Yet Another Fine
Thursday, August 14th, 2008 Yet another payer has been ordered by state regulators to pay restitution of $3.9 million to thousands of members and a $250,000 fine for underpayment of claims related to care in out-of-network hospitals and other medical facilities.
State Insurance Commissioner Mike Geeslin ordered the health insurer to make the payments over the next several months and specified that if they don’t total at least $3.9 million, the balance must be paid to the state as an additional fine, reported the Dallas Morning News.
Doug Danzeiser of the Texas Department of Insurance said the underpayments date to Jan. 1, 2004, and involves thousands of members in Texas enrolled in Preferred Provider Organization plans.
Dallas Morning News, August 9, 2008
Healthcare Payment Reform
Thursday, July 24th, 2008 In many ways, the nation’s current healthcare payment system creates inefficiencies by adding cost and complexity to healthcare administration. Achieving payment system reforms will require a level of cooperation among all stakeholders.
In the current volume-based payment system physicians and others who provide high-quality, efficient care and thereby reduce the volume of patient services, receive reduced payment. The payment system encourages competition among healthcare providers for high-margin services, leading to increased fragmentation and, in some cases, an overuse of those services.
Principles of a New Payment System
1. Payments should encourage and reward high-quality and efficient care.
2. Payments should align incentives among all stakeholders to maximize the efficiency.
3. Payment systems should balance the needs and concerns of all stakeholders.
4. Payment processes should be simplified, standard, and transparent.
Only by operating within a shared framework of principles and goals will meaningful change be possible.
Virtual Office Visits
Friday, July 4th, 2008 The doctor doesn’t have to see you now. Thanks to new technology, patients may not always need a face-to-face visit with their doctor to get the care they need.
And thanks to a growing awareness of this fact on the part of health plans, structured, Internet-facilitated and reimbursable “virtual visits” are on the verge of entering mainstream medicine. Virtual visits also are seen as a tool that will save money, provide convenient care and maybe do something to solve the problem of patients not having access to their doctors.
This is especially true in Minnesota, where five of the six largest private health plans reimburse physicians about $35 per virtual office visit, and the last holdout announced that it will soon join the club. Unresolved, however, are issues over standards for billing and legal jurisdiction matters concerning doctors conducting e-visits during travel to states they are not licensed to practice in.
Health information technology vendors are helping to bring the parties together, and a message is being spread that virtual visits benefit patients by offering affordable and convenient access to their doctors; help providers more efficiently process routine cases; aid employers by reducing absenteeism created when workers take time off to see their physician; and—perhaps most significant—assist insurance companies in saving money.
“I would hope that 100% of the companies will be doing this in the next few years,” said independent family physician and e-visit advocate Michelle Eads of Woodland Park, Colo. “Once the insurance companies get it through their thick skulls that it saves money, they’ll be more than willing to do it.”
Eads is also the sole practitioner in a pilot study Kaiser Permanente of Colorado Springs is conducting exploring the use of virtual visits by in-network independent physicians. She receives $50 for an online consultation and said preliminary figures from 2006 show that Kaiser is saving between $70 and $120 on each virtual visit.
Internist Paul Tang, the vice president and chief medical information officer of the Palo Alto (Calif.) Medical Foundation, believes employers should pay more attention. He said, in a study, his organization found that for every $1 employers invested in virtual-visit programs, they received a $4.50 return—mostly in the form of savings generated from having less lost productivity.
Eads, speaking at the AAFP’s annual scientific assembly in Chicago earlier this month, said it takes about 16 minutes to complete the typical virtual visit, and that they have been particularly useful in monitoring patients with hypertension and depression. Besides chronic conditions, Eads said these visits are also helpful for patients who work nights or who are just under the weather.
“I live in the mountains,” she explained. “Some people don’t want to drive into the mountains just for me to say ‘Yes, you’re sick.’ ”
E-visits also work out for patients without insurance who find the $50 online-consult fee easier to swallow than the price of an office visit, Eads said.
Miami-based family physician Bernd Wollschlaeger has nothing but self-pay patients in his cash-only, paper-free practice, and he said his patients don’t mind paying for electronic communication. Fees start at $15 to $20 for a prescription refill, $25 for chronic condition management, and then go higher the more complex the task. “Most people in my practice understand that my time is money,” Wollschlaeger said. “I’ve never heard a complaint.”
How Are Employer Medical Premium Dollars Being Spent?
Friday, July 4th, 2008 The Texas Medical Association and the National Federation of Independent Businesses have teamed up to help their members, most of which are small business owners, find out how much of their medical premium dollars are actually being spent by insurers on health care.
