Develop a Simplified,

Centralized, Medical Billing System:

Improved Efficiency

Physicians spend hundreds-of-millions of dollars every year simply trying to collect payments from Medicare, Medicaid, and private insurance companies. In fact, hiring staff to move the paperwork comprises a significant portion of the overhead in a physician office.

According a 2009 Medical Group Management Association (MGMA) report, the average physician office requires 4.43 support staff for every provider. That number rises to 5.24 staff per physician for “better performers.”* The billing and administrative burdens of Medicare, Medicaid, and traditional insurance drive much of this need for excessive staffing.

By dropping all third party payers, a North Carolina physician (Brian Forrest, MD) reduced this ratio to 1.0 support staff per working physician. Running a direct pay / low overhead practice enables Dr. Forrest to spend more time with patients and achieve better outcomes at a fraction of the cost of a traditional practice.

 If a physician office can nearly triple its efficiency by ridding itself of the billing, collections, and administrative overhead of third-party payers, this massive inefficiency of our current billing system provides a target ripe for reform.**

Preventing Fraud, Waste and Abuse

On the other hand, the lack of a centralized database to screen healthcare billing patterns opens the door for fraud and abuse.

 A speaker at the Center for Healthcare Transformation told the story of a dentist who billed for 900 Medicaid patients in a single day. Unless an office worker made a clerical error and billed a month’s work on a single day, this represents clear fraud. Perhaps equally disturbing is the fact the Center for Medicare and Medicaid Services (CMS) simply wrote the check without flagging the filing for potential fraud.

The Center for Healthcare Transformation estimates 10% of New York State’s Medicaid payments are fraudulent. However, no real time screening tool presently exists to quickly identify such behavior.

The Solution

A single, simplified electronic billing format could easily screen billing patterns across multiple payer sources in real time. All payer sources, both public and private, would receive their billing data through this single electronic system.

This would eliminate the complex process of sorting out the different billing requirements of scores of different payer sources. Using a rolling history of billing patterns sorted by individual provider numbers (done as a daily, weekly, and monthly rolling history), this system could immediately identify true fraud while simultaneously improve physician efficiency.