Health IT

Pilot project would gather Ohio doctors into one insurance e-portal

The one-year pilot is being run in New Jersey and Ohio. Advocates call it the ATM approach for insurance: several different payers all agree to one method of delivery. It has the initial backing of state physicians groups as well as insurance companies that represent more than 90 percent of Ohio’s privately insured population. America’s Health Insurance Plans, the national trade association for insurers, wants to develop a service for every region of the country.

Updated 3 p.m.

COLUMBUS, Ohio — An insurance-driven plan will try to unite doctors around one online portal to submit patient claims information: cutting down on administrative time, quickly providing details on how patients are insured, and (hopefully) trimming costs from health care.

The one-year pilot is being run in Ohio and New Jersey. Advocates call it an ATM approach for health insurance: several insurers agree to one method of information delivery. It has the initial backing of state physicians groups as well as insurance companies that represent more than 90 percent of Ohio’s privately insured population. America’s Health Insurance Plans, the national trade association for insurers, wants to develop a service for every region of the country.

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But rallying around one system may be thorny. Many doctors have an electronic method to manage and submit records — as do many insurance companies. So, using the banking comparison, this pilot will try to create an ATM system after hundreds of banks that already have their own money machines. Will they be ready to use something new?

Insurers say a streamlined system will attract physicians because more patients have high deductibles and many aren’t paying. Plus, there is waste. Physicians spend the equivalent of nearly three workweeks every year interacting with insurance companies, according to a May report in Health Affairs.

“That interaction has no value to the patients — it’s administrivia,” said Mark Jarvis, senior director of practice economics at the Ohio State Medical Association, one of five state doctors groups that joined in an announcement Monday morning welcoming the initiative.

And making that interaction an automated exchange of information through technology — rather than a manual transaction by phone or Internet — can reduce cost by up to 90 percent, said Julie Klapstein, chief executive of Availity, which is providing the online claims and health transaction platform for the pilot, during a noon conference call with reporters. “It takes $4 to $8 per manual transaction,” Klapstein said. “Automating these transactions moves that cost down to less than $1.”

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If the “administrative simplification” envisioned by the pilot were to succeed and go nationwide, it could save the U.S. health care system hundreds of billions of dollars over 10 years, said Karen Ignagni, president and CEO of America’s Health Insurance Plans, the national membership organization for health insurers, during the press teleconference.

Starting in November, physicians can enter patient data into a Web site provided by electronic claims manager Availity, which can connect with multiple insurance companies. Participating insurers are: Aetna, Anthem Blue Cross and Blue Shield, CIGNA, Humana, Kaiser Permanente, Medical Mutual of Ohio, UnitedHealthcare and WellCare Health Plans.

Physicians currently enter different kinds of information for each insurance provider they work with, which increases time spent on data entry and billing, doctors groups and insurers said. This new system would eliminate the duplication and provide faster feedback on patients’ insurance policies including data such as co-pays, coverage and deductibles.

The system will allow for real-time referrals and online submission of health-care claims.

The target for the project is eliminating unnecessary expenses, whether its bureaucratic waste or a better way to collect fees. The Health Affairs report in May stated that medical practices spend $68,274 per physician per year interacting with health plans, which equated to $31 billion in annual expenses. The Ohio State Medical Association cited figures that claim a 10-physician practice spends 2,600 hours a year verifying patient information: a total of $39,000 annually.

At the same time, physicians are increasingly concerned about collecting from patients with high deductibles. About 12 percent of employers offer high-deductible plans, which typically have a deductible of $1,000 for single coverage or $2,000 for family coverage, according to the Kaiser Family Foundation’s 2009 Employer Health Benefits Survey. That’s roughly the same as last year but up from 4 percent in 2005. About 8 percent of covered workers are enrolled — double the amount from 2006, according to the survey.

“With this economy, people walk out of the office and make it a low priority to pay that bill,” said Paul Apostle, vice president of enterprise development at Medical Mutual of Ohio.

Many physicians have already taken steps to use electronic records to address these problems. Medical Mutual, for example, has its own electronic system and receives 85 percent of its claims electronically. AHIP may have the clout to gather the other 15 percent of physicians who aren’t using online processing, Apostle said.

But, Apostle added: “A lot of providers have their own way to get claims through a back-end office system. Is the value proposition sufficient for them to try a new system?”

Another challenge by year’s end will be costs. Physicians don’t pay for the system, but insurers pay a transaction fee they didn’t have using their own systems.

The Ohio Department of Insurance gave the project its blessing. The project didn’t need state approval to get underway, though the department will monitor insurer compliance with state law through the project as it does with all claims.

“We applaud the efforts of health plans and providers to continue to work together to reduce administrative expenses in an effective manner, slowing the growth of health care costs, which could ultimately make health care coverage more affordable for Ohioans,” Insurance Director Mary Jo Hudson said in a statement.