Susanna Donato


If claims management sometimes feels like a pingpong match, it's no wonder. Payers bounce back an average of 10 percent to 15 percent of all submitted claims as denials, according to Elizabeth Woodcock, FACMPE, director of knowledge management for Physicians Practice. That figure can ricochet to 25 percent or so for certain specialties. 

But despite their best efforts, practices are unlikely to eliminate denials altogether. After all, Woodcock says, "float," or interest on funds held, is how insurance companies make money. Add to the mix mobile patients or those who just shirk their obligations, and about 5 percent of claims will likely remain uncollectable. 

To stanch the flow of denials, you must clean up your claims. Begin by understanding how many denials you receive, for what types of services, and from whom. You can develop a simple worksheet to measure denial rates by payer and to track those denials to their source: registration, coding, the billing office, or the payer.  

Woodcock's visits to hundreds of practices across the country show that problems start in registration and coding. The front desk's high turnover and low pay often mean staff there don't understand the billing process. When the process begins with inconsistent patient information, practices wind up submitting claims with outdated insurance data, for ineligible patients, or for services not covered by a specific insurance plan. 

"Frankly, there's a disconnect between the positions and functions in the registration area, and the billing office," says Woodcock. "You've got to change that mentality. Everyone is part of the billing process." During the hiring process, make billing part of the job description for reception staff, and pay well enough to get skilled people who can handle the complex registration process. Also, says Woodcock, "Realize you might be squeezing so hard on the front desk by understaffing that you're actually paying twice as much to have more highly paid people fix problems on the back end. You could save money by correctly staffing both places." Woodcock suggests new receptionists spend two weeks in the billing office right off the bat so they understand the process. 

You can tackle denials with high-tech tools or with old-fashioned paper. Your choice will depend on the size and budget of your practice, and on your comfort with technology. A practice that uses paper charts can still use a computerized claims scrubber that checks claims before they're submitted. Practices that have converted to electronic medical records (EMRs) usually can tie in claims management systems to their EMR and transmit claims to payers with a few extra mouse-clicks. 

Last fall, Potomac Physician Associates, in Bethesda, Md., a three-office practice with 17 internists and a patient panel of 20,000, brought their claims submission and practice management services in-house. Amanda Tomko, the practice administrator, initially budgeted for seven people to handle billing. After four months of electronic claims submission, just four employees manage the process. Eliminating the need for three staff members, whose salaries average $30,000 to $35,000 per year, saves the practice nearly $100,000 annually. 

The cost? Typically, Potomac's electronic claims submission service, Payerpath, charges a set-up fee of $95 per physician, with a $495 minimum per practice. Thereafter, the service costs $49 per doctor per month. Over a year, that totals $11,611 for the entire practice. Clearly, preventing denials offers rich rewards: The cost of billing and staff time adds up to $25 per denied claim, according to Sara Larch, FACMPE, chief operating officer of University Physicians in Baltimore. 

For Tomko's practice, the change paid off: It has seen 98 percent clean claims since bringing billing in-house. "We have no idea what our statistics were before, because we didn't track it," Tomko says. "By our receipts, I can tell you that it was probably 50 percent, based on the denials that were coming in." 

John Gastright, MD, of West Ashley Family Practice in Charleston, S.C., uses Companion Direct, another online claims processing service. When he began his three-physician practice two years ago, Gastright decided three elements were critical: high-speed Internet connectivity, a modern practice-management system, and an EMR. 

"I've watched doctors for 10 years [as a medical director] go crazy trying to [submit claims] manually," he says. "The technology now basically gives practices the same capabilities the payers have, so why not take advantage of it?" 

Gastright's office uses Companion Direct to identify problems such as eligibility or mismatched codes before a claim is submitted. The company charges practices a fee of $0.21 per claim submitted. The greatest benefit, Gastright says, is the service's instant adjudication of claims, so the practice doesn't have to wait for the evidence of benefit information to know if a payer will accept a claim. 


The service's efficiency, combined with the practice's EMR and paperless operation, allows West Ashley to run with 2.5 FTEs per physician - one FTE fewer than the Medical Group Management Association's average of 3.5 FTEs per physician. Gastright estimates the practice saves 0.5 FTE per physician - a practice total of 1.5 FTEs - by using Companion Direct. If those employees earn $10 an hour, the practice can save $30,000 annually on salaries alone. 

"With a payer such as Blue Cross of South Carolina, we have a four-weekday turnaround time on the claim. There's not only instant recognition if a claim is acceptable, but we also are paid promptly," says Gastright. "Consequently, our accounts receivable beyond 120 days is less than 2 percent. We basically turn claims around in 30 days." 

Old-fashioned paper still has a role, however. For Tomko, paper claims fill gaps where electronic claims can't be used - for instance, when secondary claims can't be captured electronically. 

