While information technology is something of a novelty in the clinical areas of many medical practices, administrative and billing functions have long been computerized in physician offices.
Indeed, 80% of physician executives who took the 2002 Modern Physician technology survey represent practices that use computers for billing and claims submission, and nearly 75% have electronic scheduling.
Yet one critical piece has been missing: direct links to payers.
That, too, is changing as large health insurers go live with Web portals that offer instant claims submission, real-time adjudication and automated explanations of benefits-often before patients leave the doctor's office.
Consultants at Cap Gemini Ernst & Young found that 53% of health insurance companies allowed physicians to submit claims through secure Web sites as of last March. The number dipped to 44% in October because some payers took their sites down to get their portals ready to handle HIPAA-specified code sets, Cap Gemini says, but more recent developments suggest the lull was temporary.
As the new year began, seven major commercial insurers-Aetna, Anthem, Cigna, HealthNet, Oxford Health Plans, PacifiCare Health Systems and WellPoint Health Networks-sold their automated claims processing venture, MedUnite, to ProxyMed, a healthcare transaction technology firm.
ProxyMed, of Fort Lauderdale, Fla., then formed a partnership with NDCHealth, a data processor, practice management systems seller and former MedUnite investor.
ProxyMed projects MedUnite will have annual revenues of $70 million and, with the partnership, will handle 200 million transactions annually from 140,000 physicians who use NDCHealth billing software
Meanwhile, several Blue Cross Blue Shield licensees have embarked on designing their own online claims adjudication systems, among them Anthem, Empire BlueCross BlueShield, Blue Cross and Blue Shield of Florida and BlueCross BlueShield of South Carolina.
Since late 2000, some 20,000 physicians and 210 hospitals in Florida have been wired to submit electronic claims to Blue Cross and Blue Shield of Florida, according to Vice President Patrick Haley. Seven of every 10 claims from these providers come in electronically, and 80% of those are adjudicated "without any human contact," Haley says.
Physicians typically are paid 11 days after an adjudicated claim hits the Blues' computers. But, Haley says, only about 5% to 7% of electronic claims are adjudicated in real time because physicians still rely on clearinghouses rather than going to the expense of linking their back-office information systems with the payer's systems.
"That's the last piece of the puzzle," Haley says. "It's an economic problem, not a technical problem. Everybody is fighting over who's going to pay for it."
As a result, he says, "There hasn't been any progress with that black hole in years."
In Florida, the Blues and Humana control about 31% of the commercial health insurance market, says Julie Klapstein, CEO of Availity, a joint venture of the two payers built on the early work of the Blues' Virtual Office project Haley spearheaded.
In Florida, at least, that high level of market penetration has solved the chicken-or-the-egg problem other regions face in trying to set up claims adjudication systems, Klapstein says. It takes a certain level of cooperation for payers to attract enough physicians to sign up to make payers' investments in a system feasible, and without a system to target, programmers for practice management vendors have nothing to integrate their systems with.
Today, under the Availity partnership, more than 7,000 physicians' offices and hospitals are connected, Klapstein says. About 1,055 of those sites have integrated their billing systems with Availity so they can do eligibility and benefits checks in real time.
So far, five practice management and IT vendors have integrated their back-office systems with Availity for that purpose, she says. Providers that use a Web-based, practice management ASP have an advantage in making those connections easier, Klapstein says.
Availity also can process and adjudicate a Florida Blues HMO claim in real time over the web. They're still developing the system to handle real-time claims adjudication for their PPO and other products. Humana plans to add this capability in 2003, she says.
With a typical clean claim, "it goes through in less than 17 seconds, adjudicates the claim and gives a response," she says. But the real advantage to providers comes from claims with problems.
"Edits at the time of entry tell providers immediately there is misinformation," Klapstein says.
The problem is, none of the physicians' back-office systems hooked to Availity can handle real-time claims adjudication in a single pass. That forces office workers to double enter the claim on the Availity Web system if they want it processed in real time.
"I think the integration on the Web will start to happen in the next year to 18 months," Klapstein says. She says she expects about half of its providers to avail themselves of real-time processing in three to four years.
"It depends on how rapidly the vendors and providers upgrade their systems," she says.
South Carolina Blues is moving forward by targeting small medical practices to enter claims information through the Web.
That Blues plan has been accepting HCFA-1500 claim forms via its My Insurance Manager Web site since April 2001 and added real-time adjudication one year later. The insurer launched real-time Universal Bill-92 (HCFA-1450) institutional claims processing in November, opening the system up to about 9,000 healthcare providers statewide.
After processing 57,000 submissions in 2001, South Carolina Blues handled 225,000 online medical claims in 2002. Through mid-December, 1,218 physicians were participating; some 90% of the claims submitted through the Web are being processed through the Web, according to David Boucher, assistant vice president for healthcare services.
"I would think that we will increase our volume somewhere between 50% and 100% (in 2003)," Boucher estimates.
With My Insurance Manager, practices can edit claims on the Web. If the system spots an error during data entry, administrators "can correct that online before they submit it," Boucher says. The claims then go right into the Blues' mainframe computer, bypassing any clearinghouse or other third party.
"Larger practices will still submit batch claims," Boucher says. "This is a free alternative for small practices who don't think that they can afford EDI software or practice management systems."
Though Boucher says it takes a full minute to enter each record, administrative personnel do not have to check back later because the system returns a claim number immediately, permitting them to tell patients on the spot if there is a balance due.
The payer usually cuts a check within four to five business days, according to Boucher. "It really speeds cash flow," he says.