The Best Medicine for Healthcare is Better Medical Billing

Well designed medical billing processes will play a critical role in driving down healthcare costs. This article discusses this link and the role medical billing services can play in helping make healthcare more affordable.

Although the issue of claims processing is mentioned as one of the sources of rising healthcare costs, the true economic drivers that are keeping the current inefficient and opaque processes in place has not been well explored. The fact of the matter is that the current process prey's upon the technology, process and staffing limitations of most physician offices to take money from the physicians and give it to the payers. The result is rising costs and following revenues for the average medical provider.

The tactics used by payers to save money (and drive up the cost for medical practices to operate a medical billing process) include: Underpaying over 10% of medical claims, "losing" submitted claims on a regular basis, and constantly changing the rules by which they decide if claims are actually payable. If the provider's medical billing process is not technology savvy, well designed and properly staffed then over 20% of the practice's revenue can easily be lost to these tactics.

Now, here is a shocking fact - more than 50 percent of claims that payers "lose" or are underpaid are never pursued by physicians (and therefore the payers never have to pay the money they owe to the physician or facility). This means that payers have a powerful economic incentive to play games and make the medical billing process complicated.

Nothing is free, so payers do incur a price on their end because of the current process. It cost about $25 when a payer that has spotted an underpaid or missing claim gets a insurance representative on the phone. This has lead payers to get quite clever and grade each medical provider. The grade is based upon how well the provider spots issues and calls the payer (thus generating costs for the payers). If the provider catches the payers "mistake" each time they will be rated an A. If they never catch the payer's errors they will receive a F. Interestingly, the payers that are rated an F seem to have many more lost and underpaid claims than those rated an A.

So, how do all of these facts tie lead to the conclusion that better medical billing processes can lowering the cost of healthcare? If each and every underpaid or lost claim is pursued (which is what a well-designed medical billing process should do) then eventually payers will lose all economic incentive to play games and make the medical billing process complicated and expensive.

Imagine if every physician's internal billing department or medical billing company pursued every claim until it was paid in full. The payers would see their cost to adjudicate the claims rise and they would see their payments to providers rise because the lost/under paid claim games would no longer prevent providers from ultimately being paid. This combination would lead to each physician ultimately being paid quickly and without fuss because the insurance companies would lose significant money by playing games ($25 per extra phone call generated by the games) and they would gain nothing since payments would only be delayed, not avoided.

Real-time claim adjudication, where a payer adjudicates the claim while the patient is in the physician's office, is a goal that has been frequently described as being "just around the corner." This goal will never be reached while the balance of power between payers and providers is so skewed in the favor of the payers. Once each provider is rated an "A" and the payers are no longer able to use their superior size and technology to under pay providers, a truce can be achieved. It is from this truce that a true real-time, low cost medical billing system can emerge.

Copyright 2008 by Carl Mays II

Article Source: http://www.ApprovedArticles.com

Carl Mays II is founder and CEO of ClaimCare Medical Billing Services, one of the largest Medical Billing Companies in the US. Carl has improved the performance of organizations ranging from solo practioners to global conglomerates.

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated