exchange solutions for the health-care industry, based in Middletown, Conn. "This direct connectivity greatly improves relationships and communication between payers and providers, increases the percentage of claims providers receive electronically and allows both payers and providers to realize significant administrative savings."
IMPROVEMENT ON THE RECORD
Cigna HealthCare recently teamed up with Post-N-Track to deliver faster claims submission and tracking for health-care providers, billing entities and other third parties involved in the claims-handling process. The HIPAA-compliant program allows providers to submit, or "post," their claims to Cigna directly and securely over the Internet and receive, or "track," processing results, such as claim status, receipt confirmations, acknowledgements and remittance Money sent from one individual to another in the form of cash, check, or some other manner.
Financial statements sent by a creditor to a debtor frequently refer to the process of submitting a monthly remittance.
REMITTANCE, comm. law. notices, without an intermediary.
"The process works like Federal Express for health-care transactions," explains O'Malley. "Health-care providers can go online to track the status of their claims information and get an immediate response from the payer. If the provider doesn't have electronic claims submission capabilities, we offer direct entry of claims into the Post-N-Track system, which can then be forwarded to the payer, or if the provider has a practice management system that generates a print image, we can transfer it to a HIPAA-compliant format for processing."
Paul Keyes, director of EDI at Cigna HealthCare in Hartford, Conn., notes, "We're making significant improvements in the way providers are able to submit claims to us without the need for them to change technology or incur any other costs. Once a claim is submitted, the provider gets an immediate response, in real time, letting them know the claim has been received and whether or not it will be accepted for payment." The ultimate goal is to make it easier and faster for providers to do business with Cigna.
Dr. John Thayer John Thayer is a name associated with the following notable persons:
A physician who specializes in ophthalmology. at Westfield Eye Center in Westfield, Mass., has been using the Post-N-Track system to submit claims to Cigna for the past year and a half. "The program is extremely easy to use and helps us process claims in a more efficient, cost-effective way," says Thayer. "Using P-N-T, we can submit claims directly to Cigna, rather than a bulletin-board system bulletin-board system (BBS)
Computerized system used to exchange public messages or files. A BBS is typically reached by using a dial-up modem. Most are dedicated to a special interest, which may be an extremely narrow topic. or clearinghouse, and we get a verification right away. We simply 'drop' claims into a folder on our computer system, and P-N-T will automatically pick it up and archive it. In addition, we receive an e-mail receipt once the claim is sent to Cigna, and receive another e-mail notification when remittances
Remittances are transfers of money by foreign workers to their home countries. come through. The program provides a direct route to Cigna and greatly simplifies the process on our end."
Simplification of the claims management process is a key benefit of Web-based transactions.
"The Internet is truly helping to enable the electronic data-exchange process," says Ringlein of PWC. "Providers are beginning to embrace the services the Web offers, such as eligibility verification, benefit verification and tracking of claims status, although claims submission is being adopted a bit more slowly. In addition, health plans are increasingly using automation tools to turn paper claims into electronic records."
Last year, the Bush administration called for the widespread adoption of electronic health records for most Americans within 10 years. As part of that initiative, the U.S. Department of Health and Human Services Noun 1. Department of Health and Human Services - the United States federal department that administers all federal programs dealing with health and welfare; created in 1979
Health and Human Services, HHS issued a "Framework for Strategic Action," outlining an approach toward nationwide implementation of interoperability of health information. HHS HHS Department of Health and Human Services. is seeking to develop a national health information network--an Internet-based architecture that links disparate health-care information systems together to allow patients, physicians, hospitals, community health centers and public health agencies across the country to share clinical information securely. Both the federal government and private industry are being called upon to facilitate the deployment of an NHIN NHIN Nationwide Health Information Network
NHIN National Health Information Network .
One of the ways in which health information is being exchanged--as a foundation on which to build an NHIN--is through Regional Health Information Organizations, or RHIOs, says Sarich of FileNet. RHIOs aim to establish electronic ties among payers, providers and other organizations involved in delivering health care.
"RHIOs encourage the coming together of payers and providers to share health-care information," says Sarich. "Doctors who live and work in a specific regional area, along with hospitals, insurance companies and other health-care delivery organizations in that region can then work together to design a records-management function everybody can use."
While it's too early to say how successful RHIOs will be in facilitating the development, implementation and application of secure health information across various health-care settings, more than 100 of the networks are in various stages of formation across the nation.
"Health plans are focusing on how to evolve their technical infrastructure to stay in step with new products, benefits and reimbursement Reimbursement
Payment made to someone for out-of-pocket expenses has incurred. arrangements," says Ringlein. "An increasing number of payers are focusing on how to improve electronic claims transactions to better service providers and customers, simplify the claims management process and reduce administrative expenses."
MINDY TORAN is a freelance writer in Huntingdon Valley, Pa. She can be reached at email@example.com.