WITH THE INCREASING trend toward consumer-directed healthcare, providers can add another specialty to their list: bill collector.
Interim solutions
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"For providers, health savings accounts [HSAs]can cause an administrative nightmare," says Cynthia Blain, CPA, director of
SS&G Healthcare Services in Solon, Ohio. "Most claims are filed electronically to insurance companies at a minimal cost. Now
with the new HSA trend in the industry, the provider side is seeing increasing difficulty getting the money that is owed to
them for services rendered. Not only is the cost of collection higher [postage, statement processing, and follow-up correspondence],
but the average payment rate is significantly lower because of the rate of nonpayment or slow payment of patient balances."
Those slow payments and non-payments cause a cash flow problem that real-time claims adjudication (RTCA) could solve.
"The notion of real-time adjudication has been around for some time. The consumer-driven health plan business model has made
it a priority," says Janice Young, program director at Health Industry Insights, an IDC company, Framingham, Mass. Young is
responsible for researching healthcare insurance at the advisory services and market research firm. "If you're a provider
and you bill a patient's insurance company and get paid something eventually, there's no real impetus for real-time transactions.
But now providers have to worry about consumers with bad debt—or not being paid at all. So real-time claims strategies are
directly related to the execution of consumer-driven, direct business models." In today's world of electronic payments, consumers expect to know what something costs ahead of time and pay for it immediately.
MHE Executive View
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"It's not only a system challenge, but a challenge to the fundamental understanding of the way healthcare is going to change,"
says Tom Young, MD, senior vice president and senior medical officer for Connextions Health in Orlando. "The consumer doesn't
want to ask five people what something will cost. They want to know exactly what they're going to pay for something."
The sea of change will be led by larger health plans such as Humana, Blue Cross and Blue Shield and United as they execute
real-time transaction in demonstration models, says IDC's Young, however, she agrees that the change will be fed by the trend
toward a consumer health plan strategy.
Physicians now have to manage direct consumer payments and insurance claims. The systems and technology to bill directly at
the point of care are not universally implemented. Many providers use third-party billing companies who execute claims to
insurance companies in batches, not in real time. Because each provider usually deals with multiple insurance companies, the
challenge of determining what each plan pays is daunting. There isn't a universal way to exchange electronic financial data
in healthcare the way there is in retail.
"Assuming someone could get beyond the issues on the provider side, now we get into health plan technologies," says IDC's
Young. "Many use multiple legacy applications not suited for handling real-time processing. It's difficult, when multiple
systems need to 'talk' to each other, as it were, to get a real-time response. It's not that they can't. Auto-adjudication
rates [adjudication without human intervention] have been increasing to where 68% to 70% of claims are automatically adjudicated
now, but that doesn't mean they're done in real time."
