6 Worst Payer Trends That Impede Electronic Medical Billing Software and Service Performance

Healthcare insurance business continued to boom in 2006, mostly at the expense of both providers and patients. A review of recent healthcare insurance industry trends help identification of six payer activities that will impact medical billing and healthcare providers revenue in 2007.

Two key aspects dominated business background for insurers in 2006. They

 

1. Must meet tougher profit margin benchmarks. For instance, United Healthcare saw its earnings rise 38% in the 3rd quarter of 2006 alone. To keep its share value growing, United Healthcare will have to demonstrate still better performance in the 3rd quarter of 2007.

    

    

2. Approach the limit of their ability to grow premiums. Premiums increased significantly beyond inflation and workers' earnings growth in 2001-2006. For instance, health insurance premiums increased 65.8% between 2001 and 2006 while inflation grew 16.4% and workers' earnings increased 18.2% during the same period.

    

    

Therefore, in 2007, insurance companies will continue to pay less using the following six key strategies:

 

 

1. Add new denial reasons and increase costs of medical billing service and software because of growing complexity. In January 2007, thousands of physicians discovered they were having trouble getting Medicare to pay for services billed under the codes 99303 and 99333. The reason for denial was simple: Medicare deleted codes 99301-99303 from CPT in 2007, forcing the physicians to review the new 99304-99306 codes in an up-to-date CPT code book. The 99331-99333 codes also were deleted in 2007. Review the new codes, 99324-99328.

    

   The payer-related component of the medical billing process costs an average 8% to 10% of providers collections. It includes claim generation, scrubbing, electronic submission to payers, payment posting, denial identification, follow up, and appeal. By complicating the process, payers increase the likelihood of failing the payment and winning the subsequent appeal process. Providers face the lose-lose choice of expensive medical billing process upgrades or forfeiting denied payments.

    

2. Reduce allowed fees. Average physician reimbursement from billing Medicare and commercial payers dropped 17% in 2002-2006. From 2005 to 2006, allowed amounts for E&M visits alone dropped 10% nationally, 27% in the Northeast, and 20% in Northwest.

    

    

3. Underpay. Partial denials cause the average medical practice lose as much as 11% of its revenue. Denial management is difficult because of complexity of denial causes, payer variety, and claim volume. For complex claims, most payers pay full amount for one line item but only a percentage of the remaining items. This payment approach creates two opportunities for underpayment: the order of paid items and payment percentage of remaining items. Additionally, temporary constraints often cause payment errors because of misapplication of constraints. For instance, claims submitted during the global period for services unrelated to global period are often denied. Similar mistakes may occur at the start of the fiscal year because of misapplication of rules for deductibles or outdated fee schedules. Payers also vary in their interpretations of CCI bundling rules or coverage of certain services.

    

    

4. Increase leverage over providers through consolidation. It is harder to drop a contract with low allowed amounts when there are fewer remaining payers. Consolidation in the insurance industry reduces competition among payers for physician's services, allowing payers pay less to providers. Today, 73% of insured population are covered by 3 plans alone: the top ten health plans cover 106 million lives, while three plans, namely, United, WellPoint, and Aetna together cover 77.7 million lives. In 2006, consolidation rate accelerated. For instance, United Healthcare Group purchased 11 plans in 2006, including MetLife, PacifiCare, and Oxford. Turning down a contract offered by a payer that controls such a large portion of population results in giving up significant revenue from medical billing. Providers face the lose-lose choice of seeing fewer patients or accepting lower rates.

    

    

5. Drive providers into networks (which offer lower allowed amounts). United Healthcare has announced a new national policy to discontinue direct payment of medical billing to out of network providers. Effective July 1, 2007, under the "pay the enrollee program," United Healthcare will direct out-of-network benefit checks to the insured member rather then non-participating providers. This policy forces the providers to choose between chasing the patients for payments or joining the payer's network. In any case, provider loses some of earned revenue. Oxford Health Plans, a United Healthcare Company, implemented the Pay the Enrollee policy on April 1, 2006. According to the Oxford web site announcement, Oxford may refuse to honor the assignment of benefits for claims from non participating providers pursuant to language in the Certificate of Coverage. If enrollees choose to receive treatment out-of-network, the claim reimbursement may be sent directly to the enrollee. In such cases, the non-participating provider will be instructed to bill the covered patient for services rendered.

