HHS Proposes Administrative Simplification Standards For Health Care Transactions

05/07/1998

FOR IMMEDIATE RELEASE

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HHS PROPOSES ADMINISTRATIVE SIMPLIFICATION STANDARDS.FOR HEALTH CARE TRANSACTIONS

HHS Secretary Donna E. Shalala today announced new proposals to.streamline the processing of health care claims and reduce the.amount of paperwork required in the U.S. health care system.

The plans include a requirement that every health care provider. -- hospitals, doctors, nursing homes, and others -- be provided with.a unique alpha-numeric identifier to be used in filing claims for.reimbursement by public and private insurance programs. HHS also is.proposing regulations that would establish a standard format for the.submission of electronic claims.

"These are important steps toward a faster, simpler, less.costly, and more efficient health care system," Secretary Shalala.said. "We are working with the private sector to prepare our nation.for the information age in health care."

At present, health care providers are assigned different.identification numbers by private health plans, hospitals, nursing.homes, and such public programs as Medicare and Medicaid. These.multiple provider ID numbers result in slower payment of bills,.increased costs, and a lack of coordination.

The proposed rules published in today's Federal Register are.two of the administrative simplification steps provided for in the.Health Insurance Portability and Accountability Act of 1996 (HIPAA)..By promoting the greater use of electronic transactions and the.elimination of inefficient paper forms, the regulations are expected.to save at least $1.5 billion over the first five years of.implementation.

Under the first proposed rule, health care providers would.apply for an eight-digit identifier that they would use whenever.processing claims electronically. They would apply for that.identifier only once and keep it when they move from one state to.another or if they change specialties.

Under the second rule published today, every health care.provider would be able to use a single standard electronic format to.bill for services rendered. All health plans would be required to.accept these standard electronic claims. Currently, different.insurers utilize different electronic and paper claims forms.creating a confusing and cumbersome system for health care providers.and taking providers' time away from their patients.

The electronic claim proposal also includes new standards for.other common transactions and for reporting diagnoses and procedures.in the transactions. Health plans will be able to pay providers,.authorize services, certify referrals, and coordinate benefits using.one standard electronic format for each transaction. Using a.standard electronic format, providers will be able to inquire about.whether a patient has insurance coverage or the status of a claim or.request authorizations for services or specialist referrals.

Employers who provide health insurance to their workers and.their dependents also will be able to use a standard electronic.format to enroll or disenroll employees and to make premium payments.to any health plan with which they contract to do business.

"These efforts will help more providers move from paper to.electronic transactions," said Nancy-Ann DeParle, administrator of.the Health Care Financing Administration, which runs the Medicare.and Medicaid programs. "This will make information exchange more.efficient and accurate, and result in better service for consumers."

Later this year, HHS will issue other administrative.simplification proposals to establish national ID numbers for health.plans and employers and to establish stringent new security rules to.protect patient confidentiality.