Consistent administrative rules slim down the need for paperwork

October 1, 2010

Now is the time for collaboration of payers, billers and providers to lead the industry by reducing inefficiencies

Key Points

NOW IS THE time for the collaboration of payers, billers and providers to lead the industry in healthcare reform by reducing costly administrative inefficiencies. Stakeholders have to trust each other and believe as a group they can effect change and accomplish goals.

A study by Thomson Reuters indicates the U.S. healthcare industry can eliminate $3.6 trillion in healthcare waste over the next 10 years by addressing known operational inefficiencies, such as complex and redundant transactions. Streamlining will go a long way toward slowing healthcare expense increases and curbing healthcare's share of the nation's gross domestic product.

COST-CUTTING INITIATIVES

Several initiatives are under way to reduce administrative costs. The Council for Affordable Quality Healthcare's Committee on Operating Rules for Information Exchange is bringing industry stakeholders together to achieve consensus on a set of operating rules for interoperability between providers and health plans. This will help reduce excess costs, multiple rules among payers and redundancy in the healthcare system.

The Patient Friendly Billing Project, a collaborative endeavor spearheaded by the Healthcare Financial Management Assn. promotes clear, concise, correct, patient-friendly financial communications. One of the latest reports from this decade-old project describes how high-performing hospitals successfully implement revenue cycle strategies by developing competencies in the key areas of people, processes, technology, metrics, communication and culture.

More recently, the AMA created a Health Insurer Code of Conduct, which challenges payers to commit to 10 principles. Two of the principles include administrative simplification and claims processing. The administrative simplification principle urges insurers to comply with laws governing use of electronic transactions and to disseminate clear, timely and accurate eligibility and benefit information, among other provisions. The claims processing principle calls for timely and accurate payment with clear and comprehensive information about how claims are handled and explanations of rationale when claims are denied.