Payer Performance Examined

May 31, 2010

Our fifth edition of PayerView uses real claims data to examine and rank payers based on financial and administrative performance, as well as efficiency. Here’s to friendly competition that helps docs get paid.


Wouldn’t it be great if payers would own up to their part in the number of days your practice’s claims languish in account receivables? Or if you could see at a glance which payers denied more claims than the rest, and then compounded the hassles by sending back muddy explanations of their denials?

Now you can. In fact, if you’ve been reading Physicians Practice in recent years, you’d know that detailed information on payer performance has been a reality since 2006.

Like its predecessors, this fifth edition of PayerView details how well or poorly national and regional payers do in getting you paid correctly and on time for the services you perform. Using only hard claims data, PayerView is a top-to-bottom ranking of commercial payers, Medicare, and Medicaid that measures the level of “hassle factor” each payer represents.

Payers judge your “performance.” Now it’s your turn to judge them on theirs.

When the project started in 2006 in collaboration with athenahealth, the nation’s largest revenue cycle management company, the goal was twofold. First, by offering you vital intelligence (otherwise unavailable) on payer performance, you can make informed judgments about which payers you want to work with. Second, we hoped that over time the publicity from PayerView would prompt competition among payers to improve.

We knew that the second objective was a bit ambitious. But it’s worked. Many payers have improved performance in most of the categories PayerView measured this year. (To review past performance, read the 2007, 2008, and 2009 reports.) They paid claims faster and resolved more claims on the first submission. Even the sorest spots in provider-payer relationships, such as denial rates, showed improvements almost across the board.
Let’s look at the numbers.

Payers compared

What is PayerView, exactly? It’s a public ranking of 137 payers doing business in 45 states and the District of Columbia during 2009. The rankings are prepared by athenahealth and based on data from millions of claims submitted by thousands of providers, which are run through an algorithm athenahealth created that includes weighted performance metrics in key categories.

Not only does the trend from 2008 to 2009 show improvement, but payers are displaying competitive levels of performance between each other. This year, PayerView introduces the all-payers comparison, which allows comparisons across all categories of payers. When all 137 payers were examined, the top performer was Blue Cross & Blue Shield of Rhode Island, where claims averaged just 12.2 days in accounts receivable, and 98.5 percent of claims were resolved on the first pass. Close behind in the all-payer rankings was the national payer Humana.

How can tiny Blue Cross of Rhode Island outperform giant national payers? By making shrewd use of electronic transactions and by streamlining the claims process.

Even notoriously inefficient state Medicaid payers, perennial basement dwellers in PayerView’s rankings, took steps forward in performance, though they continue to lag behind.

“It’s really become a game of who’s improving faster,” says Melissa Lukowski, director of payer outreach for athenahealth. Lukowski credits the widespread use of electronic transaction standards in helping companies like athenahealth guide users more precisely and improve payer performance.

“The payers getting to the next level in rankings are the ones who fully leverage electronic transaction,” she says. “They don’t just process a claim; they keep you informed about its progress through the entire chain of eligibility, claims status inquiry, and electronic remittance.”

(*See our complete payer rankings broken out by payer and region : you’ll find data on all 137 payers in the PayerView database.)

Key measures
How, exactly, does PayerView work?

Each payer is judged on how well it performs in certain areas that are important to physician practices - average days that a claim spends in accounts receivable (A/R), for example, or the rate at which it denies claims outright. The payer’s performance in all categories is tallied by the data crunchers at athenahealth to get a final score, which is then used to rank the payers against each other.

Some notes:

First, because some categories are more important to practices than others, the categories are weighted when athenahealth tallies up the final scores.

Second, athenahealth does not report the final score itself. It reports only the rankings and the payers’ performance on each individual metric.


Third, because PayerView data comes only from physicians using athenahealth for billing, it’s not a complete picture of each payer’s network. In fact, payers generally perform better inside athenahealth’s system than outside of it, due to the various steps athenahealth takes to facilitate payment - that is its business, after all - so we can’t say for sure that PayerView performance is precisely reflective of a payer’s performance generally.

Still, PayerView contains so much data that we consider it a representative sample. Working in nearly every state, athenahealth’s data represent more than 39 million charges worth $7 billion from more than 22,000 providers in 2009.

