It also doesn’t really see a problem with its denial rate: “Fourteen percent of TRICARE medical claims for care rendered in the United States during FY 2007 were denied on first pass. This is consistent with industry denial rates,” said TRICARE spokesman Austin Camacho.

Of course, part of what PayerView tries to address is the assumption that a 14 percent denial rate is OK.

Regional insights

For the second year in a row, Blue Cross Blue Shield (BCBS) of Rhode Island had the fewest days in A/R and lowest denial rate in the nation. It helps that this payer operates in the smallest state and is a dominant payer in the market. Like Aetna, BCBS has emphasized transparency, making clear what it needs to process claims quickly. To review all the Blues data see our Blue Cross spreadsheet.

On the other end of the spectrum, Medicaid of New York has the most days in A/R in the nation. This year, it also assumed the worst first pass resolve rate in the nation. The state program has complex referral authorization requirements, insists on proprietary claims forms, and original signature requirements on paper claims — all things that slow the process down.

While Medicaid programs perform poorly in general, there is wide variation state to state, with North and South Carolina at the top of the heap.

Among private payers, however, regional differences were slight. It’s a little better to be a physician in the South than in the West, as Southern payers pay a bit faster and are somewhat less involved with consumer-directed healthcare. But overall, it’s much better to have the right payers than the right ZIP code.

Trends revealed

Overall, payer performance dipped slightly compared to last year. Melissa Lukowski, director of payer outreach for athenahealth, suggests that National Provider Identifier (NPI) issues, which hurt days in A/R, first pass resolve, and denial rates may have been a contributing factor, though multiple dynamics were in play.



The May 23, 2007 deadline for implementing NPI was extended, but providers ended up managing multiple payer-specific timelines and directions. According to Lukowski, some physicians didn’t get the word when payers started using NPI edits for informational purposes. The result? Increased calls, delayed claims, multiple resubmissions, and overall confusion. There were also incidents of payers unintentionally turning on NPI-related edits, incorrectly denying claims, and then asking providers to resubmit.

Regional payers had worse problems than national payers, experiencing a 2.6 percent increase in denial rate and a 0.9 percent decrease in first pass resolve.

If the NPI transition had a slight, negative impact on 2007 performance, you can bet your bottom dollar it will really mess things up this year, when the requirement goes fully into effect.

A small increase in patient liability also hurt overall performance. The increase was just 0.4 percent for the national payers compared with a 19 percent increase in 2006. Lukowski calls it “planned growth.”

Patient liability isn’t so much of an issue for physicians if they are able to figure out what the patient owes at the time of service and collect there and then. And payers are stepping up with online, real-time claims adjudication systems. Both United and Humana, leaders in the consumer-directed movement, offer real-time adjudication to at least some practices.