How Mandatory Electronic Claims Submission Affects Us

Recently the state of Minnesota mandated that all medical claims are sent electronically by July 15, 2009. If you are not from Minnesota, you may not feel that this affects you, but it does. It affects us all.

Costs are definitely cut down with electronic billing. Both insurance companies and the government would like to see all claims sent electronically. If Minnesota is effective with instituting the electronic mandate, you can be sure that other states will follow. It is just a matter of time.

The real question is how will this affect the individual providers and billing services. A very small percentage of medical offices or billing services are capable of sending all their claims electronically. Many small insurance carriers are not yet capable of accepting claims electronically. So how will we accomplish this major undertaking?

The providers in the state of Minnesota will have to at the very least have a computer with internet access in the office or they will have to hire someone who can submit the claims on their behalf. Don’t laugh! We still find offices that don’t have a computer. They won’t have to purchase an expensive practice management system if they don’t want to. They may have a good way of tracking their claims on paper but hopefully they are tracking claims. Anyone who has been in this business for any length of time knows of the office that looses thousands of dollars or tens of thousands of dollars by not tracking claims to make sure they are paid.

The Trade Association of State HMO’s (The Minnesota Council of Health Plans) has contracted with an independent company who is building the software that will be available to medical offices and billing services in the state of Mn. to submit the claims online. The biller will go to the site and enter the claim information and send it to the insurance company. The only problem with this is that the information will have to be entered again for tracking purposes. If the office has a practice management system, any claims that had to be sent through this new system will also have to be entered into the practice management system.

We don’t know how this affects the smaller insurance companies in Minnesota who were not yet capable of receiving electronic claims submissions. I presume they are scrambling to get ready. Not only has Minnesota mandated that medical insurance claims be submitted electronically, but they have also mandated that all insurance carriers use ERAs or electronic remittance advices (electronic eobs). This is huge too. Electronic remittances make posting payments much quicker and easier if you have the means to post them automatically.

At any rate, it will be very interesting to see how this all works out. All eyes are on Minnesota. We would be interested in hearing from anyone in Minnesota and how it is affecting them.


8 Responses to “How Mandatory Electronic Claims Submission Affects Us”

  1. Roxy Lewis Says:

    I am a Minnesota biller and so far this has been a very bad “experiment” in “cost savings” via electronic billing. I say that because there are unforeseen results from the mandate. For example, we have companies here who are “repricers” but not insurers, thus they do not have electronic submitter identifiers. Sending claims to them for repricing so they may be filed with the actual insurer requires that we go to their web site and enter the data as described above, which is a duplication or triplication of effort, the opposite of a cost savings. We have insurers here who are headquartered out-of-state, and thus unfamiliar with the Minnesota requirements. The providers do not understand these requirements at all, so for smaller offices such as the type I bill for, there is more confusion than clarity. Mandated ERAs will either force the provider to get online and print that to supply to me, or cause me to do it on their behalf, and charge them for the extra time. The large insurers, such as Blue Cross, require benefit and eligibility information to be obtained electronically, except for behavioral health due to the complexities of that benefit type. They will still give that information if you call them, for the time being at least. Their IVR says this is a “backup only” which would lead me to believe they will phase it out. At the same time, their contracts prohibit providers from sharing their user name and password so I can access the information electronically! They will not issue a user name and password to a billing entity so I cannot check benefits on behalf of my clients to enable them to comply with the insurer’s mandated collection of copays at the time of service.

    I think this is not so much a cost-savings program as it is a cost-shifting program, onto the backs of the smaller providers. Filing secondary claims is a nightmare, as the insurers require an electronic claim, with what would formerly have been attached primary EOBs, sent separately, yet they must match up on the receiving end. We have no control over the mechanism they impose, so there are multiple mechanisms by the different insurers. We have no control over the recipient’s handling of the attachment, or whether they are properly matched to the claims. Even claims between government insurers, such as Medicare and state Medicaid programs, are a problem. When crossovers between the programs themselves or with commercial payers work, that’s great, but often they do not. Following up and fixing those claims is now a major headache. The same applies for workers’ compensation claims and any claim of a complex nature requiring attachments. Out-of-state carriers have been slow to respond to requests for clarification and assistance to the clearinghouses.