    

    

6. Return for refunds and penalties. Justice Department recovered a record of $3.1 billion in refunds and penalties in 2006. It is the largest amount ever recovered in a single year. Invariably, providers are in denial about their exposure, and insurers are quick to comfort them. They will tell you that medical billing audits are an unfortunate but necessary tactic for keeping fraud in check, implying that honest providers have nothing to worry about. But insurers are not crusaders for truth and justice. Providers need to understand that payer's motive is money, the means is a gargantuan statistical database, and that every provider is an opportunity. Healthcare finance insiders call this a Big Brother system and, setting aside the melodramatic implications of such a name, it is easy to see why. While executives have a soft spot for pretty charts, the true power of such a system is its ability to drill into the data and find outliers (when they talk about this type of tool, Information Systems specialists use jargon like data mining and On Line Analytical Processing, or OLAP for short). The system automatically pinpoints providers that are “easy audit targets: because they are:

    

    

   • Doing something differently from the pack,
   • Lacking infrastructure for systematic denial follow up,
   • Lacking compliant medical notes.

    

    

Having acquired the means to cost-effectively target providers, insurers have begun the hunt. It behooves providers to arm with powerful electronic medical billing software and fight back for improved revenue.

References

 

1. Neil Weinberg, “Envy Engines,” Forbes, March 14, 2005
2. “Fraud Statistics – October 1, 1986 – September 30, 2004”, Civil Division, U.S. Department of Justice, March 4, 2005
3. Capra, Lirov, and Randolph, “The “Business” of Healthcare Provider Audits - How Payers Are Getting Away with Practice Murder,” Today's Chiropractic, January 2007, pp. 60-62.
4. P. Moore, "Power to the Payers - Consolidation Puts Insurers in Charge," Physicians Practice, January 2007, pp. 23-30.

   Yuval Lirov, PhD, author of "Practicing Profitability - Network Effect for Revenue Cycle Control in Healthcare Clinic and Chiropractic Office: Scheduling, SOAP Notes, Care Plans, Coding, Billing, Collections, and Audit Risk" (Affinity Billing) and "Mission Critical Systems Management" (Prentice Hall), inventor of patents in Artificial Intelligence and Computer Security, and CEO of Vericle.net - Distributed Billing and Practice Management Technologies. Yuval invites you to register to the next webinar on audit risk at BillingPrecision.com.

Electronic Medical Billing Software Products in Press (June - July 2006)

Medical Billing technology has witnessed continued expansion during the first two months of this summer, as evidenced by press releases about some ninety products accumulated in BillingWiki. A practice manager may find it difficult to select the best product from such a large product variety. This article roughly tabulates some eighty-five press releases about medical billing technology products and/or vendors across two-dozen service categories.

Asset Life Cycle Management: Products that help healthcare organizations optimize the performance of their capital assets, uncover hidden expenses, gain more visibility and control over their asset and facility operations, and improve safety. Such systems also serve as repositories for hazards, alerts and recalls facilitating a closed-loop process that documents the hospital's course of notifications and corrective action. See St. Croix and LYNX.

Audit and Compliance: Products that help providers and payers to manage compliance by facilitating internal audits and planning external audits respectively. Such systems assist an auditor to spot errors, omissions, fraud, and abuse. Solutions span spectrum from basic audit reporting to complete automation of the audit process by using data mining, natural language processing, and statistical methods to produce a random sample of medical records, data scoring, and potential revenue loss estimate.

• Claim Audit: A-Life, CodeRyte
• EFT Audit: GlobalSCAPE
• HIPAA Privacy and Security Compliance: MedicalSuite

   

   

 

Certification and Awards:

• Best in KLAS: KLAS is a leading source of information on Healthcare Information Technology vendor performance, with information gathered from users at more than 4,500 healthcare facilities nationwide. Performance data collected from 300 Healthcare Information Technology vendors and 500 of their products is evaluated and made available to subscribers through the KLAS website as well as through periodic reports and custom research. See press releases about VantageMed and athenahealth.
• CCHIT Certification: The CCHIT Certified mark - a "seal of approval" for EHR products - provides the first consensus-based, consistent benchmark for ambulatory products. See LSS Data Systems and Misys.
• DOQ-IT Testing: CMS, an agency of the U.S. Department of Health and Human Services, established the DOQ-IT initiative program to encourage physicians to adopt EHRs and, in turn, improve the quality, safety and efficiency of health care. In order to gain official DOQ-IT recognition, vendors must meet all 35 DOQ-IT reporting requirements. See Misys

   

   

 

Deals: This category shows business development activity based on leveraging reciprocal client relationships and complementary product capabilities. See A-Life, Affinity Billing, athenahealth, eClinicalWorks, Eclipsys, GE Centricity, H-Quotient, Healthnostics, IngeniousMed, JPI Data Resource, LEAPpm, Massachusetts Medical Society, MedLink, Misys, medFORCE, medHost, MediSys, Nexplicit, Nicka & Associates, Nightingale On-Board Communications, PatientKeeper, Quantum Group, RXHub, Scandent, Streamline Health.

