By Neil Versel, contributing editor

October 21, 2008 | SAN DIEGO—The Medical Group Management Association (MGMA) will push the health insurance industry to standardize patient identification cards with magnetic stripes, bar codes, or embedded chips and has commissioned a study to quantify the potential savings for payers and providers alike.

MGMA wants to go after the perceived low-hanging fruit of administrative waste, specifically in standardizing physician credentialing and patient eligibility and benefits verification. The organization will study the cost to medical practices of making copies of patient insurance cards, manual entry of data—and related transcription errors—telephone calls to check benefits, and delayed collection of co-payments from not having accurate information at the time of service.

“It’s amazing how much waste there is in the system,” MGMA president and chief executive William F. Jessee, M.D., said here Monday at the organization’s annual meeting. Jessee expressed optimism that an IT-enabled, standardized insurance ID card—not a politically radioactive plan like a national patient ID number—will help trim much of the fat that has weighed on health care nationwide.

“We’re soliciting partners to join our call for guidelines for industry-wide adoption of these technologies,” Jessee said. He confirmed that MGMA will be talking to major health insurers, and suggested that standardization follow a health-IT implementation guide developed by the Workgroup for Electronic Data Interchange.

To this end, the Healthcare Administrative Simplification Coalition, which MGMA helped establish in 2005, is meeting next month to design a set of principles for combating waste and inefficiency, Jessee said. The group includes medical societies, health-IT and administrative professional organizations, Microsoft Corp. and several payers, including Humana, UnitedHealthcare the Centers for Medicare and Medicaid Services (CMS).

“Compared to the rest of administrative challenges,” this one is downright simple,” Jessee said, adding, “We picked this one in part because it’s so simple, even a legislator can understand it.”

Earlier this year, lawmakers in the MGMA’s home state of Colorado approved a health reform plan that includes the standardization of printed insurance ID cards, but stops short of mandating machine-readable cards.

Jessee said practices could obtain card readers for $50 or less, though there may be additional costs for interfacing the readers with practice management software. However, the integration may be worth the money for the hassles it could help avert.

In one Monday conference session about online patient-physician communication, Richard Bevington, manager of OB/GYN Specialists of Northern Kentucky (Edgewood, Ky.) explained how a credit-card processing company insisted that the practice register a second merchant account, with all the attendant fees, to add an e-commerce module to the practice’s Web site. This little bit of duplication has caused all sorts of problems for the practice in reconciling online payments with bank statements, Bevington told Digital HealthCare & Productivity.