GOOD MONEY AFTER BAD:

Billions Wasted on Billing (Ezekiel J. Emanuel, 11/12/11, NY Times)

How do we get to these savings? First, electronic health records would eliminate the need to fill out the same forms over and over. An electronic credentialing system shared by all hospitals, insurance companies, Medicare, Medicaid, state licensing boards and other government agencies, like the Drug Enforcement Administration, could reduce much of the paperwork doctors are responsible for that patients never see. Requiring all parties to use electronic health records and an online system for physician credentialing would reduce frustration and save billions.

But the real savings is in billing. There are at least six steps in the process: 1) determining a patient's eligibility for services; 2) obtaining prior authorization for specialist visits, tests and treatments; 3) submitting claims by doctors and hospitals to insurers; 4) verifying whether a claim was received and where in the process it is; 5) adjudicating denials of claims; and 6) receiving payment.

Substantial costs arise from the fact that doctors, hospitals and other care providers must bill multiple insurance companies. Instead of having a unified electronic billing system in which a patient could simply swipe an A.T.M.-like card for automatic verification of eligibility, claims processing and payment, we have a complicated system with lots of expensive manual data entry that produces costly mistakes.

The Affordable Care Act requires the Department of Health and Human Services to develop operating standards for electronic eligibility determination and payment -- steps one and six -- in the next few years, but we need to go further. We need the standard operating rules to encompass authorizing tests and treatments, submitting claims, verifying where in the process a claim is and the real-time adjudication of denials. And we must accelerate the process, covering all steps by 2015. Finally, the government needs to require that all parties -- doctors, hospitals, insurers, government agencies -- use the electronic systems.

Posted by oj at November 13, 2011 8:22 AM
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