Digitization of Patient and Financial Transactions

Monday, December 07, 2009

Over the last three decades virtually every major industry has reached some level of digitization of their manufacturing, logistic, inventory, sales, and service delivery systems. Products are routinely bar coded and radio tagged to optimize ordering, pricing, sales, inventory control, and shrinkage. So why shouldn't health care benefit from some of the same forms of technology?

The Act attempts to obtain a similar level of technology adoption by mandating, starting within two years and completed within five years, the digitization of patient health care data and the accompanying financial transactions.

The Act’s goals are to:

o be unique, no conflicting/standards
o permit no additions/constraints for transactions, including companion guides
o be comprehensive, efficient/robust, minimal paper transactions/clarification
o be real-time/near real-time in determination of financial responsibility/service eligibility
o use machine-readable health care ID cards
o allow near real-time adjudication of claims;
o provide electronic acknowledgment, response, and status reporting
o describe all data elements unambiguously
o harmonize common data elements
o require optional paper versions of transactions (Aren’t we trying to get rid of paper?)
o enable electronic funds transfers
o require timely/transparent claim adjudication
o require standard electronic member enrollment

While many health care providers currently have systems in place to conduct most enrollment, claims, and reporting activities electronically, at best, it can be said they are not standard across providers. In addition, the availability of “paperless” and “on-line” transaction and reporting may very by group size. A provider may not offer the same level of automation to a group of 25 as it does to a group of 250 members. Furthermore, those systems in place to manage Medicare, Medicaid, Tri-Care, and state-based CHIP plans may all have differing data standards, formats, and inter-faces.

To ease the burden of converting from their current data formats, the Act does provide for “incentives” to assist various providers. The Act specifically addresses incentives for providers who are “serving rural or underserved areas”. Finally, all of this automation must comply with any current privacy laws and as might be expected, the Act provides for its own enforcement through the use of audits and penalties.

What will it take to make all of this happen over the next 5 years? Most large carriers and providers have technology staffs who have the abilities to make the changes required in data standards, formats, and inter-faces, but will they have the capacity? How will this impact the small providers who have limited or no technology staffs? Who and how are the thousands of medical office staffs going to be trained to input these standard transactions?