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Administrative Simplification Overview

To reduce paperwork and streamline business processes across the health care system, the Health Insurance Portability and Accountability Act (HIPAA) of 1996 and the Patient Protection and Affordable Care Act (ACA) set national standards for:

HIPAA includes Administrative Simplification provisions that the ACA (Affordable Care Act) expanded in 2010. ACA introduced operating rules to standardize business practices.

It’s the Law

Health care providers, health plans, payers, and other HIPAA-covered entities must comply with Administrative Simplification.

The requirements apply to all providers who conduct electronic transactions, not just providers who accept Medicare or Medicaid.

Save Time and Costs While Helping Patients

Standard transactions, operating rules, code sets, and unique identifiers allow information to be shared electronically in consistent ways.

With common standards for content and formats, information moves quickly as it is shared between providers and health plans in predictable ways.

These standards have the potential to decrease health costs, time spent on paperwork, and administrative burden, giving providers more time for patient care.

And quick communications with insurers can help inform patients upfront about coverage, benefits, and out-of-pocket costs.

Electronic communications can offer:

  • Solutions for routine manual processes ranging from eligibility verification to payment, saving time spent on phone calls, faxes, and regular mail
  • Real-time responses from health plans to questions about issues like patient benefits and claim status
  • Cleaner claims and less rework as standards ensure greater consistency by reducing uncertainty
  • A faster revenue cycle while reducing the burden of labor costs related to business functions like manually posting payments
  • Upfront information for patients about out-of-pocket costs
  • More provider time for patient care, less for administrative tasks

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