New healthcare rule to cut red tape, save up to $4.6B, says HHS

New healthcare rule to cut red tape, save up to $4.6B, says HHS

HHS also delay ICD-10 implementation deadline by a year

The U.S. Department of Health and Human Services (HHS) on Monday announced a proposed rule that it said would cut the red tape involved in processing medical payments and save the industry $4.6 billion over the next decade.

The proposed rule, published in The Federal Register, would implement several administrative simplifications to the Affordable Care Act, which would make it easier for doctors, hospitals and health insurance companies to identify patients and issue payments for treatment. The public comment period began Monday and continues for 30 days.

HHS also said the proposed rule would delay by one year the requirement for healthcare providers and insurers to implement the ICD-10 (International Classification of Diseases) medical coding system. The delay of ICD-10 was expected despite being criticized by healthcare professionals who say its use is long overdue.

ICD-10, which is designed to better track diagnoses and treatments, affects dozens of core software applications for healthcare providers and insurance payers. The move from ICD-9 to ICD-10, replaces about 15,000 medical codes of diseases with approximately 68,000 more specific ones.

The College of Healthcare Information Management Executives (CHIME), an organization representing healthcare CIOs, is concerned with the federal government's delay of ICD-10, which has been adopted by 25 other countries.

Hospitals and insurance providers are already under the gun to implement the so-called "meaningful use" of electronic medical records and to update how medical transactions are processed, known as the Version 5010 standard.

HHS Secretary Kathleen Sebelius said the proposed rule delays require compliance for ICD-10 implementation from Oct. 1, 2013, to Oct. 1, 2014. "Many provider groups have expressed serious concerns about their ability to meet the Oct. 1, 2013," the HHS said in a statement.

Cutting red tape

The proposed new healthcare rule also creates a requirement for a unique identifier for health plans with a standard length and format in order to facilitate routine use in computer systems. By standardizing the length and format of the health plan identifier, healthcare provider offices will be able to automate and simplify their processes, particularly when managing bills and other transactions.

Currently, health plans and third-party administrators, such as bill providers, are identified using a wide range of different identifiers that don't have a standard length or format. The variety of formats cause a time-consuming problems, such as misrouting of transactions or even the rejection of bills by payers due to ID errors.

"The new health care law is cutting red tape, making our health care system more efficient and saving money," Sebelius said. "These important simplifications will mean doctors can spend less time filling out forms and more time seeing patients."

The proposed rule is the third in a series of administrative simplification rules in the Affordable Care Act. HHS released the first last July and the second in January, and plans to announce more in the coming months, it stated.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian or subscribe to Lucas's RSS feed. His e-mail address is

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