Overview of Players and Their Roles in the Emerging Medical Banking Industry

Note: I'm not able to attend the MBI this year but I'm going to blog from notes on the hope that this will still be of value to the MBlog readership. - ED

Presenter: Doug Bilbrey, EVP, The SSI GROUP, Inc., Mobile, AL, 800-880-3032, [email protected]

During the Medical Banking Boot Camp, Doug's presentation discussed the Players in the Medical Banking field: Providers (Institutional, Professional, Ambulatory Care Centers), Payers (Commercial, Governmental, Fiscal Agents), Vendors (HIS, PMS, RIS/PACS; EDI; Analytical / Revenue Recovery; Document Management {OCR/ICR}; Decision Support {Financial, Clinical}; Clinical Systems; Adjudication Systems), Trade Associations (HIMSS, HBMA, RBMA, MGMA, HFMA, RSNA, ECT...; Cooperative Exchange ), Collections Companies (NCO, Chamberlain Edmonds, Regional / Local ), Consultants, Banks (Consumer, Commercial), Employers, Politicians, Government, Consumers

Discussing the The Bad and The Ugly of Healthcare Fiscal Management, Doug noted:

• $300 billion of collected funds goes to processing bills, claims and payments; bad debt; and other transactions each year.
• 60% of claims paid are paper, average cost of $8 each
• Approximately 1 in 5 claims submitted is delayed or denied
  • 96% must be submitted more than once!
• Bad debt expense ranges between $40 to $60 billion
  • 80-90% of consumer self-payments goes uncollected
  • on average, 50% of commercial payments

Further, he pointed out that 14 percent of all claims submitted to payers are denied and that this is important when one considers that denials represent 11 percent of a provider’s gross charges.

On "Why Do Claims Get Denied?" he reported:

Coordination of benefits	25%
Patient not eligible	15%
No authorization	5%
Medical Record requested	11%
Untimely filing	11%
Additional info pending	9%
Non-covered Service	7%
Benefits expired	6%
Billing Errors	1%
Contract Review	.03%

Regarding the Cost of Collections, he listed these factors: Patient Balances, Statement Generation/Processing, A/R Aging, Small Balance Write-offs, and Unbilled or Missed Charges

Among Industry Pressures on Providers, he cited: Reimbursement from Payers (CMS, Commercial), Higher Deductibles, Philosophical/Cultural (“We’re here to take care of sick people”), Requirements Complexities (Coding, Billing, Collections and follow-up), Human Resources (Finding them, Keeping them, Incentives ), Legal (Liability), Outpatient Centers (Highly compensated services, Hospitals left holding the bag), Infrastructure (Physical Plant, Technology), and  Community Perception

Industry Pressures on Payers faced include: Operational Costs (FTE’s, Payments), Inefficient Processing Mechanisms (Telephonic, Paper), Membership Satisfaction, Community Demands (On-line access, PHR, Provider Tools, and Integrated Delivery Systems)

Industry Pressures on Employers relate to: Costs (Company, Employee, Dependants), Employee Retention, Employee Recruitment, and Enrollment

While Industry Pressures on Consumers comes from all of the above as well as Access to Healthcare, Affordability, and Bombardment of R/X Ads (Do I have this? Should I take this? What are the consequences?)

Meanwhile Political Pressures will focus on Election 2008 (The Economy, Cost of Living {Fuel Costs, Inflation}), Access to Healthcare (Real or Perceived); Fallout (What new pressures will be levied on system? {Fixed Prices?, Additional/Stricter Requirements?}, Who Pays for This?)

Solutions need to recognize Patient Access/The Genesis of The Claim and the Potential Impact

Patient Access is Key since 45 – 55 Percent of all billing errors originate in Patient Access, Patient Access has one of the highest levels of turnover within a provider organization due in part to the Tremendous Pressure placed of Patient Access Staff (Consent Forms, Benefit Verification, Copay and Deductible Collection, Advanced Beneficiary Notice, Advanced Directive and "Do all this in 10 minutes or less") Improved Processes can affect outcome for Patients, Providers, Payers and the Entire System

How Might Banks Help?

Trusted Delivery Mechanisms (PHR, Financial Transactions, Infrastructure); Connections between Payers, Providers, and other Banks; LockBox (Remits, Claims ???, Eligibility Rosters ???) Banks Are Uniquely Positioned (Patient Access {Credit Card Processing, Upfront Collections of Co-Pay and Deductibles}, Claim Processing {Value Added Services [Clearinghouses, Claim Warehousing, Data Archival]}; Remittances (ERAs, Lock Box {Paper to ERA}, All Payer Capabilities), and Providers Need and Will Use These Services