Practice manager Martin Bodzin filed electronic claims for several years. Now, he has returned to paper claims for the Dayton, Ohio, practice he manages for solo practitioner Rivka Sanders. Bodzin is no Luddite. He designed an EMR that works with an off-the-shelf database he customized. The system lets Sanders do charting and billing simultaneously. Bodzin manages the claims from his position as general manager - and sole employee - of the small practice. 

"I don't believe in going to high-tech just for the sake of technology itself," Bodzin says. "When we looked at the costs with time and effort, we found it was cheaper and just as easy to file with paper." 

Despite improved efforts up-front, you still must decide how you'll handle the inevitable claims that will bounce back. Start by tracking which claims cause problems. Then, set guidelines for what you will appeal. Woodcock notes that if, for instance, you're billing Medicaid for a low-level office visit, for which the agency will reimburse you $23 to $28, you can lose money if you rebill the claim. 

"If you know every denial costs $25, don't appeal anything under $10," Woodcock suggests. "Use a cost-benefit analysis to decide: if it's over $10 but under $100, do you make a second [appeal] effort? Maybe not. But if it's a $5,000 claim, you might appeal it till the cows come home." 

When you can't get paid for a claim, or when appealing a denial would mean digging your practice into the red, it might be time to write off the claim. Most practices first turn to a secondary payer: the patient. 

"I don't really believe in writing things off. We turn the responsibility over to the patient," says Tomko. "If they don't respond within 60 days, it goes to the collection agency. The market is tough; expenses are high. We have to have receipts in the door." Before you turn over all your old A/R balances, check the rules. For instance, Tomko says, in Maryland, only accounts over $20 can be sent to collections. 

Bodzin says his practice notifies new patients that they bear ultimate responsibility for paying for their care; then he bills patients if the practice hasn't received payment within 60 days from date of service. 

Gastright, too, says his practice has occasional write-offs, most often when patients don't cover their responsibilities. "Occasionally somebody isn't eligible, and we provide service; that's the luck of the draw," he says. 

Whatever you do, have some patience. According to Woodcock, it can take six months to see results from cleaning up your claims process, simply because carriers take 60 to 90 days to pay a claim. But the resulting lack of headaches - and the boost to your business accounts - is worth it.    

This article originally appeared in the April 2003 issue of

Articles

Take steps to keep denials from taking over your expense budget.

Three Steps to Fewer Denials

A physician taps a stylus on a small screen, then tells her patient a new prescription will be waiting at the pharmacy. A few more taps code the visit, note it in the patient's record, and request any necessary lab work. Before the physician leaves the room, the chart is updated and all data is available to be submitted for electronic billing.

If your office decor features a pile of paper charts, this scenario might sound far-fetched, and for all but a handful of practices, this level of coordination remains a dream. But technology research firm Forrester Research predicts that while only 11 percent of practices use handheld devices for electronic prescribing today, 86 percent anticipate doing so by 2003. Similarly, 77 percent plan to use a handheld for charge capture, and 80 percent are headed for electronic charting.

In other words, handhelds will be near-ubiquitous in practices by this time next year -- and they will be used as more than just fancy address books. In deciding which palm-enabled applications to adopt, you'll need to consider your particular needs and how you can you ensure a healthy return on your investment.

As Forrester's data suggests, mobile applications for prescription writing already are popular, partly thanks to patients.

"My patients really like it, because I can write prescriptions from the exam room ... and by the time the patient gets to the pharmacy, the prescription is ready. So if they have a sick kid, they don't have to wait for the prescription to be filled," says Dan Diamond, MD, who has used a handheld prescription-writing application for two years at his office outside Seattle. He also looks up dosing and drug interactions and reviews formularies on the Palm. 

While the system helps patients, it also has helped Diamond's office become more efficient. For example, when Diamond writes a prescription electronically, he sends it to the pharmacy via his wireless network -- meaning he doesn't have to take time out to synchronize the data with his desktop system. 

He isn't constantly interrupted by refill requests, because his nurse simply logs on to the Internet to process refills after reviewing them with Diamond. Some cases are even simpler; Diamond has authorized his nurse to handle certain refills, such as an interim birth control refill, automatically. A "favorites" category lets Diamond input regularly prescribed medications with a few quick clicks. And the program slashes pharmacy phone tag by incorporating formulary information.

The system's hardware costs were minimal -- besides his Palm Pilot, he spent about $500 for both a wireless network card and a network port, which Diamond (who acknowledges he is "techno-savvy") installed himself in 15 minutes. The ePhysician program Diamond uses costs $600 annually for each physician's user license (staff can use the Web-based portion of the program for free). 

Diamond hasn't measured his return on investment, but he says, "My hunch is that I can see one or two additional patients a day [because of the system] -- it is significant if you add it up at the end of the month." For a family practice like Diamond's, an additional 30 patients a month could amount to nearly $1,000 in revenues, based on Medical Group Management Association (MGMA) data estimating the average gross revenue for family practice visits at $32.

