Payers required to adopt standardized electronic claims processing

The Health Insurance Portability and Accountability Act of 1996 requires most claims payers to support electronic claims processing and uniform national standards for code sets and identifiers to streamline healthcare administration. The law will penalize payers that do not support the standards and are not prepared to conduct business electronically by the year 2000. Many providers may qualify as claims payers and, thus, will be subject to penalties if they do not adopt EDI for the transactions required by the Act. Providers also will have greater opportunity to eliminate paper, speed claims payments, and cut administrative overhead. Both providers and payers will have new guidelines for privacy and confidentiality, and violation of these guidelines will result in significant penalties. Consequently, all providers should become familiar with the legislation and evaluate their EDI strategy in light of new opportunities and responsibilities.