Midwest alliance focuses on quicker claim payments

Company mounts effort to seek solutions

As conflicts between physician groups and payers intensify over how speedily claims are being paid, one electronic claims processing firm says it has a new product to solve the problem. And it says it has devised a unique way to promote the system: Form an alliance of physicians and practice administrators to lobby insurers and plans to install its system.

The Indianapolis-based RealMed Physician and Practice Manager Alliance was organized in October "to address what we believe is the single most important issue facing the provider community: making the current claim processing and payment process faster, less time-consuming, less costly, more secure, and more convenient for patients, physicians, and their staff," says RealMed spokesman Dan Perrin.

The purpose of RealMed’s Alliance is simple: lobby plans to install faster, more accurate electronic claim processing and payment systems — which the company hopes will be RealMed’s system. Membership in the Alliance is open to any provider, not just RealMed customers. "We wanted to provide a forum for providers to organize around the idea of having plans install faster electronic payment systems, then communicate this desire to payers," says Perrin. Meanwhile, RealMed hopes to develop a loyal customer base — something like Saturn has done with car buyers — which will prompt more plans to use its product.

"According to a Booz-Allen study and the Journal of American Medical Association, 84% of a nurse’s time is spent on administrative duties. According to the same study, almost 40% of a physician’s time is spent performing administrative duties," says Perrin. "Our system can greatly reduce this time and cost by resolving claims before the patient leaves the physician’s office."

"We have identified the most vexing problem in our industry, and are working to fix it," says Kevin McCallum, MD, an Indianapolis internist and member of the Alliance. "It is my diagnosis that claim processing and payment issues are at the heart of most of the physician-payer acrimony.

"Obtaining timely and correct payment from third-party payers has become the major problem for medical practices. Lost claims, delayed claims, and dirty claims mean that physicians wait months for payment for services rendered," says another Alliance member, Paula Y. Sowers, office manager for Associated Vitreoretinal and Uveitis Consultants in Indianapolis.

The goals of the RealMed Network represent the ideal of claims processing: The patient’s eligibility status is verified when he or she checks in at the office, the amount of the patient’s deductible and/or co-pay is produced, and an explanation of benefits (EOB) is printed out and the claim is processed before the patient leaves.

"We have designed the process to be much like buying groceries at the supermarket. Normally, when a consumer purchases a product or a service, the consumer knows how much it costs," says Robert B. Peterson, chairman and CEO of RealMed.

Besides processing claims, the system also collects and sends the payer clean encounter data in real time, allowing better case management and analysis of the claim or encounter data by actuaries and plan administrators.

Two months vs. 69 seconds

Last November, RealMed concluded six weeks of pilot tests involving some 500 physicians, mostly in Indiana and the Midwest. Pilot participants ranged in size from single physician practices to 50 physician groups with eight satellite offices.

"The current claim resolution process at most pilot practices — electronic or paper — presently takes about two months," says Perrin. According to Seattle-based actuaries Milliman & Robertson, it costs the average payer $11 to receive a claim, review it, print and send two EOBs (one to the patient and one to the physician), and print and mail the check to either the physician or the patient.

According to RealMed, the average elapsed time from claim transmission to completion of repricing, claim adjudication, and acceptance of the claim by the physician’s staff during the pilot was 69 seconds.

Before the pilot test, the practices had an average of 30% to 35% of their claims rejected for errors. With RealMed, 99.96% of their claims were error-free, according to company officials.

"Many offices are stuck doing billing the old-fashioned way where you print a claim form, seal it in an envelope, and wait several weeks or months for a response. In our office, it takes six full-time employees to enter charges, file claims, and follow up with insurance companies," says Sherry A. Coleman, operations manager for Indianapolis Gastroenterology & Hepatology, which participated in the pilot test.

"We think these private networks could have a tremendous impact in re-establishing a positive relationship between physicians and insurance carriers across the country."