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HIPAA and online transactions


New rules require payers to offer online eligibility, claims status, EOBs, and more.



HIPAA and online transactions

New rules require payers to offer online eligibility, claims status, EOBs, and more.

While the new HIPAA electronic transaction rules have created concern about payment delays during the transition period, the regulations could reduce administrative work in physician practices. From now on, all payers must support standardized electronic transactions related to claims, claims status, eligibility, benefits, service review (preauthorizations of referrals, tests, and procedures), and electronic remittance advice. By obtaining this data online, you can save staff time, get paid faster, and avoid nonpayment for ineligible services.

Early this year, when payers started converting their information systems to comply with HIPAA, less than 20 percent of commercial plans supported online eligibility checks, says Gary Stuart,

senior vice president of sales for WebMD Envoy, the biggest electronic data interchange (EDI) clearinghouse. Since eligibility was the most common online transaction after claims submission, that meant that even fewer payers could handle requests for other kinds of electronic data. So, unless one of those plans contributed the bulk of a practice's volume, it wasn't efficient to do these transactions online. Stewart expects many more practices to perform administrative tasks online after they can get electronic data from all of their payers.

Many plans are relying on the Web rather than on EDI for nonclaims transactions, and an increasing number accept claims over the Internet. "Some plans are trying to become more efficient by using the Web to let physicians do more self service," notes Thomas G. Morrison, an executive vice president of NaviMedix, a vendor of connectivity services.

One plan that's in the forefront of this trend is Blue Cross and Blue Shield of South Carolina. BCBSSC's Web portal allows physicians to file claims, check claims status, eligibility and benefits, and get electronic remittance advice. Most physicians who have an Internet connection in their offices are using some or all of these features, says David Boucher, a plan vice president.

As a result, he says, nearly 90 percent of provider inquiries are being handled over the Web or telephone voice response systems, compared with 40 percent in 1999. And, because many physicians who don't own practice management systems are now transmitting claims over the Web, the portion of Blues providers submitting claims electronically has jumped from 66 to 85 percent over the past four years.

Many offices with practice management systems have been sending claims over the Internet since May, when BCBSSC introduced real-time claims adjudication. By the end of June, 1,600 physician offices, hospitals, and ancillary providers—15 percent of the Blues' network—were submitting claims this way, even though it involves double data entry. The advantage for the office is that it knows immediately whether a claim has been accepted and, if not, what needs to be fixed. Moreover, there's no fee for Web-based claims submissions, and the average claim is paid within 4.2 days, rather than the 8 days it takes through a clearinghouse and 15 days for paper claims.

Real-time claims adjudication hasn't spread as quickly as expected, mainly because it's expensive and difficult for plans to reconfigure their systems to do it. But RealMed, the leading technology vendor in this area, is working with Blues plans in 12 states and with UnitedHealthcare. According to RealMed President and CEO Chet Burrell, 85 to 90 percent of claims submitted to plans that approve claims over the Internet are paid within a week.


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