MINNEAPOLIS, January 23, 2008—Minnesota is the first state to adopt rules to help providers quickly verify patients’ insurance coverage and benefits eligibility, says Minnesota Health Commissioner Sanne Magnan, M.D.

The new rules require that, starting in 2009, “eligibility inquiry and response” transactions between health care providers and insurance companies and other payers must be exchanged electronically, using a single standard format.

Governor Pawlenty proposed the legislation authorizing the rules in collaboration with health care providers and health plans. The goal is to improve service and reduce costs of a common activity occurring millions of times each year during most interactions between patients and their health care providers.

“This rule is important because until now, payers and providers often had many different requirements for the exchange of very routine business information,” said Magnan. “The resulting complexity creates a great deal of unnecessary burden, rework and expense throughout the health care system."

Given the high volume of eligibility inquiries – happening many times every minute, every day and every week – even small inefficiencies add up significantly. These are costs that can be redirected to patient care, Magnan said. 

The standards for the recently adopted rules are based on the Medicare program, with modifications the commissioner of health finds appropriate after consulting with the Minnesota Administrative Uniformity Committee. 

James Golden, director of the Division of Health Policy at the Minnesota Department of Health, said the savings from the new rule could be substantial. “Studies have shown that exchanging common health care administrative transactions on paper, or in nonstandard formats, is more expensive than standard, electronic data exchanges and can result in problems of incomplete or incorrect information that cause delays and further expense,” Golden said.

Golden also noted that under the new rule, providers will have better, more timely information about patient insurance benefits and the correct data for submitting bills. This will help providers file bills correctly and collect patient financial obligations, leading to more efficient administration, faster payment of claims and fewer denials on first filing.

The new rule is being announced one year in advance of its effective date of January 15, 2009, to allow health care providers and payers time to become aware of and comply with the requirement. The rule applies to all health care providers and insurance companies and other payers.

For more information about the rule or health care administrative simplification, see the MDH Web site at www.health.state.mn.us/asa/.