Clinical, Financial and Administrative Insights For Physicians

Medical Billing : You Could Be Richer By $29 billion.

Posted by Alok Prasad

I was recently reading a report on US Healthcare efficiency Index. It confirmed what we all know from our experience of working intimately with various healthcare providers - paper costs and it kills as well. About $30 billion is wasted on paper in American health care, 2/3 of which is related to paper-based medical billing that includes medical claims, billing, and payments by check to doctors and hospitals.

To give you some perspective of what this means, here are some numbers from the report to ponder about:

Claims:

Presently 75% electronic utilization
Provider cost savings electronic vs. paper: $3.73
Payer cost savings electronic vs. paper: $0.73

Eligibility:

Presently 40% electronic utilization
Provider cost savings electronic vs. paper: $2.95
Payer cost savings electronic vs. paper: $1.38

Claim Status:

Presently 40% electronic utilization
Provider cost savings electronic vs. paper: $3.33
Payer cost savings electronic vs. paper: $2.56

Claim Payment:

Presently 10% electronic utilization
Cumulative Provider and Payer cost savings electronic vs. paper: $4.80

Claim Remittance:

Presently 26% electronic utilization
Provider cost savings electronic vs. paper: $1.49

TOTAL:

Total unrealized industry savings: $29,718,502,500
Present transaction types by percentage: 57% paper / 43% electronic

This begs the questions: aren't billing and payment transactions already electronic? Didn't HIPAA simplify administrative aspects of healthcare years ago? If so, what really happenned?

Medical BillingAccording to the report, these are common misperceptions about the business side of healthcare. The facts are quite different indeed. While Health Insurance Portability and Accountability Act of 1996 (HIPAA) addressed administrative simplification, and it was hoped that this would provide the mandated framework necessary to unify the system in transition to automation, it did not provide any detailed operating rules, leading to significant operational variances from payer to payer. It not only resulted in inconsistent formats but has also mades it almost impossible to create interoperable and fully electronic systems.

The Administrative Simplification provisions of the healthcare reform legislation are designed to accelerate the standardization of transactions and solidifying a set of operating rules that will eliminate these kinds of inconsistencies.

Healthcare industry can accrue these benefits irrespective of whether or not the perceived benefits of EHRs are realized. As we have seen the meaningful use of EHR definition and certification process has ben dogged by political controversies and / or clinical concerns. I have no doubt in mind that they will get resolved in the mid to longer term timeframe, but surely they will not get resolved in the short term.

Why not start off by saving $29 billion by moving rapidly towards increasing use of electronic administrative transactions? There are no forms to fill out, no data to report.

________________________________________________

RevenueXL Inc. provides best value comprehensive solutions to medical practices. Our solutions include affordable Electronic Medical Records Software (a.k.a. EMR or EHR Software), Patient Portal, and Practice Management or Medical Billing software and revenue cycle services including medical billing, medical coding, coding audits and account receivables management services. RevenueXL offers a free consultation session to review your current challenges and answer open questions revolving around EMR and revenue cycle.

Tags: EHR Software, Meaningful use, Medical Billing

Get Blog Updates by Email

New Call-to-action

Free EHR Software Replacement eBook

Contact Us

Browse by Tag