Uniform Billing Legislation

Three Acts To Reduce Health Care Costs And Standardize Medical Coding and Billing
(S697, S699, S704)

Lead Sponsors:

  • S697: Senator Spilka – An Act Standardizing medical coding and billing formula for health insurers
  • S699: Senator Tarr – An Act To reduce health care costs and improve patient care
  • S704: Senator Tolman – An Act To reduce health care cost and improve patient care

Summary of Propsed Laws:

Massachusetts has the highest health care costs in the world. Health care providers in the United States, because they must treat patients covered by dozens of different insurance policies and public safety net plans, spend more than three times as much on paperwork than do providers in countries with a single national insurance plan.  Legislation simplifying and standardizing the billing process in our health care system has the greatest potential for reducing costs, while at the same time improving patient care.

Senate bills 697, 699, and 704 would require that a single system be used by all providers for insurance billing and coding.  S697 would accomplish this goal by requiring all carriers and health care providers to use Medicare’s coding and billing guidelines, which fall under the jurisdiction of the Centers for Medicare and Medicaid Services.
S699 and S704 assign the task of developing a system of uniform and standardized billing to the Commissioner of the Division of Insurance, in consultation with other state agencies.  S699 and S704 would also create a commission to study and recommend legislation that would reduce administrative overhead costs for insurance companies.

Background:

In the United States, providers face dozens of payers, each with a different set of requirements for reimbursement and each imposing their own paperwork standards. The result is that in the United States in 2005 hospitals spent  $487 per person on administrative overhead, compared to $85 per person in Canada, which has a single payer for health care providers; physicians offices in the United States spent $561 per person on administrative overhead compared to $144 in Canada. The gap is similar for nursing homes and even for home care workers. The net result is that in 2005 the United States spent $2,877 more per person on health care than did Canada – and almost half of that extra spending, $1,264 of it, is accounted for by the extra administrative burdens imposed at all levels of the health care system in the United States. Reducing administrative waste is thus one of the most efficient ways to reduce health care costs, while actually improving the quality of care, as paperwork requirements impose significant burdens on patients as well and interfere with the process of care-giving.

This legislation addresses the fact that our rapidly rising health care costs are largely lost before they ever pay for care, before they ever secure access to needed goods and services.

Further Resources: