Practices devote costly hours to insurance dealings

At Cardiology Consultants of Philadelphia, one of the region's largest specialty physician groups, the expensive quest to get paid by dozens of insurance companies begins days before a patient shows up for an appointment and can take weeks or months.

It's a quest repeated in doctors' offices and hospitals everywhere, one made more complex and time-consuming by America's hodgepodge of insurers. Each has its own rules and procedures, rules so complex that Cardiology Consultants produced a 100-page how-to manual just for front-desk employees.

We all pay for the ensuing bureaucracy through insurance premiums and taxes. And the heart doctors in this practice have had to organize their business around making shortcuts in the labyrinth.

Before appointments, employees at Cardiology Consultants start calling patients to make sure they have a valid insurance card and a referral from a primary-care doctor, if needed. Without those, any hopes of filing a "clean" claim that is paid quickly are doomed.

Weeks later, 18 employees in a cubicle-filled central office on North Broad Street are still making calls on 17 percent of the claims, fighting denials or figuring out why there's been no response to a bill.

In between, the 78 doctors and 350 employees spend hours talking with insurance companies about which drugs patients can take and which tests they can have and where they can have them.

Workers do their best to collect co-pays that have grown as businesses have shifted the cost of health to workers. Co-pays for an office visit are as high as $75, a sacrifice for elderly patients with heart trouble. One managed Medicare plan charges a $150 co-pay for a stress test. At its 18 offices, the practice handles a million dollars in cash a year.

All in all, Peter Jannelli, executive director for Cardiology Consultants, estimates that 45 full-time employees do nothing but make sure the doctors get paid for their 230,000 patient visits a year.

"Chasing money," Jannelli said. "You're chasing your money all the time."

American doctors and hospitals have to employ far more billing clerks than counterparts in, say, Germany or Canada, Princeton University health economist Uwe Reinhardt said.

"We have without any question the most complex, bureaucratic health system in the world. There is just no other nation that spends as much on paper and computers . . . just claims-processing. . . . To my mind, we get very little for that in terms of social value added."

The raucous health debate in Washington has largely focused on increasing the number of people who can afford insurance. The House and Senate bills recognize that bureaucracy is a problem, though, and address it primarily by standardizing billing procedures. The Congressional Budget Office estimates that standardizing insurance claim forms would save $8.8 billion in federal spending over 10 years.

"Streamlining administrative procedures will reduce cost and reduce the time and effort that go into getting coverage and getting care paid for," said Rep. Allyson Y. Schwartz (D., Pa.), who supports change. That would allow more of our money to be spent on providing care.

The stimulus package funds improvements in information technology that could simplify billing. There's no serious discussion of a single-payer system, and some lawmakers want to go in the opposite direction, encouraging more competition.

U.S. payments for health administration - 7 percent of our health spending - are twice the average of the Organization for Economic Cooperation and Development, 30 countries that share economic data. (That includes only spending by government and insurers, not doctors or hospitals.)

A study this year by the Medical Group Management Association found that "interaction" with insurers, other than for Medicare, costs medical practices $21 billion to $31 billion a year.

David Gans, MGMA's vice president for innovation and research, wouldn't release details but said a new study comparing the United States and Canada found much lower costs in Canada's single-payer system "because they have a single set of rules."

Susan Pisano, a spokeswoman for America's Health Insurance Plans, said the industry lobbying group does think doctors "have a legitimate concern, and we also want it to be more streamlined from our end."

New Jersey will soon announce a pilot program funded by insurers that creates a single billing portal for hospitals and doctors, she said.

That approach standardizes the format, Pisano said, but not the rules.

Cardiology Consultants uses three Web portals to do business with most insurers. It needs four additional sites to pre-certify heart stress tests.

Mark Victor, an energetic 58-year-old cardiologist who is chief executive officer and managing partner of Cardiology Consultants, said the clerical work accounted for about half the practice's overhead, which amounts to 47 percent of revenue.

The insurance paperwork "has nothing to do with the quality of care or the delivery of care," he said. "At the end of it, it's all about the payment for care."

Some of the insurance company rules that doctors find so annoying are meant to prevent fraud and overuse of expensive drugs and machines. Under many insurance plans, doctors have a financial incentive to give more, not necessarily better, care.

In some ways, Cardiology Consultants is exactly the kind of practice that people who study health spending would say needs some checks and balances. The cardiologists own their own catheterization lab at Hahnemann University Hospital. Patients can get stress tests at 13 of their offices and echocardiograms and EKGs in all of them. The practice makes money on these tests.

