AMA Advocates for Administrative Simplification
Administrative simplification in the physician practice
Inefficient health care claims processing, payment and reconciliation carry estimated costs of between $21 and $210 billion¹. In the physician practice, this expense equals, on average, 10-14 percent of practice revenue². The administrative simplification objective within the physician practice is to encourage:
- automated, real-time health plan transactions
- reduction of manual processes throughout the physician’s claims revenue cycle
- increased transparency and reduced ambiguity during the health insurer claim payment process
The AMA is committed to addressing and advocating for the following solutions to the ongoing problems in the claims revenue cycle—problems which contribute to increased complexity and expense.
1: PNC Bank (2007), Commonwealth Fund (2007); RAND Corporation (2005), PricewaterhouseCoopers, 2008
2: Kahn, J. G., “Billing and Insurance-Related Administrative Costs: Burden to Health Care Providers”, IOM Roundtable: The Healthcare Imperative, May 2009.
AMA administrative simplification white papers are developed and published to raise the awareness and priority of the critical, costly manual processes endured by the physician practice. These processes must be automated by all participants in the claims revenue cycle in order for all parties to realize reduced expense and increased administrative relief.
The National Committee on Vital and Health Statistics (NCVHS) is the federal agency responsible for electronic health care transaction standards and other administrative simplification provisions contained within the Patient Protection and Affordable Care Act (ACA). The AMA has provided extensive NCVHS testimony regarding administrative simplification to ensure physicians’ interests in fully automating their practices are represented. Elimination of the manual processes and administrative hassles endured today can only occur if NCVHS adopts standards which meet the needs of all stakeholders, rather than just the interests of health plans.
- Read the AMA's submitted comments regarding the recent Department of Health and Human Services (HHS) Administrative Simplification: Adoption of a Standard for a Unique Health Plan Identifier (HPID) proposed rule.
- Read the AMA letter in support of operating rules for electronic funds transfer (EFT) and electronic remittance advice (ERA) adopted by the Centers for Medicare and Medicaid Services (CMS).
Because of the significant savings of time and revenue that can be achieved by physicians through automation of the claims process, the AMA diligently advocates for continued administrative simplification. Today, the prior authorization process is all to often manual, time-intensive and confusing for all stakeholders. The AMA believes that the best automated solution for prior authorization would be a single, standard electronic PA process applicable to all service types that include medical, pharmacy, laboratory, radiology and durable medical equipment (DME) services to reduce the administrative burden placed on payers and physicians alike. Read the AMA's workflow recommendation regarding automation of prior authorization.
The AMA encourages you and your organization to get involved with ASC X12, CAQH CORE, NCPDP and WEDI. These organizations are leading the development and use of electronic standard health care transactions and need your input.
Learn more about electronic health care transactions, and about how AMA is advocating for physicians within these organizations.