Paper Studies EDI Provisions of Reform Law

A new white paper from the HIMSS Medical Banking and Financial Systems Committee examines the administrative simplification provisions of the Affordable Care Act, including the development of operating rules to make the HIPAA transaction sets more uniform.

The paper details the provisions and the affect they'll have on providers, payers, banks and claims clearinghouses. It also looks at the entities that will develop the operating rules.

Winners from the provisions will include providers, "though at some cost," according to the paper's authors, as well as banks which will find solid new business opportunities.

"Payers are likely to incur substantial costs of compliance and this should be recognized in the Medical Loss Ratio policy area," according to the authors.

To reduce excessive administrative costs, the health reform law mandates that insurers spend a minimum amount of revenue from premiums on payment for clinical care. This is the "medical loss ratio" and the minimum level is set in the new law at 85 percent for the large group market and 80 percent for the small group market.

Clearinghouses may be the entities hardest hit by the reform law provisions, particularly the operating rules, according to the white paper. "Their business model today is to provide some order and regularity to healthcare transactions. In the future, the Act will impose order and regularity on both payers and providers. Thus, clearinghouses may have to re-think their business models."

The white paper is available here.

--Joseph Goedert