US Physicians’ Administration Costs Four Times Higher Than Single-payer Healthcare Providers

Going by a recent survey by the researchers with Cornell University and University of Toronto – which has unearthed alarming fact about relatively higher administrative costs in the United States: physician practices incurring nearly $83,000 in administrative costs per physician each year, nearly four times the amount spent by their Canadian counterparts – it is quite imaginable the extent of its implication on physicians’ fees, and patients’ medicals bills ultimately. The fact that the survey has treated Canadian medical quality on par with that of United States, ranked highest globally, further endorses the need for immediate insurance-related administrative reforms that can drastically:

• Bring down the per-capita physician administrative cost to as low as $22,205
• Reduce time spent by nurses and medical assistants on administrative tasks related to health plans to as low as 2.5 hours per physician per week, which is what prevailing in Canada, and
• Achieve an annual savings of $27.6 billion on insurance related administrative costs

Easier said than done, the reform measures should effectively address multiple issues that have been responsible for this undesirable scenario. While running a thorough analysis on reasons responsible, the researchers have identified the following areas that require reformatory action:

• Multiple-payer health care system: The prevalence of multiple-payer health care system has been both complex with different sets of regulations, procedures and forms mandated by each health insurance plan or payer, as well resource-consuming. Ideally, multiple-payer health care system needs to be simplified into either two-payer system – one each for private and Federal insurance plans – or, if possible, single-payer system that Canadian physicians follow.
• Failed Experimentation with in-house medical billing: Experimentation with in-house medical billing practice has not been encouraging either – either in-house staff reporting it to be detrimental to their core function of supportive medical care, or underperforming despite heavy investment on training and system-implementation. Consequently, physicians – with no avail but to practice medical billing somehow – have to bear the brunt of excessive operational costs.
• Unscrupulous Medical Billing companies: There have been instances where in solution-seeking physicians/hospitals have run into some unscrupulous medical billing company or medical billing agency, who contrary to ensuring cost optimization and revenue maximization, have further compounded their clients’ woes by sending out wrong bills in an incorrect format.

Amidst such complex problems, the ensuing Affordable Care Organization (ACO) floated by Patient Protection and Affordable Care Act of 2010 (PPACA), scheduled to be officially launched in January 2012, promises to bring down spiraling health expenditure through

• Incentive linked payment system, initially for Medicare physicians, and subsequently for private practitioners also.
• Controlling premium and incidental charges of insurance carriers

While these reformatory measures are greatly welcome, physicians/hospitals should inevitably carry on seeking professional help of expert medical billing specialists that are competent enough to tackle spiraling administration costs, and ensure operational efficiency and revenue maximization.

Medicalbillersandcoders.com, the largest consortium of medical billing professionals, brings certified medical billers and coders from all 50 states under one roof. With the average experience of billers in this consortium to be 7 years, you can find well trained in-house billers and well equipped medical billing agencies in your city.

These billing professionals are adept at accurate charge-capture, intricate procedure coding, electronic filing of claims, patient billing, multi-tiered appeal process, denial elimination initiatives, and compliance standards, riding on unparalleled set of pre-qualifiers – certified by the American Association of Professional Coders (AAPC).

Expert at applying standard CPT, HCPCS procedure and supply codes, and ICD-9-CM diagnosis; and an impressive track-record of maximum and efficient reimbursement of medical bills with the leading private insurance carriers such as United health, Wellpoint, Aetna, Humana, HCSC, Blue Cross Group and Government sponsored Medicare and Medicaid as well – is uniquely poised to complement physician cost-minimization and revenue-maximization endeavors.

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Level of Preparedness for Smooth Transition to ICD-10

US Federal Government, which has earmarked October 1, 2013 as the deadline, has sought to replace the 30-year-old ICD-9 with the radical ICD-10 – believed to be harbinger of sweeping changes across all facets of healthcare organizations: providers, staff, processes, insurance carriers, and systems and technology.

But, given the experience in other countries – UK, France, Australia, Germany, and Canada, which prior to adopting ICD-10 in 1995, 1996, 1998, 2000, and 2001 respectively, had to wait as long as 5 years for achieving successful implementation of ICD-10 – it is only expected that the incubatory period from 2010 to 2013 is going to be spent on implementation alone across the length and breadth of the U.S. healthcare system.

Further, transition involving multiple constituents – ICD-10 CM, used in both inpatient and outpatient settings, replacing ICD-9-CM volumes 1 and 2; ICD-10-PCS replacing ICD-9-CM volume 3 for use in inpatient settings only; and, more importantly, the implementation of the HIPAA compliant 5010 standard, a prerequisite to ICD-10 since the current HIPAA 4010 standard does not support ICD-10 codes – is sure going to make it excruciation for all covered entities, including health plans, healthcare clearinghouses and most healthcare providers.

Fortunately, experiences historically in other nations should both be an indicator of challenges that lie on the way, as well as guidelines for realizing smooth transition by the deadline of October 1, 2013. Combining these experiences with the following implementation guidelines should not only make the transition less excruciating but also enable an early interoperable health data exchange in the US, and improve the ability to measure medical processes and outcomes:

Analyzing the chasm between the current system and the demands of ICD-10 system

One of the important tasks prior to implementing the ICD-10 is to analyze the gap between the current system – both technical as well as human – and the projected demand of ICD-10 system. Fundamentally the areas that require a re-look are technology, including interface and interoperability requirements; education and Training; workflow and organizational processes, including clinical documentation, health Information management (HIM) department, clinical service areas and back-office administrative and billing functions and processes, coding productivity and workflow, data quality, data and information reporting – internal and external, and revenue cycle processes and workflow.

