PROVIDERS ARE painfully aware that they pay billions of dollars to support the claims adjudication process. Payers pretty much know the same thing.
Well, then, this should be easy. Someone push that big red button and let’s get on with it.
Ah, but it’s really not that simple. Despite all the dire estimates about how much money is spent on the claims administration process – most recently, I heard a third of all healthcare expenditures are for paper shuffling – there doesn’t seem to be much resolve to do anything about it.
At the recent Revenue Cycle Strategies Conference sponsored by the Healthcare Financial Management Association, a financial services group presented a survey indicating that both payers and providers could save money by using automated services, such as electronic data interchange and electronic fund transfer, and that they want to save money. There’s still too much paper being used in the claims processing system.
But wait a minute; wasn’t that part of the promise of adopting the standardized transaction codes as part of the Health Insurance Portability and Accountability Act? Yes, and it remains an unrealized promise.
The problem, providers say, is that nothing really changed for payers, who didn’t want to scrap their investment in legacy systems. Providers had to make changes or risk delays or loss of payments. While the code sets have been standardized, each payer has a unique companion guide that frustrates the spirit behind standardized HIPAA transactions. Payers use clearinghouses, which makes them technically compliant with HIPAA but doesn’t bring efficiency to the system as a whole.
Providers aren’t without blame. They hold onto old paper-based clinical systems and have done little to upgrade to automated contract management and revenue cycle management systems. And they’ve let competitive differences stymie cooperation in regional initiatives, such as the New England Health Information Network, which has leveled the playing field in achieving concessions from payers.
There remains a huge level of distrust and antagonism between providers and payers. One provider at HFMA’s conference complained about being squeezed at both ends – he contends that payers challenge every claim for payment above a certain dollar amount, asking for paper documentation, and then cause “death by a thousand paper cuts” by nickle-and-diming his facility on each and every small claim.
Payers still distrust providers, feeling they’re being given unsupportable claims. Or, more to the point, payers intimate that they’re lying – so please send the paper record. For a $200 claim? It’s no wonder, then, that some estimate that 50 percent of claims involve some transfer of paper.
From statistics at the HFMA conference, 20 percent of all claims require six or more rounds of reworking.
This logjam probably could go on indefinitely. But many express hope that consumer-directed healthcare and government pressure to wring unnecessary cost out of the system will have an impact.
Excuse my skepticism, but as long as providers and payers remain polarized, I don’t see enough momentum toward change.
Every good editorial should end with an action point, and mine offers this: Providers and payers need to think about the system as a whole and the profound waste that occurs during “business as usual.”
As one hospital exec recently explained to me, he spends millions of dollars on nurses who battle daily with insurers for payment. That’s nurses and money not directed for patient care. It leaves a trained professional, who’s in short supply, stuck in a chair with a phone in his or her ear – most likely talking to another trained medical professional on the other end of the line at the payer organization.
Your choice, healthcare industry – spend precious funds on administration or care. Can we really afford not to change?