Denial Management, Genetic Testing, and Health Care
A lot of money is spent in the health care business just trying to figure out who will pay the bills, something that doesn't happen with a single-payer system:
Fights Over Health Claims Spawn a New Arms Race, by Vanessa Fuhrmans, WSJ: Four years ago, Paluxy Valley Physicians of Glen Rose, Texas, was struggling to recoup more than $500,000 in denied or unpaid claims from insurers. Two of its eight doctors left the practice, while three others had to borrow $100,000 to keep it afloat.
To turn things around, the medical practice turned to Boston-based athenahealth Inc., one of the biggest of hundreds of companies in a lucrative niche: helping doctors wring payments from health plans. Athenahealth's software flagged and corrected the complex coding for thousands of claims, preventing them from getting hung up in insurers' Byzantine rules. Today, Paluxy Valley has whittled its claims outstanding to $179,000 and repaid the bank loan. ...
"The insurers outcode us, they outsmart us and they have more manpower," says Shari Reynolds, the administrator at Paluxy Valley... "Now at least we have a fighting chance."
Doctors increasingly complain that the insurance industry uses complex, opaque claims systems to confound their efforts to get paid fairly for their work. Insurers say their systems are designed to counter unnecessary charges... Like many tug-of-wars over the health-care money pot, the tension has spawned a booming industry of intermediaries.
It's called "denial management." Doctors, clinics and hospitals are investing in software systems costing them each hundreds of thousands of dollars to help them navigate insurers' systems and head off denials. They're also hiring legions of firms that dig through past claims in search of shortchanged payments and tussle with insurers over rejected charges. "Turn denials into dollars," promises one consultant's online advertisement.
The imbroglio is costing medical providers and insurers around $20 billion -- about $10 billion for each side -- in unnecessary administrative expenses, according to a 2004 report by the Center for Information Technology Leadership, a nonprofit health-technology research group based in Boston. ...
The denial-management industry's rise shows how much of medical spending is consumed by propping up and doing battle over an arcane patchwork of claims systems. Roughly 30% of physicians' claims are denied the first time around. Sales of physician-billing and practice-management technology grew 25% to more than $7.5 billion last year...
Here's more on a related topic, health care and genetic testing. I think this is a step in the right direction:
Congress May Prohibit Genetic Testing for Jobs, Health Coverage, by William Roberts, Bloomberg: The Democratic-controlled Congress, with the backing of President George W. Bush, may soon pass the first U.S. legislation preventing the use of genetic testing by employers and insurers.
The measure ... would prohibit health plans from denying coverage or charging higher premiums based on a person's genetic predisposition to disease. It also bars companies from collecting genetic information on employees.
The legislation had been stalled in the Republican-led House for more than a decade because of opposition from business groups such as the U.S. Chamber of Commerce...
With the Democrats now in charge, prospects for passage ''look excellent,'' said Representative Louise Slaughter, a New York Democrat who sponsored the measure.
Scientists and other supporters of the legislation say the lack of privacy protections has hampered research on treatments for cancer and other diseases. They say volunteers have been reluctant to participate in genetic testing to identify a predisposition to disease because confidentiality couldn't be guaranteed. ...
The Senate approved the bill in 2005 by a 98-0 vote. Slaughter said it died in the House because Republican leaders ''would not even hold a hearing'' on it. ''The drug companies and the insurance companies were dead set against it,'' she said...
Does this matter?:
Individuals with genetic conditions twice as likely to report health insurance denial, EurakAlert: A new study published in the February 2007 issue of the American Journal of Medical Genetics reveals that individuals with genetic conditions are twice as likely to report having been denied health insurance than individuals with other chronic illnesses. ...[This is] believed to be the first large-scale study to systematically compare and contrast the health insurance experiences, attitudes, and beliefs of persons with genetic conditions versus individuals with other serious medical conditions. ...
"Anyone with chronic medical conditions should be legitimately concerned about access to health insurance, but individuals with genetic conditions may have additional reasons to worry," said principal investigator Nancy Kass, ScD, deputy director for public health at the Johns Hopkins Berman Institute of Bioethics and a professor at the Johns Hopkins Bloomberg School of Public Health. "We learned that there is considerable concern about being denied health insurance because of a genetic condition, as well as maintaining some privacy about the status of that condition." ...
Almost all of the individuals in the study ... said they obtained their health insurance through either their employer ... or their spouseâs employer... Nearly half of employed individuals ... said they felt they could not leave their jobs because they would lose their health insurance. Individuals with genetic conditions were also more likely to report trying to obtain additional health insurance compared to individuals with other serious medical conditions. Only 67.2 percent of these individuals reported success in obtaining additional health insurance. ...
The Health Insurance Portability and Accountability Act (HIPAA) expressly forbids a group health insurance plan from using genetic information to establish rules for eligibility or continued eligibility. HIPAA also prohibits insurance companies from treating genetic information as a "pre-existing condition in the absence of the diagnosis of the condition related to such information." Individuals cannot be denied health care coverage for a medical condition as a result of a genetic marker for the condition. However, individuals can be denied if they have symptoms of genetic disease. As such, HIPAA provides no protection for the vast majority of respondents in the new study.
"As we spoke to family after family, it became clear that people with all types of medical conditions are quite worried about access to health insurance and make life changes in order to preserve their access to it," added Kass. "But people with genetic conditions may face additional challenges... Bioethicists are problem-finders, and we found a big one." ...
It's not clear to me what the new legislation offers over and above the HIPAA, but any additional protection is welcome.
Posted by Mark Thoma on Wednesday, February 14, 2007 at 12:14 AM in Economics, Health Care |
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