Thanks to a little-known piece of legislation passed by the Texas Legislature in 2007, insurance companies must disclose this information, reported the Houston Business Journal. TMA and NFIB hope that if enough small business owners demand this information and then use it to contest premium-rate increases or to shop for better pricing, it might be a small step toward more transparency and competition in the health insurance market, the Business Journal added.
Houston Business Journal, June 13, 2008
Physician Costs and Getting Paid Properly
Friday, July 4th, 2008 Administrative complexity and inefficiency are major cost-drivers in a largely fragmented health care delivery system. A typical physician practice contracts with a dozen or more health plans and must contend with each payer’s way of contracting, credentialing, preauthorizing, coding, billing and reimbursing.
Health insurer contracting and billing represent the major sources of administrative burden for physicians. Physicians divert substantial resources – as much as 14 percent of their total revenue – to ensure accurate insurance payments for their services, according to the AMA’s first National Health Insurer Report Card on claims processing, released last month.
Even in a typical physician office without a fully automated practice management system, replacing traditional paper and telephone calls for insurance administration – i.e., claims submission, referral and preauthorization requests, and patient eligibility verification – with electronic transactions brings a per physician savings of more than $42,000 annually, according to a Milliman Inc. study released January 2006.
Some administrative burden is self-imposed by physicians, particularly small or medium-sized practices that are busy seeing as many patients as possible and don’t take the time to think about standardizing their workflow for efficiency.
The main focus of administrative simplification initiatives has been standardization of data flow between physicians and health insurers. Health insurers reported to physicians the correct contracted payment rate only 62 to 87 percent of the time. When health insurers report an amount that does not adhere to the contracted rate, it adds additional, unnecessary costs to the physician practice to evaluate the inconsistency.
Rating Payers
Saturday, June 28th, 2008 Some health insurance companies rate doctors on their performance. Now doctors are turning the tables.
The American Medical Association issued its first health insurance report card at the group’s annual meeting Monday. The primary focus is on how quickly and accurately doctors get paid.
“Physicians are spending 14 percent of their total revenue to simply obtain what they’ve earned,” said Dr. William Dolan, an AMA board member.
The report card is an effort to reduce the cost of claims processing to doctors and help them as they negotiate contracts with insurance companies, he said. The report card will help patients if it reduces wasteful administrative costs, Dolan added.
The report card compares Medicare and seven national commercial health insurers on the timeliness and accuracy of claims processing. It is based on a random sample drawn from 3 million claims.
There are no grades like A, B and C, and many of the technical measures may not mean much to most patients. But business leaders and health policy makers are interested in cutting an estimated annual $210 billion in wasted administrative claims processing costs, AMA leaders said.
Four years ago, Dr. Marcy Zwelling got so frustrated with the time and cost of making sure she was paid accurately by insurers that she stopped dealing with them. She now runs a so-called “boutique” practice. Most of her patients pay her an annual fee out of their own pockets.
“The best thing is, I get to be a doctor” instead of a claims processor, said Zwelling, of Los Alamitos, Calif. She says she doesn’t make any more money than she did when she accepted insurance, but she has more time with patients.
UnitedHealthcare had the lowest rate of contract compliance, according to the AMA report. About 62 percent of medical services billed were paid by UnitedHealthcare at the contracted rate, compared with 71 percent for Aetna and 98 percent for Medicare.
UnitedHealthcare spokesman Gregory Thompson said doctors and their billing services share responsibility for prompt payment. “Data show there is often a significant lag time between when services are provided and physician claims are submitted,” he said.
He said UnitedHealthcare has improved its electronic claims systems and noted the AMA gave the company higher ratings on other measures.
Medicare performed better than the private insurers in most areas, said Dr. Lawrence Casalino, a University of Chicago health economist and former physician. Commercial insurance plans compete by promising employers that they are tough on holding down the cost of claims, he said.
“There’s no question that administrative costs for doctors and the country would be a lot lower in a single-payer system,” Casalino said in an interview after the meeting. But a market-based system has advantages of competition, choice and innovation, he said. “Are the benefits enough to justify the cost?”
Peter Lee of the Pacific Business Group on Health welcomed the report card, but said he hoped the AMA would look at a broader range of areas that would be helpful to consumers.
“Increased payments to physician’s means increased premiums and increased costs in a system that is spiraling out of control,” Lee said.
Susan Pisano, a spokeswoman for America’s Health Insurance Plans, said that for claims to be processed accurately and quickly it takes two parties: insurers and doctors.
She complained that while insurance companies that rate doctors generally share the information with doctors before they make it public, the AMA did not share its report with insurers before releasing it online Monday.
