NRPM: Standard Health Care Provider Identifier. H. Qualitative Impacts of Administrative Simplification

05/07/1998

Administration simplification produces more than hard-dollar savings. There are also qualitative benefits that are less tangible, but nevertheless important. These changes become possible when data can be more easily integrated across entities. WEDI suggests in its 1993 report that there will be a “ripple-effect” of implementing an EDI infrastructure on the whole health care delivery system in that there would be a reduction in duplicate medical procedures and processes as a patient is handled by a continuum of health care providers during an episode of care. WEDI also suggests that there will be a reduction in the exposure to health care fraud as security controls on electronic transactions will prevent unauthorized access to financial data.

We also believe that having standards in place would reduce administrative burden and improve job satisfaction. For example, fewer administrative staff would be required to translate procedural codes, since a common set of codes would be used. All codes used in these transactions will be standardized, eliminating different values for data elements (for example, place of service).

Administrative simplification would promote the accuracy, reliability and usefulness of the information shared. For example, today there are any number of claims formats and identifiers in use. We estimate that there are over 400 variations of electronic formats for claims transactions alone. As we noted earlier, these variations make it difficult for parties to exchange information electronically. At a minimum, it requires data to be translated from the sender’s own format to the different formats specified by each intended receiver. Also, since industry has taken different approaches to uniquely identifying patients, health care providers and health plans (based on their individual business needs and preferences), it has become difficult to develop methods to compare services across health care providers and health plans. This mixed approach to enumeration has made it extremely difficult for health care researchers to do comparative analysis across settings and over time, and complicates identification of individuals for public health and epidemiologic purposes.

Administrative simplification greatly enhances the sharing of data both within entities and across entities. It facilitates the coordination of benefit information by having in place a standardized set of data that is known to all parties, along with standardized name and address information that tells where to route transactions. Today, health care providers are reluctant to file claims to multiple health plans on the behalf of the patient because information about a patient’s eligibility in a health plan is difficult to verify. Additionally, identifying information about health plans is not standardized or centralized for easy access. Most claims filed by patients today are submitted in hardcopy. We anticipate that more health care providers will file claims and coordinate benefits on the patient’s behalf once standard identifiers are adopted and this information is made available electronically.