By Mark Wolf
Dr. Susan saw Bill, Tom and Mary for their annual physicals on the same afternoon. Each patient complained of hearing loss in the right ear. The doctor examined each one and discovered they all had waxy buildup and cleaned out their ears.
Bill, Tom and Mary each have different insurance companies. After Dr. Susan treated them, her office billed each company for the annual physical and for cleaning their ears.
Bill’s carrier said ear wax cleaning was just part of the annual checkup and declined the charge for the ear cleaning. Tom’s company said the ear procedure should have been under a separate visit and will not recognize the procedure as part of an annual exam. Mary’s company says the cleaning was done as part of an annual physical and will pay for the procedure at a reduced rate.
That’s the simplified example Barry Keene, co-chair of the Colorado Medical Clean Claims Transparency and Uniformity Act Task Force, uses to convey the challenges the task force faces in creating uniform edits and payment process for all medical claims in Colorado.
The task force, created by House Bill 1332 in 2010, was appointed by the director of Colorado’s Department of Health Care Policy and Financing. It includes representatives from insurance companies, health care providers, medical software vendors and other shareholders. The task force is funded by grants, donations and gifts.
The task force’s charge is to provide a framework for uniform and transparent claim adjudication for each medical procedure. It will not affect the amount of money insurers pay for those procedures or the contracts between health insurers and providers.
At stake, says Keene, an engineer and founder of KEENE Research and Development, is the potential to save hundreds of millions of dollars and potentially funnel them into increased care. The Colorado Blue Ribbon Commission on Health Care Reform reported that more than $2.2 billion in health care spending projected for 2007-08 was spent on administration.
“This is a way to actually bend the cost curve,” Keene said. “We keep struggling with health care reform and trying to get more people insured, but we haven’t done anything to bend the cost curve.”
The task force’s final report is due in December 2012 and insurance providers will then have about a year to implement the new rules.
Several of Colorado’s large health insurers have representatives on the task force, but the industry has serious reservations about the issue.
“The overarching caveat is this is an incredibly complicated issue. They are essentially trying to take something that’s done by many different payers, private companies as well as Medicare and Medicaid, and make it standardized in a way no one has ever seen before,” said Marc Reece, associate director for the Colorado Association of Health Plans, whose members include Aetna, Anthem, Cigna, Colorado Access, Denver Health Hospital Medical Plan, Kaiser Permanente and other plans representing more than 75 percent of the commercial health insurance market in Colorado.
“They understand the value added if there is a standard set of edits. It would reduce administrative expenses, but it’s not that simple because the editing process adds value to make sure claims are done accurately, not done fraudulently and that members’ health care dollars are spent in the best way possible.”
The definition of a code edit according to the legislation creating the Colorado task force and cited by Keene in testimony to the National Committee on Vital and Health Statistics Subcommittee on Standards Nov. 18 in Washington, D.C., is: “A practice or procedure pursuant to which one or more adjustments are made regarding procedure codes…that results in (a) Payment for some, but not all, of the codes; (b) Payment for a different code; (c) A reduced payment as a result of services provided to a patient that are claimed under more than one code on the same service date; (d) A reduced modified payment related to a permissible and legitimate modifier used with a procedure code, as specified in section 25-37-106 (2); or (V) A reduced payment based on multiple units of the same code billed for a single date of service.”
Agendas and minutes from previous meetings are available here.
The task force meets each month. Quarterly meetings are in-person gatherings, the others are teleconferences.
The next in-person meeting is at 8 a.m. Monday, Nov. 30, at the University Physicians Building, 13199 E. Montview Blvd., on the Anschutz Medical Campus.
“I did not anticipate how much lexicon would play into this,” said Keene. “The word ‘edit’ means very different things depending on where you’re coming from. Payers will sometimes confuse ‘edit’ and ‘audit.’ Billing agencies get confused about the difference between ‘edit’ and ‘denial.’ ”
The end goal is to make health care transactions work as well as the banking industry, said Marilyn Rissmiller, senior director of the Division of Health Care Financing for the Colorado Medical Society and co-chair of the task force.
“To do that you have to have standards, and everybody has to be following the same standards. One bank doesn’t interpret something to mean this and another bank interprets it as something else, otherwise you’d have money flowing all over the place. That’s what we’re trying to get at. The ideal would be you go to your doctor, you swipe your insurance card and it tells you exactly how much you owe for that visit and how much your insurance company is going to pay, or if they’re not going to pay,” she said.
“The claim gets paid electronically right after you leave the doctor’s office, gets processed and the money is transferred to the doctor’s account and he gets a remittance explaining how the claim was processed through his billing system,” she said. “Nobody touches anything.”
Some insurers believe the effort to establish uniform claim edits could raise price-fixing concerns.
Dr. Chris Jagmin, a medical policy and operations senior medical director forAetna, told the NCVHS subcommittee that efforts to “review claim edits and their sources must be done with careful attention to antitrust and competition policy parameters, given the relationship of claims edits and payments. Such careful attention should extend both to the relevant discussions, as well as to the manner in which resulting recommendations are conveyed and utilized. Because antitrust law generally prohibits agreements on price-related terms, an agreement among commercial plans on a set of claims edits is not a viable option.”
Rissmiller responds that the challenge for the task force “is to get everybody to agree that the end dollars are not what we’re talking about. We’re talking about how to get claims into the system cleanly and consistently across payers.”
All of the testimony before the NCVHS is available here.
Under provisions dealing with administrative simplification in the Affordable Care Act, the Secretary of Health and Human Services is charged with taking input on “whether there could be greater transparency and consistency of methodologies and processes used to establish claim edits used by health plans” and most of the stakeholders in the process agree on the need for a national set of standards.
“There needs to be a national authority to step in here. Colorado doesn’t want to be unique; we want to ignite a robust national conversation around this,” said Keene. “We have made ourselves subordinate to the output of a national initiative.”
Rissmiller employs a sports metaphor to describe her optimism about the task force’s mission:
“It’s one game at a time. It’s not easy and I don’t think anyone at the table thinks it’s going to be easy, but even given our diverse organizations and backgrounds, no one has pushed away from the table and everyone is committed to finding a way to make it work,” she said.