The U.S. Department of Health and Human Services (HHS) has issued an interim final rule that provides standards for the electronic payments between health plans and healthcare providers such as doctors, hospitals and pharmacies.
The new rules are required by the health reform law’s changes to HIPAA’s electronic transaction rules (known as EDI). These rules apply to HIPAA covered entities, such as healthcare providers and employer health plans. The goal here is administrative simplification: by requiring a standardized format and data content for electronic payments, federal regulators hope to save the health care industry up to $16 billion over a ten year period.
The new standard for electronic transfers is based on recommendations from the National Automated Clearing House Association (NACHA). That organization develops operating rules for the Automated Clearing House Network, the process and delivery system for most electronic funds transfers.
The regulation is effective immediately, although compliance is not required until January 1, 2014. HHS will accept comments on the new rules through March 9.
What does this mean for employers sponsoring health insurance for their employees? For fully insured plans, the compliance obligation falls on the insurance company, as it is the one paying claims. For self-insured plans, third-party administrators (TPAs) will have to ensure they are capable of satisfying the new electronic payment requirements, and plan sponsors will want to ensure their TPAs are compliant. Health plans will need to certify readiness with the new rule before January 1, 2014. Future HHS guidance will address the certification process.