Wasteful, redundant administrative tasks like resubmitting denied claims and double-checking patients' health coverage cost the typical 10-doctor medical group almost $250,000 a year, according to a new survey by the Medical Group Management Association.
The study, released during the association's annual conference in San Francisco, is the first using MGMA's Group Practice Research Network, a consortium of almost 300 medical groups that supplies what officials describe as a statistically valid sample of medical specialties across the nation.
The survey, which illustrates the need for a simplified system of financing and administering an increasingly complex healthcare system, indicates that the average 10-doctor group spent about $34,000 negotiating insurance contracts with an average of 15 different health plans a year; nearly $40,000 verifying patient coverage; and about $20,000 on phone calls with pharmacies resolving drug-formulary issues.
Almost 5,300 members and exhibitors are attending the annual conference hosted by the Englewood, Colo.-based MGMA. Over the last year, the association has lobbied for a simplified payment system that would continue to feature multiple payers but would include standardized credentialing, a single set of clinical guidelines, one formulary and a consistent contract form with payers.
The MGMA's plan has not gained much traction. Still, William Jessee, M.D., the president and chief executive officer of the association, continued to push for the plan, saying he was "dismayed" by the figures in the latest cost survey.
"Unnecessary administrative complexity accounts for a large portion of the $1.79 trillion our nation will spend on healthcare this year," he added. "We urge all the stakeholders in our system -- patients, payers, employers and providers -- to face the real cost of this wasteful system and work toward redirecting wasted resources into activities that expand access and improve care for our nation's citizens."