While Diamond is satisfied with his system, he notes that picking the right software can make all the difference between revenue enhancement and revenue depletion. Diamond also considered e-prescribing software that, instead of sending new prescriptions to the pharmacy electronically, required the physician to print the order and give it to the patient. Diamond estimates that the additional time required to print and send an average of 15 prescriptions daily could add up to 45 minutes a day or $4,500 a month in lost revenues. On the other hand, some physicians may prefer having a paper trail, despite the cost.

In short, while e-prescribing looks promising, make sure to look carefully at the workflow and demands of your particular practice before choosing your software.

Charge capture is the second biggest growth area for practice management-based handhelds. Here's how it typically works: After a patient visit, a physician completes an electronic charge document on his handheld, pulling from a customizable list of procedures, diagnoses, and ancillary services. A rules engine -- set by the practice -- alerts the physician to incomplete or erroneous data. The charge is immediately ready to be reviewed by the billing office and sent on to the payer. The result? Faster payments and better cash flow. Paper can't keep up.

Multispecialty Carle Clinic in Urbana, Ill., for instance, had a terrible time getting charges out the door using a paper system. "From the time a physician filled out a paper document until that document reached our central system, we were averaging a seven-day delay -- including quality assurance and several steps of coding edits," explains Debbie Rivers, manager of systems support at Carle Clinic. 


However, when physicians use the clinic's new system from MDEverywhere, "we can have a one-day turnaround," Rivers says. Carle Clinic's goal is to have 98 percent of charges enter the billing system within three days; its old target was to have 90 percent of paper charges submitted within seven days. 

While a faster turnaround is an obvious win, the new charge capture system does have a downside: reduced physician productivity -- at least in the beginning. Initially, Carle Clinic estimated electronic charge capture would add 30 to 45 minutes to a physician's day, but it still seemed worthwhile to Rivers. 

"For physicians, it took 10 seconds to write charges on a piece of paper; but the cost goes up with the number of hands that paper had to travel through to get to the billing system," she says -- not to mention the cost of lost revenue for hand-written charges that never make it into the system. "We had to review the cost of all those hands versus the physician taking an extra 15 seconds to 30 seconds to do charges electronically."

In fact, Rivers was pleasantly surprised -- after a user has about two weeks of experience, the new system is as fast as the old one. Consequently, the practice has seen an increase in efficiency, with actual costs running at 65 percent of the paper-based system costs. 

Carle Clinic speeds things up with careful training and transition. One-on-one physician training and "super users" -- desk staff coordinators -- in each clinic location support other users. "We have trained all types of computer skill levels -- from those who won't read e-mail to those who want every new gadget out there," Rivers says. She notes that the new system met resistance at the beginning, but after training and practice, not one participant has gone back to paper. Rivers expects to have more than 200 of Carle's 300 physicians using the charge capture application by the end of 2002.

As Rivers and Diamond both found, electronic products are not all created equal. Before choosing an application, practices should evaluate how it will be used. A major problem area for many is integration with existing or planned systems.

Some e-prescribing and drug-reference applications, for example, aren't integrated with patient care systems. For now, many physicians find the usefulness of these programs outweighs their stand-alone nature. Time will tell, as more physicians implement a larger number of more powerful handheld practice management applications, whether that usefulness continues to make it worth juggling another application.

For some, the juggling act is paying off now. Bruce Bagley, MD, and the family practice physicians in the two offices of Latham Medical Group, in Albany, N.Y., adopted a dual system using ePocrates on handhelds alongside a NextGen electronic medical record (EMR) on a small portable device.

Using what Bagley describes as a "glorified handheld" -- a wireless computer with a keyboard and touch screen -- physicians can review charts, enter notes directly into the EMR, then order blood work -- and have the nurse waiting outside the door with bar-coded test tubes for the draw as soon as the doctor wraps up the visit.

Once Latham Medical selected an EMR, "our system didn't give physicians a choice to opt out," Bagley says. Latham Medical ramped up slowly, initially using handhelds only for interoffice messaging and prescription writing. 

"Even the reluctant ones didn't last long, maybe a month," says Bagley. "They realized how efficient it is -- when someone comes in with 12 medications needing to be renewed and a long last name, you can just push 'renew.' The system was so functional, they were just captured by it.

"Most doctors recognize immediately that prescription writing is a good deal," Bagley adds. "So we gave it to them as a reward for making harder transitions, like beginning to use the electronic medical record."

Latham Medical considered using a stand-alone prescription writing utility. Instead, the group chose to use the EMR's prescription writing function because it automatically records printed or faxed prescriptions in patient charts. But for drug reference questions, Bagley turns almost daily to ePocrates, the free drug reference program he downloaded from the Internet a couple of years ago. 

The program lets him examine medication side effects, substitutions, pricing information, and formularies -- all from within the exam room. For Bagley, having that kind of information on his Palm gives him handy expertise -- and credibility with patients.

