Standardizing medical billing by insurers could cut physician office administrative costs by an estimated $7 billion, according to a newly published study in the journal Health Affairs.
Researchers drafted the estimate based on an analysis of labor and overhead costs to process health insurance benefits and claims at one large academic physician group practice in 2006. The analysis also included $6 million in lost revenue for wrongly denied claims, according to the researchers' calculations.
The study estimated savings of $44 million should the group practice process all benefits and claims using Medicare's payment rules as a hypothetical standard for all insurers. Of that amount, paperwork and follow-up with insurers by doctors and staff totaled $33.1 million. Billing office labor and overhead accounted for another roughly $5.6 million in potential savings.
Such a standard would end opaque and frequently changing rules among commercial insurers, eliminate outpatient referral rules, create a single claim submission deadline and payment posting rules, the authors said. Other benefits include prompt response to claims and electronic processing, according to the study.