I have often thought that an instant billing/payment system for medical offices (sort of a Visa/Mastercard type of setup between providers and health insurance carriers) was long-overdue. This New York Times article details exactly how such a system could work, but also addresses some of the problems it would face. The main issue is the complicated nature of health insurance billing, with thousands of medical codes that the doctor’s office has to sort through in order to correctly submit a bill.
Obviously doctor’s offices would have to be fully electronic with medical records and billing in order for real-time claims adjudication to work. But if electronic medical records systems were designed with instant billing in mind, they could be made more more user-friendly in terms of the time required to sort through codes. Imagine if all medical providers carried a device that would do most of the work for them. After seeing each patient, the provider would be able to access a simple touch-screen menu that would narrow down the field of possible codes dramatically with each touch. While it will take a person a while to search through 14,000 diagnostic codes and 4,500 procedure codes, a computer can do it in the blink of an eye. Once the provider had selected the appropriate billing codes for the visit, the data could be sent directly to the health insurance carrier for approval.
Another benefit to such a system would be that providers could being to collect the patient’s portion of the bill immediately. The way the system is set up now, copays are due at the time of service, but deductibles are not usually paid until after the claim has been processed by the health insurance company. So the doctor sees the patient, and then sends a bill to the insurance company. Then the insurance company processes the claim and determines what amount will be written off, what part is the patient responsibility, and what will be paid by the insurance company. At that point, the patient and the doctor are both notified of the payment breakdown, and the provider is able to send a bill to the patient. We had to take our son to the emergency room for stitches earlier this year, and we knew that we’d be responsible for the entire bill as we have a $5000 deductible HSA qualified plan. But it was nearly 6 weeks after the incident before we got the final bill, which means that there was quite a lag-time between when the doctors provided care for our son and when they got paid.
Real-time claims adjudication could allow the doctor and the patient to see right away what the patient’s portion of the bill will be. This could be collected at the time of service or a payment plan could be set up for people with high deductibles. Either way, it would mean that doctors wouldn’t have to wait as long to collect their payments, both from the health insurance carriers and from the patients.