If Forrester's predictions are right, most physicians are doing some serious thinking about electronic applications. Even in an ideal world, selecting the best vendor can be tricky. Crucial to any decision are examining the chosen vendor's stability as well as how a handheld application can connect with your charting and claims filing systems. In the long run, the opportunities to reinvent an entire practice's efficiency will recruit more medical offices to the handheld army.

"Physicians are more likely to use handhelds not because they save time or at least break even, but because of collateral benefits to the rest of their operation," says Brad Holmes, senior analyst with Forrester. "If you find an application that becomes more valuable, not as a time saver for the physician, but because of its integration with the practice management system -- that makes a heck of a lot more sense." 

This article first appeared in the Spring 2002 issue of 

How and why groups are adopting handheld computers

Take It With You


"I once heard that the definition of insanity is doing the same thing again and again, but expecting a different result," says Gerti Reagan, a claims management consultant with Garner Consulting in Pasadena, Calif.

Some practices can embody that definition, and worse, when it comes to managing denied claims. One group was appealing claims denials - and also writing them off, according to Rhonda Koehn, managing consultant with Practice Management Consultants of Breckenridge, Colo. "The write-offs were higher than the payments, which means there's a problem," Koehn says. Still other practices get denied and simply file the claim away.

It's time to stop the crazy cycle of denials - which is detrimental to your staff and to your bottom line. Instead, search out your claims problems and set protocols for better operations.

Put the right number of sound minds to the task of claims management. "Staffing is one of the most common problems we encounter," says Koehn. "Some practices don't have enough staff. Others don't have dedicated staff, and billers are always being pulled to the front desk."

Koehn has worked for several years with Denver's Midtown Obstetrics & Gynecology, where staffing has been a truly make-or-break proposition. "We had a new practice manager and a new computer system," says Elizabeth McCrann, MD, one of Midtown's four physicians. "We didn't realize the manager couldn't use the system correctly, and in three months, the practice was almost bankrupt because claims weren't going out."

Once staffing is solidly in place, use electronic claims editing software to keep information flowing. You can electronically double-check claims and be alerted to missing information, such as a state, group number, or date of birth. Electronic claims submissions let you verify that a company received your claim, which can result in quicker payment.

"Our electronic system works well - if you know how to use it," says McCrann, explaining that Koehn's expertise was one reason the practice decided to outsource claims follow-up. "Having someone who knows how to make it work has improved our numbers enormously."

If you do not use electronic claims editing, invest in staff time so someone can review each claim for completeness before submission. "The more you check things before they go out, the better. That's the number one step in controlling denials," says Judy Richardson, a senior consultant with Hill & Associates in Wilmington, N.C.

It's important to know what you are owed and what you are likely to get paid for - and have documentation to back up your claims. Unpaid claims mean stagnant cash flow, and big accounts receivable balances can give you a false sense of your practice's revenue stream.

It's often the relatively small mistakes that cause the biggest problems. Specialty claims can be denied if an authorization is not on file, or because what was billed was not precisely what was authorized. Primary-care claims are often denied if the service rendered is covered under a capitation agreement. Or primary-care physicians might see erroneous denials of carve-out services.

Many denials never enter a payer's adjudication system. Koehn notes that electronic systems can identify where the denial occurred, allowing a practice to resubmit a corrected claim before the denial correspondence even arrives.

"It's important to understand that claims go into the [payer's] computer system exactly as they appear on the HCFA [now CMS] 1500 form," adds Richardson. "The system reads across the form, reading demographic information first. The program will deny at whatever point it finds an error. If a claim is denied for an invalid contract number, you have to resubmit it - that means the claim never even got into the system."

More complicated issues - such as a treatment deemed not medically necessary or a claim requiring additional information - can be appealed. Instead of resubmitting these claims, which could result in denial as a duplicate claim, experts advise addressing the problem identified by the payer in a letter accompanying the claim. For example, if the debate is whether a service was medically necessary, attach an article from a medical journal supporting your opinion, or letters from peers in your specialty.


Timely filing can mean the difference between money in the bank and writing off a claim. Original claims and appeals have state-mandated filing requirements. In her practice's case, McCrann says, "By the time we realized claims hadn't gone out, we'd missed timely filing, and insurance companies denied all the claims."

You may have prompt-payment legislation on your side. These state-by-state laws force payers to pay within a certain time frame - check the Web to find out if there are prompt-payment laws in your state. If not, consider negotiating prompt-payment rules into your future managed-care contracts. Define what a clean claim is and state that the payer must pay all clean claims within, say, 45 days - or pay penalties.

Practices need more than just bodies to key claims information into a computer. Stanching the flow of denials requires using judgment regarding individual circumstances and consistent follow-through.

