- Greg Gillespie, Publisher
Fifteen years ago, many hospitals and clinics were just beginning to communicate electronically with payers, replacing paper claims with electronic versions submitted in more than 400 proprietary formats over private networks.
Today, most claims are submitted electronically in the standard HIPAA-mandated format, with many traversing the Internet. And provider-payer electronic communication finally is expanding to include other transactions.
Among the fastest-growing transactions are insurance eligibility verification, remittance advice and funds transfers.
In addition, a handful of payers are taking the big step of adjudicating claims in real time, telling doctors within seconds of receiving the claim how much they will be paid and how much they should bill the patient.
This trend is driven, in part, by the growth in consumer-driven health plans, which place more of the burden for payment on the patient through higher deductibles and other factors.
Beyond financial transactions, many observers predict that in the years to come, providers and payers will be exchanging far more clinical data to support disease management efforts and quality improvement. Whether the same clearinghouses that serve as the conduit for claims and related transactions will handle this clinical data exchange remains uncertain. Also unclear is the role broader health information exchanges (or regional health information organizations) will play in all these transactions.
How Many Steps?
Since the very beginning of electronic claims processing, it's been common for a claim to go through several middlemen before reaching its destination at an insurance company. For several years, Aetna Inc., for example, required that all its claims had to be funneled through the clearinghouse of Emdeon Business Services, Nashville, Tenn. As a result, a clinic that served Aetna customers but used a regional clearinghouse might see its claims go from that clearinghouse to Emdeon before reaching Aetna.
In recent months, Aetna has announced it's accepting claims directly from several other clearinghouses, including RelayHealth and MD On-Line. Responding to demand from providers, the payer decided to offer them more flexibility in choosing which clearinghouses to use to submit electronic transactions, a company spokesman says.
The Aetna action is the signal of a trend, says Patrick Kennedy, partner at PJ Consulting, Rockville, Md. "Payers want to get closer to the doctors," he contends. "They want to work with the vendor who has the contract with the doctor. They want to ultimately be able to exchange more data directly with the doctor."
This desire for more direct connections reflects a long-term goal of exchanging clinical data for disease management, Kennedy says. "Payers want to be able to send clinical data to physicians," he explains. For example, he says they want to be able to send a message to remind physicians that a diabetic patient is due for a test.
Many payers have established their own Web portals to enable providers to file claims directly, "but those portals are not being used anywhere near as much as the payers expected," Kennedy says. Providers are better served by using a single clearinghouse to send their claims to dozens of payers, rather than struggling to use the portals of each payer individually, he contends.
Web portals have not caught on because payers and providers alike are better served by having a clearinghouse in the middle to edit claims to make sure they're complete and accurate, says Paul Fox, principal consultant at Hayes Management Consulting, Newton Center, Mass.
But for some hospitals and clinics that treat a large number of patients covered by a handful of payers, these portals could eventually prove valuable, says John Osberg, managing partner at Informed Partners LLC, a Marietta, Ga.-based consulting firm. These providers, however, will need to acquire robust software to edit their claims, he adds.
Orlando (Fla.) Regional Healthcare is already moving in that direction.
"We are using fewer clearinghouses and attempting to go direct with more payers to eliminate the extra fees," says Thomas Yoesle, corporate director of patient accounting for the seven-hospital system. The organization is beginning to use Web portals to file claims directly with several major payers, he explains. The hospital uses its revenue cycle management software from QuadraMed Corp., Reston, Va., to create the claim in a standard format so it doesn't need to be rekeyed into the portals, he adds.
Most insurance companies, including Aetna, realize they must accept claims from multiple clearinghouses because more group practices want to rely on a single vendor for their practice management and electronic health records software, as well as their claims editing and clearinghouse services, notes Fox, the consultant. "It's easier to just use one vendor," he says.
Emdeon stands to lose ground as other clearinghouses stop using it to gain access to major payers and make direct links instead, Osberg contends. He also claims Emdeon is not well-positioned to capitalize on the Internet because it relies heavily on its own private networks.
Emdeon executives, however, say Aetna's actions will have little impact on the clearinghouse. Many practice management vendors, hospital information system vendors and other clearinghouses still rely on Emdeon as a conduit to major payers, notes Philip Hardin, the company's executive vice president of provider services. "Plus, every month, we're signing payers to our managed gateway agreements where we're the sole conduit for them for many transactions," he adds.
Emdeon already uses the Internet for a substantial portion of its 3.7 billion transactions a year, Hardin says. He predicts that the clearinghouse will build relationships with health information exchanges to link regional networks to national payers.
"Several years from now, we'll no longer be labeled as a clearinghouse," Hardin says. To remain viable, today's clearinghouses must diversify to offer a full range of revenue cycle management services as well as a wider variety of clinical and financial transactions, he adds.
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