Monday, June 15, 2009

The Minnesota Mandate: What Does It Mean?

By Mark Brousseau

When HIPAA was passed in 1996 it looked like an electronic future for healthcare was upon us. As it turned out, the lack of enforcement for the new law combined with the ability to “opt-out” of electronic claim and remittance processes altogether allowed payers to delay their adoption of electronic file capabilities.

This was extremely counter-productive to the healthcare industry as a whole, notes Jim Ribelin, CEO, HERAE, LLC ( How could payers take the laws seriously when Medicare has only recently made the move to all electronic remittance data, and there are still US Military hospitals that as of today require paper-based processing as ‘standard procedure?’

It took Tim Pawlenty, Governor of Minnesota, to enact a state law requiring all insurance payers that do business in the state of Minnesota to conduct all claim and payment transactions electronically by December 19, 2009. This time there is no ability to “opt-out” of the electronic mandate. Furthermore, there are stiff penalties waiting for any payer that does not comply, Ribelin points out.

“This presents a very different situation than we’ve seen with HIPAA enforcement,” Ribelin says. “There is the law, but now there is enforcement and penalties, and a relatively tight deadline, at a state level.”

Ribelin adds that Minnesota is home to some of the top, internationally-recognized healthcare facilities. “This new law will require quick and decisive action on the part of large and small payers to provide electronic files across the board,” he says. “It will also create a level of ‘fear and uncertainty’ in the provider market, as every one of them is finally confronted with the inescapable requirement to accept and process electronic remittance information.”

The good news is that the healthcare remittance market has matured since HIPAA and there are solutions available that provide flexible online workflow, payer connections and electronic funds transfer (EFT) data re-association with electronic remittance advice (ERA) data, Ribelin says. The bad news is that there are also very limited solutions out there that do the bare minimum, and often create more work and headaches for the healthcare provider in their quest to adopt electronic payment solutions.

“The challenge is to educate the market on what they should look for in a remittance partner,” Ribelin says. “Sending a scanned image of an explanation of benefit (EOB) can be considered an electronic solution – but it’s a far cry from obtaining a fully HIPAA-compliant 835 data file complete with claim, patient and procedure information that can be searched and reported upon.”

The optimum solution deals with the data right at the source, by direct-connecting to payers, Ribelin claims. This provides many advantages, including standardized online presentation of claim information regardless of the payer, the ability to receive the most robust remittance data before it is modified/tainted by clearinghouses or accidently by the providers themselves, he says. There are also longer-term benefits, Ribelin adds, including significant advantages in terms of reporting to improve back-office processes and collections, contract management to monitor and improve accuracy of insurance payer payments and much more.

What do you think? Post your comments below.

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