|
 What
will become of the small independent electronic claims
clearinghouse?
With so many changes in the healthcare industry
over the last 10 years, and with the economy in question, I turned
my attention to the small independent electronic claims
clearinghouse this month. In following the Ingenix acquisition of
ENS last May (see
details), the number of small independent clearinghouses is
officially down one – (Ingenix is neither small, nor independent).
So what does that say for the rest of the pack? What will happen to
the Gateway EDIs and the ET&Ts of the world? It may come as a shock
to you that the small independent clearinghouse is alive and well in
the United States today and, in fact, many are thriving.
 What
does a clearinghouse do? In healthcare IT, doctors have
the nasty, yet critical, task of taking all of the patients that
they have seen for the day and submitting the details of each of the
office visits to all of the insurance carriers belonging to those
patients. If this task is not completed properly, the doctor
will go out of business. This, as you might guess, can be an
arduous, time-consuming, and frustrating process. In the caveman
days, doctors would fill out the insurance forms by hand and mail
them to the carriers. In the late 1980’s, Medical systems began
automating much of that process, so that forms could be creating
electronically and printed. Changes in the industry over the last
20 years have facilitated (and even governmentally mandated) sending
those forms electronically to the insurance carriers – which is
where the clearinghouses come in.
Clearinghouses maintain relationships with
hundreds and even thousands of insurance carriers, so that the
doctor can send their electronic files to one location. The
clearinghouse generally checks the files to ensure their accuracy
and then re-routes the files electronically to all of the
appropriate carriers. When done correctly, this is a thing of
beauty, speeding up cash flow for the medical office and allowing
the doctor and the medical staff to focus on patient care.
Size Matters? Today, electronic
insurance claims clearinghouses can be found in a plethora of
variations and sizes. From the billion dollar corporations found in
McKesson and WebMD (now EMDEON), to regional clearinghouses like
THIN and WMSC, to the small independent clearinghouses like Navicure
and Apex - there are multiple options to suit the eClaims needs of
any medical office. Small clearinghouses have maintained steady
growth over the past 10 years and have maintained competitive
offerings by adding what have traditionally been viewed as 'large
clearinghouse' transactional services to their mix, in addition to
eClaims. These services might include: eRemittance (the
processing of the insurance payments electronically) eStatements
(the printing and mailing of patient statements for an office), and
real-time eEligibility (the electronic process of checking to see if
a patient is eligible for treatment before giving patient care).
Though these services have helped the little guys remain
competitive, they really only reveal a small portion of why many of
the small clearinghouses are thriving. The real essence of the
small independent clearinghouse's success is found in the unique
customer service experience that they are able to give the physician
clients they work with.
Happy Customers. For a large
corporation, sometimes the ability to 'connect with' and 'delight'
customers becomes a near impossible challenge. Smaller
clearinghouses are still able to maintain that ‘personal touch.’
For example, ET&T “often spends extra time” with their new customers
“until they are comfortable with filing claims electronically.”
This can also be said of Navicure, who has a "deep commitment to
highly personalized customer service, [and] developing one-on-one
relationships with clients.” Apex thrives on "personal attention to
the client. [They] know their names, who they are, who their
children are, and what they did over the weekend.”
The personal touch and connectivity with the
clearinghouse is a significant part of the growth that the small
independent clearinghouse’s have experienced, but this is only
effective if the medical office is getting money back from their
claims. If the physician’s office is not get paid in a timely
manner, then they will switch to another company. Cashflow is
king with any clearinghouse, it is the bottom-line, regardless of
clearinghouse size. Luckily, in most cases small
independent clearinghouses are able to be just as effective as the
large carriers, if not more effective, in getting insurance claims
processed and paid. Gateway EDI, for example, has implemented a 99%
program to help its physician clients submit cleaner, more complete
claims, so that the claims have the highest chance of being accepted
the first time they are submitted. President Charlotte Martin
elaborated, “Any Gateway EDI provider that commits to file its
claims in less than 15 days from the service date, produce more than
200 claims per month, and maintain an overall claim acceptance rate
of 99 percent or better can become a 99 Percent Club Member. In
exchange, Gateway EDI will produce faster claims payments (in as
little as two days), quicker resolution of rejected claims, enhanced
cash flow, and overall administrative efficiency.” Programs
like this one - that maintain a personal touch, improve customer
service, and speed up cash flow for the doctor’s office - are a
perfect example of why many small independent clearinghouses are
growing.
