Intentional and systematic inefficiencies in the insurance companies' medical reimbursement processes lead to inflated medical costs. Improved medical billing processes from providers and medical billing services can play a significant role in decreasing this component of healthcare cost.

Although the issue of claims processing is mentioned as one of the sources of rising healthcare costs, the true economic drivers that are keeping the current inefficient and opaque processes in place have not been well explored. The fact of the matter is that the current process prey's upon the technology, process and staffing limitations of most physician offices to take money from the physicians and give it to the payers. The result is rising costs and following revenues for the average medical provider.

Payers employ a series of complicated (and frequently changing) adjudication rules which medical providers and cardiology billing services must navigate to obtain payment for services rendered. Even when the maze is navigated successfully, payers will frequently (ten percent to twenty percent of the time) underpay claims. To add insult to injury, payers will also frequently simply "lose" claims that have been submitted. Unless the cardiology billing process is designed to catch these errors the payers never pay the money that is saved though the underpayment and misplacement of claims.

There is a strong economic motivation for payers to maintain the current inefficient billing process. They can increase their profits sharply since more than fifty percent of the claims they misplace or accidentally underpay are never noticed by medical providers.

The payers ultimately lose money on providers that catch the payer's mistakes and pursue the claim. It cost the payers about $25 each time one of these watchful provider's cardiology billing specialist calls the payer and speaks to a live person. To mange this cost, they payers have a system in place to make sure they pay the diligent practices properly while continuing to lose claims and underpay less watchful practices. They payers do this by grading each practice. If you are watchful you receive an A. If you are not catching the payer's errors you receive a F. A's are paid well. F's are not paid well.

So, how do all of these facts tie lead to the conclusion that better medical billing processes can lowering the cost of healthcare? If each and every underpaid or lost claim is pursued (which is what a well-designed medical billing process should do) then eventually payers will lose all economic incentive to play games and make the medical billing process complicated and expensive.

Imagine if every physician's internal billing department or cardiology billing company pursued every claim until it was paid in full. The payers would see their cost to adjudicate the claims rise and they would see their payments to providers rise because the lost/under paid claim games would no longer prevent providers from ultimately being paid. This combination would lead to each physician ultimately being paid quickly and without fuss because the insurance companies would lose significant money by playing games ($25 per extra phone call generated by the games) and they would gain nothing since payments would only be delayed, not avoided.

Many companies and individuals are dreaming of the day when the medical billing process disappears entirely and claims are adjudicated in real-time while the patient is standing at the checkout desk. In this system significant costs will be saved, but the system will never emerge until payers no longer have an incentive to play games with medical claims. Medical billing companies and medical providers can make this happen by insuring that all providers are rated A  in the eyes of each payer.

Copyright 2008 by Cardiology Billing Partners