« Paul Krugman: Once and Again | Main | Try to Get Lucky »

Thursday, May 25, 2006

The Cost of Getting Paid

"Tardiness or refusal to pay what doctors consider legitimate medical claims may add as much as 15 to 20 percent in overhead costs for physicians":

The Check Is Not in the Mail, by Milt Freudenheim, NY Times: Few things rankle a doctor more than an insurance company's saying it cannot find a claim for medical services. ... It is a problem known to many doctors as they struggle to balance the rising cost of providing patient care with what they see as a reluctance by some powerful insurers to pay promptly.

Pediatric Alliance's 37 doctors are among the 7,000 physicians, nurse practitioners and other health care providers around the country who are clients of the claims-processing company Athenahealth, which plans today to present a rare warts-and-all look at how well — or not — the nation's seven biggest health insurers pay their bills.

Not well enough, in many cases, according to the data and to experts... Tardiness or refusal to pay what doctors consider legitimate medical claims may add as much as 15 to 20 percent in overhead costs for physicians...

The survey, an analysis of more than five million line items from health insurance claims submitted in the last three months of 2005, sheds light on the challenges that doctors and their patients face in getting their bills paid.

"We all pay that cost," said Dr. William F. Jessee, a pediatrician... "It winds up getting passed on to consumers and employers who purchase health insurance." The data may also provide the glimmer of an answer to a seeming conundrum: How is it, as the nation staggers under growing health care costs, that the commercial insurers responsible for paying much of the bill tend to be highly profitable and have stocks that are performing well? Tight-fisted approaches to paying bills may be part of the answer.

Athenahealth concedes that its survey, while broad and fairly representative of a cross section of the nation's doctors, is not statistically scientific. That is a limitation that WellPoint, the nation's largest commercial insurer, quickly pointed out in saying that its own poor showing was unjustified. ... Most of the other national insurers in the report, which also included Aetna, UnitedHealth Group and Cigna, regardless of how they fared, acknowledged the survey as a unique and potentially useful snapshot. ...

Phil Pead, the chief executive of Per Se Technologies, a large claims-handling company ... said errors made by doctors' offices also accounted for a large share of their problems in being paid. "About 40 percent of denials occur because of incorrect information — the wrong insurance card or address or other information," he said. ...

The results are to be posted for public viewing today on a new Web site, www.athenaPayView.com, and revised every three months. ...

Doctors in a number of states said they welcomed the Athenahealth report, which also compared dozens of regional insurers around the country. Dr. Molly Katz, a Cincinnati gynecologist and former president of the Ohio Medical Association, said she hoped the publicity would encourage insurers to improve their payment practices. "I would much rather have my staff talking to patients than talking to insurance companies," Dr. Katz said.

I'm not sure how much to make of this given the statements about statistical validity, hopefully that will get resolved over time, but even with uncertainty the costs appear large, especially since there are additional costs over and above the extra overhead costs to physicians described above. For example, the administrative costs to insurance companies from screening applicants and reviewing claims are also significant.

    Posted by on Thursday, May 25, 2006 at 12:33 AM in Economics, Health Care, Policy | Permalink  TrackBack (0)  Comments (5)

    TrackBack

    TrackBack URL for this entry:
    http://www.typepad.com/services/trackback/6a00d83451b33869e200d834c4af5169e2

    Listed below are links to weblogs that reference The Cost of Getting Paid:


    Comments

    Feed You can follow this conversation by subscribing to the comment feed for this post.

    -->