New rules from HHS hopes to save $12 billion in health care administration expenses Posted: July 6th, 2011

New rules will go into effect on January 1, 2013 requiring certain health insurance companies to meet minimum standards for electronic communications with health care providers. The government estimates the new standards will save the health care system $12 billion during a ten year period.

In announcing the rules, the Department of Health and Human Services (HHS) cited a 2010 study from Health Affairs, a health policy journal. The report discovered physicians spend nearly 12 percent of every dollar they receive to pay for excessive administrative tasks.

"Doctors and health insurance companies waste thousands of hours and billions of dollars filling out forms and processing paperwork," said HHS Secretary Kathleen Sebelius in a press statement.

How the new rules streamline health care administration

Beginning in 2013, certain health plans will have to provide standardized information electronically to health care providers. This information will cover whether a patient is eligible for coverage and the status of claims submitted to health insurance companies. Under the new rules, insurers will have to provide detailed responses that include information about any deductible or co-payment requirements.

According to the HHS, the new rules will save money by reducing phone calls and paperwork between health care providers and health insurance companies. In addition, the standards will cut the number of denied claims and help automate administrative processes. In subsequent years, additional rules will be created to further streamline health care administration.