"Split up denials by carrier categories: major carriers, the Blues, Medicare/Medicaid," suggests Richardson. Manag-ing denials this way allows one person handling a particular carrier to learn what that carrier's denials mean, and it creates accountability within the practice. If a patient asks why a certain claim has not been paid, the physician will know where to turn for an accurate answer. Likewise, if coding problems consistently generate denials, claims staff should advise physicians how to remedy the situation.

Prioritizing will send easy-to-handle matters out the door swiftly. Some denials require research, but even these tend to fall into recurring categories. "Quickly categorize denials: those that require research, those that are quickly handled, those that require a call to the patient or carrier verifying eligibility," Richardson recommends. "You want to work the ones that could eventually mean money first."

Reagan suggests creating form letters for recurring denials - for example, explaining that a claim is not a duplicate but includes an additional service, like an injection, that wasn't charged on the original claim. Then an appeal will simply require filling in a few details and adding documentation. "Printing off a quick letter is far less time-consuming than accumulating hundreds of individual items, compiling them, and sending them to the payer," says Reagan. And, she adds, by handling claims individually, you are more likely to be paid quickly.

Be sure to spend the most energy on bringing in revenue. "Weigh the cost benefit," Reagan advises "A $5 claim probably is not worth pursuing, but $5,000 is probably worth it. You have to decide where you're going to draw the line. That often comes at around $75 or $100, particularly if it is a recurring problem."

Certainly, it is better to sort claims by their value and start working through the biggest claims first. Some practices sort by patient name - but by doing so, they may never get to the really big claim at the bottom of the pile.

Although they can be time-consuming and frustrating, claims denials can be a learning tool. "If you are trying to figure out which diagnosis codes pay and which deny, you can find out by watching your denials," says Richardson. "In a specialty practice, every time you use a certain code combination, it might cause a denial such as 'not medically necessary.'" Staff should let physicians know not to use those risky code combinations - and what to do instead.

If you don't use an electronic tracking system, a log can help you track denials to identify which staff are generating too many errors, says Elizabeth Woodcock, director of knowledge management for Physicians Practice Inc. If you learn that 50 percent of your denials come from the front desk - a number Woodcock says is typical - you can focus there to prevent future problems. "The key is being proactive, not reactive," Woodcock explains. "You must fix the root problem." 

And remember, claims processors on the payer side are human, too. Try an old-fashioned conversation to solve a problem. "If you see a pattern, go to the claims director and say, 'How can we solve this problem systematically rather than on an ad hoc basis?'" Reagan suggests. "People often don't take the obvious step of picking up the phone and talking to someone who can commit to a [resolution] process."

This article originally appeared in the November/December 2001 issue of 

Advice for improving denial management and increasing collections

Stop the Insanity!


Are your schedulers stressed out from phones that won't stop ringing and appointment books that are impossible to decipher? Do your patients complain of inconvenient appointment times? Have you considered scheduling patients online? With 167.1 million Americans surfing the Internet - and online traffic doubling every two years - scheduling appointments online seems a likely next step for physician offices that are looking for increased efficiency through technology.

In the past, security and privacy were the top concerns for potential users of electronic appointment scheduling. Now security measures, including encryption, data signatures, and online information packets, are commonplace and ensure the protection of patient data online. More important, most online scheduling programs now transmit patient information within a Web site, where privacy can be protected. Simply scheduling by e-mail, on the other hand, may be less secure, because private information might be misdirected, for example, and inadvertently wind up in an employer's computer system.

Leslie Jebson, manager of specialty clinics operations at the University of Missouri Health Sciences Center in Columbia, agrees that encryption technology has become so sophisticated that security should not be a major concern. What should be a concern, he says, is ensuring a reasonable response time. "Making scheduling work requires the ability to give patients their first or second preference for an appointment - along with a good verification system," Jebson says.

Many experts acknowledge that response time is a big issue - and one that cannot be solved by technology alone. Putting an online scheduling system in place requires training, planning, and preparation. "Responsiveness has to do with staffing levels and efficiency," says Darrel Schmucker, information technology director for Sutter Health, a hospital and physician network in Northern California. "Patient expectations are always an issue to consider, along with privacy and confidentiality."

Jebson envisions a day when the electronic patient scheduling process, or "e-scheduling," will resemble the way airline tickets are purchased online: Patients will enter their condition, their physician's name, and several possible appointment dates, and in a moment's time the system will automatically confirm a date and time. Right now, Jebson believes, only a few practices' sites have reached this level of sophistication. For most practices, e-scheduling still requires someone to take appointment requests and match them with available times.

For the 22 clinics he oversees, Jebson has developed a Web application called E-appointments that allows patients to request appointment times as well as update insurance and registration information.

on the secure Web site, patients enter information on a standard form, choosing which physician they want to see and at what time. "The information about the patient is more accurate, since they're entering it themselves," Jebson says. The request is then packaged into an e-mail that is sent to a customer service representative at the corresponding clinic, "who responds to the patient within 24 hours with three possible choices," he explains. A major benefit is that the system keeps the patients off the phones.

