Comments on: Readers Write 9/2/09

By: Seeking Truth

Seeking Truth — Thu, 03 Sep 2009 17:41:36 +0000

Scott perspective is very accurate, but is really only identifying clearinghouse issues from a provider’s perspective. While the industry’s largest clearinghouse (formerly NEIC) was started by some of the nation’s largest insurance companies, today’s payers have a different perspective on clearinghouses since the advent of HIPAA Transactions and Code Sets. Most payers (and providers) were forced to invest in claims processing systems as a result of HIPAA and the need for HIPAA compliance. As a result, many payers developed the ability to accept and send transactions without being dependant on clearinghouses for transaction exchange with providers. One must also consider that a clearinghouse will charge both the provider and the payer for the same transaction (Medicare and Medicaid are exceptions, due to government policies preventing the payment of transaction fees to receive electronic claims, these payer entities have offered direct transaction exchange with providers well before HIPAA came into effect). According to HIPAA, when a provider and a payer exchange transactitions via a ‘direct’ transaction exchange (no middleman), then neither of these ‘covered entities’ can charge the other a transaction fee. While several large payers (Blue Cross, Medicare FIs & Carriers, Medicaid FIs) could accept transactions from providers prior to HIPAA (~2002), this industry trend has accelorated each year since HIPAA. The push to reduce ‘the cost of healthcare’ has further promoted direct transaction exchange between providers and payers. There are at least two indicators that verify this; the numerous ownership changes of most major clearinghouses and the financial statements published by publically traded clearinghouses. There are even instances where payers will offer ‘other incentives’ to providers to exchange transactions with the payer without use of a clearinghouse (cost justified by the elimination of clearinghouse transaction fees paid by the payer). Hospitals are employing direct transaction exchange with payers to a greater degree than physicians or physicain groups. This is also evident in clearinghouse financial statements that separate revenue from hosptials from revenue from physicains. Clearinghouse revenues from physicains has not dropped nearly as much as clearinghouse revenues from hospitals since HIPAA. Physicians also tend to pay higher transaction fees than hospitals. The convenience of using a clearinghouse is often ofset by the lack of control a provider has over the content of claims (editing for payer acceptance compared to editing for payer adjudiction) and electronic delivery of claims (one size fits all when a clearinghosue is used, isn’t that convenient). Most sophisitcated hospitals recognize the benefit of investing in a ‘claim editing and edi system’ that does not rely on a clearinghouse and does not employ transaction fees. Often, both financial performance (cash collections) and the billing productivty improve when replacing a clearinghouse-based vendor with a claim editing and edi system. It comes down to a ‘control vs convenience’ decision, and convenience has costs built in for both providers and payers. The recent HIStalk posting on Cigna and Emdeon shows a growing trend among payers, and one that Blue Cross pursued many years ago. Clearinghouses also face other threats to their way of doing business, and the healthcare industry’s 5010 conversion will further test clearinghouses due to the lengthy conversion period in the CMS timeline. Entities like the Utah Health Information Network (UHIN, http://www.uhin.org) are examples of state sponsored ‘switches’ that providers and payers use to exchange transactions without incuring transaction fees, clearinghouse delays, claim aggregation prior to re-transmission, inability to process payer acknowledgement reports and a host of other issues associated with clearinghouses. It’s not just a cost-based or convenience decision. UHIN has been in existance for almost a decade and is often ‘the model’ that RHIOs or the like try to emulate because it is a financially viable entity for information exchange between providers and payers. If you currently opt for a ‘convenient’ method of transaction exchange, with today’s emphasis on reducing costs in healthcare, you may want to consider other options available.

By: Blah

Blah — Thu, 03 Sep 2009 16:43:32 +0000

Athenahealth stock running at 64 times this years earnings?

Some people are going be hit hard here.

http://seekingalpha.com/article/159718-athenahealth-a-reluctant-short?source=article_lb_articles

By: Jennifer McDuffee

Jennifer McDuffee — Thu, 03 Sep 2009 13:52:15 +0000

Thanks for sharing the information about CAQH CORE. If we really want clearinghouses to go away, this is the kind of endeavor that is needed. Any effort to move the health care system toward uniformity and transparency – and to thus lesson its existing complex and proprietary nature – is a step in the right direction. There are an estimated 6 billion medical claims filed each year. If every single one of those claims could be filed according to the exact same data protocols, with no payer specific differences for required fields; imagine the time and money that could be saved!

By: Laurance Stuntz

Laurance Stuntz — Thu, 03 Sep 2009 11:35:26 +0000

Re: Clearinghouses and Dave Shaver’s comment

Solving the problem of non-standard communications infrastructure is part of the point of the CAQH CORE (http://www.caqh.org/CORE_overview.php) project. Take a look, and encourage your health plans, particularly state Medicaids, to participate.

By: Dave Shaver

Dave Shaver — Thu, 03 Sep 2009 05:29:11 +0000

Re: Healthcare Clearinghouses

IMO, beyond continued comfort and lack of change, what providers get with clearing houses is business process outsourcing. The business office can simply (and often) say, “Magically the data is extracted from our HIS/EMR and money appears in return.” If the provider is more deeply engaged, then they describe how claims are scrubbed, rejections reduced, and whatnot — the “clearing house helps improve payments.”

If the hospital actually works with and understands X12 messaging and understands the full scrubbing/pre-submittal validation process, then the value of a clearing house is (again, IMO) reduced. However, most hospitals do not directly grok X12.

If we ignore the outsourcing aspect and the direct pain of X12 grokage, the final value of a clearing house communications infrastructure. While the transactions are most standard per HIPAA) the communications protocols are not at all standard. Said another way, each payor has the ability/option of creating custom protocols for communication and providing such details in their companion document. e.g., UHC can use real time web services with multi-part HTTP Post while BCBS of AL can use sftp while Medicare of CA can use ftps. Sigh.