By: Tom McCarthy, Founder of Mitchell Casualty Solutions
Property & Casualty (P&C) insurance companies have a choice of several techniques for encouraging faster provider adoption of electronic billing (eBilling) and electronic payment (ePayment). There are multiple benefits associated with electronic billing and payments, including the capacity to substantially lower transaction expenses, unload a big burden off adjusters and call centers, and enable similar benefits to accrue to medical provider trading partners. There are seven specific steps that encourage and enable eBilling and ePayment practices and adoption:
- Implement the ability to accept eBills from and make Electronic Funds Transfer (EFT) payments to any provider that requests it
- Encourage the cooperation and support of provider trade associations, state and national
- Leverage your technology partners with your provider adoption efforts
- Request provider networks to convert their members to electronic processing
- Ask volume providers directly to convert to electronic methods
- Cooperate with industry trade associations that might need to understand P&C differences from healthcare insurance claims (practice management systems, for example)
- Keep at it!
Step 1: Become Enabled
The healthcare world is marching towards the January 2014 mandated date (Affordable Care Act) when all providers
and payers must be electronically enabled to send and receive EFTs under the Health Insurance Portability and
Accountability Act (HIPAA) mandated standards and operating rules. In 24 months, all commercial health insurance
payers will be fully capable of eBill, eRemittance, and ePayment through EFT. Provider adoption will escalate as those
dates get closer. When you are enabled in every relevant state and every relevant jurisdiction and capable of handling
all relevant HIPAA transaction sets, you will be able to recruit providers to enroll in submitting and receiving electronic
This is worth repeating: only when you are enabled in every relevant state and every relevant jurisdiction and capable
of handling all relevant HIPAA transaction sets, will you be able to recruit providers to enroll in submitting and receiving
electronic healthcare transactions. If you want to play in the healthcare world, you need to follow suit. No longer can
the standoff for who goes first be allowed. Providers will not become enabled unless P&C payers can accept electronic
transactions and there is a mechanism and adoption process for providers to become enabled.
Now is the time for the P&C industry to step up and become fully enabled as the federal mandates for compliance reach
their target dates. P&C payers must take advantage of the momentum, and strongly encourage all healthcare providers
to adopt electronic transactions.
Step 2: Sell the Circle –The 360-Degree Solution
One way to help increase the adoption of eBilling is to sell the entire 360-degree solution—and that starts with showcasing the savings providers can obtain by using eBilling and ePayment solutions. Providers are looking for one workflow for all lines of business and payers. The ASC X12 electronic health care standard transactions allows P&C payers to be able to take advantage of this opportunity by utilizing the same transactions the commercial market is mandated under HIPAA to pass P&C information between the provider and payer. This includes sending an eBill and requested attachments, acknowledgement, claim status, electronic remittance advice and EFT functionality.
If you follow the cycle of benefit in the Electronic Data Interchange (EDI) world, the cost to the provider of sending a paper invoice is between $1.50 and $2.00, with postage continuing to increase. Submitting bills electronically reduces the provider billing cost to below $.50 per invoice and it is faster, more secure, and receipt is acknowledged. Additional payer advantages include:
- Elimination of mailroom, scanning or distribution expense
- Automatically screens invoices to determine whether it’s a “clean bill”
- Automatically submit for bill review
- Ability to pass the invoice on for automatic payment
- Frees more time for claim investigation
- Electronic Funds Transfer and Electronic Remittance Advise lowers costs from $5 to $15
This functionality removes significant administrative time from the higher paid adjuster and frees more time for claim
Why stop there? ePayment has been available for years but lightly adopted. Most trade associations and many payers
have estimated the cost of making a paper payment after a decision has been made is somewhere in the $7 to over
$20 range. Making an electronic payment through EFT coupled with an Electronic Remittance Advice (ERA) costs in the
range of $3 to $5, depending on the bells and whistles you choose to include, a significant savings.
Providers who have chosen to receive payment through EFT love it, too. One large medical delivery company has
publically reported that days in accounts receivable reduced to 47 days from 82 days. Bad debt dropped from 30.5% to
9.1%. This eliminated 35 days allocated to chasing payment through phone calls. Instead, they were able to receive and
reconcile payment for almost 25% more of the eBills through the implementation of the 360 degree solution.
The faster 360-degree solution avoids repeat billing and reduces payment status calls to your adjusters. Presenting the
electronic bill status on a web portal allows the practice to look up and download Explanation of Benefits (EOB) and
payment information 24X7 without making a call and depending on your staff to respond.
Estimates of provider calls to a payer range from 25% to the 40%-60% range of all calls received. Even assuming only
25% of providers call regarding payment status, eliminating the majority of these calls with the 360-degree solution is
a tangible benefit to a payer. The provider benefits substantially from reduced manual phone calls, the adjuster gets
relief from time consuming paperwork, and the payer saves expense from reduced bill processing costs and avoidance
of status calls.
Step 3: Take Advantage of Industry Associations
AMERICAN MEDICAL ASSOCIATION (AMA)
In the spirit of administrative simplification initiated
with the adoption of HIPAA and amplified with the
Affordable Care Act, the AMA has developed providerdirected
programs to educate physicians and other
health care providers on the advantages of eBilling and
related transactions. They are cooperating with payer
organizations and bringing market specific educational
materials and toolkits to their constituents, the
physician practice community. One of the AMA’s goals
is to reduce the administrative cost of medical practice
billing from 10-14% of revenue to 1%.
