EDI saves Indiana practice time, money

But function still labor-intensive

Although various electronic and automated claims processing systems have been introduced into the health care industry, the administrative burden and cost of processing medical claims continues to rise for many practices, according to one Indiana-based group practice that has converted to electronic claims processing.

"We’re doing everything we can to automate everything we can," says Mary Valdez, manager of patient accounts for the Indianapolis Women’s Health Partnership (WHP).

Yet, despite the fact 80% of WHP’s claims are processed electronically (compared to the 50% to 60% national average), it still costs this group practice an average of $7.42 to process each claim, which the practice still considers expensive.

"I was alarmed at the lack of sophistication of the computer systems and the lack of industry benchmarks in health care compared to banking," says Valdez, who worked in the banking industry before coming to health care. "In banking, I could move hundreds of millions of dollars in a matter of minutes. But once I started in patient accounts, I was amazed to find myself having to send a $10 claim to an insurance company three times before it would get paid."

The introduction of electronic data interchange (EDI) has cut two weeks off WHP’s claim payment cycle. Instead of two and a half months for the average claim to be paid, it now takes two months.

Even with EDI, 30% to 35% of all WHP’s claims are denied because of alleged errors or missing information, she says. "This claim rejection rate is compounded by the problems WHP’s various prime payers are having with their EDI systems. Our EDI system may show a claim has been accepted by the payer, when in fact it has been lost or has just disappeared," says Valdez.

Because electronic claims often make multiple stops among three or four entities before reaching the end of their processing ride, this makes it "hard to figure out who is at fault, who didn’t get it, and where it was lost," says Valdez. Backtracking is supposed to be a key element of an EDI system, but in reality, it takes a lot of work to find the claim. Historically, researching this problem with payers often takes a couple of weeks.

As an alternative, WHP has moved to a "real-time" claim resolution system distributed by RealMed Corporation of Indianapolis.

"With a real-time system, before the patient leaves our office, they are given an automated accounting of how much their insurance covers for that visit, and how much, if anything, the patient owes, without filing any paperwork," says Valdez. "By taking care of the transaction in one setting, with the patient present, and not having to reopen the claim file three or four times, we are starting to move our savings from processing claims into more quality care for the patient."

On a larger scale, Health First, a Melbourne, FL-based health practice with specialties in cardiology and women’s and children’s services, has expanded its electronic medical records and claims management to make them easier for the ambulatory physicians in its 29 clinics to use.

"This is an active managed care market with many patients who need both primary and specialty care," says Rich Rogers, Health First’s vice president of information technology and chief information officer. "We know that to capture and retain patients, we have to make their experience with us satisfying. Electronic records are key to reaching this objective."

For instance, Health First wants any authorized caregiver in the system to have a patient’s records available to them whenever a patient arrives for a visit. "This assures them they’re being cared for in a close-knit and efficient health care community, and they avoid the hassle of a new chart work-up by each provider they see," says Rogers.

Look for built-in coding prompts

Significant improvement in coding by physicians is one of the key benefits Rogers expects the new system to produce. "One of the keys when evaluating new software is whether it has built-in prompts and lists that cover practically every procedure. This really simplifies the process and all but eliminates under- and overcoding. In turn, we bill and receive a reimbursement rate that reflects the care we’re providing," he says.

The evaluation process for picking the new system took about six months. Health First picked software named Logician, produced by MediaLogic of Hillsboro, OR. Logician easily fits into the organization’s current information technology infrastructure. "Logician scored well given that it runs in Windows 95, Windows NT, and Novell environments, and is HL-7 compliant. Also, being based on Oracle, it meshes well with our financial and human resources systems," Rogers said.

Another important element in the software evaluation process is the ability to accommodate the different needs of the various practice disciplines in Health First’s 29 clinics. This meant finding a product whose screen icons flowed according to the way most physicians practice, or that could be easily customized to meet specific needs.

Other items Rogers found important in making the final choice included the ability to track immunizations, the ability to add a module that automates the prescription process, and the ability to print patient handout materials. "These are the kinds of features that really boost practice efficiency, " he adds.

Health First also is integrating the software into its new after-hours call center, which is designed to serve out-of-town visitors needing a primary care physician. Nurses will field calls from patients, enter their medical information in Logician, forward it to the nearest Health First clinic, and schedule the next available visit. "When the patient arrives, the record will already be there. It’s a way for us to build our business base and deliver exceptional patient service," Rogers said.