ADMINISTRATIVE SIMPLIFICATION: Long-Awaited Rules Issued

      Health and Human Services Secretary Donna Shalala announced new proposals last Thursday designed to streamline the processing of health care claims and reduce the amount of paperwork required in the U.S. health care system. Under the proposals, which were mandated by the Health Insurance Portability and Accountability Act of 1996, all health care providers in the U.S., including hospitals, doctors and nursing homes, will be provided with a unique eight-digit alpha-numeric identifier to be used in filing claims with all public and private health insurers and programs. In addition, the new provisions will establish a standard format for the filing of electronic claims that all health plans will be required to use. Shalala said, "These are important steps toward a faster, simpler, less costly and more efficient health care system." The new regulations are expected to save $1.5 billion over the first five years of implementation.

Time Is Money
      The electronic claims proposal also includes new standards for other common transactions and for reporting diagnoses and procedures. Under the new standards, health plans will be able to pay providers, authorize services, certify referrals and coordinate benefits using a standard electronic format for each transaction. Providers will be able to use standardized formats to check on patients' insurance status, the status of a claim, request for referral or service authorization, and employers will be able to use the standard electronic formats to enroll or disenroll employees and to make premium payments to health plans. Health Care Financing Administration Administrator Nancy-Ann Min DeParle said, "This will make information exchange more efficient and accurate, and result in better service for consumers" (HHS release, 5/7).