PayerView: You be the Judge - PayerView Reveals Who Treats Physicians Right

June 1, 2007

Tired of being judged by payers? Here’s your chance to turn the tables and judge them. With help from our friends at athenahealth, we give you the second annual PayerView rankings. It’s a report card that uses real claims data to judge dozens of local and national payers on how well they treat you, the physician. Compare this data with your own; then strive to change what isn’t working.


Tired of being judged by payers? Here’s your chance to judge them.

For the second year in a row, Physicians Practice has teamed with athenahealth, inc., to produce hard data on how well payers are treating physicians. The result, our annual PayerViewSM report, is within these pages. We name names and give grades so you can make better contracting decisions.

Our goal: to illuminate the dark recesses of the physician payment process, revealing problems in order to fix them, and to share what good payers are doing so the rest of the industry can catch up. While the picture that emerges isn’t entirely encouraging, there is reason to hope for better relations between physicians and payers. That’s because when you start measuring performance, and making the results public, performance tends to improve. Payers start to care more about it.

In other words, PayerView seems to be having the effect we hoped it would: Payers generally are becoming more efficient, and that’s good news for them and you.

Now let’s have a look behind the curtain.

Instead of reporting on anecdotal or slapdash opinions about payers, PayerView is based on actual claims data derived from athenahealth’s athenaNet® database. Based in Watertown, Mass., athenahealth provides physician billing, practice management, and EMR services via Web-based software to practices all over the country. It has access to oodles of billing and payment information, and with our input, it used data covering all 12 months of 2006 to develop a system to compare payers in terms of how they treat doctors. Physicians Practice has developed a chart that describes the measurements we used to rate payers and the weights we gave each measurement.

To make things fair, we report on only those payers for which athenahealth has data from at least 30,000 charge lines per quarter (for national payers) and 5,000 charge lines per quarter from regional payers. This is an even higher benchmark than we used last year. Also, at least six of athenahealth’s physician-practice clients had to be represented in data on any given payer; that’s because we didn’t want to report trends from just a few practices.

If one of your payers is not on the list, it’s because we didn’t have enough data on that payer to report on it. Still, even this high standard allowed us to capture enough data to report on dozens of payers around the country.

In total, then, the data you’ll see summarizes claims performance from more than 8,500 providers representing more than 28 million charge lines billed from 33 states and submitted to payers in 46 states.

We took all those numbers and ranked payers based on the following measures:

Days in accounts receivable (A/R) - How many days did it take a physician to get paid from the date the charge was entered in athenahealth’s system? The math: Average total outstanding A/R divided by the average daily charge. The rationale for including this metric: The faster you get paid, the more the money is worth. The weight we gave this metric: 25 percent of the total score.

First pass resolve rate - The percentage of claims resolved (either paid or passed on to the patients) the first time they were sent in. This is a slight change from last year, when we measured just first pass pay rate - the percentage of claims actually paid on first submission. But it’s legitimate to count the other sort of resolution as a reasonable outcome as well. The rationale for including this metric: First pass resolve rate characterizes the amount of administrative waste and angst it takes to get paid. The weight we gave this metric: 25 percent of the total score.

Percentage of patient liability - So-called consumer-directed healthcare plans that force more costs onto patients in the form of higher copays and deductibles are all the rage. That may be good for health plans, but it’s generally bad for practices because patients are harder to collect from than insurers. This is a measure of the percentage of billed charges transferred to the patients. The rationale for including this metric: It helps describe how much burden is placed on physicians, who must figure out how much patients owe and collect it. The weight we gave this metric: 7.5 percent of the total score.

Denial rate - The percentage of claims that required back-end work, whether the claim was actually denied or just rendered pending. The rationale for including this metric: When a claim is denied, it takes you longer and costs you more to get paid - if you ever get paid at all. The weight we gave this metric: 20 percent of the total score.

Claim denial transparency - This measures the percentage of denied claims that were then paid with just one resubmission. This is a new measure this year. The rationale for including this metric: To gauge how clear the payer is when they deny a claim. Does the explanation of benefits or a customer service rep on the phone make it easy to understand how to get the claim processed? If so, you’re likely to get paid on the first resubmission. The weight we gave this metric: 7.5 percent of the total score.

