Minnesota has become the first state to require that all health-care providers and all payers file claims electronically. Starting in 2009, every physician office in Minnesota, including the smallest ones, will have a choice of using a practice management system, hiring a billing service, or filing claims on the Web portals now offered by the state Medicaid agency and some private payers. They'll also have to request eligibility verification online.

CMS exempts practices with fewer than 10 employees from having to file Medicare claims electronically. While that exemption still applies in Minnesota, solo and two-doctor practices will have to submit claims electronically to private payers and state health programs. But this provision will have less impact in Minnesota than it might have in other states, because an unusually high proportion of Minnesota doctors practice in large groups.

The state is also requiring payers to verify eligibility online and send electronic remittance advice—both of which can be a big time saver for practices. Moreover, the health plans will have to agree on a single "companion guide" to the HIPAA standards that must be used in electronic health care transactions. Today, each payer has slightly different requirements for submitting HIPAA-compliant claims. Harmonization of companion guides would make it easier to create acceptable claims and would facilitate direct transmission to payers.