Medical Economics Feature - October 2009
Tex Med . 2009;105(10):41-44.
By Ken Ortolon
The proliferation of high-deductible health plans and other insurance products that place more financial responsibility on patients has created significant additional administrative burdens and cash flow problems for many physician practices.
Tom Banning, chief executive officer and executive vice president of the Texas Academy of Family Physicians (TAFP), says that has been a particular problem for primary care physicians.
"A lot of practices started seeing significant increases in their accounts receivable because under these plans and under some contracts, physicians were prohibited from collecting any money beyond the copay at the point of service," Mr. Banning said. "In essence, we had doctors becoming collection agencies for patients' financial responsibility for the care they were providing. The ability to collect from a patient after the service has already been provided is a challenging thing, to say the least."
Carlos Morgan, practice manager for Jefferson Street Family Practice in Austin, says his practice has struggled to adjust to increased patient financial responsibility under the high-deductible plans.
"We didn't address collecting the deductibles appropriately," Mr. Morgan said, adding that the practice saw the amount patients typically owe jump from $25 or $50 to as much as several hundred dollars. "We're actually retooling our financial policy in terms of letting patients know their financial responsibility has changed and how we're going to collect that responsibility ahead of time, rather than sending multiple statements and not receiving any payments."
But determining just what the patient owes out of pocket is not always simple. Now, some health plans offer new online tools to provide real-time information about patients' coverage and to calculate their share of the cost of care while the patient is still in the office.
Both CIGNA and UnitedHealthcare have cost-of-care estimators available to physicians and other health care professionals within their networks and work with either all or most of their insurance products.
Other health plans also offer such tools or will offer them in the near future, thanks to passage of legislation backed by the Texas Medical Association and TAFP earlier this year that requires plans to use information technology to make real-time coverage information available to physicians, hospitals, and other health care providers, as well as health plan enrollees themselves.
While TMA officials say physicians' offices use these tools, they say there are some problems with the cost estimators that need addressing to make them more useful.
Dan McCoy, MD, chair of TMA's Council on Legislation, says physicians supported House Bill 1342 because of a need for more efficiency and transparency in health plan transactions.
"Many times it's very unclear to both the patient and the physician what the actual reimbursement from their insurance company will be and what the patient's responsibility is," Dr. McCoy said. "But if a claim is adjudicated at the time of service, then the patient is aware of exactly what his or her fee is going to be, and there are no surprises later. Those kinds of efficiency improvements can dramatically improve the billing process for the patients and make them more comfortable that they're not going to receive a huge bill later."
HB 1342 requires health plans to use information technology to give physicians, hospitals, other health care professionals, and patients information on the enrollee's copayment and coinsurance, deductibles, covered benefits and services, and estimated financial responsibility. The plans can use their Web sites to provide this information.
While HB 1342 doesn't mandate real-time claims adjudication where a physician can bill for a service and receive a fully adjudicated response back from the health plan while the patient is still in the office, it should give physicians and patients information that will be vital in navigating the plethora of new high-deductible and consumer-directed health plans.
As it turns out, some health plans already offered online tools that likely meet the requirements of HB 1342 even before the law was passed.
CIGNA launched its online Cost of Care Estimator in April that allows physician practices to use the Internet to quickly obtain estimates. UnitedHealthcare has had a similar tool, called the Claim Estimator, available since 2007.
Humana actually offers real-time claims adjudication that fully adjudicates the claim while the patient is still in the physician's office and allows the physician to collect the patient's share of the cost at the point of service. TMA officials say, however, that Humana offers it for only a limited number of its health plans.
Lori Logan, director of product management for CIGNA, says her company launched the Cost of Care Estimator after its network physicians complained about increased administrative hassles and patient bad debt. CIGNA also heard from its health plan enrollees that they were confused about their coverage and what they owed for the care they were receiving.
"Clearly there was an information gap," Ms. Logan said. "Both sides needed this information pre-care to help in their decision making."
The tool was implemented nationwide after an 18-month trial to ensure that the information and cost estimates would be accurate.
Physician practices need not invest in any new equipment to use the CIGNA Cost of Care Estimator or UnitedHealthcare Claim Estimator. A physician or an office staff member may simply log on to CIGNA's health care provider Web site at www.cignaforhcp.com and click on "Estimate Patient Liability." They then enter a CPT code or Healthcare Common Procedure Coding Systemcode, place of service, service type, other identifying information about the service, anticipated date of service, and identifying information about the patient.
