Be careful what you wish for: consumer-driven health plans may slow the rate of health care inflation, according to proponents. But the technological billing challenges associated with these plans are so complex that they threaten to erase any pricing gains

Risk & Insurance, March, 2005 by Tom Starner

"Most small medical practices still have personal computers and all the problems that come with them for bill management," she says. We offer Web-based practice management services, but we have a fully integrated process." Again, the carriers and health plans benefit because the technology creates more data to create cleaner claims, eliminating messy processes and lost dollars.

"Everyone gets a benefit, whether that means cleaner claims, fewer calls from providers, and lower costs," LaFontana says, adding that Athenahealth, which aggregates the small medical practices into one seamless universe for payors, is striking partnerships with payors in helping them deal with smaller practices.

"A practice with 10 physicians is hard for payors to influence," she says. "Sometimes, it's hard for payors to understand what are the problems for those providers, but we can get them that feedback."

In fact, Athenahealth's Web technology provides several results for payors, including increased auto-adjudication rates (without human intervention) approaching 90 percent and lower phone call-to-claim ratios. "That is priceless in some cases," says LaFontana, adding that in a ease study with a large payor, more than 70 percent of administrative costs were saved by using Athenahealth technology.

According to John Sarich, insurance industry marketing manager at Filenet, a Costa Mesa, Calif., company that helps companies manage their digital information, another key bill management for payors is claims "leakage."

With upcoming Health Insurance Portability and Accountability Act requirements waiting in the wings (automated claim attachments will be mandatory), things will only get worse, Sarich says.

"The bluest issue is poorly executed bill management that causes claims leakage, mainly paying the same bill twice, or not paying on time and paying additional charges," Sarich explains. "There are a lot of things that can go wrong in poorly executed bill management."

Sarich says a sizable percentage of claims-related medical bills wind up in "exception processing," which means the payor has to figure out who gets paid for what, rather than a smooth claims payment process.

"You have to take it from the fast track to a snail's pace," Sarich says. "You have to print this out, the send it to someone, and soon you have a problem." Where HIPAA comes in, he adds, is that in the pursuit of eliminating administrative costs in the health claims payment process, the 2005 HIPAA requirement is that claims attachments require an upgrade in technology. That upgrade, which most payors do not currently have in their systems, means, in essence, that if a payor gets a bill from a emergency room, and the diagnosis is a fractured arm, the system should know that the payor will get a bill from a radiologist.

"The metadata should tell my system what else is coming," says Sarich. "And most medical payors are not there yet in terms of technology."

To combat that technology deficit, Filenet offers functionality that can take the first notice of loss and code in, at the outset, the attributes of a claim--so the attachments won't come as a surprise to the payor.