Insurance companies are definitely in a stronger position in the ‘payer payee’ relationship shared with healthcare providers. They have the advantages of scale, power and a large claims database. The complexity of billing procedures further tips the scales towards them. Technology and the internet come to the aid of medical providers through medical billing networks, promising to level the playing field between the two players.
Insurance carriers benefit from complex medical billing process. Changing codes, rules, and procedures make filing claims tortuous and error-prone. Insurance companies pick on these errors to reject claims. Sometimes this happens repeatedly till the medical provider caves in and forgoes the claim. Medical practitioners lose out on a significant chunk of revenue because of this tactic.
Common tactics used by insurance companies to delay payments
Insurance companies take advantage of the intricacies of billing procedures. Some of the common strategies used by them to delay payments of medical claims are:
Picking out bureaucratic errors to reject claims
Most medical practitioners do not have efficient and reliable billing processes. Insurance companies pick out errors and omissions in the submitted claims to reject them. Almost 20% of medical claims go unpaid as a result of claim rejections and unaggressive follow-up. This cut in revenue can seriously setback the operations of a medical practice.
Low allowable amount
Insurance companies take advantage of their large size by concurring on low allowable amounts to medical practitioners. Medical providers are left with little choice but to go with the low sums of money as competing insurance companies also offer the same amount.
Insurance firms conduct post-payment audits to correct mistaken payments and redeem them. They have access to a vast claims database and can verify records to demand post-payment refunds. This further depletes the revenue of medical practitioners.
Insurance companies have an efficient billing system that allows them to reduce payments to healthcare providers. The added advantage of scale makes them a tough proposition.
Medical billing networks reinforce the medical billing process
Medical billing networks consolidate the claims database of various healthcare practitioners. Medical billing service providers provide the means to facilitate this network. The information of clients is combined into an efficient and accountable automated system that also offers effective records management and efficient processes. Medical providers can leverage the economies of scale to their advantage, as insurance providers have been doing since years.
Advantage of medical billing networks
Independent medical practices cannot do much on their own, but collectively they can build an effective system to combat the obstacles in getting payments from insurance payers. Billing networks enable medical providers to do business with large-scale insurance companies on an equal footing. The networks offer the advantages of improved collections, effective revenue management, lower audit risk and added revenue sources.
All medical practices should use medical billing network services to combat large-scale insurance company tactics to deny and reject claims. Healthcare providers can use network services to maximize revenue and streamline revenue management processes.