Danielle LancasterThe process of obtaining insurance authorization to provide medical care has long been inefficient, requiring significant manual intervention and sometimes causing delayed delivery of patient services. The 278 electronic data interchange (EDI) transaction supports the electronic transmission of authorization, notification, and precertification information between providers and payers, and thus has the potential to reduce costs through gains in efficiency while improving service to patients and establishing more accurate industry benchmarks.

Despite the potential benefits, the 278 EDI transaction has not been widely implemented. The 278 transaction can help your organization streamline the authorization process, decrease authorization-related denials, and increase patient satisfaction. Here are a few practical steps providers can take immediately to begin implementing the transaction.

Leverage existing relationships and success with the 270/271 eligibility transaction. The processes and relationships that were established when applying the 270/271 eligibility transactions can translate to success with the 278 transaction. Start by asking these questions:

  • Is your organization using 270/271 transactions with payers wherever possible?
  • Can the use of 270/271 transactions be expanded?
  • Is there an established team working with payers to expand and improve on the success rate of the 270/271 transactions? If not, start by putting together such a team.

Pilot 278 transactions with selected payers based on 270/271 success. Assemble a work group to begin identifying all of your current payers that have 278 capabilities. Start with your largest payer and the one with whom you have had the most success with 270/271s. Reach out to clearinghouses and vendors that can help you through the initial setup, and keep the scope small at first to minimize costs.

Determine how to analyze the results of the pilot program. Before launching the pilot program, dedicate resources to identifying the metrics you want to track. To develop your metrics, consider:

  • Ease of use. How much time does your staff take to process eligibility using current methods compared with 278 transactions?
  • Key performance indicators (KPIs) and staff productivity. Track KPIs for authorizations along with your staff’s productivity to determine the effectiveness of the program. KPIs include preauthorization compliance rate, percentage of authorizations completed five days in advance of patient appointment, average eligibility authorizations and denials, and number of authorizations completed per staff.

Based on the results of your pilot, define which payers, patient types, or procedure types would benefit most from using this EDI transaction.

Expand your pilot program. After your pilot program has run for a few quarters, determine which payers are providing tangible benefits for your organization with respect to 278 transactions. Standardize the process for these payers, and develop a training program for staff. Make sure to continue tracking the KPIs and productivity of your staff.

Set a schedule for reevaluating payers that you did not transition to 278. Set time aside quarterly or yearly to quantify the success of the program, the available resources for expansion, and potential additional payers.

These initial steps can help your organization begin using 278 transactions. A number of issues have contributed to a lack of use in the past. However, the transition to the 5010 transaction set, increased use by payers, and new functionality provided by vendors to support the transaction make it more feasible to take advantage of the potential benefits.

Danielle Lancaster is a senior manager in the Health Care Advisory practice at Ernst & Young LLP, Roseville, Calif., and a member of HFMA’s Nevada Chapter.

Publication Date: Monday, July 27, 2015