Verification will get boost through EDI initiatives
Verification will get boost through EDI initiatives
Cost reduction, better customer service likely
Change is coming sooner rather than later in the world of insurance verification, and access managers are advised to be ready.
The Health Insurance Portability and Accountability Act signed into law last fall mandates simplification of health care administration, including insurance verification. It requires third-party payers to provide insurance eligibility verification electronically under a single national standard format that must be established by June 1998, and that companies must be using within 18 months thereafter.
"Thirty-six months is not a long period of time to begin getting ready for this," says John St. George, principal in St. George Consulting, in Canaan, NH. "The burden is on the third party to respond to a provider request. The law doesn’t mandate a provider to use EDI [electronic data interchange] but if a provider does use it, it must be this standard."
This includes self-insured plans, St. George points out. "Even if they’re doing [verification] out of the company offices, if [providers] tell them they want it electronically, they have to do it."
In addition to eligibility verification inquiry and response, eight other electronic health care administrative transaction areas are included in the law. They are:
• health care claims or encounters;
• health care claims attachments;
• enrollment processing in a health plan;
• health care claims payment and remittance;
• first report of injury (a workers’ comp transaction);
• health claim status;
• referral certification and authorization.
The U.S. Department of Health and Human Services is expected to adopt the ANSI X12 transaction standard, St. George predicts. The transactions are available for review and comment on the World Wide Web at http://www.wpc edi.com.
There are three methods of transmission in EDI, he notes. Those are:
• normal, or batch, transmission;
• fast batch, which takes about three seconds;
• interactive, which may or may not be real time.
The standards adopted by the Secretary of Health and Human Services likely will accept both normal and fast batch initially, St. George says.
He estimates that only 20 or 30 health care providers in the country are now using EDI, and perhaps 100 are prepared to do it. But when you include those that use an insurance verification clearinghouse to conduct EDI, the number grows substantially.
Such clearinghouses allow providers to send out transactions to one telephone number rather than to, say, 100 individual insurers, and to get back one set of answers, St. George says. In some instances, schedulers or preadmission personnel — whoever tracks which patients are scheduled to come in — can generate eligibility inquiries through batch transmission each night and update the hospital’s database with the information that comes back. Then instead of calling all the scheduled patients the next day to verify the insurance information, they call only the exceptions, he notes.
Some providers might want to connect directly with payers that represent a large percentage of their business — such as Blue Cross or Medicare — and use a clearinghouse for the rest, he suggests. (For information on how one health system is doing this, see story on p. 17.)
Preparing for the future
The new federal simplification law places the burden on payers, not providers, to prepare for EDI, but St. George points out that with one uniform standard established for EDI transactions, providers can expect payers and clearinghouses to push for use of EDI. They also can expect system vendors and EDI vendors to offer EDI support at a lower cost as a result of the single standard replacing multiple variations and proprietary formats, he adds.
To prepare for the onslaught of EDI use —which he says will reduce costs and change staff work patterns for most providers — St. George suggests that access managers evaluate these areas for EDI readiness:
• ability of application to accept batch update file, especially patient registration databases;
• ability of application to accept new data while retaining old data, especially insurance data;
• EDI knowledge of internal MIS staff and vendor staff;
• advantages of general-purpose EDI translator or single-purpose translator.
Access managers also may want to start one-on-one meetings or focus groups with their payers and application system vendors about the best way to approach expanded use of EDI, St. George says.
State or metropolitan professional associations might be good vehicles for promoting planning, he adds.
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