Plan offers real-time claims adjudication

The South Carolina Blues hopes that a card reader will spur instant electronic transactions, which are rarely available now.

By Tyler Chin — Posted Aug. 22, 2005

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Companion Technologies, a health care technology company owned by BlueCross BlueShield of South Carolina, began marketing a card-reader machine to physicians that will enable them to collect money from patients both coming in and going out the door.

When a patient checks in, physicians can use the machine to determine insurance eligibility by swiping the patient's magnetic stripe health insurance card, or keying in the patient's identification number and birth date on the device.

Assuming the patient is insured, the device then lets the physician office know the amounts for co-payment, deductible and coinsurance, said Harvey Galloway, president of Companion Technologies.

As the patient is being checked out, the physician's office can submit claims and have them adjudicated in real time through the device, as long as the patient's insurer has real-time claims adjudication capability, said Deryl Metze, vice president of electronic data interchange at Companion Technologies.

If the insurer has that capability, physician offices using the device will know exactly how much a patient owes and how much the insurer will pay them before the patient walks out the door, Metze said.

Companion Technologies expected to begin marketing the device, which also handles credit and debit card transactions, in South Carolina starting Aug. 15, followed shortly thereafter by a national rollout.

Physicians would have to pay $19.95 a month per device plus 20 cents per transaction. They would not be required to buy the device to remain with the Blues plan.

Only a handful of insurers, including the South Carolina Blues, are adjudicating claims in real time, said Pat Kennedy, a managed care consultant in Rockville, Md. "Nobody else is doing it today, but virtually all of the Blues and all of what I'd call the major payers in the country want to do it."

While technology, other priorities and cost are barriers, the biggest reason most insurers don't or aren't adjudicating claims in real time is that the activity requires physician offices to change their work flow significantly, Kennedy said.

"Physicians and staff have done business the same way for 50 years," he said. "You see the patient, and at the end of the day or at the end of the week you bill the insurance company," he said.

Still, Kennedy expects the market to move in the direction of real-time claims adjudication over the next several years, particularly in light of the movement toward consumer-directed health plans and health savings accounts.

As patients bear more of the cost of their care, the business risk for doctors will increase and they will be more interested in using real-time claims adjudication to minimize billing issues, Kennedy predicted.

While real-time adjudication will help physician customers of Companion Technologies collect payment from patients while the latter are still in the office, that doesn't necessarily mean that doctors will see faster payment from insurers, Galloway cautioned.

Whether that happens will be up to individual insurers, he said.

If there's a dispute about coding or whether a service is covered, the doctor's office will receive a claim number, and the office and insurer would resolve the dispute the same way they handle those disputes today, Galloway said.

That also would apply in instances when the insurer later determines a claim was erroneously approved or errors were found after the fact.

"It's absolutely no different [than what happens today]," Galloway said. "All we're doing is providing information back to the doctor's office faster than they are getting today."

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