The annual National Insurer Report Card published by the American Medical Association (AMA) provides information on the claims revenue cycle activities of the major commercial health insurers and Medicare.
AMA recently stated that a change to its report card shows that physicians are facing reimbursement difficulties when it comes to chasing the bills that patients have to pay. The 2013 report card reveals that the co-payments, deductibles and coinsurance that patients are responsible for paying constitute nearly a quarter of their medical bills overall. Physician practices are finding it difficult to collect the patients’ portion, says the report. It also finds that the revenues of physician practices are being affected by duplicative, erroneous and late claim submissions.
Employees Facing Higher Deductibles
Over the past few years, employers have required workers in job-sponsored health insurance plans to contribute a greater share in their cost of their care. Here are some pertinent findings:
- A recent survey shows that employees now face higher deductibles, the out-of-pocket amount that a member should pay before their health plan starts paying for covered services and that the total employee cost share has risen from 34% in 2011 to 37% in 2013.
- A November 2012 study by the Kaiser Family Foundation shows that the employee contribution to healthcare is currently 42% higher than what they paid five years ago.
- The November 2012 study also reported that the proportion of workers covered by a plan that has a deductible rose to 52% to 72% during 2006-2012, with individual deductibles rising from an average of $584 to $1,097 during the same period.
Collection Issues that the Physicians Face
This shifting of payment responsibility to patients is considerably affecting physician revenues. Earlier, physicians needed to collect payments exclusively from insurers, but now they have to chase patients for payments, which they are obviously not good at. In other words, the increase in patient cost responsibility is becoming difficult for them to handle. Based on claim data submitted by leading health insurance companies, AMA reports that Health Care Service Corp. had the highest patient responsibility at 29.2% and that Humana’s plans had the lowest at 15%.
One factor that is affecting the physician’s ability to collect payment is the lack of proper information about patient responsibility. It is easier to collect payment from the patient at the time of the office visit, but the problem is that most often, physicians are not aware of what the patient’s portion is. As insurer rules are complex and difficult to follow, the AMA has requested insurers to provide physicians with effective tools to determine patient responsibility before treatment.
An American Health Insurance Plan (AHIP) survey conducted in February showed that 16% of electronic claims and 54% of paper claims sent by physicians or hospitals were received more than 30 days after the service date. The 2013 report card points out that the claims settlement process in physician practices can be improved and quickened with electronic claim submission. Submitting claims electronically can also minimize chances of submitting duplicative, inaccurate or delayed claims, all of which increase the physician’s cost burden. The following information from 2013 Administrative Burden Index of the American Medical Association provides a clear picture of the administrative cost of reworked claims:
The AMA estimates that, on average, the phone calls, investigative work, and claims appeals associated with reworked claims are costing physician practices as much as $14,600 annually.
Professional medical billing companies are providing all the support they can to help AMA and others to reduce the administrative burdens and improve the efficiency of the health care system. The comprehensive array of services an established medical billing and coding company can offer include charge capture services for review of all charges for completeness and accuracy, insurance benefit verification services to determine patient benefits as well as the patient’s payment responsibility prior to treatment, customized billing procedures, electronic claims submission, follow-up with insurers and patients on payments, and much more.