By Larkin, Howard
Medical Economics , Vol. 76, No. 8
Even the best-run practices can have trouble keeping up with changes in health-plan benefits and coverage. Depending on your location, specialty, and market conditions, you may find yourself confronting hundreds of mutating benefit packages, each one a potential menace to your bottom line.
Marketing by health plans is to blame for much of the problem, says John M. Brase, executive director of Somerset OB/GYN Associates, a sevendoctor group in Bridgewater, NJ. "In their effort to be all things to all employers, managed care organizations have introduced a plethora of products."
Typically, a carrier offers multiple product lines, ranging from HMOs to PPOs to indemnity coverage. Within each of those product lines may be several "standard" options, such as point-of-service plans, coverage for well-baby visits, and different levels of copayment. These variations multiply the number of benefit packages to keep up with.
Further complicating the situation, "standard" coverage packages are customized for particular employers. These custom benefit plans may call for the use of certain labs or for referral of patients to particular specialty networks, such as mental health, orthopedic, or cardiac-surgery carveouts (see page 143). They may even allow workers to choose from a menu of optional benefits, such as coverage for routine eye exams or chiropractic care.
The upshot can be a bewildering array of health plans. (To learn what some insurers are doing to reduce these variations, see page 106.) While Somerset OB/GYN, for example, participates with about 55 insurers, the practice must deal with more than 100 separate health-plan products that include more than 120 variations in coverage. Benefit differences range from what services must be bundled with prenatal care and delivery to where and under what circumstances ultrasound is covered.
Despite recent improvements in the group's ability to track changes in benefits and referral requirements, Brase says, dealing with claims denials still eats up 15 to 20 percent of his billing staff's time. "It doesn't take many mistakes to lose some significant money" he notes.
At Axminster Medical Group in Hawthorne, CA, the disparity between the number of contracts and the number of benefit packages is even more pronounced. The 20-doctor primary care practice is signed up with only nine health plans, but has to keep track of more than 400 separate benefit packages offered by various employers, says Evan Silbert, the group's assistant administrator. "The HMO may have to offer three well-woman visits a year instead of two to get a particular employer to sign on;' he says.
To make matters worse, health plans don't necessarily tell physicians when they've made changes, particularly if the doctor is a specialist or if the plan is a PPO with no assigned primary care physicians. In fact, 48 percent of the nearly 30,000 doctors surveyed in 1998 by The MedStat Group said it was a "hassle" or a "major hassle" to get current information on benefits and coverage from their health plans.
Why it pays to be aware of benefit changes
It's obvious that you can lose money when you perform an uninsured service, and waste time when you file a claim that's ultimately rejected. But there are other, less obvious ways in which ignorance of plan benefits and coverage rules can cost you heavily.
Overhead is one. A claim denial, on average, generates about $25 in extra expense, according to Elizabeth Woodcock, a Philadelphia-based consultant with MGMA Management Consulting Services. And that $25 includes only your staff and paperwork costs for refiling an amended claim or billing a patient for an uncovered service; it doesn't include the revenue lost if you never recover the money.
"It's almost always cheaper to put the time in on the front end and not make the mistake, rather than to try to fix it on the back end," observes Woodcock. …