The state of Minnesota is turning a corner that no other state has dared face in the same way.

A 2007 law takes effect today, requiring “electronic billing of all health care claims.”

The [...]]]> By Jeff Hansel

The state of Minnesota is turning a corner that no other state has dared face in the same way.

A 2007 law takes effect today, requiring “electronic billing of all health care claims.”

The effort to eliminate paperwork, standardize billing terms and reduce errors will save an estimated $60 million per year, said David Haugen, director for the Minnesota Department of Health’s Center for Health Care Purchasing Improvement.

“We think the savings potential has been estimated pretty conservatively,” Haugen said Monday.

Mountains of paperwork pass through the nation’s health care system daily and, often, no two forms include the same definitions for the words written upon them.

Now, Minnesota has defined a standard set of terms that all health providers, including doctors, dentists, chiropractors and hospitals, must use when billing for a health care claim.

“Each year, more than 55 million medical bills, known as health care claims, from these health care providers are processed in Minnesota, resulting in significant transactions costs — and opportunities for savings,” the Minnesota Department of Health said in a statement.

The changes “may be especially challenging” for small health providers, Haugen said. Most offices already have begun implementing the changes.

“I’m sure it’ll save a lot of money and help everybody. Some offices will probably have a little harder time,” said Connie Reinhart, office manager at Amethyst Dental Care in Rochester. Her office has already been using the new system and is putting final touches in place. She has already noticed quicker turnaround on claims, both for patients and for the dental office.

“We do ours through a clearinghouse. You just send it and in seconds they’ve got it,” Reinhart said. She also expects to save postal costs.

It’s about twice as expensive to send paper instead of electronic forms, Haugen said.

“I think there’s growing interest and growing acknowledgment that there’s really some potential for savings,” he said.

What happens if a health provider prefers paper and ignores the law?

Haugen said the statute encourages voluntary compliance but allows fines of up to $25,000 per year. If every state saved as much as Minnesota expects to, more than $3 billion could be saved annually nationwide.

“I think we’re very hopeful that the country as a whole will take a look at Minnesota and expand that dialogue about how we can reduce these health care administrative costs and how we can streamline these health care administrative transactions,” Haugen said.

On Dec. 15, health providers and insurance companies will also have to electronically file “adjustments to or denials of” claims.

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