Join the AMA in supporting these activities that promote
adoption of electronic transactions and sponsor related
programs to show that P&C payers are enabled for
eBilling. The costs and simplification benefits sell the
value of eBilling, with value to both physician practices
and payers that result in a “win-win” situation.
Specifically, use the P&C toolkit prepared for and
provided by the AMA for HIPAA standard transaction
compliance in P&C. Refer healthcare providers to the
AMA website at www.ama-assn.org/go/workerscomp to access webinars and related documents that are downloadable.
Contact the AMA at email@example.com when you are enabled and get added to the list of
confirmed electronic payers or vendors posted on the web site. Be active in promoting physician practice adoption of
electronic transactions at every chance available.
STATE MEDICAL ASSOCIATIONS AND NATIONAL MEDICAL SPECIALTY SOCIETIES
Meet with state medical associations and national medical specialty societies to learn what particular concerns their
members have with P&C eBilling in their state. Assign a resource to help resolve those issues either through the standards
committees or to influence state regulatory changes to allow wider adoption of eBilling.
Ask the state medical associations and national medical specialty societies to market the fact that you are an electronically
enabled payer ready to accept their eBills and return claim processing information through electronic remittance advices
and pay through EFT. Ask them to post lists of confirmed electronic payers on their website with links to the AMA
toolkits, eBilling vendor listings, and referenced companion guides for P&C transactions.
INDUSTRY ASSOCIATIONS AND GROUPS
Industry groups and associations that have a stake in the process are recognizing that some burden falls on their shoulders
to facilitate electronic transaction adoption by providers and enablement by payers. The International Association of
Industrial Accident Board and Commissions (IAIABC) created a model companion guide based on ASC X12 005010 and
NCPDP D.0 for states that are interested in mandating eBilling and associated electronic transactions. This model and
companion guide is being reviewed across the states and is the model for the recent California legislation. A standard
approach that mirrors the commercial and governmental plans is critical so that the P&C industry does not end up with
50-plus versions of companion guides and state specific variations of the standards.
Step 4: Leverage Bill Review and Workflow Providers
Work with your bill review and workflow technology partner. A good partner will have ready-made solutions to quickly
enable automation for all states and jurisdictions. Provide them with a list of your top submitters so they can perform an
analysis of the market of providers that are currently enabled to send eBills through its solution. An experienced partner
will have already completed testing of integration points and compliant solutions being offered. Benefits of working
with an experienced provider include:
- Internal systems monitoring and modifications for changes in transactions and changing state regulations
- Building compliant solutions
- Quicker adoption by payers already working with partner companies
- Cost effective option (build and maintain once, then share the advantages and cost among all their clients)
Step 5: Provider Networks
Ask your provider network partners to strongly recommend that their providers adopt electronic submission for P&C
claims, providing an incentive for adoption or disincentive for not adopting. You should also be ready to contribute your
fair share to an incentive program that you believe will yield significant increases in adoption. A good solution partner
will provide recommended approaches and walk hand-in-hand with you through this process.
Think about how you can offer incentives to provider networks through either fast payment with EFT or refunding a
small percentage of the discount you normally take for a period of time after initial adoption. Try to also be creative
when encouraging providers. Remember, most providers are not familiar with P&C vernacular or processes. The easier
you make it for them, the faster you will see adoption rates increase.
Step 6: Direct Reach-Out to High Volume Providers
Be cognizant that you might have significant influence over provider adoption when you have a large market share
in a particular area as you could be a material source of revenue to the practice. A direct request from you to targeted
high volume providers, particularly regional providers, could result in increased adoption. Sometimes it just takes
additional education regarding how easily eBill can be performed to get movement. Often, mail stuffers and electronic
notices do not reach the decision maker, and it’s difficult to encourage adoption if the message does not reach the
right person. Consider scheduling regular periodic efforts to recruit providers. If the providers do not have an electronic
transaction clearinghouse or practice management system solution provider, refer them to the one with which you have
Step 7: Keep at It
Provider adoption is not just a project but it is an ongoing strategy. It will take time to gain volume towards this movement
to adopt eBilling and EFT even with the federal government incentives for adoption of electronic transactions. If you are
a large volume payer, you might have the resources to fund an internal provider outreach strategy. Others might find
collaborating with associations or groups that represent many carriers in your space to be more cost effective. The key is
to develop an outreach strategy and keep at it and reinvent the strategy based on lessons learned. Let's face it; everyone
wants to reduce the cost of doing business and the same end result of an easy and inexpensive electronic transaction
exchange. Provider and vendor education is critical to assist in understanding how to successfully implement eBilling
and the 360-solution.
Electronic commerce is here. eBilling is a more efficient way to do business as it is less expense, easier to process and
provides for higher accuracy. And don’t forget, eBilling is a green initiative. The reduction of paper, the absence of diesel
for shipping, and decreased contributions to landfills all help to save the environment; something to keep in mind with
your program planning.
The time is now, if not a bit late, to get moving with your 360-degree solution for electronic transaction adoption. Help
providers understand how to perform P&C eBilling, then gather the information you need to help simplify enrollment
and collaborate with your trading partners. Enabling your organization to send and receive electronic health care
transactions, enabling providers to send and receive electronic health care transaction through an outreach strategy and
collaborating with like-minded partners will assist in automating the P&C industry and reducing manual cost and burdens
being experienced by all stakeholders today. And, you can leverage the help and support of several well-connected
organizations that are pushing for the automation of the billing process: Mitchell International, Inc., American Medical
Association, Jopari Solutions, Inc., IAIABC, Cooperative Exchange, and more.