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HHS: Electronic funds transfer rules to save $4.5 billion

by Brendon Nafziger, DOTmed News Associate Editor | January 05, 2012
New streamlined rules governing electronic fund transfers from health plans to doctors could save the U.S. health system billions of dollars over the next decade by cutting down on paperwork, the Department of Health and Human Services said Thursday.

The new rules, which hail from a provision of the Affordable Care Act, require electronic payments and notices of the payment, called Remittance Advice, sent by the health plan to doctors to carry tracking numbers so doctors can more easily match up the payments with the bills they correspond to.

HHS says the rules, Adoption of Standards for Health Care Electronic Funds Transfers and Remittance Advice, would shave approximately $4.5 billion in administrative costs from the budgets of doctors, hospitals and private and government-run health plans over the next 10 years.

"The less time a physician has to spend on paperwork is that much more time that can be devoted to patient care," CMS Acting Administrator Marilyn Tavenner said in a statement. "Having standardized procedures across the health care industry can only lead to lower costs and greater efficiencies all around."

A May 2010 study published in Health Affairs, and cited by HHS, said 12 cents of every dollar providers earn from patients goes to cover administrative costs.

The new regulations come a little over six months after the HHS released rules governing electronics claim handling, also called for by the Affordable Care Act, and which the agency says will save the health system $12 billion over the next decade.

The current regulation went into effect at the start of the year, and health plans must comply within the next two years, HHS said.

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