Rosemarie Nelson, a New York-based healthcare information technology consultant, agrees. "Since the calls are decentralized somewhere else, it really frees everyone up," she says. "Staff doesn't have to worry about the [appointment] book being there." With an electronic scheduling system in place, "the person at the front desk can truly be a greeter," clearing up roadblocks that can form at the front desk. "Nurses would be able to schedule patients [for their next appointments] from exam rooms, so the patients won't have to go back to the front desk," says Nelson.

She cautions that practice managers should take a step back before jumping onto the e-scheduling bandwagon. "Many practices simply don't have the infrastructure to approach a fully paperless office now. While vendors are hyping their solutions, practices are still concerned with reimbursements going down and how to cut costs," says Nelson.

Indeed, the prudent practice will do its homework before adopting an e-scheduling program. Be sure that your practice - both staff and patients - is ready for the change and will take advantage of the benefits.

Access to technology is something to consider at the outset. "An issue with technology in general is accommodating both the haves and the have-nots," says Schmucker. "At one point in time, physicians had to deal with those who had a telephone and those who didn't - the situation now is probably not that much different."

Physicians are now using the Internet more in their practices. An American Medical Association (AMA) survey released last March found that 54 percent of physicians use the Internet at work, up from about 37 percent in 1999 - but access to the Internet is still not universal. The Commerce Department estimates that 60 percent of American households currently lack access to the Internet. For those households, traditional methods of appointment scheduling would have to remain an option. Find out if your patients are currently - or likely to become - Web users by surveying patients at checkout, when they phone in for appointments, or on new patient information forms.


If your patients can make the transition to online scheduling, make sure that your office can as well. Is the technology in place to use online scheduling? If not, are you ready to invest in new programs and upgrades? Compare vendors' products with your existing and future needs. Is your administrative system aging so that a complete, integrated system would be worth the investment? Or would a separate scheduling element make more sense? Today, systems available to healthcare providers can handle everything from scheduling and prescription refill requests to patient-physician e-mails and lab results; other systems let patients go online to update insurance data and complete registration forms. It's up to you to determine how much you need.

Be sure to work with your staff so that the transition goes smoothly, designating specific responsibilities, assignments, and backups. Develop guidelines for how soon inquiries will be answered and design a message flow for patients to get inquiries to specific staff members.

Finally, realize that e-scheduling only works if patients use it. Decide if you want to alert only existing patients or use the service to attract new patients. Activities as simple as sending out a patient mailing and posting a flier at the front desk to encourage e-scheduling can put existing patients in touch with your practice in just a click. Notify patients at the Web point of contact about which requests are appropriate for online scheduling, letting them know the hours during which online requests will be handled, and what to do if they have an emergency.

"Electronic scheduling will continue to boom," Jebson predicts, citing comprehensive, Internet-capable management systems that combine back-office administration, computer support, and patient scheduling into one cohesive program. Software like this replaces entire management systems but requires extensive staff training. For smaller practices, there are Web-based applications that handle appointment and prescription refill requests, and allow physicians to e-mail patients newsletters and other information.

Whatever route you choose, take your time finding the right vendor and the program that will work for you. Invest in staff training and integrate the system into the practice's daily workflow. Then be sure you involve your patients by letting them know the practice offers e-scheduling - and by responding as promptly and as courteously to online inquiries as to phone calls.

Online patient scheduling can be more efficient and private than other, older methods

Are Your Schedulers Wired?


You've seen the advertisements; perhaps you've even spoken to sales reps at medical society meetings or national conferences. But with the near-daily deluge of information about technological advances to help physicians practice more efficiently, you may not have made the leap across one of the most promising frontiers of paperless medical offices: electronic prescribing. 

"E-prescribing," as the technique is commonly known, is probably one of the most practical and accessible ways for physician practices to jump into the electronic age. Electronic prescribing technologies are praised by their advocates as time-savers that also reduce the risk of error and liability. One company, iScribe, even offers physicians a discount on their malpractice insurance premium after using its product for one year. An attractive offer, to be sure. 

So what's the catch? There seem to be relatively few. Aside from spending some time to set up the equipment and master the learning curve, e-prescribing is virtually painless. Some companies even provide needed equipment, and most services increase productivity in exchange for a minimal investment. 

An e-prescribing system's greatest boon is its promise of a streamlined prescription process. Each of the estimated 2.5 billion prescriptions dispensed in the United States every year takes valuable time - especially when taking into account the physicians' time fielding pharmacist calls to confirm prescriptions, replace non-formulary drugs, and related tasks. 

To e-prescribe, a physician opens the patient's electronic record, (stored on the e-prescribing device), selects a condition or medication, checks for drug interactions or allergies, confirms the medication is included on the patient's health plan formulary, enters dosage information, and sends the prescription via fax - or electronically -  to the pharmacy of the patient's choice. The whole process takes no more time than writing a conventional prescription -  and has additional safeguards built in. 

