The business side of medical practice can sometimes be a bigger challenge than ferreting out a difficult diagnosis. Inflation-adjusted physician income has declined about 7% since 1995, according to a June 2006 study by the Center for Studying Health System Change. Flat or declining fees from both public and private payers are cited as a primary factor. Add to that excessive payment delays and too-frequent denials from insurance companies, and the business of practicing medicine continues to frustrate doctors.
On the other hand, there may be an electronic light at the end of the financial tunnel. More physicians-otolaryngologists-head and neck surgeons included-are utilizing electronic billing systems, resulting in faster payments and fewer denials.
A May 2006 study by America’s Health Insurance Plans (AHIP), a national association of health insurers, indicates that three-quarters of all health insurance claims are now submitted electronically, up from 24% in 1995, allowing 98 percent of claims to be processed within a month of receipt from the health-care provider, the AHIP said. Further, the study found that insurers now process a majority of claims within a week of receipt.
Many Variations in Claims Processing
Another May 2006 survey has ranked insurance carriers by their payment speeds, denial rates, adherence to national standards, and more. Called PayerView (available online at www.athenapayerview.com ), this survey by athenahealth, a provider of physician services including outsourced billing, analyzed claim performance data from more than 7,000 providers during the last quarter in 2005. Among its findings:
Some insurance companies don’t pay well and we know that. It’s not rocket science; it’s just practical experience. – -Lee Eisenberg, MD
- National carrier Aetna denies claims twice as often as the top performer, Humana.
- Cigna led all carriers in the category that measures the percentage of claims found to be not on file at the payer after inquiry by the physician.
- Wellpoint was the most aggressive shifter of responsibility to physicians to secure payment from patients directly.
- The average number of days a claim is in accounts receivable among national payers is 38.
In a press release announcing the survey, athenahealth co-founder and CEO Jonathan Bush claims that by making these rankings publicly available, we hope to illustrate the significance and scope of this national problem, help insurers recognize the source of process breakdown, and work to improve their reimbursement practices for everyone involved.
However, physicians interviewed for this article weren’t too sure the PayerView survey would have much impact on the performance of insurance companies.
We don’t look so much at the number of days it takes to pay as much as the contracting rate of pay, said Roger Crumley, MD, MBA, Chair of the Department of Otolaryngology-Head and Neck Surgery at the University of California, Irvine School of Medicine.
On the other hand, Dr. Crumley added that it’s known in the health-care field that the sooner you collect your money, the higher the chances of collecting at all.
Lee Eisenberg, MD, a private practice otolaryngologist in Englewood, NJ, doubts the survey will be helpful. Some insurance companies don’t pay well and we know that. It’s not rocket science; it’s just practical experience.
So, What’s a Doctor to Do?
The first step toward achieving fair, accurate, and timely insurance payments is effective insurance negotiation, said Jane Dillon, MD, a private practice otolaryngologist in the Chicago suburb of Hinsdale, Ill., and a physician with Adventist Midwest Health’s Hinsdale Hospital. If you don’t have in-depth experience with this process, find someone who does.
The key to accurate, timely insurance payment is the type of billing system used by otolaryngologists, Dr. Eisenberg said. Noting that electronic claim systems are the way to go, he recommends software add-ons called claim scrubbers that look at every field in a claim, correcting data input errors and ensuring that a clean claim is sent to the insurance company.
Dr. Crumley agrees. Unfortunately, some insurance companies do whatever they can to delay or deny payment. If there’s one typo, they might wait a month before sending it back for correction. It has to be a clean claim and electronic billing systems with scrubbers can do this.
However, the high cost of electronic billing systems has prevented many physicians from implementing them. Dr. Eisenberg suggests that solo practitioners or small groups might want to partner with others to form a group large enough to split the costs. Think outside the box and figure out a way to do it, he said.
Dr. Dillon credits her group’s membership in two local physician hospital organizations (PHOs) for improved business relationships. The physicians work together with the hospitals, and I think the insurance carriers respond quite well to hospitals. She adds that the PHO meets with insurance brokers and employers to tell them which insurance companies are doing the best job.
One Approach to Electronic Billing
As for the electronic side of their business, Dr. Dillon said the accounts receivable (A/R) days, or average time it takes to get a claim paid, have been cut in half, from more than 60 days to about 30. Her group’s system works like this:
We plan to implement a system where a patient office visit is immediately coded and sent to the carrier while the patient is being seen. The carrier will tell us how much they’ll pay, and we’ll be able to collect the remainder from the patient as he or she leaves the office. – -Jane Dillon, MD
Coding is done by the physician. At the end of each day, one of the billing staff double-checks the code for correct use of modifiers and code combinations, and a system called RealMed is used to verify the demographics within the claim before the electronic billing system sends it to the insurance carrier.
RealMed is a service that gives you real-time information from the insurance carriers that participate in it, Dr. Dillon explained. When you input the patient information, such as name, address, group number, etc., the service tells you within minutes if the information matches what is on file with the patient’s insurance company. Most of the insurance problems are not so much coding as demographics.
When payment and the explanation of benefits (EOB) are received from the carrier, the physicians’ electronic system automatically posts it into the office database and the patient’s account.
Other Tips for Combating Denials
Dr. Dillon’s group also uses the electronic system to monitor claim denials. We have adopted a policy called Zero Tolerance for Wrong Payment. We set our billing system to look for patterns of denial or underpayment. The reasons may be due to changes in carrier policy, substitution of another fee schedule, failure of insurance company employees to follow payment guidelines, and computer glitches where payment is somehow turned off. Sometimes it’s as easy as calling the carrier to get the payment button switched on again.
Unfortunately, some insurance companies do whatever they can to delay or deny payment. If there’s one typo, they might wait a month before sending it back for correction. It has to be a clean claim and electronic billing systems with scrubbers can do this. – -Roger Crumley, MD, MBA
Dr. Eisenberg, who teaches a course called Overcoming Payment Denials, offers additional suggestions. If both spouses have health coverage, you have to find out who the primary is and submit first to that company. If you find an insurance company denies payment when more than one procedure is listed, go after those denials. Look at your EOBs and check the contracted rates. We do that all the time. Many times you’ll get paid.
And then there’s the newest technique on the electronic block-instant adjudication. According to Dr. Dillon, we plan to implement a system where a patient office visit is immediately coded and sent to the carrier while the patient is being seen. The carrier will tell us how much they’ll pay, and we’ll be able to collect the remainder from the patient as he or she leaves the office.
If the hassle with insurance companies becomes too painful, an otolaryngologist can always consider a cash-only business where patients pay the total bill for services rendered as they leave the doctor’s office. (See Getting out of the Insurance Game in the June issue of ENToday for more on cash-only practices.)
One otolaryngologist-head and neck surgeon who continued with a successful fee-for-service practice until his recent semi-retirement is Stanley M. Blaugrund, MD, of New York City.
I have never aligned myself with the insurance companies, he said. Although he accepted Medicare because the older folks are entitled to a break, he only accepted cash from his other patients and got enough referrals to make it work.
The reality of most physician fee-for-service practices, however, is that today’s fee will be negotiated with insurance carriers. While otolaryngologists may have justifiable criticism regarding patient access to care or quality of service with managed care, issues with contracted rates, payment timeliness, and reimbursement accuracy appear to have workable solutions.
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