We often talk about the challenges that exist in healthcare surrounding wasteful spending on administrative tasks, but the reality is that problems and solutions can exist simultaneously. One of the solutions: legislation.
In healthcare, legislation is not always seen as the fastest route to cultivating change in an already slow-moving industry. But system-wide issues, like administrative waste, can benefit from system-wide initiatives. As waste and burden persist due to administrative complexity, federal and state agencies continue to advocate for and pass legislation with the goal of chipping away at healthcare’s wasteful spending.
When Standards are Only Suggestions
On a national scale, attempts to eliminate administrative waste started with the Health Insurance Portability and Accountability Act (HIPAA) in 1996. In the early days of the internet, Congress enacted HIPAA to create structure and guidelines for those utilizing the world wide web for business in healthcare. The Affordable Care Act (ACA) in 2010 built on HIPAA by introducing more concrete operating rules for a variety of administrative, non-clinical transactions, and established the Administrative Simplification standards to “allow information to be shared electronically in consistent ways.”
Since the beginning, these standards have aimed to help payers and providers find “solutions for routine manual processes,” including common transactions between payers and providers. This encompasses transactions like enrollment for electronic data interchange (EDI), electronic funds transfer (EFT), electronic remittance advice transactions (ERA), and more.
The challenge with HIPPA’s Administrative Simplification standards is that they leave loopholes and set the bar too low for what can be defined as “electronic.” While these standards call for transactions to be completed electronically, these requirements can be met through processes that require manual work. For example, many payers ask providers to send paperwork electronically (PDFs or email), but still require wet signatures that necessitate printing, signing, and scanning documents back into PDF form. And, a recent report found that more than 80% of “attachments” still somehow travel through snail mail or fax. The standards are a start, but alone are not enough to transform the administrative transaction process.
Laying Down the Law
One of the more widely discussed effects of non-compliance with electronic standards and inefficient administrative processes is inaccurate provider directories. When providers and payers can’t easily exchange basic information, it leads to outdated physician profiles on sites that patients use to seek care.
With the healthcare industry under pressure to reduce spending, additional legislation has cropped up in the past few years to move payers, providers, and everyone in between, more forcibly toward fully electronic processes by focusing on directories.
In 2016, The Centers for Medicare & Medicaid Services (CMS) extended beyond Administrative Simplification standards to mandate that Medicare Advantage plans keep their provider information up-to-date, or face significant fines. Timely provider data management not only allows for accurate directories, but it’s also the foundation of all administrative transactions between payers and providers. Despite this critical importance, and the government mandate, CMS found that in 2018 nearly half of all provider profiles for its Medicare Advantage directories were outdated.
Taking matters into its own hands, the state of California has passed legislation even more stringent for provider directory upkeep. California Senate Bill 137 requires payers to keep up with their providers to ensure that “the accuracy of the provider directory meets or exceeds 97%.” The bill also requires payers to update their directories weekly. This level of upkeep necessitates more efficient processes, especially because basic information changes often. On average, in one week, 3,300 physicians’ names change, 33,000 addresses change, and 1,750 phone numbers change across the nation. The strict bill has pushed California healthcare organizations to utilize new tools and partnerships to adhere to the law.
In an effort to comply with Senate Bill 137, reduce administrative burden, and increase interoperability, a group of California payers, providers, and patients, convened by the Integrated Healthcare Association (IHA), created a statewide repository for reconciling and collecting accurate provider data called the Symphony Provider Directory. In its first year, the initiative has been successful at improving provider count metrics for its organization of 90 providers and 11 health plan participants, helping to increase the accuracy of California’s directories.
The California example demonstrates that it’s ultimately up to all stakeholders in the healthcare industry to work together toward change. While change can be inspired from the top down with legislation, it must be embraced and embodied by all for real impact.