"Electronic prescribing is quick and easy," says Joseph Goldberg, MD, a San Francisco physician who uses ePhysician's system. "I can easily go through a list of 10 or 12 descriptions of a drug - side effects, contraindications, potential conflicts. Avoiding the phone calls is great, too - that's very time-consuming for my staff." 

Among the challenges e-prescribing helps avoid are illegible handwriting, incorrect dosages, unclear instructions, and often-dangerous errors related to confusing similarly named drugs. The long-term goal: to increase accuracy and minimize medication errors, which in 1993 were estimated to account for about 7,000 deaths - more than double the number from a decade before. 

Checking formulary compliance -  a time-consuming, yet crucial part of prescribing -  becomes simpler with most e-prescribing tools. Most vendors update formularies weekly or more often, based on input from health plans, pharmaceutical benefit management firms, and formulary management companies. 

Users of the ePhysician service, for example, receive new formulary information when the physician "syncs" with a desktop computer. And ReadyScript's wireless system makes new formulary data available to subscribers immediately via instant connectivity. Either way, e-prescribing systems mean no more guessing or memorizing lists of drugs. 

An unexpected benefit is that handheld prescription devices may bolster physicians' level of experience and caring in the eyes of some patients. One Palm-based product, ePocrates (which is free to physicians), brings a searchable PDR into the exam room. 

Bruce Bagley, a family physician and board chairman of the American Association of Family Physicians, uses ePocrates -  with unexpectedly positive results. "One patient told me last month a drug was making her nauseous," he relates. "I pulled out my Palm Pilot and looked the medication up on ePocrates, then told her nausea was not a usual side effect with that medication. She looked surprised, then said, 'You really know, don't you? You're not just guessing.' Here is a tool I didn't know I needed, but have used every day since I got it. It gives me the power and support to do a better job." 

Pharmacists, too, see added efficiencies by being able to quickly fill faxed or electronically submitted prescriptions. "[E-prescribing] eliminates all the communications problems," says Ken McLain, a Newport Beach, Calif.-based pharmacist. "From our viewpoint, the prescription is already prescreened and easy to read - we just type it in and fill it. So far we haven't had to call or have any questions about those prescriptions." 


E-prescribing systems now offer - or soon will - everything from prescriptions to more complex applications, allowing physicians to check patient records, order lab tests and referrals, or complete an online patient "visit." To be sure that you choose the right system for your practice, ask yourself a few questions. 

First, how will you handle conversion? Patient data must enter the system somehow. Practices using electronic medical records (EMR) are set to begin - as long as the e-prescribing software can work with the EMRs. ReadyScript, for example, is a medication management and prescribing system that creates an interface with a practice's existing management system to integrate its EMR. Practices can enter patient data one chart at a time, perhaps as a patient schedules an appointment. Or they may choose a start date, and enter new information from the next patient visit. 

Next, consider whether you have the appropriate infrastructure. Do you have enough computers to allow other staffers to be appropriately connected? Think about how e-prescribing will affect daily workflow and whether individual responsibilities need to be modified to make the most of everyone's time with the equipment. 

You'll need to decide which platform to use. Options include Palm (used in Palm and Handspring handheld units) and Windows CE (used in the Hewlett-Packard Jornada and some "mini-laptop" or tablet computers). If you will need new hardware to use an e-prescribing system, consider the cost - and be aware that some companies provide hardware. This may be an especially worthwhile perk if e-prescribing vendors undergo a likely industry consolidation, perhaps rendering current hardware unusable. 

Finally, decide what you want to accomplish in the long run. For the not-so-computer-savvy, using a handheld device might be intimidating at first. But once the system becomes part of your routine, you might want to add other services. Think ahead about what sounds right for your practice: Ordering labs online? Processing online referrals? Linking to your existing EMR or practice management system? Conducting online visits with patients? 

Although many products focus on prescription refills, they offer several other activities online. "We tried to design our product to fit with how a physician works," says Michael J. Lombardi, ReadyScript's executive vice president of marketing and business development. 

That's good news for busy physicians who are often inundated with information about technologies that may or may not be particularly beneficial. Wherever your practice stands along the winding road of practice management technology, e-prescribing will likely prove to be worthwhile. Plan ahead, take a deep breath - and take that first step. 

This article originally appeared in the September/October 2001 issue of 

E-prescribing is one of the most practical ways for physicians to jump into the electronic age

Instant Medicine


The luster has faded from managed-care health plans in many markets, where increasing premiums and decreasing patient satisfaction mean employers and legislators have become sounding boards for complaints. And a class-action lawsuit was filed this year in Florida - an amended version of an earlier lawsuit in California - in which physicians have accused certain managed-care plans of conspiracy to deny them payments. But as the environment becomes increasingly rancorous, physicians can take some consolation from their decade-old relationship with managed care. Many, by virtue of real-life experience, are becoming increasingly empowered to negotiate their health plan contracts. 

