Today's CH's routinely trade claims with other CH's. In fact, it would not be unusual for a CH not to trade claims with others. These so called "gateway" agreements can be a significant source of revenue. I know of several clearinghouses that can support a claim for a NY resident treated in Seattle, if the payer uses a CH of any significant size. Out of network claims do not necessarily have to be dropped to paper. Most health plans today do not require provider enrollment or network participation in order to receive electronic claims. As long as the CH has connectivity (directly or through a gateway), providers are free to bill.
Though dropping claims to paper is routine, in my experience its often done as part of an "all payer" solution. This solution enables the provider to send all claims to the CH. The CH sorts through the claims file, routes those with a valid payer ID electronically and drops the rest to paper. The cost averages from about .39 to .49 a claim. For most providers this is a cost effective method of processing claims. Often providers send claims that are missing payer ID's. As a value add service CH will drop these claims to paper rather than reject them. When either service exists CH's normally provide summary reporting back to the provider giving claim totals by payer ID and indicating the number dropped to paper. It's important for submitters to audit these reports periodically to ensure maximum EDI volume. Few do. In the "good ol' days" CH's dropped claims to paper for "non-par" payers (payers who do not pay for claims) in order to give the payer an incentive to contract for services. The thinking was that if a CH could show a high enough volume of paper, the payer would pay the CH to receive them electronically. The advantage to the provider was that in the end, the payer cost shared for EDI. This worked. But today's incentive more often comes from matching payer listings of network providers against a CH's list of submitters and showing the potential for volume. If you have a CH dropping claims to paper for a payer who they show they are billing electronically, I would check your agreement for a possible violation and ask for a refund. Marcallee Jackson Long Beach, CA 562-438-6613 -----Original Message----- From: David Frenkel [mailto:[EMAIL PROTECTED]] Sent: Monday, January 28, 2002 3:40 PM To: [EMAIL PROTECTED] Subject: RE: When is an EDI transaction not? This is a type of scenario that happens with out of network claims. With today's model there is no a way a CH can be connected to all potential payers. If you live in NY and have an emergency room visit in Seattle what are the chances the hospital CH has connections to a payer in NY? Unfortunately paper is the answer in these cases today. CH's may have to do 'interconnections' to find another CH that has an electronic connection to a particular payer. Dave Frenkel -----Original Message----- From: Rachel Foerster [mailto:[EMAIL PROTECTED]] Sent: Monday, January 28, 2002 3:02 PM To: [EMAIL PROTECTED] Subject: RE: When is an EDI transaction not? Dave, I can't imagine this practice being valid once HIPAA kicks in. This practice, if it's fairly common, could really put a clearinghouse at risk, especially if they continue this practice but don't advise their customer (i.e., business associate) of it. This is a whole new issue that certainly should be part of the problem/requirement/solution effort of this group. Rachel -----Original Message----- From: Dave Minch [mailto:[EMAIL PROTECTED]] Sent: Monday, January 28, 2002 3:39 PM To: '[EMAIL PROTECTED]' Subject: When is an EDI transaction not? When your CH drops it to paper because they don't have the payer in their TP list.... William, What you have suggested has certainly not escaped our thought process here. While we would eventually like to exchange all of our transactions directly with the payers, the reality of the situation is rather blindingly obvious to those who care to look (and i'm quite frankly amazed at the number of people who should be looking that aren't...). We have created our "top 50" list of payers, which account for about 93% of our total volume, have sent them a questionnaire about 4 months ago, and are just now preparing to send to them RFIs regarding their EDI requirements. For the vast remainder we are certainly hoping to find a VAN willing to take them on, and will be preparing an RFP to that effect in the spring. We presently use 5 different clearing houses for our gov't and commercial claims, and have no idea how many secondary CHs and VANs get into the act now, because the "first-hop" CHs shield us from that information (not that we've asked, which we haven't). The other interesting fact that I learned late last week is that one CH that we use drops many of the "electronic" bills to paper and mails them when we send to a payer not in their database (that should fly well with the HIPAA auditors...). I'm now trying to find out if that is a common practice with the others. With the privacy requirements looming, however, we've certainly got to become more careful, and that means for us a new business model that has many fewer hands playing with the transactions (both directions). I'm actually trying to determine whether or not we can bypass the CH / VAN and have all messages from the payers to us sent directly. It'll be part of the RFP when we get it ready. Dave Minch T&CS Project Manager John Muir / Mt. Diablo Health System Walnut Creek, CA (925) 941-2240