Having analyzed the gap with respect to the above parameter above, there comes the need to align the requisites in line with the ICD-10 demands

Education and Training

Having analyzed the areas to be upgraded in line with the demands, the next step is to educate and train the human resources that actually are going to be impacted. Primarily, the following sections of manpower are going to be in need of the education and training in line with the ICD-10:

• Health Information Management (HIM) professionals (regardless of departmental affiliation or the presence of centralized or decentralized coding practices)
• Administrative and front office staff such as Registration or Scheduling departments
• Clinical staff – physicians and all other allied health professionals who may document the patient health record
• Revenue Cycle and Business office support staff, including contract managers, documentation reviewers and corporate compliance officers
• Finance Department staff
• Departmental and other management staff including quality and utilization management, performance improvement and other key areas that may use or report ICD codes
• Clinical Documentation Improvement

Educating and training your staff alone is not going to make any difference unless there is considerable improvement in clinical documentation, which, along with successful compliance with HIPAA norms, enables best coding practices as per ICD-10. Hence, the resources spent on education and training should reflect on the quality of clinical documentation.

Tactful Management of Revenue Cycle

ICD-10, being exhaustive and stringent, has the potential to negatively impact your revenue cycle, with the billing reimbursement taking far more time to realize, or frequent reports of denials. A better proactive processing system that can tactfully solve ICD-10 intricacies will be indispensable.

Upgrading Information Management and Technology

Successful implementation requires a matching deployment of technology application and system in congruence with ICD-10 demands. Therefore, healthcare organizations should look installing advanced systems, and at integrating them across all functional points within the organization.

Post Implementation Review

Implementing alone will not yield the desirable objectives; there will be regular review and audit of the implementation, which will not only ensure revenue optimization, but also and quality data dissemination for research and archiving.

With such an arduous task ahead, physicians or hospitals can safely resort to availing services of medical billers who are proactive and prepared with material-requisites for ICD-10.

MedicalBillersandcoders.com (www.medicalbillersandcoders.com), with a long-standing reputation of being the largest consortium of medical billers in the U.S., is a preferable catalyst in smooth transition to ICD-10.

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The Need for a Long-Term Solution to the Perennial SGR Problem

The decade old uncertainty over fixing a permanent solution to Sustainable Growth Rate (SGR) is set to continue with the House deciding not to set off the accumulated deficit (25% for 2011) against primary care physicians till the end of this year. Although a temporary relief for doctors, the absence of a permanent solution will always keep doctors apprehensive every year. What is more, the accumulating deficit is destined to move upwards.

Primarily brought into force by the Balanced Budget Act of 1997 to amend Section 1848(f) of the Social Security Act for controlling costs related to spending on Medicare expenditure by the Centers for Medicare and Medicaid Services(CMS), Medicare Sustainable Growth Rate (SGR) happens to be an overriding improvement over the earlier method, the Medicare Volume Performance Standard (MVPS).

As the SGP advocates equating Medicare expenditure for each beneficiary proportionate to the growth in the GDP, physicians are driven to render quality service under the GDP sealing. Despite Medicare Payment Advisory Commission’s close watch – advisory to the U.S. Congress on the previous year’s total expenditures as against the target expenditures, and conversion factor that modifies the payments for physician services for the next year in congruence with the target SGR – the Medicare Sustainable Growth Rate has never been able to witness the Medicare expenditure in congruence with the GDP.

Although the CMS may place partial blame on physicians for overshooting the SGR every year, yet, amidst ever-rising cost of medical practice, physicians have been finding it hard to sustain the SGR. The estimated SGR for 2010, which is a negative 10.30%, and the conversion factor for the physician fee at a negative 25% are still more alarming. The current scenario would have meant a negative Medicare budget, and cut in physicians’ fees by 25%, in which case physicians would have resorted to boycott the Medicare patients.

In the long run this scenario is also going to affect the quality of healthcare as the physicians would be wary of investing money in new equipment or latest technology to enhance their patient care and management services if they are unsure of their potential revenue and expenses. Another pertinent fact here is that the implications of the SGR stalemate go beyond Medicare as most private insurers take a cue from Medicare to set their payment rates.

Fortunately, like it has been since 1997, there has been yet another extension to the implementation of conversion factor; Medicare and Medicaid Extenders Act of 2010 has deferred it till January 1, 2012. But at some point of time, the inevitable question will have to be answered and permanent solution to be given amidst booming demography of senior citizens, which will further escalate SGR problem. It is heartening to see the premier health body, AMA actively pursuing the issue with the congressional leadership for a long-term solution.

We, Medicalbillersandcoders.com (www.medicalbillersandcoders.com), the largest consortium of medical billing and coding advisory are equally interested in witnessing a permanent solution to this perennial SGR problem. Being an integral part of medical endeavors, we hope it is realized sooner.

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About Medicalbillersandcoders.com

Medicalbillersandcoders.com is the largest ‘Consortium of Medical Billers and Coders,’ across the US. The portal brings together hundreds of billers, with experience in different specialties, on the same platform to service physicians in their local areas. This network of coders and billers is growing rapidly and is currently servicing over 50 specialty physicians, across the US (Iowa Medical Billing, New York Medical Billing, Ohio Medical Billing, Texas Medical Billing), with the most prominent being Cardiology Medical Billing, Mental Health Medical Billing, Dental Billing, Oncology Medical Billing, and General Practice.