HIPAA may be a pain but could produce a gain
Act should simplify your dealings with insurers
There’s good new and bad news where the Health Insurance Portability and Account a bility Act (HIPAA) is concerned.
The bad news is that you’re going to have to make sweeping changes in the way you do business. The good news is that the changes could improve your bottom line.
"Nobody likes the government forcing them to accept new requirements, but the good news is that there is a positive return on your investment if you do transactions electronically," asserts Christopher Assif, CEO of Health Network Ventures in Chicago, operator of Health.Net, an on-line network for medical professionals and office staff.
One purpose behind HIPAA is to encourage providers to transmit claims electronically because it is cheaper and easier.
When HIPAA regulations go into full effect, all your transactions with all your third-party payers will be conducted in the same way. That means one method of checking eligibility, one set of treatment and procedure codes, and a standardized method of submitting claims. The cost savings could be substantial, Assif says.
"Physicians now spend money on operational expenses to keep people on their staff to call the insurance companies to verify a person’s benefits. That will no longer be necessary. They will be able to dial directly into the computer," adds Jon Zimmerman, solutions manager for Shared Medical Systems Corporation, a Malvern, PA, supplier of information systems and professional services for health care providers.
When HIPAA standards go into effect, you should get the correct information about your patients upfront and be able to follow the plan rules. It should eliminate all the reimbursement problems that occur after the service has been provided, Zimmerman says.
For instance, at present, every time you don’t get the right eligibility or benefits information from the patient and your claim is rejected by the payer, it costs you money.
If a patient gives you the wrong plan number by mistake and he’s not covered, the debt will sit on your balance sheet for months.
"It’s not uncommon for outstanding receivables to go as long as 100 to 120 days, and in some cases, the cost of carrying the debt isn’t worth what the value of the debt is," Assif says.
Not only is there a benefit to providers if they collect on their claims faster; patient satisfaction can be another issue. According to Assif, problems with the way bills are handled prompt patients to find another physician.
John Knapp, a health law attorney with the Philadelphia law firm of Cozen and O’Connor, isn’t all that optimistic about cost savings. "It has the potential to cut down on administrative expense, but that’s often not the way things play out. I wouldn’t be surprised if no one sees any resultant savings," Knapp says.
He points out that when personal computers came on the market 15 to 20 years ago, many predicted they would cut down on the use of paper.
"In reality, the use of the computer has multiplied the use of paper. With a computer, you have to deal with the inevitable glitches and problems," Knapp adds.
However, leaving HIPAA aside, it’s beginning to be financially prudent for physicians to submit their claims electronically, he points out.
One big issue, the lack of speed with which third-party payers process claims, figures largely in the issue of electronic transmission.
As providers renegotiate their contracts with managed care payers, many are addressing the issue of how often they get paid, Knapp says. "One of the inevitable compromises is that if they want to get paid quicker, they have to submit their claims electronically," he adds.
Some states already have passed laws that say payers can’t hold your money if you submit your claims electronically, Zimmerman says.
In some areas, Medicare carriers have put a 50-cent surcharge on paper claims, according to Jim Klein, director of HIPAA compliance services for EDS in Plano, TX.
"That practice is gaining popularity. Paper claims mean an increased cycle time. If providers send in claims electronically, they get paid in 14 days. If the claims are on paper, it’s a full month," Klein says.
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