DENVER — Incorrect patient identification information is still the No. 1 reason for rejected insurance claims, and the majority of these errors—which cost the nation an estimated $2.2 billion in administrative waste—reflect the failure of the health care industry to embrace standardized, machine-readable magnetic ID cards.

The Medical Group Management Association (MGMA) is hoping to change the situation. Last year, it launched Project SwipeIT, a national, multistakeholder effort to push for full implementation of magnetic insurance ID cards in all public and private health insurance plans.

In its first year, Project SwipeIT garnered pledges of support from more than 1,000 physicians' organizations, insurance companies, and health information technology vendors who vow to issue, support, or accept machine-readable ID cards.

Standards for magnetic insurance ID cards were first developed in 1997. Yet today, health care transactions are still almost entirely dependent on paper or plastic ID cards. Each insurance company has its own card design and format, some of which can be difficult to read or copy.

Stapling a photocopy of a patient's ID card into the medical chart or manually key-stroking information into the patient's record is still the norm in nearly all medical practices.

Reliance on paper-to-paper transfer of identifying information leaves a lot of room for error. Numerals are easily mistaken, names misspelled, benefits changed, and expiration dates unnoted.

The MGMA estimates that 98% of all claims generated by physicians' offices are not electronic, and approximately 5% of those claims are rejected because of incorrect ID information, leading to long and costly delays in physician reimbursement.

On average, it takes roughly 15 minutes of staff time to manually correct and resubmit an erroneous claim once the error has been identified.

The MGMA estimates that outpatient physicians nationwide could save as much as $290 million per year if all insurers used swipe cards in compliance with standards developed by the Workgroup for Electronic Data Interchange.

The American College of Physicians is one of many physician groups that have endorsed Project SwipeIT. Others include the American Academy of Family Physicians, American College of Surgeons, and American Medical Association.

“There's no reason we shouldn't have machine-readable cards at this point,” said Dr. Lori Heim, AAFP president. “We are very supportive of this project.”

Dr. Heim attributed the failure to adopt swipeable ID cards to “procedural inertia.” Though standards for creation of cards have been in place for more than a decade, it has taken more time to develop standards for reader devices, interfaces between card readers and electronic health record systems, and platforms for interoperability.

“It is reflective of the broader problems we've seen regarding the adoption of health care [information technology] in general,” she said in an interview.

Without strong consensus and commitment from all major insurers—or an unequivocal federal mandate—individual plans have been unwilling to take the first steps and implement their own swipe cards.

And if the plans weren't going there, neither would physicians, even though both parties stand to gain.

Dr. Heim said that creating standards for transfer of ID card data into electronic health records will be critical for general success. “It's a complex issue because there are so many different EHR systems, and each has its own setup. In order to realize the savings potential, we need the patient ID information to transfer smoothly from the card reader to the right places in the EHR.”

Like any other technological innovation, implementation of swipe cards will carry some upfront costs for purchase and installation of card readers and production of the cards themselves. The question of who should bear those costs is an open one at this point.

According to the MGMA, card readers cost around $200 per clinic, and the software upgrades needed to interface card readers with electronic practice management systems are minimal.

Dr. Heim said that she believes the implementation costs should be borne by insurers, who have much to gain by digitizing transactions and reducing errors. “It would significantly reduce the amount of money they have to pay to people for spending time on the phone working out disputes with doctors' offices.”

But she will not be surprised if the insurance industry tries to put all or some of that cost on the shoulders of physicians and hospitals. “We will definitely push back on that,” she promised.

In 2010, the MGMA and its partners plan to become more active in pushing the Project SwipeIT agenda. According to the group's Web site, the second phase of the project involves publicly recognizing payers that have met their pledges and issued standardized, machine-readable health ID cards, while publicly identifying those that have not.

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'There's no reason we shouldn't have machine-readable cards at this point.'

Source DR. HEIM

Swipeable Insurance Cards Will Reduce Errors, Costs