RE: clearinghouse/provider relationship

William Openshaw Fri, 19 Sep 2003 12:06:14 -0700

HIPAA was developed to help lower the rising cost of Health Care coverage by increasing automation and mandating standard transaction formats. For everyone involved in the covered transactions, this is a plus. Coming from a payer, I can't begin to count how many programs we have running over here and over there to convert customer (provider, health-plan, PPO, PBM, etc, etc) data files into the format needed for out Legacy systems. This is very costly and consumes I.T. time to implement, which reduces the amount of time that we can dedicate to programming NEW functionality that will benefit our customers and our internal operations. On the other hand, the added cost of clearinghouse fees is going to take away from budget dollars that would be used to fund the new programs.

We can argue all day and all night about who is responsible to pay for what, but bottom line, it comes down to what costs you are willing to absorb to not only maintain current relationships with provider organizations, but to help expand your PPO region and reach new business outside the confines of your normal territory. With EDI, work-at-home technology and auto-adjudication, it's very easy and cost effective to offer plans across the country, while maintaining a single, local office. Paper claims will never completely go away (if they do, I will jump for joy then fall dead from a coronary). The providers will strike deals on transactions fees with clearinghouses and payers will just have to suck it up pay the fees. Clearinghouses will undoubtedly become very wealthy and will hold a lot of power in the insurance community. Until providers are willing to work with the individual payers to transmit direct, without some sore of intermediary, we have to accept the nature of the agreement and pay the fees required to conduct business in an electronic format. Community routers would be an avenue worth exploring, where payers and providers the like can freely exchange files without the hassle of maintaining separate agreements and system routines for each and every payer that they deal with. Until this happens, we will just have to negotiate each agreement to meet both the needs and wants of the providers and satisfy the requirements of the payers.

-----Original Message-----
From: Catherine Lohmeier [mailto:[EMAIL PROTECTED]
Sent: Friday, September 19, 2003 9:54 AM
To: WEDI SNIP Transactions Workgroup List
Subject: RE: clearinghouse/provider relationship

I just saw a posting on the Business Issues list that said they have a draft response to a question very much like the one we have been discussing.

I have asked if the draft response is for public viewing yet. If so I'll post the link to this group too.

I have read the other postings on this thread this morning and I must say this is the best discussion of this subject that I have heard/read since I started working with these rules three years ago. My compliments to all involved.

As we all can see, this is a complicated matter and HIPAA itself gives no direction other than stipulate the "don'ts" that have already been pointed out in this discussion.

I think, along with Kate, that William's example is a good one and it highlights another possible variation in the market place that might give us guidance. If a payer has done their homework and provided a variety of connection options for providers to use at no additional cost, and one doctor says those options won't work for them...what next? Legitimately, as in the ATM example, the one who chooses to go outside the defined network should be responsible for any charges incurred.

I also remember encountering the clearinghouse volume issues that Rachel wrote about. Also, some payers did not do EDI or didn't do it with the clearinghouse I worked with. Some providers were locked into using a specific clearinghouse due to the relationship the PMS vendor had with the clearinghouse.

My understanding is that the setup costs with new connections, between any computers in any industry, come mainly from doing the testing. An industry standard format for the transaction should reduce the testing time and therefore the cost. It may not be reduced day one, but certainly in the near future. That is the purpose of the standard format.

I am beginning to think that we need a clearinghouse representative to chime in here and let us know how they are viewing this situation and what plans they have to help facilitate the inevitable connections we have been discussing. It seems the business models they have been using in the past will not work once HIPAA is in effect. If they don't adjust something then it will leave payers and providers in this potentially adversarial position and that will only make things worse in this industry.

Catherine Lohmeier

Implementations Project Lead

OD Professional(tm) Team

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RE: clearinghouse/provider relationship

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