Humana’s settlement in the federal class-action lawsuit filed by physicians had nothing to do with the company’s top ranking in PayerView in 2008, according to Smithson. “What we agreed to do were things we were already doing.”
(*See our complete payer rankings broken out by payer and region.)
In contrast, Aetna, which slipped from first place to second among national payers, acknowledges the settlement as a push toward being physician-friendly. “It was a changing event,” says Paul Marchetti, the company’s head of national networks and contracting services. “We realized we needed more of a customer-focused strategy, whether the customer was a provider, a plan member, or a plan sponsor.”
Cigna finished third among national payers in 2008, improving on key measures such as days in A/R.
Medicare slipped to fifth place, perhaps in part because of the NPI switch, which temporarily clogged its payment pipeline. “Medicare was the biggest stickler on adjudicating claims based on the NPI,” notes Lukowski. “From March through September last year, denials and days in A/R spiked, but then they precipitously declined.” Overall for the year, Medicare nudged its days in A/R down slightly and held the line on denials.
Wellpoint, Champus/Tricare, and Coventry Healthcare rounded out the bottom three. This trio also represented the bottom rungs in 2007 and 2006. Coventry, one of several defendants in the class-action suit that didn’t settle (a federal judge dismissed the case in 2006 in favor of Coventry and UnitedHealth Group, the remaining defendants), finished last for the first time in the latest rankings.
Days in A/R for Coventry in 2008 stood at 38.54, top among all national insurers and almost 3 days higher than in 2007. One possible explanation for the payer’s poor numbers, says Lukowski, is its piecemeal business structure, consisting of more than 15 affiliated health plans. “More affiliates mean more adjudication systems, which is a challenge to manage,” she says. Coventry didn’t respond to a request for an interview by press time.
Regional payers
The top five payers in each of our four PayerView regions — Midwest, South, Northeast, and West — include at least one local Medicare carrier. In the Northeast, Blue Cross Blue Shield of Rhode Island held onto the top spot, paying doctors on average in 15.4 days and boasting a denial rate of 3.36 percent. No other insurer, national or regional, could beat those numbers. The Rhode Island Blues owes much of its success to being the dominant payer in a small state, which reduces administrative complexity, according to Lukowski.
(*See our complete payer rankings broken out by payer and region.)
At the same time, the Blues as a whole made a good showing in PayerView, placing second in both days in A/R (31.30) and denial rate (7.44) among payer groups after the major commercial nationals (Aetna, Cigna, Humana, and UnitedHealthcare, minus their affiliates). The Blues’ regional roots generally make them easier to deal with, explains Lukowski. “They pride themselves on having a local presence, and they tend to be more transparent about their guidelines.”
Medicaid underperforming
It’s hard to find something nice to say about one set of regional payers — state Medicaid programs. Collectively, their days in A/R rose 21.7 percent in 2008, while other payer groups drove that number down. At 68.57 days in A/R on average, state Medicaid programs are paying doctors about twice as slowly as everyone else. That’s when it pays at all: Medicaid’s denial rate of 21.73 percent is roughly three times the norm.
Part of the problem is Medicaid’s shaky financial footing. Relying on a combination of state and federal funds, and often the target of state budget cuts, Medicaid programs sometimes run out of money. Consequently, these pinched programs generally haven’t invested in the sophisticated claims-processing systems used by other payers, says Lukowski. Another problem is inadequate training of Medicaid call-center employees, who pass on misinformation to doctors’ offices, gumming up their billing operations.
There’s also a cloud of sleepy indifference that hangs over Medicaid bureaucracies. “The attitude you often encounter in Medicaid is, ‘That’s the way it is. Our hands are tied,’” says Lukowski.
Once again, New York’s Medicaid is the nation’s worst. You’d better sit down for these numbers: The average New York Medicaid claim takes nearly five months — 160.95 days to be exact — to get paid, and it denied or pended more than a third of all claims. (The program puts its denial rate at 23 percent, but that figure doesn’t include pended claims).
Sources of the quagmire include complex authorization requirements, proprietary paper claims forms that must be ordered from the state — can you believe that? — and, for doctors who bill electronically, the need to annually enroll for this electronic relationship. Once a check for payment is cut, the state program automatically waits two weeks before mailing it. Lukowski says much of this inefficiency stems from New York’s overzealous efforts to prevent Medicaid fraud.
How to use PayerView
While collecting from most payer groups — other than Medicaid — generally got easier in 2008, the outlook for 2009 is uncertain, given an ailing economy. Earnings last year declined for every commercial national payer in PayerView. Whenever their bottom line suffers, commercial payers typically try to recover by squeezing doctors, says Susanne Madden, president of The Verden Group, which has its own system for rating payers on physician-friendliness. Ailing insurers “cut reimbursements and require more preauthorization and precertification,” says Madden. It’s possible that insurers also could sit on claims longer, lengthening days in A/R, adds Lukowski. “It’s unclear what will happen.”
Insurers, however, say they intend to be your friend, regardless of their latest earnings report. “We’re not here to take money out of a provider’s pocket,” says Aetna’ s Marchetti.
Still, you must negotiate contracts with them. Whatever payers say about making nice, the negotiation process is warfare fought with data. PayerView can help even the odds for you, says Todd Welter.
Start by calculating days in A/R for each of your payers. For those whose days in A/R exceed their PayerView averages, arrange a meeting and highlight this discrepancy, says Welter. Use the following script: “We know you’re paying claims in X number of days according to PayerView. Why aren’t we being paid like everybody else? It’s costing us time and money to collect from you. We should be compensated for that by receiving a higher fee.”
You may not necessarily receive higher fees, but the payer may nevertheless speed up payment. Or it may identify inefficiencies and coding errors on your end that drag out the billing cycle, says Welter. “It’s too easy to blame the health plans. Doctors need to get their own act together on claims.”
At the same time, PayerView can help identify payers that may not be worth your business. “It’s one thing to put up with slow pay from a payer that sends you lots of patients,” says Welter. “But if a payer accounts for only a sliver of your volume, and the pay is low and slow, while the hassle factor is high, why bother with them?”
*See our complete payer rankings broken out by region and payer.
Robert Lowes is an award-winning journalist based in St. Louis who has covered the healthcare industry for 21 years. He can be reached via physicianspractice@cmpmedica.com.
This article originally appeared in the June 2009 issue of Physicians Practice.