Electronic Charge Capture: MedAptus

Electronic Data Interchange (EDI): The ability to access one single source of continuously updated claims tracking data to perform real-time status checks directly from local PCs instead of spending hours on the phone calling one insurer after another to track down the status of submitted claims. See MicroSys.

E-learning: AlphaQuest, Care2Learn

Enhanced website: CAP-MPT, Companion Technologies, Patientrak

Factoring: Factoring provides healthcare professionals with automated electronic insurance claims management solutions and advance funding on medical claims, as submitted, through a revolving line of credit. See MDWerks

Integration: Products that expedite revenue cycle by integrating office management functions, which in the past used to be performed separately. Integration eliminates data entry repetition, reduces errors and costs, and streamlines revenue cycle. See press releases about four integration aspects outlined below.

• Billing and Coding: ChartLogic
• Billing and EMR: Affinity Billing, MediEMR, Siemens, NextGen, athenahealth.
• Billing and Compliance: Billing Precision.
• Billing and Imaging: IMPAC, AMICAS, Fujitsu, MedLink.

   

   

 

New clients: Ingenious Med For, Lumetra, Misys, Per-Se, MediSys, Craneware, PaperFree, athenahealth, Picis, MicroMD, intraNexus, Visionary Medical Systems, AllScripts, LUMEDX, Streamline Health, LYNX, Sullivan Group, PHNS, Streamline Health, ECDS, McKesson

New billing products and services: Automed, HealthWare, JP Morgan, Physmark-Transplant, LabDAQ

Online Supply Store: Antek HealthWare

Patient Payment Ability Verification: Offers predictive reporting functionality to determine a patient's ability to pay for services and verify a patient's billing address in real time. See Per-Se.

Payer-side automation: See Guidewire ClaimCenter, XPERT Connect.

Personal Health Record Smart Card: Patients and health care providers can access medical health records, and send and save their most vital personal medical information instantly using the Internet or multiple devices, such as smart cards, USB keys, mobile phones, PDA's and Tablet PC's. See Patientrak.

Telemedicine: eNotes.

Yuval Lirov, PhD, author of Practicing Profitability - Network Effect for Revenue Cycle Control in Healthcare Clinic and Chiropractic Office: Scheduling, SOAP Notes, Care Plans, Coding, Billing, Collections, and Audit Risk (Affinity Billing) and Mission Critical Systems Management (Prentice Hall), inventor of patents in Artificial Intelligence and Computer Security, and CEO of Vericle.net - Distributed Billing and Practice Management Technologies. Yuval invites you to register to the next webinar on audit risk at BillingPrecision.com

Most Popular Electronic Medical Billing Software

In the last few years there has been an increase in pressure in the medical profession. Many people do not have medical insurance to pay their medical bills and this has resulted in medical offices having less money for hiring employees. Because of this, many doctor’s offices have started using third-party electronic medical billers to help improve their cash flow.

Other offices are purchasing electronic medical billing software so they can upgrade their own billing system. Being fully automated helps to cut down on office personnel and is more efficient than the former billing practices. The medical billing software comes with options such as printing the bill with late charges or just showing the number of days the bill is late. There are several software companies which provide billing software; you just need to know what features you need to fulfill your office requirements.

Sage Software: This company offers a billing software package which can be customized to suit the needs of the company. There is a section provided for address changes or to announce an upcoming event. It also has a feature to provide collection letters or letters reminding someone of their appointment time.

Collaborate MD: This software offers medical billing which uses the Internet for its day to day operations. The small monthly fee is affordable and the company always performs back-ups each day. This insures that you will not lose all of the valuable data which is stored in the system. With the click of the mouse you can view the reports needed to tell you what is going on with your business. This frees up time for the office staff since they do not have to spend hours running reports.

Medical ProClaim: This is a powerful program which is windows based and provides top notch medical claims processing. There is more than one version to choose from including medical practice, anesthesia, and dental. The low price for this software with its extensive features can help the medical practice office save a lot of time and money.

Choice Medical Billing Service: This is an outside medical billing firm that charges a percentage of the paid medical claims. Their goal is to provide a dependable billing service that has a high rate of success. They are not paid unless their clients get paid which can help reduce the costs of repeat billing. They offer a 100% guarantee that you will be satisfied with their service.

No matter what route you choose to take, electronic billing can help speed up the process of billing claims. You can choose software which is installed on your office computer which requires very little input from the staff. This software also compiles the reports needed for accounting so your staff has more time to perform other duties. This software is usually fairly inexpensive and provides updated versions for a nominal fee.

By choosing an outside firm or individual to do your billing you will be able to employee less staff and cut the costs of everyday operations. By having fewer employees you will not have to pay the salary or the benefits which are associated with each employee.

Kelly Hunter writes for http://www.electronic-medical-billing-guide.com for Electronic Medical Billing and has several years experience in research and writing.