Medicare Smart Card Technology a Cost Benefit to Healthcare?
By - Whether you check the time on your smart phone, smart watch, or an only moderately intelligent clock radio, the realm of all things electronically stimulating is indubitably interwoven into the fabric of all technological facets within the healthcare industry. Electronically readable Medicare smart cards are one of the latest technological advances to affect revenue cycle management.
What are the cost benefits and detriments for the healthcare industry associated with such smart cards? The answer is defined by a collectively gray response. Maximizing the yet unknown potential of electronically readable Medicare smart cards is a widespread challenge that requires addressing and exploring. As smart cards potentially make their way into the hands of over 50 million Medicare beneficiaries, industry-wide hesitation ensues. Will the intended fiancial purposes for electronically readable Medicare cards be met or exceeded? Or will unforeseen security and cost limitations only make their use expensive, problematic, and cumbersome?
A recent study from the Government Accountability Office (GAO) with the assistance of contributing resource, the Workgroup for Electronic Data Interchange (WEDI), examines such inquiries within a 55-page report about how electronically readable cards can be used by both beneficiaries and providers for Medicare to replace paper cards.
To more clearly comprehend the needed next steps from the Centers for Medicare & Medicaid Services (CMS) and Medicare providers to effectively implement and use electronically readable cards, GAO interviewed a variety of experts within the healthcare industry, such as federal agencies and stakeholder organizations, to help garner accurate insight into the future implications of this technology.
The report confirms CMS could use electronically readable cards in Medicare to meet a variety of objectives. “Three key uses include authenticating beneficiary and provider presence at the point of care, electronically exchanging beneficiary medical information, and electronically conveying beneficiary identity and insurance information to providers,” states GAO.
Financial challenges, benefits of smart card implementation
There are many challenges that require ironing out regarding smart card implementation within the Medicare realm for healthcare payers and providers. There are also a slew of expected advantages that make the hopefully temporary struggles worth focusing on. There are notably cloudy areas when considering each independently.
In terms of anticipated financial challenges, GAO emphasizes smart cards will cause direct hindrances with interoperability and provider record consistency. Immediate updates are needed to prevent hiccups. CMS will specifically need to modernize its claims processing systems to verify cards are swiped at point-of-service. Additionally, CMS will need to revise its card management processes, such as issuing provider cards and implementing criterions and general methods for use.
These updates are not always free, as there may be additional expense to Medicare providers to update systems to allow for new card use. Says GAO, “Officials at CMS and ONC, along with stakeholders, noted that Medicare providers are already investing resources, and facing IT challenges, to meet Medicare EHR Incentive Program requirements and to update their IT systems to adopt new billing codes.” GAO confirms financial incentives for card use are essential to encourage provider participation in previously implemented models in other European countries.
The good and bad of security changes
Aside from cost, GAO confirms security needs can be met with electronic cards. Paper cards are a particular fraud threat to beneficiaries because they clearly display individuals’ Social Security numbers, which policymakers have pushed to have removed. The implementation of magnetic stripes or bar codes might provide increased storage capacity for information exchange as well as decrease fraudulent activity. Smart cards are indeed more difficult to counterfeit or copy as encryption and authentication efforts increase, such as PIN usage or biometric factors to make using a stolen card impossible, confirms GAO. But GAO also confirms they are not a simple safety resolution, as fradulent electronic card use may increase with the discovery of new security loopholes involving billing for services not rendered, the escalation of fraudulent or abusive billing practices, or increased kickbacks.
GAO confirms counterfeit cards are not a tangible problem, adding, “Officials in France told us that they chose to use smart cards as their health insurance cards, in part, because they were less susceptible to counterfeiting, and reported that they have not encountered any problems with counterfeit cards.” Whether there were no problems or simply no problems reported is yet to be determined.
Preventing the aforementioned types of healthcare fraud and malpractice and promoting safety is expensive. As GAO confirms, “Practices that provide higher levels of identity authentication generally are more expensive and difficult to implement and maintain and may cause greater inconvenience to users than practices that provide lower levels of assurance.”
Keeping up with a global initiative
France and Germany have used electronically readable card systems for the past two decades, whereas its use is still limited in the United States. Says GAO, “According to stakeholders, the limited use is due, in part, to reluctance among the insurance industry and health care providers to invest in a technology that would depend on a significant investment from both parties to implement.”
Time is also money. France and Germany’s implementation naturally is not instantaneous. Cost savings have been reported but require a deeper understanding as time unfolds and more analysis is considered.
“It is unclear if the cost savings reported by both countries would be achievable for Medicare since the savings resulted from using the cards to implement electronic billing, which Medicare already uses,” confirms GAO. “Both countries have processes in place to manage competing stakeholder needs and oversee the technical infrastructure needed for the cards.”
Backlogged claims processing is also a burden on resources, which is an additional strain on money. When beneficiaries’ identity or insurance information is not correct, claims are rejected and reimbursements are delayed, confirms GAO. CMS officials, however, say electronically readable cards would not affect claim rejection, because providers can obtain beneficiary information via earlier adopted avenues, such as by phone or paper.
Other research points to possible financial benefits, including smoother reimbursement efforts and more seamless record maintenance. “Using electronically readable cards to convey identity and insurance information to auto-populate and retrieve information from provider information technology (IT) systems could reduce reimbursement errors and improve medical record keeping,” maintains GAO.
Moving towards a collective goal
Says WEDI Executive, President, and CEO Devin Jopp, EdD, “Looking ahead, WEDI is working, in partnership with the Sullivan Institute for Healthcare Innovation, MGMA, and HIMSS on bringing the next generation of health ID cards to bear that will leverage mobile technology to streamline the patient check-in process by using applications rather than cards to provide benefit information and essential health records.”
Mainstreamed smart technologies, smart cards being only one simple example, will continue to become commonplace, expected, and eventually mandatory within the healthcare industry. Almost every facet of the population at large is affected by the concept of electronic smart cards -- physicians, payers, providers, hospitals, your neighbor's mother, and your grocery store clerk. Just as some are zealously willing to hop on the Apple Pay bandwagon and transform their upgraded smartphones and shiny smartwatches into a direct link to their bank accounts while others merely shake their heads with uncertainty and proclaim old-fashioned cash king, there is similar industry-wide uncertainty as to whether or not electronic smart cards will thrive as they are allegedly doing so in Europe.
Hopefully, the once gray areas discussed will become clearly distinct black and white fragments as technological progression advances for providers and payers when the execution of top quality value-based care and cleanly executed communication requires nothing more than a card swipe.
