Staff
Report

Observations on Connectivity

Costs and Delays

ASP Technology Can Help

Provider Transaction Hub

• A Dallas Daily News report on December 27, 2000 points out strong provider resistance in Texas and beyond against electronic bills, reports, and digital medical information. The report stated this resistance reflects apparent widespread belief among physicians that individually identifiable patient information, released electronically from a physician’s personal custody, is subject to theft, "hacking," mistaken routing, and unauthorized access. Most physicians take on faith, the report concluded, that confidential patient information is not secure when rendered and transmitted electronically.

• eWeek reported on January 18, 2001 the top technology priority on Capitol Hill this year targets privacy. Strong industry efforts to moderate regulation of online personal information face equally determined grass-roots efforts to force lawmakers to act. Hard-line "no-regulation" advocates are being forced to confront "populist fears." Stringent regulatory measures were said to hang in the balance.

• The Bush Administration came out in strong support of the medical privacy rules that emerged from the Health Insurance Portability and Accountability Act (HIPAA). (Read our News & Commentary on page 29 for more information.)

• A white paper released by the Insurance Workgroup of ANSI X12 concluded: "HIPAA will provide the regulatory floor for health information and privacy protection for the entire healthcare industry.… All (privacy laws) will be overlaid on jurisdiction-specific workers’ compensation medical information law without consideration of unique workers’ compensation issues.…WC industry representatives have lobbied for such consideration. It is likely, however, that a single privacy standard eventually will govern handling of patient information by physicians and other parties at each point of custody along the HHS-defined ‘chain of trust.’"

A storm of information and opinion today is shaping the agenda for the care, custody, access, and control of personally identifiable medical information. Furthermore, how workers’ compensation will fit into this agenda—nationally and at the state level—remains to be seen. This storm is particularly fierce in the specific context of online, digital medical information. So many issues remain complex and unsettled that physicians are wise to seek the shelter of their own counsel and pursue a conservative approach to online transactions and document sharing.

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It nevertheless is instructive to consider economic realities ultimately playing into the debate surrounding privacy rules. Providers’ practice management costs and efficiencies, coupled with payers’ aggressive efforts to automate transactions and administrative processes, are combining as lynchpins to healthcare business viability going forward. In light of a rapid and aggressive technology shift transforming profit-and-loss expectations throughout the economy, keeping healthcare business systems from assimilating faster, cheaper processes—albeit with best intentions to safeguard patient information—threatens not only healthcare’s bottom line but also the quality and availability of care.

Take for example the AMA’s 2000 Health Data Directory where cost to transmit a claim or complete claims-related transactions on paper is pegged at a "conservative" cost of $7.00 per claim. With 4,000 typical claims per physician per year, cost of paper processing is $28,000 per physician or $12.7 billion for all physicians’ claims annually. That number factors in health claims, not workers’ compensation bills. As any occupational physician knows, workers’ compensation bills necessitate more documentation, more paper, more processing resources, and more payment status requests, resulting in stretched out payment cycles and greater deferred or lost revenue.

Occupational medical physicians are confronted with egregiously delayed accounts receivables, rising billing office expense to extract payments, and impaired communications with payers. Contact with payers, on the non-group health side, still depends for the most part on 19th century technology—post office, telephone, and the telegraph-analog fax machine. Under these kinds of manual billing constraints, the idea of a single electronic bill submission system that guarantees 30-day payment resolution has to appear attractive economically.

Except of course that a change in technology invites the unknown. Physicians understandably harbor uncertainties about maintaining patient confidentiality, avoiding medical malpractice risk, and, above all, preserving professional and personal obligations to patients. In the final analysis, each physician must individually decide to cross the technology divide. Technology vendors have the obligation to provide decision support.

News from the technology front finds Applications Service Providers (ASPs) well aware of the ethical dilemma physicians confront when deciding to change technology. Integrity of their e-business models is very much a function of their awareness. ASP technologies dedicated to creating industry savings by connecting providers and payers electronically or via the Internet depend on failsafe delivery of secure and confidential information services. Sanctity of patient information has to be their primary obligation; otherwise, their value proposition cannot exist.

It is ironic that electronic protection of personally identifiable medical information, although subject to an extremely low-order anomalous risk of inadvertent disclosure, is patently more secure today than paper-based patient information ever was. If heist of a mailbag or misrouted envelope seems unlikely, for example, imagine integrity of the "chain of trust" in a payer’s mailroom, file-cart routing of medical reports around a claims office, even surreptitious photocopying of a vivid psychological profile. As many as ten different people physically handle a medical bill or report for the typical payer. There’s a strong case to be made that medical information on paper simply cannot be considered confidential or safe from intrusion.

Then again, there is another business requirement ASPs incorporate into their business models that physicians may consider close to home: financial protection of the physician in the event of electronic misrouting, non-delivery or specified compromise (including "hacking") of personally identifiable medical information. A patient would look to the physician’s medical malpractice insurance for remediation of any real or perceived wrongful disclosure. In that hopefully unlikely event, the ASP should commit to step in and accept whatever liability exposure results from its transmission service.

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Secure Internet connectivity linking medical providers with non-group health payers can lower typical bill processing costs up to 80% and bring down accounts receivables below 30 days. Results recorded by occupational medical network billing offices uploading bills to payers via eStellarNet’s Transaction Hub validate the dramatic acceleration in cash flow made possible by eliminating paper processing. Developed by StellarNet, Inc., an industry supported Applications Service Provider (ASP) in Concord, CA, the Transaction Hub is the electronic transaction processing platform adopted by property and casualty insurers.

A rapidly increasing number of payers are constructing "e-networks" that encourage occupational medical providers to automate billing connectivity. Although Internet billing has positive cost/benefits for providers, their core motivation is reducing their own processing costs. Their loss adjustment expense factors have been increasing 10% annually over the past five years, which outweighs by a substantial margin any residual gains from held medical reserves.

StellarNet’s Transaction Hub reinvents the functionality of healthcare EDI claim submission systems, adding processing requirements in workers’ compensation jurisdiction and payer-specific edits, 24-hour reject resubmission instructions, claim number prompting, and 30-day payment status messaging. The Transaction Hub electronically "clips" all required attachments to bills and batch-delivers in 24-hours to the payer’s claim system for payment.

The Transaction Hub also enables print and mail bill delivery to non-electronic payers. Whether a particular payer can accept bills electronically or not, the registered provider’s billing office can utilize its practice management system’s electronic claim/bill upload feature for all billing activity, with the same 24-hour reject submission instructions. This does away with maintaining parallel manual and electronic bookkeeping.

The Transaction Hub is comprised of a series of processing and editing engines designed to interface with any practice management system. When registering, billing offices download bill submission software from eStellarNet’s server, which is used off-line. Bills and attachments are batched and uploaded by modem, at the provider’s discretion. Transaction Hub uses secure encrypted transmission protection, and requires provider and payer authentication and pass-code access. StellarNet engineered security features to meet HIPAA compliance, reasoning that while HIPAA exempts workers’ compensation, providers demand and should expect a single, stringent standard that maximizes confidentiality of personally identifiable medical information.

Nothing around the issue of electronic connectivity among medical providers and claim payers is settled. Legislation, regulation, the inexorable migration of business systems toward faster, lower cost technologies, the law of the marketplace rewarding innovation, and fundamental privacy rights of citizens are all part of the new healthcare industry dynamic. The dust may take years to settle. In the meantime, given an assurance of privacy and confidentiality by the astute e-business vendor, physician practice savings and improved cash flow using electronic bill submission should be sufficient motivation for physicians and occupational providers to consider joining the new economy. 

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