Percentage of claims requiring medical documentation - Is there anything more irritating than submitting a claim, only to get back a request for medical documentation? Now someone has to go pull a chart, search some journals, make a bajillion copies, and send it all back, probably on paper. Not to mention the implication that the payer is deciding what services the physician ought to be providing. “Medical documentation requirements are becoming more prevalent,” says Suzanne Verden, president of The Verden group, which helps physicians with payer relations. “I see it in surgical practices a lot, especially orthopedics, and especially if the surgeon develops a specialty in some procedure.” She has seen the requests really affect practices. The rationale for including this metric: Annoying and expensive requests for documentation are bad in our world, and we started measuring them this year. The weight we gave this metric: 7.5 percent of the total score.

Percentage of noncompliance with the Correct Coding Initiative (CCI) - One of the worst things about payers is that each one has its own unique set of rules and coding expectations. How can any billing office keep track of hundreds of rules from dozens of plans? So, we dinged payers when they refused payment on claims because their rules were different than national coding standards. The rationale for including this metric: “Instead of having the burden put on providers in having to follow rules from 30 payers, it’s great that this metric puts the pressure back on the payers,” cheers Verden. The weight: 7.5 percent of the total score.

We didn’t measure how much payers pay. Our goal here is to rank payers according to how hard it is to collect what you are owed. After all, if Payer A promises great rates but takes 70 days to get them to you, are they really a better payer than Payer B who pays a little less but gets it to you in 35 days?

Still looking for reimbursement data? No problem. Download our 2006 Physicians Practice Fee Schedule Survey Results to get a better sense of what payers should pay - and what you should be charging.

The lowdown

So, after all that data crunching, what did we see?

First, physicians are getting paid faster. Days in A/R decreased, on average, 5 percent for national payers and 3 percent for regional payers from 2005 to 2006. It now takes just 34.4 days from the time you enter a charge to the time it gets paid. That doesn’t count days added before you submit the charge, if that’s a problem in your office. Of course, three days to payment would be better than 34 days, but it’s nice to see the industry moving in a positive direction.

Here’s more good news: The extent to which payers deviated from national coding standards dropped 25 percent nationally and 20 percent regionally. That makes it easier to code right the first time without machinations for each payer.

Denial rates are also on the decline; around 16 percent fewer claims were denied last year than the year before, though this partially reflects athenahealth’s growing expertise in avoiding denials for its clients. In other words, pretty much everything that’s supposed to be going up is going up, and everything that’s supposed to be going down is going down.

Melissa Lukowski, athenahealth’s director of payor outreach, credits increased transparency for these improvements. “Transparency initiatives adopted by many national and regional payers are bearing fruit,” she tells us. “Payers are investing a great deal of resources in making tools available to providers. They are really heavily documenting, making information available through Web sites, mailing to providers. Outreach and education are going up - it’s playing out in the numbers. The ones that have experienced the best scores are the ones doing the best job at this.”

Bottom line: Payers are doing a better job of explaining what you can do to submit claims correctly in the first place. If your practice isn’t seeing these improvements, it may be that you aren’t taking advantage of what’s available, or your staff still finds the information more opaque than crystal clear.

A final trend: “Consumer-directed healthcare is on the rise, and our data is actually showing that increase as well,” says Lukowski. It’s time to hone your policies and processes for patient collections.

Meet the best

Our national results indicate that, overall, Cigna is the best-performing national payer, upsetting Humana, which took top honors last year. Cigna’s top ranking was thanks largely to its high 96.3 percent first pass resolve rate and low 5.9 percent denial rate.

Bill Fandrich, product executive for all the point-of-service capabilities for providers with Cigna, says he and his colleagues expected a good showing, and says he’s grateful someone is making a public issue of payer-physician relations. “We very much were pleased to see that an organization took the initiative to publish these rankings. When we saw the rankings last year, we were very certain we could improve for this year … and think we can improve even more in the future.”


Fandrich credits a back-to-basics approach and better communication with providers. Cigna sent its many Six Sigma black belts out to fix basic business processes. For example, the payer industry traditionally measures payment accuracy based on whether its payments matched the contract terms in its own system. Physicians, though, judge accuracy based on whether the payments meet their understanding of the contract. Cigna is now at pains to make sure its interpretation matches physicians’ interpretations, Fandrich says.

