Now what does this have to do will billing. Dr. Emanuel in the NY Times today writes about Medical Billing costs. He states:
Imagine that repeated millions of times daily and you have one of the
biggest money wasters in our health care system. Administration
accounts for roughly 14 percent of what the United States spends on
health care, or about $360 billion per year. About half of all
administrative costs — $163 billion in 2009 — are borne by Medicare,
Medicaid and insurance companies. The other half pays for the legions
employed by doctors and hospitals to fill out billing forms, keep
records, apply for credentials and perform the myriad other
administrative functions associated with health care. The
range of expert opinions on how much of this could be saved goes as
high as $180 billion, or half of current expenditures. But a more
conservative and reasonable estimate comes from David Cutler, an
economist at Harvard, who calculates that for the whole system — for
insurers as well as doctors and hospitals — electronic billing and
credentialing could save $32 billion a year.
Now there is a kernel of truth here but one must dig deeper. In the early 90s I ran a medical software billing company for a friend for a while. As in most cases I went out on sales calls, remember if all else fails listen to the customer. Now this was the most painful sales calls I ever performed. You see you do not speak to the physician, you speak to an office administrator, usually a very underpaid and overworked person who takes any suggestions as an affront to their performance. Not that one complains, but the billing and coding specialists have mastered an art lost somewhere in the 9th century by some monks in the Alps, namely medical billing.
The problem is really as follows:
1. The Government has HCFA forms, they demand the most complex and convolved data known to man, ICD 9 codes for the diagnosis and CPT codes describing what procedures were performed. So for example you may have a skin lesion and it may have been biopsied. It gets worse especially if you have multiple diagnoses and multiple procedures. They must be entered properly or the bill is rejected. Remember that 20% of all health care bills are Medicare. Thus this one payer controls a lot but not all. In addition they reject a great deal just to slow pay.
2. Private insurers are always looking for fraud and over practice and over payment. Thus they take the Government forms and personalize them for themselves, making for a plethora of different forms and multiple inputs.
3. The forms are now for the most part electronically filed, but remember that the patient also has to eventually pay something, either a co-pay at the time of the visit or a payment when all other payers have been taken care of. That may easily be a year or more after the service is rendered. There is no other business in the world where the payment cycle is stretched out so far and the physician must personally foot the money until the receivable is obtained as cash.
As Emanuel states:
But the real savings is in billing. There are at least six steps in the
process: 1) determining a patient’s eligibility for services; 2)
obtaining prior authorization for specialist visits, tests and
treatments; 3) submitting claims by doctors and hospitals to insurers;
4) verifying whether a claim was received and where in the process it
is; 5) adjudicating denials of claims; and 6) receiving payment.
That is correct, and the physician today must have a small finance department taking care of all of these elements. The physician is placed in the middle of this validation process and becomes a non-paid facilitator of the insurer. This is often the most painful part of the practice of medicine. Very painful. Lost claims, claims denied, claims rejected, all add up to a nasty number.
Emanuel alludes to the provision of a credit card type approach, where a patient has a card and the physician is pad and all is electronic.
The problem is that the system, the health care system, is NOT like the credit card business at all. It is a system where the entities paying whether Government or for profit are each trying to push costs down. They also do not trust physicians or patients. The means to control is delay. Remember delay is the deadliest form of denial. And ultimately they deny. Thus there is an inherent conflict, the conflict of not paying versus the conflict of lowering costs. By not paying or stretching out payments the costs as Emanuel say actually go up. He seems to imply a 10-15% costs to health care of billing and its allied issues. I would agree. Now how do we solve this problem.
You simply do what we did in cellular. When I took over our customer service people were told to deny any billing issues, delay and have the customer call back. The result was many more call backs and loss of customers to the competition. Loss of customers may not wok in the monopoly like environment but multiple call backs will drive up costs even more. The solution, trust but verify.
Trust but verify say that the payee pays out to the physician at the time the electronic invoice is submitted. But then like the credit card companies using sophisticated fraud management software ferret out the cheats and deal with them to the fullest degree of the law. There will always be cheats, physicians or patients, but for 99% of the patients and providers they will do the right thing. This will then cut down on costs and allow physician s to do what they do best, treat patients.
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