By Vanessa Fuhrmans
The Wall Street Journal
February 14, 2007
Doctors increasingly complain that the insurance industry uses complex, opaque claims systems to confound their efforts to get paid fairly for their work. Insurers say their systems are designed to counter unnecessary charges and help keep down soaring health-care costs. Like many tug-of-wars over the health-care money pot, the tension has spawned a booming industry of intermediaries.
It’s called “denial management.” Doctors, clinics and hospitals are investing in software systems costing them each hundreds of thousands of dollars to help them navigate insurers’ systems and head off denials. They’re also hiring legions of firms that dig through past claims in search of shortchanged payments and tussle with insurers over rejected charges. “Turn denials into dollars,” promises one consultant’s online advertisement.
The imbroglio is costing medical providers and insurers around $20 billion — about $10 billion for each side — in unnecessary administrative expenses, according to a 2004 report by the Center for Information Technology Leadership, a nonprofit health-technology research group based in Boston.
Some companies are profiting from arming both sides. Ingenix, a unit of UnitedHealth Group Inc., the country’s second-biggest health insurer, sells insurers systems to screen doctor’s claims while promising doctors its software for them will “help you take a more assertive stance on fair and accurate payment.”
The denial-management industry’s rise shows how much of medical spending is consumed by propping up and doing battle over an arcane patchwork of claims systems. Roughly 30% of physicians’ claims are denied the first time around. Sales of physician-billing and practice-
management technology grew 25% to more than $7.5 billion last year, estimates Jewson Enterprises, a health information-technology research firm in Austin, Texas.
Some doctors say they see insurers stepping up efforts to keep a lid on reimbursements. One increasingly popular tactic among health insurers is to hire “health-care claims recovery” teams or software to dig through claims, some as old as two years, to see if they overpaid and seek redress. That’s partly because more states have been adopting “prompt pay” laws that require health insurers to reimburse claims within 30 or 60 days, says UnitedHealth spokesman Tyler Mason, which sometimes doesn’t leave enough time to review them first. “We need to have a way to still thoroughly review whether a claim’s paid correctly or not,” Mr. Mason says. Some insurers demand the money back. More, though, simply deduct it from future claim payments. That forces doctors to appeal the claim all over again.
By Don McCanne, MD
Let’s see. Our health care system is plagued with highly burdensome, expensive, inefficient, wasteful administrative excesses due to our ineffective, fragmented system of financing health care.
So what is the response from the industry? They provide highly burdensome, expensive, inefficient, wasteful administrative services to administer the highly burdensome, expensive, inefficient, wasteful administrative services that they are already providing.
And our policymakers want to reform health care by mandating more of this? Get real!