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Physicians have historically been lacking in collecting on bad debt, and now the cost of tracking it down might not be worth it
The move by some employers to raise deductibles, co-pays, and out-of-pocket expenses for their employees is fueling a concern about bad debt as patients walk away without paying up. Real-time information would prevent much of the guesswork, but today real-time transactions are more of an exception than a rule.
Often, it can cost more for physicians to collect smaller amounts than the actual debt itself, putting providers in a bind. Members might feel that they don't owe any fees once they walk out of a provider's office, reasoning that insurance will take care of the bill.
"The growing popularity of consumer-directed health plans translates into a number of issues, including members who don't know how much they owe when they go to the doctor," says Augusta Kairys, vice president of provider relations for Highmark, a Pittsburgh-based health insurer. "At the same time, doctors have historically not been good at collecting these amounts. Once a patient walks out of the office, the chance of collecting owed money drops. That means bad debt for the provider."
Real-time technology can help streamline the transaction by giving providers the up-to-the-minute data on each member's deductible and financial responsibility before they leave the care site.
"It will create a much stronger process to make sure there is a collection of member liability," Kairys says. "It's an essential tool for providers and members."
Real-time technology in hospitals can help staff keep track of expensive equipment, for example, which can maximize use and the return on the investment.
The bottom line is that real-time technology can help the healthcare industry control its costs if it is used to its fullest extent, says Orie T. Mullen Jr., vice president and chief operating officer of Louisville, KY-based Humana Military Healthcare Services, an administrator of the Department of Defense's TRICARE program.
Humana Military uses Availity's Health Information Network, a secure Web portal that employs real-time technology for inquiries into eligibility, benefits, and claims' status. Between 70% and 75% of its claims are processed electronically (up from slightly more than 50% during the past three years).
The insurer, which provides healthcare services to nearly 3 million active duty and retired military personnel and their families in the southern U.S., expects the technology to reduce costs and improve the member's experience, Mullen says.
For providers, real-time technology means a claim can be processed that much quicker. Mullen says the "human element" is eliminated because there is no need to translate and interpret a document manually.
"Providers file the claim right into our system," he says. "They get paid quicker."
For members, the biggest benefit is understanding their out-of-pocket contributions upfront, he says. The potential is also there for members to research treatment cost ahead of time.
Kairys says real-time technology has the promise to improving members' awareness of not only what they are paying for in terms of their own treatments and procedures, but also the true cost of healthcare.
Highmark, which serves more than 4.5 million members in Pennsylvania, uses real-time tools through its provider portal. Real-time claims processing and member liability estimation gives providers the ability to reconcile payment for services at the point of care.
The portal's tools have enabled physician practices to obtain reimbursement from Highmark within three days instead of 15 to 20 days, Kairys says.
"It's helpful to us to have a consumer educated about what they are paying for and understanding the care they are getting," Kairys says. "We feel a member will be more strongly engaged in their treatment plans if they question some of the costs of their healthcare."
It's all about visibility and access to data according to Mullen.
"It reduces inefficiencies and the cost to providers and the health plan, and it improves the patient experience," he says.
Ken Krizner is a Cleveland-based freelance writer.