How to Bill a Medical Claim – Before the Patient Leaves

A June 28, 2010 NY Times article by Randall Stross, See You in 6 Months. And the Insurer Is OK with Your Bill, offers some insight into the future – and challenges – of medical billing in an area known as real-time adjudication or RTA. 

The HIMSS Medical Banking Project first addressed aspects of this topic in 2001 (before acquisition by HIMSS in 2009) through extensive market outreach including over 240 bankers, numerous government agencies, (Department of Health and Human Services, Office for Civil Rights, Federal Reserve and US Treasury), provider engagement and many others. 

Among the factors that we, at the HIMSS MBP, believe must be addressed for RTA to proceed:

Policy:  To implement a real-time process, banking and healthcare systems need to be electronically linked with more private health data flowing through banking systems. The HIMSS Medical Banking Project developed a “Gold Seal” diagnostic tool kit to identify areas of risk to help organizations comply with the HIPAA/HITECH mandates (as well as other data privacy regulations).

Early in the development of medical banking, we drafted white papers that were published by LexisNexis, defining the legal and regulatory issues in the development of inter-organizational systems in banking and healthcare. Our work was later drafted into a letter by the National Committee on Vital and Health Statistics, a statutory advisory to HHS on health-related issues and to HHS advising of HIPAA’s impact on banking systems (an area some banking groups sought to avoid in the initial stages).

As we move from paper to electronic processes, privacy and security is an ongoing issue. Privacy and security of health data is much like identity theft in that we’ll always be “fighting the bad guys” to keep it private; so this is an evolving issue.

Organizational Transformation:  Essentially, providers are so used to an aged trial balance of receivable that the concept of real-time really takes some good thinking to implement. This is not surprising given where we’ve been. Thus, appropriate billing of a claim before the patient leaves, when the treatment is unclear upon entry, remains a challenge as does the charge capture process within the institutional setting so that systems, processes and people are aligned for real-time.

Convergence of Banking and Healthcare Technologies: If providers simply knew the deductible at point of service, we could efficiently tackle over 90% of all claims (per early research reports from a provider of a real-time payment technology platform). This, of course, will require technical linkage between banking and healthcare systems in that knowing what to pay then kicks off a series of technologies that can effectuate the payment (with patient authorization to do so).

Operating rules: H.R.3590, Sec 1104 (the health reform bill) appropriately creates a federal action plan that will mandate the creation of an electronic platform for healthcare claims and payment management. HIMSS is teaming with the appropriate groups that can assist HHS in creating the operating rules for health data transaction management in America. This is an evolving area but we think it will bear much fruit in this exciting area.

The HIMSS Medical Banking Project has long-held that healthcare providers alone can derive a $35 billion annual cost saving from streamlining this complex area.  Another group that has captured some of this thinking is the US Healthcare Efficiency Index (see http://www.ushealthcareindex.com/) that estimates $30 billion could be realized by moving the dial in electronic claims processing. With savings like these, this issue remains at the center of our work to improve healthcare in America; a goal that has strong implications globally as well. While there are hurdles, if the marketplace can implement instances of real-time processing and document the administrative benefits to all parties, new best practices around this area could emerge.

HIMSS Business-Centered Systems is working on a program dubbed “G7” that brings together seven key stakeholder groups (providers, health plans, banks, consumers, government, technology, employers) focusing on designing the healthcare financial network of the future. With plans for the first official G7 meeting in October at our Leadership Forum, our community will focus on RTA and provide an advisory report that could include a pilot program.

RTA is an interesting concept.

I recently spoke with Bill Marvin, CEO of InstaMed, an organization that has been at this for some time and has been a long-standing member of the HIMSS MBP.  We discussed other dependencies, such as systems alignment; even if processes were changed for RTA, it doesn’t mean that it will happen. Many times the payer system processes payments in batch so even if the adjudication happens in real-time, it doesn’t mean the payment will be made in real-time.

So RTA could occur without real-time payment.

He suggests that the “hotel method,” referring to taking a card and billing after the visit, may be the best process we have going forward, especially relative to the immediate need of the provider’s revenue coming from the patient and not a third-party health plan.

We are still in the very early parts of “RTA innovation” and we’d love to know what you think about it. Comment and let us know!