The claims scrubbers

November 13, 2008

03:52 PM

Scrubbing-tech sampler

Claims-scrubbing software aims to rid medical claims of errors and omissions that result in payers' denying or underpaying claims. Among the tools used today are:

ClaimStaker, a Web-based application developed by Alpha II Software Solutions, scrubs medical claims for errors in ANSI 837 fields, the file format used for electronic billing of professional services. The software generates reports of problems that are likely to hamper timely and accurate payment.

ProVation MD simplifies the traditional method for converting physicians' notes into medical claims. The company says its abbreviated method streamlines coding and billing procedures. In place of traditional dictation and transcription procedures, doctors use ProVation to document medical procedures at the point of care.

Netrics makes software that mimics human discernment and the brain's capacity for pattern matching. The solution tackles the type of problem that arises if, for example, a clerk inadvertently enters the name Rogers instead of Rodgers on a medical claim. A purely automated system might reject the claim, even though it was otherwise accurate.

" John Pulley

Explainer: Clearinghouses

On a typical day, several million medical providers using hundreds of information technology applications submit tens of millions of medical claims to thousands of insurance carriers.

In the eye of this informational storm are dozens of medical billing clearinghouses that keep the data moving toward its final destination. Those clearinghouses serve much the same purpose as air traffic controllers. In both cases, the primary goal is to avoid costly crashes.

Medicare and the insurance industry laid the groundwork for clearinghouses. The first one to operate on a large scale was the National Electronic Information Corp., which major insurance companies founded to promote electronic submission of medical claims.

"It was the payers trying to solve their own problem," said Jan Powell, president and chief executive officer of Megas, a health IT company.

Medicare's promotion of electronic claims filing further boosted the clearinghouse concept. The program receives almost all institutional claims and a high percentage of claims for ambulatory care electronically.

"Medicare has supported electronic data interchange for claims for decades," said Karen Trudel, deputy director of the Centers for Medicare and Medicaid Services' Office of E-Health Standards and Services. "We've been among the first to try to move providers in that direction. We then had [Health Insurance Portability and Accountability Act] standards on top of that."

HIPAA designated clearinghouses as one of three types of entities governed by its Privacy Rule for protecting patient data. In addition to sorting and routing claims, clearinghouses identify and correct errors that impede claims processing.

"Clearinghouses are part of the landscape," Trudel said.

" John Pulley

From a clinical perspective, the U.S. health care system is among the finest in the world. Even so, the system for paying providers of health services often resembles a computer age dystopia in which closed loops, inaccurate payouts and inappropriate denials are staples of daily life.

In an era of genetic medicine, advanced imaging and breakthroughs in noninvasive surgery, filing for reimbursement can seem like a process designed for patent lawyers, not patients.

The American Medical Association said the inefficient and unpredictable system for processing claims adds up to $210 billion annually in unnecessary costs. Therefore, in June, the organization unveiled a National Health Insurer Report Card for claims processing as part of its Cure for Claims campaign.

"The retail and banking industries have been using [interoperable] standards for years that let everybody communicate through computer systems," said Jan Powell, president and chief executive officer of Megas, whose software eliminates errors in medical claims that result in inaccurate payments or rejection. "Health care has been the last to join this bandwagon."

Improving the claims process is a widely shared goal whose attainment won't be easy. A cursory examination of the claims process reveals a recalcitrant malady that is systemic, chronic and complex. The claims system involves thousands of payers, hundreds of thousands of providers, and numerous plans, technologies, treatments and standards, all of which overwhelm any hope of finding a panacea.

"It's a long road," said Lauren Thompson, a program director at the nonprofit Altarum Institute, which conducts health systems research. "We've only just started down it."

Real-time adjudication
The holy grail of medical claims is real-time, automated adjudication. Such a system would accurately determine a member's coverage at the point of care without the need to send faxes, make telephone calls or otherwise rely on human intervention.

According to a report by market research firm Gartner, the percentage of claims processed without manual intervention is "in many cases the single most important performance indicator for most health plans." In 2005, about 72 percent of claims were clean, Gartner officials said.

Health plans with a single offering and defined benefits, such as Medicaid, record auto-adjudication rates approaching 100 percent, a level that would be "unrealistic in the multiproduct, diverse benefit offerings typically found in commercial health payers," the Gartner report states.

That's because the system of medical claims processing is akin to a partially automated assembly line that has been cobbled together from mostly incompatible parts. As a result, some plans muddle along with auto-adjudication rates as low as 47 percent, the report states.

Another critical measurement of the process of reimbursing medical providers is accuracy. Gartner analysts found that as many as one in every 20 claims processed by poorly performing plans required adjustments after payers reimbursed or denied claims.

Yet simply pushing for automated adjudication at the expense of accuracy would not be wise. "It's easy to get 100 percent real-time adjudication of claims, but most of them will be denials," said Howard Burde, a partner and leader of the health law practice group at Blank Rome. "You don't want to create a system whereby there is an incentive to deny claims because of a timeline mandate that would overwhelm getting it right."

The path of a claim
To better understand the complexity of the claims system, consider someone who is rushed to a hospital for emergency heart surgery. The odds of that patient making a full recovery might be favorable, but if hospital administrators are unable to determine the patient's eligibility when he or she is admitted, the prognosis isn't as good that his or her claim will be paid on time and for the correct amount. Given the nature of emergency procedures, the claim could be sent back for a multitude of reasons, including the failure to pre-certify the procedure according to the plan's rules.

To further complicate matters, three claims are typically submitted " for payments to the surgeon, the hospital and the anesthesiologist. Inconsistencies in a doctor's name, National Provider Identifier (NPI) or tax identification number, for example, will result in rejection. Given that doctors often have multiple affiliations, even the seemingly simple act of positively identifying providers is not always easy. And the assignment of mandatory ID numbers for doctors hasn't c

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