The Department of Health and Human Services (HHS) took the first steps to implement an Affordable Care Act provision that cuts red tape in the healthcare system and saves an estimated $12 billion over the next ten years. These savings come from improved use of electronic standards that will help eliminate inefficient manual processes and reduce costs.
This is the first in a series of steps that will help reduce inefficient business processes by standardizing and improving electronic healthcare transactions. This will not only save healthcare providers and health insurance companies money, but also allow physician offices to redirect time now spent on administrative tasks to patient care.
[See also: HHS says ACA changes to Medicare will save $120B over 5 years]
Consumers will also benefit with more complete information about their out-of-pocket costs and deductibles.
A May 2010 study in Health Affairs found that physicians spend nearly 12 percent of every dollar they receive from patients to cover the costs of excessive administrative complexity. The study found that simplifying these systems could save four hours of professional time per physician and five hours of support staff time every week.
"Doctors and health insurance companies waste thousands of hours and billions of dollars filling out forms and processing paperwork," said HHS Secretary Kathleen Sebelius. "The Affordable Care Act is helping doctors operate more efficiently and spend their time treating patients, not filling out papers."
The interim final rule issued today requires compliance by health plans, healthcare clearinghouses and certain healthcare providers by January 1, 2013, and implements part of Section 1104 of the Affordable Care Act. It puts in place operating rules that make it easier for providers to determine whether a patient is eligible for coverage and the status of a healthcare claim submitted to a health insurer.
The new rules save an estimated $12 billion for physicians, other health providers and health insurance companies by reducing transaction costs in the form of fewer phone calls between physicians and health plans, lower postage and paperwork costs, fewer denied claims for physicians and a greater ability to automate healthcare administrative processes.
"As a pediatrician, I know how frustrating it can be to spend time dealing with paperwork instead of patient care," said CMS Administrator Donald M. Berwick, MD. "These rules will help healthcare professionals operate more efficiently, lowering their costs and reducing hassle for consumers."