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Although all of the medical community is aware of the of the HIPAA (Health Insurance Portability and Accountability Act) law regarding medical privacy and health insurance portability, most physician’s offices and medical ancillaries are just beginning to feel the effects of the medical claims portion of the HIPAA law.

The original purpose of the medical claims portion of the HIPAA law was to create a means for physician’s offices and other medical entities to electronically transmit their claims to all the insurance payers using the same format. The format was called the ANSI 4010A1X12. ANSI stands for the American National Standards Institute. The whole purpose was to standardize the way claims would be transmitted electronically to the payers and to simplify transmissions.

Prior to ANSI, the most common format was NSF, but each payer would put in his or her own set of rules for electronic transmission. It was virtually impossible for software developers to develop software that could accommodate all the payers. If successful, the software was usually too large and cumbersome to be effective. The new ANSI format was designed to eliminate that problem
Unfortunately, when dealing with all the different payers, including Medicare and the various State Medicaid programs, it seems to be impossible to have them all thinking the same way. Just like its predecessor, ANSI now has the same situation with each payer creating its own set of rules for transmissions. To make it even more complex, the federal government has created a new edit called the NPI (National Provider Identifier) enumerator.

The standard claim form has been redesigned to accommodate the NPI enumerator. In addition, a whole new set of rules for electronic transmission regarding the NPI and ANSI has been created. It almost takes an engineer to follow the complex set of protocols for ANSI transmissions. There are not too many options available to a physician’s office that will allow the physician to practice their medicine and still not have to worry about their claims payments. Most billing people are excellent at billing, but find themselves in a difficult position regarding transmitting claims to payers using both the ANSI format and the NPI enumerator. (This especially applies to the small one-person operation that does the billing in the home.) The billing person and office manager have to spend an increasing amount of time researching claims rejections and adapting to new transmission rules. Many physicians simply write off enormous amount of claims for expediency, thus drastically reducing their profit margins. However, many physicians now have found a way of relieving themselves and their office staff from the time consuming job of insurance billing and electronic transmissions.

They now outbase their whole medical billing to a competent company that specializes in medical billing and electronic transmissions. These companies have the resources to do the follow up on the claims as well as the electronic transmissions.

They know and comply with the new rules regarding claims transmissions. In almost every case, a competent medical billing company can increase a physician’s office income far beyond the cost that is incurred by using the out based billing company. The out-based medical billing company is no longer a luxury for the more lucrative specialties; it is rapidly becoming a necessity for the survival of the private practice physician.

Daniel Johnston is the ANSI compliance engineer for Allmed Services USA Inc, located in Tavares, Fla.


July 2007

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