Doctors, Hospitals Want Late Payment Rx : Health: Insurers are doing what they can to cut costs, including, doctors say, paying late. For some, it’s a crisis.
Already squeezed financially because insurance companies and government agencies are paying less for health-care services, doctors and hospitals say they increasingly face the added liability of having to wait months for their money.
The result is that hospitals and doctors say they are spending more to collect insurance claims. Some say they are threatened with financial disaster because of too many long overdue payments.
Insurers respond that cost-control pressures force them to scrutinize bills more closely than ever. They deny any intentional delays.
But health-care providers say they see many unnecessary roadblocks to timely bill collection. Not surprisingly, some of the providers hurting the most serve a large percentage of Medicare and Medicaid (Medi-Cal in California) patients. However, health-care executives interviewed recently reserved their harshest criticism for private insurers, who the providers say don’t have the excuse of lack of funds.
It can be a struggle simply getting some insurance companies to acknowledge receipt of a claim, health-care providers contend.
“We’re finding that we have to submit claims three or four times because they, quote, never received it,” said Edward Prunchunas, chief financial officer for Northridge Hospital.
“It doesn’t matter how you send it, they almost always say they didn’t get it the first time,” echoed Dr. Malcolm Margolin, a Los Angeles gynecologist stewing over his difficulties in collecting from Blue Cross of California.
The “lost” claim, health-care providers charge, is a delaying tactic employed by some insurers, including operators of health maintenance organizations and preferred provider organizations, who frequently pay well beyond the 30-day limit set by California law. Some providers say the law, which requires such third-party payers to pay interest if they delay beyond the limit, is unenforceble.
D. Mark Weinberg, executive vice president for consumer services at Blue Cross of California, not only denied that Blue Cross uses that tactic, but he also said he has never heard such a complaint from a health-care provider.
Even when insurers acknowledge a claim, the providers said the process is frequently extended with endless reviews and nit-picking questions--such as a delay caused when an Orange County obstetrician forgot to state the sex of the patient on a claim for the delivery of child.
Prunchunas cited the case of a $150,000 trauma claim from an automobile accident. The claim was eventually denied by the insurer, who decided there was a “pre-existing condition” because the patient had been drinking before the accident, he said. What bothered Prunchunas almost as much was the 10 months the insurer took to make the decision. “We have no choice but to try to find the patient and bill him,” he said.
For consumers, the danger is being caught in the cross-fire. When insurers and providers disagree over payments, the bill may very well end up in the mailbox of a patient.
Waiting longer for less money hits health-care providers with a double whammy, said Robert Bohlmann, director of the Denver-based Medical Group Management Assn.’s management consulting program. “They’ve got you on your knees both ways,” he said.
Industry representatives maintain that there has been no increase in the turnaround time in the past three years.
Based on reports from its member companies, the Health Insurance Assn. of America--the industry’s main trade group--said most claims are processed within 14 days and only about 17% are delayed. The data was from 74 of 240 companies that responded. Those 74 represented about half the nation’s commercial health insurance business, HIAA said.
“The standard we set is that we try to process 85% of all claims within 14 days and 99% within 30 days,” Blue Cross’ Weinberg said. The company’s internal tracking system shows that it is meeting its goals, he said.
Regarding complaints about slow payments, Weinberg said, “I think there are perception issues here.” Health-care providers think there are delays, he said, because in the new managed-care environment they receive fewer direct payments from patients and have to give far more details to insurers to get paid.
“We need appropriate language. Sometimes we will get an English language description of (services provided) but no codes. . . . We can’t run the risk of trying to guess what was done,” Weinberg said. Claims may be subject to several levels of review for reasons including claim size or “illogical” descriptions.
But the problem is more than just perception, said David Langness, spokesman for the Hospital Council of Southern California. “We deal with that issue all the time,” he said. Contrary to insurance industry data, he said, “the turnaround time has elongated way past what it used to be. Sixty to ninety days was the norm. . . . One hundred days is more normal and we hear anecdotes about six- to 12-month delays.”
Cheryl Joneson, director of budgets and reimbursements at White Memorial Hospital in Los Angeles, said her main gripe is with some of the private third-party payers. “Medicare and Med-Cal are turning out to be better payers,” she said. A turnaround time of two to three weeks is normal for the government programs, she said, whereas with some private health maintenance and preferred provider organizations, the time reaches up to 120 days.
An independent study of hospital performance showing that hospitals had less cash on hand and higher accounts receivables in 1989 compared to 1988 also suggests that third party payers are holding their money longer.
Blue Cross is trying to speed up claims processing, including offering electronic filing, he said. About 60% of hospitals filing Blue Cross claims can file electronically, but only 10% to 20% of doctors have the equipment, he added.
Prudential Insurance Co. said it is going one step further and experimenting with paying providers electronically through a funds transfer agreement with Chase Manhattan Bank. American Express Co. recently introduced a new type of health insurance card in Boston that, among other functions, provide automatic claims filing.
Ann McFarland, manager of a group obstetrics and gynecology practice in Arcadia, was the only health-care provider of more than a dozen interviewed for this article who did not complain of delays. However, all the clinic’s claims are filed electronically, including Medi-Cal claims. A lot of the problem is in the training of the people who file the claims, she said. “So many physician staffs are ill-equipped to know how to do the billing,” she said.
Electronic filing is bound to eventually become the industry standard because the current system is too costly, said Peter Boland, a Berkeley health-care consultant. It is not surprising that third party payers and health-care providers have a radically different view as to whether claims are paid on a timely basis, he said.
“There is a built-in business incentive for them to see it differently,” he said. Faced with growing demands that they discount their services, providers are buying all sorts of computer software to help them figure out how to file claims to get the most cash. At the same time, insurers are under such cost pressure that are installing software to “detect more reasons for them to reject claims,” he said.
One problem, Boland said, is that some health-care providers aren’t paying close attention to what insurers will allow. In reviewing claims, insurers won’t always tell the provider all of the things that are wrong at the same time. Instead, “you get all of these claims being bounced back and forth for clarification. It can drag on for months,” he said.
The real sore point with providers, he said, “is who gets to make use of the money while this is going on.”
