Newly unveiled electronic payment standards will save the U.S. healthcare industry $4.5 billion in paperwork costs over the next 10 years, a federal health agency said Thursday.

The rules adopt standards for how a health plan sends information to its bank when it wants to pay a claim to a provider electronically. It also affects the issuance of Remittance Advice notices, customer notices telling a supplier a payment has been made.

The new rules will lower costs for doctors and hospitals, private health plans, states, and other government health plans, according to the U.S. Department of Health and Human Services.

The Department says savings for the industry could reach more than $16 billion over the next 10 years due to Administrative Simplification provisions of the Affordable Care Act and the Health Insurance Portability and Accountability Act.

(Click here for to access a detailed PDF document of the interim final regulation on the Federal Register's website.)

Paperwork Reductions

Physicians spend nearly 12 percent of every dollar they receive from patients to cover the costs of filling out forms and performing other excessively complex administrative tasks, a May 2010 study concluded in the journal Health Affairs.

“Thanks to the Affordable Care Act, health care professionals will spend less time filling out paperwork and more time focusing on delivering the best care for patients,” said HHS Secretary Kathleen Sebelius.

The May 2010 study found that simplifying these systems could save four hours per week of professional time per physician and five hours of support staff time every week.

“As a nurse, I know the importance of giving health care professionals time to focus on patient care,” said CMS Acting Administrator Marilyn Tavenner.

“The less time a physician has to spend on paperwork is that much more time that can be devoted to patient care. Having standardized procedures across the health care industry can only lead to lower costs and greater efficiencies all around.”

The new tracking system will allow health care providers to eliminate costly manual reconciliation that takes time to be done.

The authors outlined future administrative simplification rules below.

  • A standard unique identifier for health plans;
  • A standard for claims attachments; and
  • Requirements that health plans certify compliance with all HIPAA standards and operating rules.

While the regulation was effective on January 1, 2012, all health plans covered under HIPAA must comply by January 1, 2014.