Technology and the
Future of Medical Billing
by Ronald E. Nyman, Esq.
In his fascinating book entitled The World Is Flat, award-
winning author Thomas Friedman gives us a clear and con-
cise explanation of the revolutionary changes happening in
the world around us. Friedman’s focus is on information
technology that enables people to work together even when
they are separated by great distances. With lower costs for
hardware and software, the rising popularity of the Internet,
and local communication networks better able to handle
high volumes of traffic, our work environment is no longer
constrained by the need for physical proximity. Whether
professionals or students, we can work with people in
remote corners of the world just as easily as with colleagues
down the hall. Distance is no longer an obstacle to fruitful
collaboration.
The World as We Knew It
What opportunities does Friedman’s "brave new world"
offer for the administration of medical billing? To better
understand the answer, let’s look back twenty years and
observe the state of the industry in the 1980s. Back then,
most healthcare providers handled their own billing with in-
house resources. Life was much simpler. A physician would
provide care to a patient and send the bill to the patient’s
insurance company. The physician set the fee, and the
insurance company paid the bill. One or two office clerks
could manage the receivables for a practice of multiple
physicians, including billing, receiving and tracking
payments, and following up on unpaid bills. Most trans-
actions were handled with a paper-based system. Little
technology was involved.
In Today’s World
Now, the situation is much more complicated. Insurance
carriers have combined into large corporate conglomerates
that have the power to control the healthcare market. They
have imposed complex and rigid rules for standardized cod-
ing of procedures, and they negotiate – some say dictate –
the fees for each and every one of those procedures. Because
correct coding requires in-depth training, the need to meet
carrier requirements has given rise to a new class of jobs,
and Certified Professional Coders (CPCs) are now in
demand. Adding to the challenge is the fact that carriers’
rules change regularly, requiring periodic re-training and re-
certification. In order to receive maximum compensation,
physicians must join "networks" and they themselves must
be certified by the carriers through a tedious process called
"credentialing." The receivables management process is
further complicated by government programs such as
Medicare and Medicaid.
Physicians, whose training has been focused on providing
medical care, are finding the administrative burden over-
whelming. As a result, many are turning to medical billing
companies to manage their payment processing cycle. The
physician still needs to code the procedure, but the billing
company can verify its accuracy, call attention to potential
issues, keep up with changes to the coding rules, and help
the provider stay informed. The billing company can handle
the entire collection process, including follow-up with
carriers and patients. Many billing companies also provide
services to help with the credentialing process, which can be
very time-consuming, especially for offices where multiple
physicians have different specialties.
For Some, It’s Business As Usual
Today, practices that handle their billing in-house must em-
ploy a fairly large staff and use a software billing package.
Supporting a staff involves substantial costs, including the
time to hire and train personnel and the hassle of hiring and
training a replacement whenever someone leaves. Software
packages are expensive and have their own learning curve,
and they must be updated and maintained, presenting
technical challenges and requiring the commitment of time
and staff. Furthermore, both in-house staff and software
require implementation of procedures for security and
disaster recovery as safeguards against malicious, uninten-
tional, or uncontrollable loss or corruption of records.
For those practices that do use a billing company, many
deliver their billing data to the billing office via a paper-
based process, that is, a "superbill." Typically, on a weekly
basis, the practice will overnight its demographic and charge
information to the billing office. The billing company enters
the information and sends out claims to the insurance com-
panies. Payors send their checks by conventional mail, and
the billing service makes manual deposits to the physicians’
accounts. Every month, the billing company sends each of
its clients a paper-based report that shows the status of
current collections. Although outsourcing the billing process
to these companies relieves the practice of much of the
administrative burden, many physicians feel uneasy at being
so disconnected from the process. With visibility to their
revenue stream limited to the monthly statements from the
billing company, they are unable to assess the financial
health of their practice for weeks at a time.
For Others, Technology Makes a Real Difference
So what do the Internet and the Information Age offer
today’s healthcare providers? Secure online connections
allow 24x7 access to up-to-date information about
receivables and credentialing status. Such connections also
enable the billing company to interact – often in real time –
with insurance carriers, banks, and patients to effect timely
transactions on physicians’ behalf. In short, the Internet
eliminates the obstacles presented by people working in
different places at different times and enables everyone to
focus on his or her area of expertise.
The software that enables Internet-based processes can also
be located remotely, thanks to what is known as the Appli-
cation Service Provider (ASP) model. ASP software resides
and operates on a server at a secure site, where it is managed
by a professional hosting company. That company maintains
the software, making periodic updates and enhancements,
and it provides redundant servers for greater reliability.
Included in the hosting service are regular backups of client
data that is stored offsite to enable restoration in the event of
catastrophe.
MediStar
12 Cambridge Drive Toll-free: (888-423-8080)
Trumbull, CT 06611 Phone: (203) 372-1900
www.medistarbilling.com Fax: (203) 372-2600
©2007 Medi-Claim Services, Inc. All rights reserved.
MediStar, the MediStar logo, Credentials Xpress, Meducation, and
Meducational are service marks of Medi-Claim Services, Inc.
Other trademarks are property of their respective owners.
Importantly, the ASP model allows authorized personnel
within practices and billing companies to connect to the
software using a standard web browser. The medical
practice need have no specialized software or technical
expertise. The practice can schedule appointments, enter
patient information and charges, and run reports whenever
and from wherever it chooses. Likewise, the billing
company can view charges as they are entered, verify codes,
and send bills out promptly, usually within 24-48 hours of
initial entry. When payments are received, the billing
company can post the receipts, as well as handle all follow-
up for unpaid amounts. Physicians no longer have to worry
about filling out superbills, making duplicate demographic
sheets, or paying postage costs for mailing paperwork to the
billing company. With Electronic Medical Record (EMR)
systems, physicians can select the appropriate CPT and
ICD-9 codes using the EMR system, and those codes will
be transmitted to the billing system immediately, in real
time. If a patient visiting the doctor’s office has an account
balance, the office will see the amount owed via real-time
access to the billing system and can request immediate
payment.
More Capability on the Horizon
In the future, the entire process will become more
streamlined and virtually paperless, which will speed the
payment cycle and make it more convenient for all
involved. Information will be transmitted among all parties
electronically, and payments will be electronically deposited
as well. Coding will be simplified with the introduction of
electronic EMR tablets that physicians carry with them to
enter coding information directly into the system. The
system will then transmit the data directly to the billing
company for immediate processing. The entire cycle will be
faster, more convenient, and more efficient for physicians
and their patients.
For many of us, technology has introduced mystery,
perplexity, and even a few hassles. But now, finally, open
computing standards, broadband networks, lower cost
computers, EMR systems, and ASP computing are
converging to make life simpler and easier. For healthcare
providers, practice-management technology means being
able to better accrue the benefits of using a billing company.
By offloading the administrative and technological burdens
to those better equipped to handle them, physicians can
focus on patient care, while maintaining visibility and
control of practice revenue.
Ronald E. Nyman, Esq. is founder and president of Medi-
Claim Services, Inc.