    I believe this law was created with large facility-based providers in mind, or large outpatient clinics, but not the small provider. Larger groups have employees who can check benefits online, and who can access payer sites using a username and password, smaller and individual providers often do not have such staff. It is the small providers who will now bear the burden of the costs associated with making this work, which is ultimately the group who could afford it least. More thought should have gone into this for those providers. All of this comes at the same time as the increased HIPAA requirements and the Red Flag requirements as well, further complicating things for providers. Of the clients I have, less than 10% have a computer in their office and only half of them have internet access.

    As Minnesota led the way in HMOs back in the 1970’s, only to find that the gatekeeping functions were cumbersome and resulted in inappropriate denials of care, I believe we will again be the ‘grand experiment’ and pay the price via increased overhead, not reduced it in this arena of electronic claims and ERAs. Watch out, America, this mess is coming to a facility or practice near you too!

  2. solutionsmedicalbilling Says:

    Well we have been wondering how it is going and you’ve provided us with at least one view point. It seems that when they come up with these plans that it is impossible for them to develop something that will work for both the large facility based groups or clinics and the smaller one doc offices, but yet they do it. Unfortunately it is the smaller one doc offices that usually have to ‘fit’ the plan, which definitely affects the billing services.

    Good luck!


  3. Roxy Lewis Says:

    Hi Michele,

    Thanks for the reply. It was interesting to me to note that TriCare is suggesting we ignore the law and continue sending them paper for non-par providers as they refuse to accept electronic claims for non-par providers. As the EDI person told me, “How will they know you sent it on paper? Go ahead and send it” which would, of course, be a violation of our law. Another company who is a case management/gatekeeper for a section of United Health Care told me today that they are “exempt from the law under ERISA and Federal law trumps state” which is also not true. If that were the case Medicare would not be required to comply with the new law, it Medicare IS required to do so.

    I’ll check back in a month or so and let you know how it’s going.


  4. solutionsmedicalbilling Says:

    Thanks for your input.


  5. Mitch Says:

    Actually, a couple of things. First, the Minnesota law doesn’t cover federal plans. They didn’t force Medicare into anything, because they can’t. Medicare put through something in 2005 saying they wanted everyone to submit electronic bills, so that’s old news. So, Medicare and Tricare are exempt, as are any bills that are sent to insurance carriers outside the state of Minnesota; that’s on their own website.

    Second, I believe that many states are going to drag people kicking and screaming into the 21st century, and it’s not such a bad thing. Electronic billing really is the way to go. Here in NY, though, obviously because of our money issues no one has been able to force hospitals and physicians to bill electronically because they’re not ready to accept those claims yet. That, plus they’ll have to figure out how to receive reports and the like electronically also.

    So, NY is behind the bubble again; oh well,…

  6. Jim Y Says:

    I wonder why all these states have been lagging behind in setting up electronic billing. They’ve had lots of time, and one would have thought they would all have been moving towards finding ways to save money.

  7. Carl Mays II Says:

    HIPPA was supposed to lay a lot of the ground work for facilitating electronic claim submission. Shockingly, it is yet another program that has not lived up to its promise.

  8. Roxy Lewis Says:

    Hello Everyone,

    Just thought I would give a brief update on things here in Minnesota.

    I have to disagree with Mitch. First, Medicare locally will not accept paper claims. In fact, locally if a provider signs up for electronic claims, they are now forced to accept direct deposit. TriCare also will not accept paper claims.

    As for the out of state insurers, my understanding, and the experience of some of the other billers I know, is that the law says “if you do business in Minnesota, you MUST take claims electronically” regardless of where the claims go. For example, Medica/UBH/UHC claims have gone to Salt Lake City for years, yet they are subject to the electronic-claims-only protocol. So I’m not sure where Mitch is seeing that out-of-state claims aren’t affected.

    Some of the clearinghouses are scrambling still for mental health, workers’ compensation and front-end case management claims. Eventually they will have to take all these claims electronically. Our state Medicaid program requires electronic claims, and even secondary claims are required to go electronically.

    This December 15th, the next step in the process occurs, which is the requirement that all of the entities in this group (insurers, providers) accept electronic remittance advice forms (ERAs) rather than paper forms. This will require a provider to either get them through a clearinghouse, with an attached fee, or to set up access via insurer portals. Again, many of these insurers are also mandating electronic deposit of funds directly to provider accounts. For some providers, this is not a problem. However, I work primarily with individual mental health providers, who not only have no office staff to do this work, but in many cases do not have a computer accessible to them.

    Insurers are beginning to send out alerts to tell providers to sign up for the electronic ERAs. It will be interesting indeed to see what happens come December 15th!

    Roxy Lewis

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