In the past few years, physician advocacy groups such as the American Medical Association (AMA) and the American Academy of Family Physicians (AAFP) have supported physicians in this arena, producing guides to assist contract negotiations. These guides, along with the advice of specialized healthcare attorneys and experienced physicians, provide great resources for those new to contract negotiations. 

Before signing anything, physicians should plan a negotiating strategy. For starters, negotiations should not threaten the security of the practice. “If you have no negotiating experience at all, start with a relatively small patient group,” advises AAFP board member Bruce Bagley, MD. In other words, “don’t bet the whole farm” on a single contract. 

Something else to keep in mind, according to John F. Mahoney, a healthcare attorney with Chuhak & Tecson PC, in Chicago, is that companies are willing to negotiate many contract provisions. The trick is to choose your battles wisely. 

“Some provisions are so onerous on the doctor - and as simple as an MCO saying physicians will be paid based on a fee schedule, but not providing the fee schedule,” says Mahoney. “It’s all negotiable - especially the fees - and physicians have a right to know the fees.” 

Once the paperwork is in hand, physicians should read it carefully, noting any terms or clauses that might cause concern. The AMA and other physician advocates recommend that physicians beware of certain conditions that can cause trouble down the road. One example is the Silent PPO, a clause requiring physicians to provide services to “any entity” which contracts with a managed-care organization (MCO). This definition could be broad enough to force physicians into contracts with any group to which the MCO sells its provider list. Similarly, an All Products segment may include physicians in “any specific plan” or “any members of the plan” - a condition that could force physicians to participate in all plans offered by the MCO, or to accept a capitated contract without specifically choosing to do so. 

“Gag” clauses, which prohibit physicians from discussing certain topics with patients, and provisions limiting physicians’ ability to negotiate with other parties, are other areas to watch for - and avoid. 

In addition, consider the possibility that your long-term relationship with the MCO can change, and prepare accordingly. Today’s volatile economy often means mergers and acquisitions as large organizations struggle to maintain market position. Does your payer have the right to assign your contract to a third party? Does the MCO stipulate it must consent to your contracting with another party, even in the case of a corporate merger? Be sure these items are spelled out clearly and to your best advantage. 

Negotiating strength depends on marketplace position. A large practice or highly specialized group with a significant patient load will have leverage with MCOs that don’t want to risk losing patients. A solo practitioner or specialist with plenty of competition will have less influence. Physician practices should assess their situation - then negotiate strategically. 

AAFP has compiled “Principles of Interaction Between Family Physicians and Health Plans,” a guide suggesting several areas that should be fairly determined in physician/MCO contracts. It includes disclosure, infrastructure, discrimination, patient rights, and contracting. AAFP also recommends that physicians seek legal counsel when considering contracts. 

“Legal review of a contract probably isn’t as expensive as you might think,” says Mahoney. “If the lawyer is experienced in healthcare contracting, he can look through a contract in an hour or two. If the contract covers a major source of revenue, it’s worth it to have [an attorney take] a look.” 

Bagley agrees. “We work with legal counsel to review the contract after we’ve done the groundwork, to make sure a contract protects us and is defensible.” 

He also offers a suggestion for physicians who cannot find a healthcare attorney in their area: “It’s absolutely necessary for the physician leaders of a group to read every word of the contract so you don’t have to teach a lawyer your business. You’re taking a chance if you just hand the contract over.” 

Although negotiations can turn ugly, Bagley notes that his practice’s discussions have mostly been friendly. In fact, his Albany, N.Y., practice has helped design capitation contracts with area MCOs that had not previously implemented them. 

When it comes to capitation, it is crucial to check for risk limitations, particularly when the practice is new to that payment system. For example, an introductory capitation contract might state that if, at the end of the year, the total from a capitated contract is less than income was under fee-for-service reimbursement, the MCO will make up the difference. 

“You should have an insurance company that doesn’t want you to fail,” Bagley says. Some small practices also prefer contracts with an arbitration clause. This provision states that any conflicts will be solved in binding arbitration, rather than in court - where a large company with deep pockets might be able to wait out a conflict until a practice can no longer fight. Some attorneys, however, advise against this clause. As with all contracting matters, practices should decide what works best for their needs. 

The AMA and local medical societies sometimes offer seminars on contracting. Healthcare attorneys, too, can advise on contracting matters. Other physicians and area bar associations can be good sources for referrals to a skilled attorney. 

Most important, an informed negotiator is more likely to succeed at getting the best deal. By knowing their positions and their requirements, physician practices can take MCOs to the negotiating table - and walk away satisfied. 

This article originally appeared in the July/August 2001 issue of 

Practices are becoming increasingly empowered to negotiate their health plan contracts