By CARLA K. JOHNSON, Associated Press Writer
AMA (PSA) National Health Insurer Report Card
Credentialing - To Delegate or Not To Delegate
Monday, May 5th, 2008 The National Committee for Quality Assurance (NCQA) sets the standard for credentialing in managed care. Defined as the “process by which a managed care organization (MCO) authorizes, contracts with, or employs practitioners who are licensed to practice independently to provide services to its members”, credentialing simply means making sure that a practitioner is qualified to render care to patients. Each MCO sets its own qualifications and then structures its processes to ensure that the practitioners meet these qualifications.
This blog entry is intended to provide the reader with an overview of credentialing requirements and the credentialing process, including delegation of some or all of the credentialing activities.
Each managed care organization (MCO) is responsible for establishing the criteria for participation within the health plan. The basic elements for a physician are likely to include the following:
1. Valid and current licensure
2. Appropriate education and training
3. Curriculum Vitae (CV)
4. Clinical privileges at a hospital
5. Valid Drug Enforcement Agency (DEA) certificate
6. Board certification (if required by the MCO or specified by the practitioner)
7. Work history
8. Malpractice insurance
9. History of liability claims
Regardless of the guidelines set, the MCO must put a system in place that ensures that its practitioners meet these standards before they are accepted as an active provider within the health plan. This system or process is commonly referred to as credentialing.
The credentialing process is just that - a process. It consists of a series of activities designed to lead to a decision to accept or reject an individual’s application to participate in the MCO as an active health care provider. A simple credentialing process is outlined below:
Application - Practitioners expressing an interest in participation with the MCO, and/or practitioners who meet the MCO’s organizational needs and administrative requirements, are invited to apply.
Initial Screening - Before proceeding with the next step, the application is reviewed to determine that it is complete.
New Provider Site Visit - The applicant is notified that a new provider facility assessment and medical record keeping process audit must take place.
Primary Source Verification - NCQA stipulates that seven criteria must be verified from the primary source because they identify the legal authority to practice as well as the relevant training and experience. MCOs may choose to use an external agency to collect information from the primary sources. If this is the case, the MCO has delegated this component of the credentialing process and must assume oversight functions. The criteria that require primary source verification include:
1. Valid license to practice
2. Status of clinical privileges at primary admitting facility
3. Valid DEA certificate, if applicable
4. Education and training of practitioners
5. Board certification if the practitioner states that he/she is board certified
6. Current adequate malpractice insurance
7. History of professional liability claims
File Preparation - Immediately following the initial screening, the file is prepared for presentation to a Credentialing Committee.
Data Entry - After all required data elements have been received, the individual practitioner’s credentialing file is entered into the MCO’s credentialing database and prepared for presentation to a Credentialing Committee.
The Decision - The decision to accept or reject an individual’s application is made by a Credentialing Committee.
References:
National Committee for Quality Assurance, The 2007 MCO Standards and Guidelines and Survey Tools
Related Web Site:
http://www.ncqa.org/ (NCQA)
The Doctor Will See You Now - Online!
Tuesday, April 1st, 2008 If you could have the equivalent of a doctor’s appointment - via the Web - without actually going to the doctor, would you do it? Would you be willing to pay for it?
Some doctors and health insurers are betting that patients will hand over a co-pay or more for the convenience of describing their symptoms from work or home.
Aetna and Cigna have announced that they will pay for doctors’ visits on the Web. The insurers think their customers - employers - will like the service because it can improve efficiency and might prevent more expensive problems. Insurers pay less for a Web visit than for a meeting with the doctor, and employees don’t have to miss work for an appointment.
This and similar programs are still in their infancy but will undoubtedly continue to grow; just as online banking has flourished. With convenience comes responsibility and patients more than ever will need to try and determine any out-of-pocket costs.
At www.USAHealthcareCosts.com patients can determine usual, customary, and reasonable charges for any AMA-approved CPT code within the U.S. Physician’s can also publish their prices via this web-portal, further strengthening provider relations.
Physician Payments Decreasing & Health Insurance CEO Compensation Increasing
Saturday, March 29th, 2008 CMS projects it will pay 10.1 percent less in 2008 than it did in 2007 for services provided to Medicare beneficiaries by physicians. These reductions will continue annually, and it is predicted that the total cuts will be about 40 percent by 2016. At the same time physician expenses are expected to increase 20% over the next few years.
Also, physicians likely consider Medicare payment rates in the context of what they receive from other payers, especially private insurers; as private insurers typically pay “a percentage of Medicare (known as RBRVS – Resource Based Relative Value System.”)
The average physician makes $149,000 per year, it may sound like a lot but it is not! Physicians pay $6,000 to $20,000 per year per physician just to file and administer insurance claims. Factor in malpractice, student loans, and other related business expenses and that $149,000 dwindles rapidly. Physicians lose countless numbers of dollars from non-payment of claims (float.) Another trick used by the insurance company is to say it never received the claim.