After submitting the information, the physician's office receives an estimate that details the total cost, how the patient's benefits are applied, any anticipated payment from a health reimbursement account or health savings account, and any out-of-pocket costs for which the patient is responsible.
CIGNA claims the cost estimator is accurate within plus-or-minus 10 percent on 90 percent of its estimates. And, physicians' office staff seem to like the tool. Ms. Logan says feedback the company is getting from the training and outreach efforts indicate that 70 percent of providers view the tool favorably and say they will use it. And many physicians' offices are discovering the tool on their own, she says.
"The adoption numbers we're getting and the transaction volume has been very good because it's pretty organic," Ms. Logan said. "Even though we have feet on the street out there promoting it, the majority of transaction volume is coming from people going out [to the CIGNA Web site] to do something they already do today, and they see a new, enhanced feature and just start using it."
From April through late August, more than 30,000 estimates were generated, she adds.
Ms. Logan says patients also seem to like the cost estimator. Surveys during the market trials found that 80 percent thought the estimates were helpful, 72 percent said they helped them better understand their benefits, and 74 percent said knowing their obligation while still at the doctor's office made it more likely they would pay their bill.
United's Claim Estimator is similar. Physicians may log on to the United Web site at www.unitedhealthcareonline.com and enter the relevant patient information and diagnosis or procedure codes. According to United officials, the estimator will confirm within 10 seconds whether the patient is covered for that service, how much United will pay, and how much the patient will owe.
Robin Eldridge, director of provider relations for United, says the tool is available to all contracted physicians nationwide and for all of United's health plans. The company is working to make the system usable for out-of-network physicians, but she could not say when that might be available.
Ms. Logan says CIGNA's Cost of Care Estimator is available on health plans under which patients have coinsurance deductibles, which represents the majority of CIGNA's enrollees. She says CIGNA focused on those plans because that's where the patient's financial responsibility will vary.
"What we don't support yet is our managed care plans, which are predominantly copay based," she added. "You can determine their copay amounts just by looking at their eligibility and benefits."
Shrinking Bad Debt
CIGNA and UnitedHealthcare officials say cost estimator tools help make coverage information more transparent for both the physician and patient. By providing estimates of what the patient owes before treatment, they reduce confusion and the potential of late payment or bad debt issues, they say.
"We're seeing more and more of our members getting more involved in the cost of their care," Ms. Eldridge said. The Claim Estimator makes it easier for the physician or office staff to sit down with the patient and discuss the coverage and financial responsibility, she says.
Ms. Logan says CIGNA's tool tells patients not only how much they owe, but also why they owe it.
"It kind of hits two birds with one stone," she said. "One, it helps raise that financial awareness, but it also explains their benefits, as well. It takes the physician out of that benefit educator role and also helps the financial discussion, as well."
TMA officials also say physicians are getting on board with these tools.
"The practices that I have heard from that use it like it because they can actually print out something from the health plan to justify to the patient why they are asking for payment at the time of services," said Genevieve Davis, associate director of TMA's Payment Advocacy Department. "That seems to make the patient feel a little bit more financially responsible."
However, TMA officials say the tools have some drawbacks. Some physicians' offices have complained that entering data into the estimators is a lot of work because they are not compatible with any practice management software systems.
Physicians have also complained about a lag time of up to 30 days in updating fee schedules or new CPT codes that can result in inaccurate information. Plus, the CIGNA tool doesn't account for preexisting condition clauses or preauthorization requirements. The physician's office still has to call CIGNA for answers on preexisting conditions or for preauthorization.
CIGNA also initially recommended that physicians collect only 50 percent of the patient's estimated responsibility at the point of service. But physicians complained that still left them with the problem of billing patients for the remainder of the cost and the potential for late payments and bad debts.
Ms. Logan says that recommendation was issued because their tool was designed to provide an estimate before delivery of care, and total charges could change after care is actually delivered. CIGNA, however, is dropping that recommendation from its Web site, she says.
Ken Ortoloncan be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by e-mail at Ken Ortolon .
October 2009 Texas Medicine Contents
Texas Medicine Main Page