HIPAA's promise undermined by claims-processing tangle

Rules that were supposed to make life easier are vexing many physicians and slowing claims payment.

By Joel B. Finkelstein, AMNews staff. Sept. 13, 2004.

Washington -- Like whispered messages in the children's game "telephone," most electronic claims filed by doctors are changed bit by bit on the way to their final destination.

As electronic transactions are passed down the line from physician to payer, they go through layer after layer of vendors, billing managers and often multiple clearinghouses. At the end of the line, the claim has been mutated -- transformed into a standardized format and filled with default settings for any required data left out of the original claim.

The result is that the claim the physician files and the one the payer receives are rarely the same thing.

This disconnect between these two main parties is creating what some experts see as a major obstacle for the implementation of national electronic transaction standards mandated by the Health Insurance Portability and Accountability Act. In many cases, problems have slowed claims processing and physician reimbursement.

Confusion has been only partially eased by the government's decision earlier this year to temporarily allow physicians to continue filing noncompliant claims, known as legacy claims.

"The way the current implementation and rollout is going is making things more complex and more costly for providers and payers," said Jack Scheffel, chief privacy officer at WebMD Corp., the country's largest medical claims clearinghouse.

The company recently published a white paper outlining current difficulties with carrying out the rules and steps the Centers for Medicare & Medicaid Services could take to ease the cost and burden of the standards.