Health Insurance Reform: Standards for Electronic Transactions. a. Affected Entities


The ASC X12N 270/271 transaction may be used by a health care provider to electronically request and receive eligibility information from a health care plan prior to providing or billing for a health care service. Many health care providers routinely verify health insurance coverage and benefit limitations both prior to providing treatment and/or before preparing claims for submission to the insured patient and his or her health plan. Currently, health care providers secure most of these eligibility determinations through telephone calls, proprietary point of sale terminals, or using proprietary electronic formats that differ from health plan to health plan. Since many health care providers participate in multiple health plans, these health care providers must maintain duplicative software and hardware, as well as human resources to obtain eligibility information. This process is inefficient, often burdensome, and takes valuable time that could otherwise be devoted to patient care.

The lack of a health care industry standard may have imposed a cost barrier to the widespread use of electronic data interchange. The ASC X12N 270/271 is used widely, but not exclusively, by health care plans and health care providers; this may be due, in part, to the lack of an industry-wide implementation specification for these transactions in health care. We expect that adoption of the ASC X12N 270/271 and its implementation specification will lower the cost of using electronic eligibility verifications. Use of the ASC X12N 270/271 and its implementation specification will benefit health care providers because they will be able to move to a single standard format. Consequently, electronic data interchange will be feasible for the first time for small health plans and health care providers that rely currently on the telephone, paper forms, or proprietary point of sale terminals and software.