Cigna also measures how many claims it can handle without a manual intervention - and it doesn’t just count claims that make it through the submission process. Company officials want to know, out of all the claims providers send, how many it handles smoothly. If the electronic data interchange channel rejects a claim before it enters Cigna’s system because the claim is missing information or is coded incorrectly, Cigna still counts that as a manual rejection, and works to avoid it. “We started counting them all. The rejection still causes a lot of redundancy and frustration in the environment,” regardless of the reason, Fandrich says. “We took the holistic view.”

Cigna also created “dedicated provider service liaisons to respond to physician concerns and anticipate where we might have issues and prevent them,” Fandrich reports. “A provider now has a single point of contact they can call and communicate issues. There is a name they can use. Before, we had a call center and a service team but they might not be dedicated to that provider. Now they have intimate knowledge of this provider’s environment.”

Cigna thinks providers are getting more and more interested in payer performance and wants to stay ahead of the curve. It seems the company is doing just that.

Yet while Cigna outperformed its peers, it wasn’t by much.

Aetna, which placed second, thinks the key to better performance is transparency and communication. “We try to make our rules accessible and make the Web site easy to use, so literally a physician or someone in the physician’s office can access that data very quickly. Accessibility and ease of use are concepts we try to push,” explains Alan Karp, vice president of healthcare delivery for Aetna. “We want to get away from the black box mentality. We try to communicate as often as we can with our physician partners.”

The Blues plans also did well in their respective regions. “I am not surprised to see Blue Cross Blue Shield plans at the top or near the top of the list in each region,” says Verden. “They seem to have a good IT structure and to educate providers really well.”

Low-ranked national payers, United and WellPoint, are in acquisition mode, notes Lukowski. “Performance does seem to be impacted by acquisition.” It makes sense - consolidating information systems can cause payment mishaps.

To get a more complete assessment of payer performance nationwide, PayerView ranks payers by region as well. This allows you to check how payers are performing in your specific area of the country.

Medicare muddle

Medicare performed well nationally, ranking third overall. Say what you will about how much Medicare pays, but having public, standard rules for coding, coverage, and prompt payment goes a long way toward making it easy to work with.

What’s surprising is the variation among regional Medicare carriers. Medicare is supposed to be a national payer, after all, but Medicare in Illinois pays in 29 days while Medicare in New York takes 51 days. In fact, not all Medicare carriers are even following CCI edits. New Jersey ignores them 2 percent of the time.

The variation “was actually news to CMS as well,” Lukowski reports. “The general understanding is that every carrier should be applying the CCI standards, and that’s not actually playing out. There is no real explanation for why the variation is there.”

Medicaid performance is a hodgepodge - just as you’d expect for something run by 50 different states - except that all Medicaid programs have higher days-in-A/R and more denials than most commercial plans. Still, working with the better-performing Medicaid programs, like those in Ohio and South Carolina, isn’t that bad. It may be time to push other states to follow the example of strong performers; there would be less paper pushing and more money for care.

Bottom line


So, what does all this data mean for you? “This sort of data is really strong for backing arguments about which payer contracts to keep or drop,” says Verden. “It’s great for making unemotional decisions. Physicians get really emotional when they get denial after denial.” Instead, analyze the data. See where your payers stand, and take notice if they are doing worse by your practice than the data suggest they are doing overall. It might be that some of the problems lie with your own processes.

Also, start focusing in earnest on patient collections to keep up with the direct-to-consumer trend. Sure, patients are historically considered harder to collect from than payers, but that’s mostly because physicians haven’t focused there. Track your collection success by payer but also by payers versus patients. Train and reward the front desk and everyone else involved when collections go up. Carefully review every step in your patient collection process to iron out wrinkles.

Above all, as you pore over the data in our charts and graphics, let yourself feel empowered. At least for this month, in this issue, it’s you who are peering over the shoulders of payers, instead of the other way around.

Pamela L. Moore, PhD, is senior editor, practice management, for Physicians Practice. She can be reached at pmoore@physicianspractice.com.

This article originally appeared in the June 2007 issue of Physicians Practice.