Healthcare Payers, Providers Partner on Claims Processing

Payers and providers are finding that it benefits both to streamline what often has been a contentious element of the business of healthcare.

2 comments on "Healthcare Payers, Providers Partner on Claims Processing"
Michael Hendershot (1/19/2011 at 7:16 PM)

The issue of transparency is indeed a notion somewhat lacking in the payer- provider relationship, leading to avoidable frustration and cost. It does not need to be like this. (Full Disclosure: My company develops repricing & contract modeling software solutions) Payers and providers spend (waste) billions of dollars annually re-working mis-paid claims. Much of this effort results from the fact that stakeholders to the payer-provider contract are not in synch with how the payment terms ("business rules") are interpreted. Clearly defining business rules during the contract negotiation proceedings and ultimately in the [INVALID]d contract avoids these misunderstandings to the mutual benefit of all parties. How do we make ourselves clear? It's quite simple actually. Our system generates a "Contract Summary" for each loaded contract (or iteration thereof as is the case in the negotiation process). The Summary presents the business rules in a qualified and quantified manner, explaining: What the business rule is (e.g. Med/Surg, Transplant Kidney, Cardiac Cath, Angio., etc.); How a business rule is defined (revenue code, DRG, CPT, ICD-9, combination of codes, etc.); What the rule pays, and; How the rule pays (per diem, case rate, step down, per unit, per visit, percent of charges). The Summary is made available to a provider electronically, providing him the opportunity to fully understand (and question, if need be) what, exactly, is being proposed. As the negotiation progresses along the iterative path, Summaries continue to be made available to ensure a mutual understanding of the rules. In the article, Sanford relates the central theme arising from their research: "the interpretation[INVALID]or misinterpretation as was generally the case[INVALID]of the contract terms as represented in the codes that the providers were using." That's exactly correct. That's what needs to be remedied. Additionally, our repricing tool generates a "Process Trail". The "Trail" is a plain English explanation of exactly how the claim was priced, according to the business rules governing that claim. The Trail is unique to each type of claim under the same contract and is as detailed as is necessary to account for all of the rules which were [INVALID]d on any particular claim. The Trail is available to authorized parties over the web. As such, prior to calling the payer, the provider can easily evaluate how the claim was priced and perhaps clarify his/her own misunderstanding right away. Indeed, to the detriment of all stakeholders, there is a dearth of transparency in contracting and claims processing in healthcare. Payers can do much more to illuminate contract intent as it relates to the business rules. Payers can also do more to "un-complicate" the repricing process buy making it more transparent. All parties benefit as a result. And to my mind, no one is worse off for the effort. With billions of dollars at stake, what are we waiting for? For more information call me at 847-864-1432 or visit us at
bob (1/13/2011 at 1:36 PM)

A great deal of money [and headaches as well] can be saved with the simplest approach to partnering between providers and third party payers. This approach involves the provider contracting out the entire billing and collection processes, including all claims processing, to a single, competitive third party payer. The contracting third party payer negotiates a collaborative strategic plan and annual budget with the contracting provider, and guarantees monthly payment to the contracting provider of all of the budgeted income, eliminating any involvement of the provider in payment and collection of bills for services to individual patients. The contracting third party payer takes over the management and staffing of the provider's billing and collection processes, maintaining the staff at the hospital, working in close collaboration with the hospital's staff that provides care and information. This approach of course requires a high degree of mutual trust, as well as processes to deal with any issues in achieving agreement on the annual budgets, and on how to handle unforeseen income and expense developments during the budget year and at the end of the budget year. Probably some arrangement for arbitration may be required. But the advantage to the provider of [1] guaranteed income and [2] being relieved of all responsibility for billing and collections may be sufficiently great to overcome any reservations. For the contracting third party payer, this arrangement assures a relevant role in the years ahead as coverage becomes universal. This approach shifts the interaction between provider and payer from a focus on individual patients to a much more effective, broader bundled perspective that has tremendous implications for greater effectiveness and efficiency than when the focus is on individual patients. As important as the reduction in costs of claims processing and collections is the fantastic reform impact of the collaborative strategic plans and budgets, prepared by professionals increasingly improving their understanding the interaction of the necessary patient care focus with the equally necessary population care focus. For more information, see my web site or call at 215-561-5730.


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