But the equipment also makes care for patients much more convenient, efficient, and coordinated, Victor said.

He said insurers could control expenses more effectively by making sure that all the labs their subscribers used met high standards, and that doctors followed practice guidelines based on science.

He's suspicious of the most obvious solution: a single-payer system. Monopolies haven't worked elsewhere, he said, and competitive markets are more likely to yield cheaper, better insurance. He's no fan of big government programs; his biggest worry now is that changes in Medicare rules could drastically cut cardiologists' pay. He said the country should make all insurers follow a single set of rules.

Administrative cost was one of the factors that drove Victor to start merging his practice in South Philadelphia with others in the 1990s. The economies of scale allowed the practice to invest in computers that simplify billing and expert employees who can bill more effectively.

Because of its size, Cardiology Consultants could afford a killer $2.5 million computer system that integrates medical records and billing information for all the offices. (No doubt it helps that East Coast cardiologists make, on average, about $450,000 a year.) It employs eight full-time IT workers.

The practice is almost paperless now, which means it no longer needs filing clerks.

The doctors record everything they do for a patient in laptops. The information is needed for both treatment and billing. The laptops are loaded with voice-recognition software. As every patient visit ends, Victor dictates a letter to referring doctors. It instantly appears on his screen and requires little editing. Before the patient leaves the exam room, Victor's letter is on its way, and the billing information has gone to the front desk.

"Twenty people that used to be typing don't work for us anymore," he said.

Even doctors in smaller practices bill by computer now, a huge improvement from the days of different paper forms. Cardiology Consultants can't link its system to insurers, so employees still type in the information, though. Victor hopes to create a health-information exchange that integrates his computers with those at hospitals and insurance companies. While the practice deals with hundreds of insurers, 10 of them account for about 90 percent of its business.

On a recent morning, Victor did a finger-stick to measure how 76-year-old Toni Picklo's blood was clotting. A Port Richmond woman with red lipstick and black hair piled high in an updo, Picklo is on a blood thinner. Victor knew he would not be paid for the test, which costs about $7. Picklo's insurance company covers only tests done at certain labs. The alternative was for Picklo to go to another lab, wait for results, and then talk to Victor. As it was, he knew instantly that her reading was perfect and told her to keep her medication at the same dose.

"If it wasn't for Dr. Victor, I wouldn't be going to bingo three days a week," she volunteered.

Veronica Covalesky, one of the other doctors in the office that morning, lost a fight to give John Orcutt, a 63-year-old charter-boat captain from Marlton, a stress test before he set off for a winter of fishing in Florida. There were complications when he had a catheterization and stent placed in June. He's had trouble breathing, and the doctor who did the procedure thought Orcutt should have another test.

Staff members spent more than an hour on the phone with Orcutt's insurer making their case that he needed the test sooner than most patients would. Covalesky's sister Rose, a physician assistant who gives stress tests, talked with an insurance company doctor. He told her, "Believe me, I'm not trying to tell you how to practice medicine, but we won't pay for this test."

Rose Covalesky said this kind of battle took as much as 30 percent of her time.

Orcutt, a soft-spoken man with a full beard and reddish hair, is waiting to see whether his union, which chose the insurance, can have more sway than the doctors.

Linda Bilbow, a nurse in the South Philadelphia office, spends a couple of hours a day dealing with formularies, lists of covered drugs. Insurance companies usually insist that patients try the cheapest drugs first. Bilbow keeps a 5-inch-thick file on her desk with the forms she uses when doctors have a medical reason for going off formulary. The insurers want faxes, so she spends 15 to 20 minutes filling out each paper form.

At the central billing operation, the practice has two high-level coders, people who know the convoluted billing system well enough to make sure the doctors don't leave money on the table when handling complex cases.

One of them is Heather Stecker, Victor's daughter, a University of Pennsylvania graduate. She audits bills to make sure the doctors code properly and document what they do well enough to back up their claims.

Earlier this year, Medicare was reviewing about 150 claims a week. "If we didn't have an electronic medical record, it would be next to impossible," Stecker said.

Billing supervisor Maria DiTomasso spends much of her day dealing with more routine denials. One of her recent challenges involved a patient who had been pre-certified by his insurer to have a procedure. Nonetheless, the bill was denied. When DiTomasso checked on it, the company said the authorization had been canceled because the patient's identification number expired. He had a new number with the company, and DiTomasso had to try to recertify him under that number.

"I'm probably going to have to appeal this," she said, "because we did what we were supposed to do."

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In Currents

Smerconish, C1.

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