At the AMBA meeting in October, the AMA’s Tammy Banks gave an enlightening presentation on how medical billing professionals can work with payers to minimize administrative waste and labor burden associated with the processing of claims. In the presentation, Banks, who is director of The Practice Management Center and Payment Advocacy, offered insights into the AMA’s ranking of payments and denials by the major insurers in its National Health Insurer Report Card (NHIRC).
In particular, the Report Card grades the timeliness and accuracy of insurers’ claims processing… when using best practices (read a previous post on the NHIRC and insurance underpayment). By focusing on the use of modern best practices, namely electronic claims transactions, the Report Card shows not just where payers and medical billers/practices need to work together for improvement but also how billing services and physician practices can find much-needed efficiencies and cost savings.
Waste is rampant… particularly in the claims-management process
It’s certainly no secret that costs are high and must be reduced. And the effort is well under way. In her presentation, Banks asserted that, while Capitol Hill may focus on electronic medical records and clinical care, administrative processes and costs are a significant contributor to out-of-control healthcare costs. And a lot of that administrative waste is in the processing of claims. (Banks pointed to the estimated annual savings of $15 billion if the discrepancy in payment amounts between insurers and providers was eliminated.) As medical billing professionals know, the claims process is complex and confusing and too often involves manual processes.
So, what can be done to simplify the claims process? Automate it. But first…
Billers, providers and payers must work together
A recurring, emphatic theme in Banks’ presentation was the need for medical billing professionals to work with payers to figure out how to reduce waste in the claims process. While claims-processing waste costs physicians 10 to 14% of gross revenue, Banks said it could be dramatically reduced. And there are solutions in place to move toward that goal, but they are underused… and imperfect. So all parties must work together to increase the use of these solutions — again, namely electronic claims-management processes. They must collaborate to ensure the quality of the information being used, to standardize the processes and to maintain transparency.
Use the claims-processing tools that are available to you
Along with privacy and security (and their accompanying challenges), HIPAA established the need for uniform electronic transactions and code sets. Billing services and physician practices should, Banks asserts, make full use of electronic transactions, from claims and eligibility requests to electronic remittance advices, claim status, referral authorization, etc. Increasing the use of the available electronic transactions means billers are exchanging manual processes for automated ones, reducing labor and, therefore, cost. But there’s another benefit, too.
Fix what’s broken
By making more complete use of electronic claims transactions, medical billing professionals do more than simply eliminate manual processes. Electronic transactions provide information that is useful for identifying problems in processes so that you can fix them and reduce the total number of claims issues, from edits to denials to under- or overpayment. Another of Banks’ recurring points: Fix the things that can be fixed. And perhaps first on the list: standards.
Standardized claims processing is needed
Banks asserted that a simple, transparent standard for electronic claims processing will lower costs, reduce angst and frustration and keep the focus on patient care. Discrepancies among payers in the claims-management process create a number of different processes/workflows for the billing office — too many processes. With a standardized claims-processing platform, billers will know how their claims are being processed and take action to reduce problems, manual processes and unnecessary costs. But a standard needs to be insisted upon, which relates back to Banks’ repeated point that all players must work together.
How do the major insurers measure up?
For the details of the AMA’s grading of insurers, you can download the National Health Insurer Report Card now. But here are some of the key findings and lessons to come from the survey of more than 2.4 million claims involving 499 practices across 80 specialties in 42 states:
•    Nearly 23% of commercial insurer claims went unpaid
•    Real-time claims processing saves time and money by reducing the need for human intervention
•    Speed of payment is associated with use of EFTs.
Still more to come from the AMBA meeting. Be sure to visit AMBA for more on this topic and the many other relevant issues discussed at the meeting.
