The State of Electronic Healthcare Transactions in Workers’ Compensation

Tina Greene
Tina Greene

Tina Greene, Senior Regulatory Affairs Consultant, Casualty Solutions Group, Regulatory Affairs and Compliance at Mitchell International.

The Administrative Simplification provisions of the Federal Health Insurance Portability and Accountability Act of 1996 (HIPAA, Title II) include requirements that national standards for electronic health care transactions be established. These standards were adopted to improve the efficiency and effectiveness of the nation’s health care system by encouraging the widespread use of electronic data interchange in health care.

In the final rule, it’s recognized that:

“Non-HIPAA entities such as workers’ compensation programs and property and casualty insurance accept electronic healthcare transactions from providers, however, the Congress did not include these programs in the definition of a health plan under section 1171 of the Act.

The statutory definition of a health plan does not specifically include workers’ compensation programs, property and casualty programs, or disability insurance programs, and, consequently, we are not requiring them to comply with the standards. However, to the extent that these programs perform healthcare claims processing activities using an electronic standard, it would benefit these programs and their healthcare providers to use the standard we adopt.”

“Health Insurance Reform: Standards for Electronic Transactions; Announcement of Designated Standard Maintenance Organizations; Final Rule and Notice.” Federal Register 65:160 (17 August 2000) p. 50319.

In an effort to realize the effectiveness of electronic data interchange, some states have adopted regulations requiring electronic healthcare transactions for billing and payment. Early implementers of EDI for workers’ compensation in various states identified issues such as payer ID (claim administrator identification), claim filing indicator code and claim number, and worked with stakeholders to find resolutions. These issues have since been addressed in industry standards.

The International Association of Industrial Accidents, Boards and Commissions (IAIABC) has created the Workers’ Compensation Electronic Billing and Payment National Companion Guide to be used in conjunction with the national standard transactions. This guide highlights the few differences in workers’ compensation from healthcare billing and offers the technical solutions to mitigate those differences. It assists medical practice management providers and payers in efficient bill and pay for professional, institutional, dental and pharmacy services. The national standard formats for billing, remittance and acknowledgments are those adopted by the Federal Department of Health and Human Services rules (45 CFR Parts 160 and 162).

Most healthcare entities have already implemented electronic transactions because of the national mandate. However, stakeholders are looking to implement a single automated end-to-end workflow across all lines of business, including property and casualty, as this will increase efficiency and reduce costs for all partners involved.

Meeting today’s compliance standards and maintaining operational efficiency goals when utilizing electronic healthcare transactions can be achieved with a complete understanding of the implications of healthcare administrative simplification initiatives, state mandates underway and a commitment to putting into place the technology able to optimize medical bill handling environments.

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