Fourth, to keep the calculations fair, athenahealth imposes some limitations on what it will include. Only payers on which athenahealth has a minimum of 3,500 claims per quarter for at least six physician practices were included in PayerView. Also, if any single athenahealth client contributed a disproportionate percentage of a payer’s claims, those claims were removed from the calculations. That exclusion may in turn have eliminated some payers from PayerView if there weren’t enough claims remaining to meet the 3,500 minimum.

The metrics included in PayerView were adjusted this year, too. Added was a measure gauging accuracy in determining insurance eligibility. Removed were measures on payers’ compliance with Medicare’s Correct Coding Initiative, and rates of claims kicked back with requests for documentation.

A metric showing the percentage of patient liability by payer was revised to measure “provider collection burden,” and was given more weight in the scoring. This metric now shows the percentage of charges transferred from the primary insurer to the next responsible party, such as the patient.

Major payers

When the eight national payers were compared, Humana scored a repeat appearance in the top spot. It led in fewest days in A/R (22.4) and was highest in claim denial transparency (96 percent), which measures how many denied claims required only one resubmission to get paid, indicating how well a payer explains its denials.

Sparking Humana’s performance, in part, was its ability to resolve claims in real time. Humana, as well as UnitedHealth Group, has integrated real-time claims adjudication with athenahealth’s system. Physicians who use this process get a determination of a patient’s liability within seconds of submitting a claim, and can collect what the patient owes immediately instead of waiting weeks for a final determination.

Mark Smithson, a service vice president with Humana, explains that real-time adjudication produces real savings for physician practices: it reduces days in A/R and saves staff time, postage and other collection costs. It also leads to fewer bad debt write-offs as many practices eventually give up trying to collect from patients who are reluctant to pay.

“We try to get providers to change their work flows a bit to make sure they are coding and submitting that claim while the patient is in the office,” Smithson says.

(*See our complete payer rankings broken out by payer and region : you’ll find data on all 137 payers in the PayerView database.)

Medicare And Medicaid

Medicare’s development of the National Provider Identifier standard in 2007 and 2008 probably hurt its PayerView performance in those years, according to athenahealth’s analysis. But with that process mostly behind it, Medicare made solid performance gains in 2009.

The program averaged declines of 24 percent in A/R days and 25 percent in denial rates while leading all payers with an eligibility accuracy rate of about 99 percent.


Even Medicaid programs, traditionally the lowest performing, marked an 18 percent decrease in A/R days. Lukowski credits the improvements to increased efficiency and transparency stemming from the spread of standardized transactions.

Many Medicaid plans also reduced rates of denied claims.

“They are dealing with complex rules and specific eligibility information,” Lukowski says. “It’s not just, ‘Is this patient eligible?’ but ‘Is the patient eligible for this particular service at this time, with this provider?’”

(*See our complete payer rankings broken out by payer and region : you’ll find data on all 137 payers in the PayerView database.)

Physicians and payers

Can the improvements seen in many of the PayerView categories continue? Yes, but more work needs to be done by physician offices, says Rosemarie Nelson, who consults with medical practices on technology-related issues for the Medical Group Management Association.

“Before you point your finger at the payer, ask if you are posting 95 percent of your claims electronically, because that’s what the better-performing medical practices do - and it works,” she says.

Nelson’s prescription for the electronically empowered medical practice goes beyond equipment. She suggests asking these questions about your practice:

  • Staff training: Is your front-office staff trained to be part of the revenue cycle team along with your business office?

  • Staff deployment: Has your practice’s check-out function moved from the cashier-at-a-counter model to a desk staffed by a “financial advocate” who completes real-time adjudication and collections?

  • Clearinghouses: Do you make good use of the information and services your clearinghouse provides, even if it costs a little extra?

  • Claims: Do you submit claims every day? “Sending claims in once or twice a week is old school,” Nelson says.

(*

See our complete payer rankings broken out by payer and region

: you’ll find data on all 137 payers in the PayerView database.)

Robert Redling is a freelance writer based in Tacoma, Wash. He has been practice management editor for Physicians Practice, Web content editor and senior writer for the Medical Group Management Association, and a speechwriter for the American Academy of Family Physicians. He can be reached via editor@physicianspractice.com.
This article originally appeared in the June 2010 issue of
Physicians Practice.