Published: 2009-06-21 16:28:17
Author: Alan Portner | Examiner | May 26, 2009
The sheer complexity of health insurance fosters myriad cost ripples at the provider level almost like the tsunami that follows an earthquake on the ocean floor. Almost half of staff members (43.6 percent) at a typical physician’s office are devoted to clerical rather than clinical tasks.
Co-pays, verifications, accounting, collections, compliance reporting, contracts, and business management eat up tremendous numbers of healthcare dollars. Each state regulates differently. Each insurer follows different procedures, requires different forms, covers different drug formularies, varies approvals for procedures, and pays on different time schedules. All add to the administrative load.
A typical physician visit generates a billing that has little to do with final payment because of a device called a courtesy discount. Most insured patients make required co-pays. The practice invoices an insurance administrator. The administrator determines technical correctness, references individual provider contracts, and makes a payment; normally at 30 to 50 percent of the charge. The provider writes off the rest as courtesy discount. The patient is informed by an “Explanation of Benefits.” Most EOBs are filed away.
If the provider orders a test during your visit, the process complicates. The co-pay and the agreement between the doctor and the insurer may not cover the test even if done concurrently. The test requires separate billing and additional co-pay (usually $3 to $7) collected later. For more advanced procedures, there may be a number of charges from different participants. This is important because of all the people required to complete the transactions.
Additional co-pays are almost always invoiced and collected at a net loss to the provider. When costs began to accelerate and insurers began to negotiate payments, providers learned to game the system with a la carte medicine. The dance has nothing to do with healthcare, but adds to the administrative costs.Full story