Health and Human Services (HHS) Secretary Kathleen Sebelius announced the release of a new rule that will cut red tape for doctors, hospitals, and health plans. The regulation adopts operating rules for making health care claim payments electronically and describing adjustments to claim payments.

Studies have found that the average physician spends 3 weeks a year on billing and insurance related tasks, and, in a physician’s office, two-thirds of a full-time employee per physician is necessary to conduct these tasks. Many physician practices and hospitals receive and deposit paper checks, and manually post and reconcile the health care claim payments in their accounting systems. By receiving payments electronically and automating the posting of the payments, physician practices’ and hospitals’ administrative time and costs can be decreased.

The operating rules build on industry-wide health care electronic fund transfer (EFT) standards that HHS adopted in January of this year. Together, the previously issued EFT standards and the EFT and electronic remittance advice (ERA) operating rules are projected to save between $2.7 billion and more than $9 billion in administrative costs over 10 years by reducing inefficient manual administrative processes for physician practices, hospitals, and health plans, according to information from CMS.