Healthcare News & Insights

Cut red tape by following HIPAA transaction standards

If your hospital isn’t using HIPAA-mandated electronic transaction standards during the claims submission process, it can be costly. In fact, hospitals are losing billions of dollars due to administrative inefficiencies, and even worse: They’re losing the trust of patients. 

ThinkstockPhotos-522258127Cutting back on the administrative red tape patients encounter during their hospital stay plays a big role in their satisfaction.

In the current healthcare climate, patients behave more like consumers, and they want to know how much a service will cost them up front.

But administrative hurdles, like determining eligibility, prevent hospitals from quickly getting this information to patients.

If every hospital used HIPAA standards for each electronic transaction, not only would facilities get this information faster, but healthcare costs would decrease around $8 billion dollars – and most of that money would go right back to facilities and healthcare providers, according to a Hospital & Health Networks article.

Per the American Medical Association, in the past, hospitals have had to comply with HIPAA standards for:

  • eligibility for a health plan
  • health claim status
  • electronic funds transfers (EFT), and
  • healthcare payment and remittance advice (ERA).

This year, as part of mandates in the Affordable Care Act, new HIPAA electronic transaction standards will also apply to:

  • healthcare claims or equivalent encounter information
  • coordination of benefits
  • health plan enrollment/disenrollment
  • health plan premium payment, and
  • referral certification and authorization transactions.

Each new standard has operating rules to govern how the transaction should occur. The rules create uniform procedures that all payors and providers must follow to stay in compliance with HIPAA.

4 keys to success

While the HIPAA operating rules are mandatory for electronic transactions, the feds aren’t enforcing them just yet, which means some covered entities are doing better at compliance than others.

But if every facility conducted all of its electronic transactions according to the operating rules, it’d simplify the claims submission process, meaning hospitals would get paid faster.

And patients would feel more like they were a part of the process instead of being alienated and frustrated by endless bureaucracy and unexpected bills.

Here are four key steps hospitals can take to make their electronic transactions more streamlined and HIPAA-compliant, while improving patients’ care and engagement in the process, straight from a report by the American Hospital Association:

  1. Consolidate administrative processes. There’s a lot of repetition in the claims submission process. Make sure multiple staff members aren’t unknowingly repeating their efforts to eliminate redundancies. It’s also important to check that your hospital’s using as many electronic transactions as possible during the process to automate some time-consuming steps.
  2. Recognize how financial management steps are interrelated. Connecting the dots for the administrative portion of your revenue cycle is a big part of avoiding repetition. Understanding how certain tasks are connected, from patient check-in to billing, helps you find weak areas to shore up and strengths to build on.
  3. Address how clinical and financial data are related. Accurate diagnosis coding is important here, as the ICD-10 codes used on claims help payors keep track of the health of your patient mix. And under value-based payment agreements, patients’ outcomes directly affect reimbursement.
  4. Improve the relationship between providers and health plans. Because hospitals are assuming more risks in many value-based contracts, they’ll have to have a closer relationship with payors, collaborating more closely to improve quality of care. This will also make it easier to discuss issues with electronic transactions and work together to solve them.

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