Today, the billing process for healthcare services is complex and time consuming for the patient as well as for the provider because third-party billing entities are involved. By streamlining medical billing, physicians could save $7 billion a year, an average of four hours a week of the physician’s time, and five hours a week of physician support staff time, according to a new study published by “Health Affairs”. The study was supported by the Commonwealth Fund and the Robert Wood Johnson Foundation’s Changes in Health Care Financing and Organization.
The study “Saving Billions of Dollars and Physicians Time by Streamlining Billing Practices” was authored by Bonnie B. Blanchfield and Bradford Osgood affiliated with Massachusetts General Hospital in Boston, James L. Heffernan and Rosemary R. Sheehan affiliated with the Massachusetts General Physicians Organization in Boston, and Gregg S. Meyer affiliated with both institutions.
To evaluate and identify the burden of excessive administrative complexity, the authors used case-study methods to analyze the billing system for one year in a physician organization at a large, urban, academic teaching hospital.
The authors found that the areas to be the most excessively complex entailed the processing and receipt of payments for physicians services and the administrative functions of physicians and staff in the clinical practices of the organization.
They found that up to 12.6 percent of submitted claims are initially rejected based on nonclinical grounds, although 81 percent are eventually paid. The authors’ hypothetical model had a single transparent set of payment rules that reduced the interaction of billing staff with payers, reduced the reprocessing of claims and the reentry and repetition of the tasks previously performed, reduced the number of claims initially rejected, and lessened the time spent reviewing payment guidelines.
Researchers found that physicians and their administrative staff spent $33.1 million for staff to prepare paperwork and contact payers about prescriptions, diagnoses, treatment plans, and referrals. Also, $5.6 million in costs were directly associated with processing and billing claims and an additional $6 million was lost due to claims that were initially rejected by payers
The authors concluded that mandating a single set of rules and a single claim form, and standardizing the rules of submission, along with transparent payment adjudication, would produce corresponding savings to both providers and payers and provide system-wide savings.