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Practices see slow progress in instant claims adjudication

Real-time adjudication, which allows a claim to be submitted to an insurer and settled before a patient leaves the office, seems like something physicians, patients and insurers can support. Physicians who use it can shorten the revenue cycle and reduce bad debt. Patients like it because they don't get a surprise bill weeks after receiving care. Even insurers like it, because administrative costs of billing and handling inquiries about claims are reduced. But real-time claims adjudication has barely made an impact. By at least one insurer's reading, fewer than 2% of claims are settled this way. While real-time claims adjudication sounds simple, implementing it can be complicated and can require a physician's office to change how it handles billing and collections. Those submitting claims for real-time adjudication find that in almost half the cases, the claim cannot be processed immediately and is handled later by the insurer. Although this might not require additional work for office staff, the low yield is a factor discouraging physicians from participating. Meanwhile, without a standard adjudication system, physicians may have to customize their processes for each different insurer. "We're all sort of running into the same challenges," said Paul Kulpa, senior program manager of consumer-directed health plans for BlueCross BlueShield of Tennessee. Kulpa spoke at Healthcare Payments Solutions Expo 2009 in Chicago July 29-30. The conference examined ways to reduce money spent on the patient billing and payment cycle, which is believed to account for approximately 5% of all health care system costs. Real-time claims adjudication was presented as one possible solution to help cut administrative expenses, but even experts touting it said it is still a long way from common practice. Rates of use Insurance companies are making real-time adjudication possible, primarily in response to demands from employers that increasingly are purchasing high-deductible health plans for their employees. This is viewed as a solution to complaints that the billing associated with these plans is too confusing and leads to patients both under- and overpaying. Physicians who do use real-time claims adjudication appear to like it, said presenters at the conference. Fewer than 2% of medical claims are submitted to an insurer and settled before a patient leaves the doctor's office. For example, a 10-physician practice in Texas participating in UnitedHealthcare's project saved $14,000 in billing costs in a year, said Gregory M. Fisher, UnitedHealthcare's electronic data interchange connectivity director. Another practice reduced accounts receivable by 13% and decreased the average time to collect insurer and patient payments from 45 days to six. According to Kulpa, a physician participating in the Tennessee Blues' program collected, on average, an additional $750 per day. Being able to print out the explanation of benefits on the spot can reassure patients that their payments were appropriate. But only approximately 650 of nearly 14,000 physicians in Tennessee and north Georgia who were signed on with the Tennessee Blues plan were using the insurer's real-time adjudication tools. Less than 1.5% of physicians linked to Humana were taking part in its program. Only 1.7%, about 4 million out of 240 million claims, were submitted to UnitedHealthcare's adjudication system. One barrier to use is how it changes the dynamic of the practice day. "The biggest problem that we have had is changing providers' work flow and adding another step when that patient is standing at the desk ready to leave," Kulpa said. Experts said too few insurers offer real-time claims adjudication to make physicians believe adopting it is essential. More plans need to make this available so it is worth it to a physician to change work flow, said Ken Willman, Humana's director of provider interface. The patient billing and revenue cycle is believed to account for 5% of all health care system costs. Also, experts said making real-time claims software part of practice management systems would help, but adding it to the more than 1,400 different systems in operation is a slow process. Then there's one other problem: Real-time adjudication doesn't always mean claims are settled on the spot. In the UnitedHealthcare program, only 53.4% of claims submitted this way were processed immediately. This number was as high as 89% for gynecology, compared with 58% for family medicine, a difference experts attribute to the fact that certain specialties have less variance in coding. Claims that cannot be adjudicated immediately for various issues, such as needing clinical review by the insurer or the server timing out, do not have to be resubmitted. Rather, the claim drops to usual processing. But a low rate of success also discourages physicians. "You're not going to have 100% of claims real-time adjudicated, but certain claims are more appropriate," United's Fisher said. "Performance needs to be consistently over 50% to support a change in the work flow." In lieu of real-time claims adjudication, some plans offer tools that estimate a patient's share. Data suggest that these types of tools also lead to an increased chance of patients paying their bills. "The more people know in advance, the higher the likelihood they will pay. It's a very important thing to engage them early," said Bobbi Coluni, director of consumer innovations at information company Thomson Reuters, during her presentation on pre-care cost transparency tools. "Billing is more complex. Consumers and providers are very frustrated with not knowing what the consumers will owe in advance." A patient survey presented at the expo showed that 80% of patients using the Cigna Cost of Care Estimator, built by Thomson Reuters, found the estimates helpful. In addition, 74% said that knowing their financial obligations up front made it more likely they would pay their bills. With estimators, however, the claim is not actually adjudicated. So while patients and practices have an idea of the bill, and payment can be made, the terms can change when the claim is processed. The full and original article can be found here: http://www.ama-assn.org/amednews/2009/08/17/bil20817.htm
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