For years, Debbie DeCarlo, the billing manager of a Hartford cardiology group, battled health care insurers over claim denials.
It’s been a battle that has cost the six-physician practice, Hartford Cardiac Laboratory, big bucks for unpaid bills and wasted administrative staff time.
“The bulk of our time is in denial management. Claim denial, in itself, is a huge problem,” DeCarlo said. “It is almost a game with the insurance carriers and the rules change almost on a daily basis.”
Many insurers, she explains, initially deny a claim and then instruct them to appeal it.
But appeals take time. Staff members in DeCarlo’s billing office are likely to resolve about 10 claims in one workday.
She doesn’t like to paint the health care insurance industry with one broad stroke because some insurers pay claims promptly and properly. Others, however, find ways around the system, and pay doctors much less than what they are owed.
Such was the case with a national insurer, discovered after Boston-based athenahealth installed a new practice management software system that included a claim denial analysis for the cardiology group.
Shortchanging Doctors
The software uncovered a practice of an insurer intentionally shortchanging the physician’s group by paying them only half of what they owed for certain medical services.
The doctors had been losing about $1,000 per patient on certain claims, amounting to about $50,000 in unpaid bills, DeCarlo said. The underpayments went undetected because of the complexity of the current reimbursement system, she explained.
Codes are assigned to a specific medical service, which is supposed to trigger a standardized payment. “Insurance carriers say they are following those guidelines, but it is really a loose interpretation,” DeCarlo said. “I find that the most time-consuming part of everything is the denied claims. Thanks to athenahealth and its software, we caught what was going on. We got every penny back.”
The cardiology group pays athenahealth a monthly fee — about $2,800 or $33,000 per year — based upon the number of physicians, patient volume and a fee they negotiate.
New Trend
Insurance denials are a big problem for doctors, agrees Jess Kupec, the president and CEO of the Saint Francis PHO (Physicians Hospital Organization).
“Historically, it has not been addressed properly,” he said. “We need something.”
As a result, numerous software vendors are now offering electronic solutions. “My phones are ringing a lot more from vendors offering denial management. The market is exploding,” he said.
His concern is that most physicians would have a difficult time determining who is a legitimate vendor. “It is too new and a small physician group wouldn’t know what to do,” Kupec added.
Growth Market
But many doctors, fed up with insurance claim denials, are seeking out software firms specializing in physician administrative needs. Athenahealth, the company DeCarlo uses, has seen its sales grow significantly for that reason.
Year-over-year sales increased by 41 percent, and the firm reported $76 million in revenues last year. It employs 550 people and counts 8,800 physicians on its network, said athenahealth spokesman John Hallock.
The problem for physicians’ groups, mostly small businesses, is that they can’t keep up with all of the new insurance offerings and payment permutations, he said.
“It’s a daily grind for them,” Hallock said. “Practices simply do not know whether they are losing money because of their patient volume.”