The insurance industry is playing to the physicians’ weakness to increase the profit from the float. Where does that profit go? Who is really making the money? You might want to sit down.
United Health Group
CEO: William W McGuire
2005: $124.8 million
5-year: $342 million
Aetna
CEO: John Rowe
2005: $22.1 million
5-year: $57.8 million
Cigna
CEO: H. Edward Hanway
2005: $13.3 million
5-year: $62.8 million
Humana
CEO: Michael McAllister
2005: $2.3 million
5-year: $12.9 million
WellPoint
CEO: Larry Glasscock
2005: $23 million
5-year: $46.8 million
We would like to thank Ira Kirschenbaum, MD for the statistics above, posted on his Thursday, August 23, 2007 WebMD blog: CEO Compensation: Who Said Health Care is in a Financial Crisis?
Not Currently Assessing Your Managed Care Contracts? Consider This
Most experts agree that the contractual relationships between healthcare providers and managed care organizations (MCOs) have not matured as expected from a strategic, financial, or operational perspective. In fact, the integrity and longevity of many managed care contracts has deteriorated.
Attorney General Andrew Cuomo of New York is conducting an industry-wide investigation of health insurers into allegations that reimbursement rates were manipulated. (1)
At the center of the scheme is Ingenix, the nation’s provider of health care billing information, which serves as a conduit for rate data to the largest insurers in the country. Mr. Cuomo intends to sue Ingenix, its parent, UnitedHealth Group, and three additional subsidiaries.
Mr. Cuomo has issued 16 subpoenas to the nation’s largest health insurance companies, including Aetna, Cigna and Empire Blue Cross/Blue Shield.
The investigation “calls into question the validity of a system that health insurers have used for years to reimburse physicians and their enrolled members,” Nancy Nielsen, president-elect of the American Medical Association, said in a statement. ”By controlling and manipulating UCR calculations, health insurers can keep reimbursements artificially low.” (2)
For UnitedHealth, the New York investigation comes only a few weeks after California regulators said they were seeking to fine a different UnitedHealth unit up to $1.3 billion over allegations of claims violations.
All Is Not Lost
Healthcare financial managers should be prepared to assess their portfolio of managed care contracts because preservation of the current portfolio may lead to deterioration of the organization’s financial and service position. More importantly, proper management can significantly increase revenues.
We strongly encourage you to review your group’s existing payer contracts. You and your providers should fully understand your contracts and fee schedules. (3)
Data and technology are essential to evaluate physician’s managed care contracts. Continuous performance and process improvements are critical to the vitality of any organization.
Electronic access to your managed care contracts and fee schedules gives you the capability to appropriately set fees, rank and compare payers, verify correct payment, and perform hypothetical analysis on any contract offer.
(1) The New York Times
By REUTERS
Published: February 13, 2008
(2) Nancy H. Nielsen, MD, PhD, AMA President-elect
Feb. 13, 2008 Press Release
(3) MGMA – Medical Group Management Association
Managed Care Contracting
On-Demand Technology
Wednesday, March 12th, 2008 For years physicians have been sold solutions that rely on complex software packages which require staff to wrangle with; often resulting in little to no benefit. Physician practices have become so frustrated that they are now out-sourcing many processes.
Physicians are not the only businesses to face this dilemma; think of how the banking and travel industry have evolved over the past few years. Consumers don’t think twice about accomplishing their banking needs online. Orbitz has all but replaced travel agents and when is the last time someone had to find you a hotel room – Hotels.com is one of many who can accomplish this for you on demand.
Physicians now have a choice between business-as-usual or harnessing the effectiveness of the internet; EMR’s is just one example. Practices work harder to get paid less – why is this? Well this is easy enough to answer – thousands of payers and more reimbursement rules than anyone could ever imagine. Another “software package” is not the answer; costs, training and updates alone make this an ineffective solution; often leading to abandonment.
Well what is a viable solution? Again think of the banking and travel industry – there are many others; they have pooled their talents/services, shared information, and provided it on-demand via the internet. Physician practices have the same opportunity. Individual physician practices are becoming as extinct as travel agents – the answer is to form a group, network, IPA, and the like. With the group(s) in place, coupled with on-demand web based solutions, physicians can now find their way through the thousands of payers and the reimbursement rules which make them work harder for less.
Web based solutions and group formation provides for information sharing, real-time analysis, convenience, little to no training, easy implementation, and ultimately reduced costs. Most importantly physicians and their practices now have a comparative advantage with payers. Any type of contract analysis is now available, real-time – whether it is regionally, nationally, or by CPT code.
On-demand services can provide financial benefits to physician practices of all sizes and specialties. Every practice needs solutions that will allow them to provide top-quality care and enhance profitability. These on-demand services will also allow physician practices to remain competitive in the ever-changing world of healthcare and contract management.
