AMA initiatives fight inequities of claims processing

There is nothing more frustrating in my solo practice than an unpaid seemingly clean claim. It's not like I have a cadre of people doing my billing. It's just me and my medical assistant. Thank goodness for the Private Sector Advocacy department at the American Medical Association.

One of the more unique aspects of the AMA, in my judgment, has been its concern not only for its members but for all physicians and medical students nationwide. Fighting inequities and inequalities on behalf of all physicians is not only remarkable -- but also effective.

Two recent examples come to mind.

The first example is the AMA's National Health Insurer Report Card, an objective and reliable source of information on the timeliness, transparency and accuracy of the job health insurers do in processing claims for payment.

In short, the Report Card starts from the assumption that patients pay for their care both directly and indirectly, and insurers should pay claims as professionally as they collect premiums.

The Report Card is based on a random sample of more than 5 million electronically billed services from Medicare and seven national commercial underwriters.

Some of the findings:

• Health insurers pay nothing in 3% to 7% of the claims received. They do so inconsistently. Their explanations for nonpayment are confusing, making physician responses expensive and time-consuming.
• In 13% to 38% of the cases, health insurers misreported the correct contracted payment rate. Again, isolating mispayment adds costs to a physician's practice if the physician even catches the underpayment.
• More than 50% of insurers mask important details needed for efficient claims processing. Lack of transparency again translates into higher administrative costs.
• Insurers employ a dizzying array of pricing rules in often capricious ways. There is extreme variation among payers in applying computer-generated edits to reduce payments. Payers use undisclosed, proprietary edits. All this adds to the administrative burden on physicians.
• On a positive note, recent prompt-pay laws appear to have been effective in ensuring relatively quick responses to electronic claims.

All physicians benefit from this watchdog approach. And we all benefit from a second AMA initiative -- its Heal the Claims Process campaign. One dollar out of every eight in a typical revenue stream goes to the cost of ensuring accurate payment for rendered services alluded to in the Report Card.

Hurdles to effective collection range from third-party-payer delays and denials to opaque explanations of benefits. And physicians are virtually paralyzed when trying to determine whether payment received was, indeed, accurate.

To level the playing field, and to decrease administrative costs from the current 14% to a figure closer to 1%, the Heal the Claims Process campaign enlists not only physicians but also payers themselves in an effort to eliminate waste; to yield a dollar's pay for a dollar's worth of work.

In simplest terms, the campaign eliminates much waste by getting things right the first time:

• Submitting timely and accurate claims the first time to eliminate rework.
• Reviewing claims payments for accuracy every time to detect and correct errors.
• Appealing underpaid or denied claims every time, thus helping payers improve their processes.

That's our physician side of the equation. On the payer's side, the campaign stresses accurate payment the first time as just good management practice. Second, payers can comply fully with HIPAA electronic standard transactions, helping physicians benefit from the savings technology produces. Third, payers can simplify fee schedules, payment policies and other communications -- making them clear, complete and concise. All of these save the payers money, too!

Those three steps alone professionalize the transaction, modernize the procedures and clarify what is now a murky mess.

In an era when costs of health care are front and center in public discourse, substituting electronic transactions for all the manual processes currently involved in the claims process could eliminate $90 billion in unnecessary administrative costs from the health care industry, according to one study. That's an average $30 per claim.

The AMA has a series of resources physicians can use to review and reconcile their claims quickly, consistently and effectively. Some of these tools are available free to all physicians. Others are available at no charge to members only.

Either way, physicians can benefit. I urge you to visit the Practice Management Center Web site the AMA has established to help you -- whether you are a member or not (link).

It's a one-stop shopping site with checklists, figures and tables, and instant links to key places within the documents themselves as well as to additional AMA resources and tools. There are master template letters to use in appealing claims. Anyone can adopt them.

AMA members can download and alter them as needed with their own practice logo and supporting text. Health insurer follow-up logs and reference logs ensure follow-up and follow-through. And there are step-by-step instructions along the way.

And they all are designed for quick, easy, effective action to optimize the claims process to heal a sick, sick system.

If you are interested in AMA's Heal the Claims Process campaign, it has a Web site that you can visit for details (link). The claims process might sound like a dull, pedestrian, boring topic. But it's as much as 14% of your practice's gross income.

Another good reason for joining the AMA!