HIPAA Transactional Challenges.
HIPAA’s ANSI transactional requirement for electronic claims and
other healthcare electronic transactions has also offered a number
of major challenges for clearinghouses to deal with. Brian Parrish,
of Navicure, expressed this challenge in a recent e-mail. “HIPAA
transaction sets have prompted the development of many standardized
electronic claims processing applications. While most do a good job
of complying with transaction standards, others take certain
liberties with data requirements.”
These ‘certain liberties’ can feel almost like
we are back to the National Standard Format days (an early format
used intermittently during the 1990s for eClaims), where insurance
claims sent electronically were neither ‘National’ nor a
‘Standard.’ ET&T’s CFO, Anne Knicely, also admits, “Like many
companies in the industry, complying with HIPAA has consumed a good
part of our programming resources for the past 6 years. Lack of
true uniformity in [ANSI] 837 and 835 formats continues to be a
frustration.”
In general, however, most small clearinghouses
agree that the HIPAA transaction regulations have been a positive
change in the industry, in spite of challenges. Charlotte Martin,
the President of Gateway EDI, said it best in a recent eInterview,
“HIPAA has had a positive impact on our organization. While we
experienced the headaches and frustrations that everyone in the
industry had during the heat of HIPAA, since then we have actually
surpassed our pre-HIPAA service standards… In addition, more
transactions are now available from more payers which allows us to
expand our offerings to providers. Today we are able to offer more
transactions for more payers to more providers, in a large part due
to HIPAA.”
Additional Changes in Healthcare.
Because they are nimble, small independent clearinghouses have been
able to branch out to offer other unique services and fill other
needs for medical offices. These additional services continue
to give them a unique presence in the market and help marry their
customers to them. These services may include: credit
card processing for physicians, eCheck processing for medical
offices, automated revenue cycle management, real time claim
editing, and health savings account support.
Clearinghouse Partnerships.
Complex changes in the industry have required that some of the small
independent clearinghouses partner with a few of the big
clearinghouse corporations in order to help manage key relationships
with specific insurance carriers. This is not a new practice
however, for big or small clearinghouses – McKesson, for example,
still routes many of its claims through WebMD (EMDEON) because of
the unique and sometimes exclusive relationship that WebMD has with
certain payors. Chris Yaden, the General Manager of Apex, explained
it to me in the most simple of terms. “HIPAA has complicated
what we do, taking us from a simple electronic claim to a multitude
of communications back and forth with insurance companies and
providers. We have battled this concern by partnering with
companies like WebMD to facilitate transactions until we can manage
them ourselves.”
The Squeeze-Out. There are still
some challenges ahead for the small independent clearinghouses that
will need to be navigated. In order to 'squeeze out' the
competition, large and mid-sized clearinghouses frequently target
practice management software companies to forge exclusive
relationships with. Such an exclusive deal could make using any
clearinghouse, other than the one prescribed by the billing software
company, a non-option for an office. Some large clearinghouses have
even gone as far as purchasing an entire medical software company in
an effort to keep all claims routed exclusively through them. This
technique of 'squeezing out' the competition has been going on for
years in the industry, probably with WebMD’s purchase of Medical
Manager in 2000.
Brian Parrish of Navicure encourages medical
office's to be leery of getting locked in to one clearinghouse by
purchasing a software that doesn't at least give you the opportunity
to drop your claims to a file and select the clearinghouse of your
choice. “Issues like these underscore the importance of selecting
an open system when implementing practice management and electronic
medical record systems. Practices should insist on an open system,
so they can choose ‘best of breed’ technology to effectively support
their clinical and administrative needs, as well as address the full
range of issues raised by HIPAA.”
Special thanks to Navicure, ET&T (Electronic Translations &
Transmittals, Inc.), APEX, and Gateway EDI for their cooperation in
working with me on this article.
-- Kevin Burdick,
InvestMedLLC.com
October 2006, TOP STORY:
Switching Vendors? Now what.
August 2006, TOP STORY:
What is all this CCHIT!
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