The Department of Health and Human Services is getting ready to enforce the Affordable Care Act's attempts to reduce administrative costs, with proposed regulations of health plans.
Open for public comment until March 3, the proposed rules would require covered health plans to show adherence to standards for processing eligibility, claim status, electronic fund transfers and remittance advice, or otherwise face fines or sanctions.
HHS regulators wrote in the Federal Register that the proposal "is intended to serve as an initial step toward the development of a consistent testing process that will enable entities to better achieve and demonstrate compliance with HIPAA standards and operating rules."
The proposed rules for administrative simplification requirements come about two years after HHS finalized its unique health plan identifier program, and more than a decade after the agency started down the route of helping standardize the industry's data exchange under HIPAA.
While previous standards implementations have not always gone smoothly, or taken effect on time, HHS regulators argue that "HIPAA standards and operating rules can reduce administrative burden" and possibly reduce spending.
Providers and now health plans should be able to find savings by reducing paper- and manual-based processes for data exchange. Administrative costs in healthcare "substantially impact spending growth and can likely be reduced," HHS said in the proposed rules.
"Automated processes, through the use of standardized electronic transactions, can lessen health care providers' administrative burden in interacting with health insurers."
These proposed rules for "controlling health plans" stem from ACA provisions for HHS to conduct periodic audits of health plans and their information service contractors and to fine those not in compliance with HIPAA operating standards for several key transactions.
Under the proposed rules, by the end of 2014 "controlling" health plans will have to show HHS regulators proof of certification for health plan eligibility, claim status, EFT and remittance advice.
As directed by the ACA, fines for noncompliance are assessed at $1 per covered life per day for major medical policies until health plan certification is complete, although HHS regulators didn't propose details for the audit program.
They also didn't wade into subsequent certification requirements mandated by ACA for 2015--data on encounters, disenrollment, premium payments, claims attachments and referral authorization--leaving the the proposed rules to a smaller category of transactions.