Dr. Ben Carson’s skills as a neurosurgeon led him to the top of his profession and made him the subject of a made-for-TV movie, but his frustration with the draconian billing systems employed by insurance companies nearly drove him out of medicine.
“In order for physicians to get paid now, they have to dot every ‘i’ and cross every ‘t,’ and then analyze that about four times,” said Dr. Carson, 57, who was awarded the Presidential Medal of Freedom in 2008 for his work at Johns Hopkins Hospital’s Division of Pediatric Neurosurgery, where he has served as director for about 25 years.
Studies back him up. An inefficient system of processing medical claims costs doctors and hospitals as much as $210 billion annually, and for individual doctors it can eat up 14 percent of their revenue. And about 90 percent of claims denials are preventable.
In stepped Terry Giles, a friend of Dr. Carson’s, who saw a business opportunity and a chance to create a solution that works.
“The real chaos in the medical area, from my perspective, is the tragedy that is existing with doctors being unable to get paid what they deserve, and being unable to get paid in a timely manner by the insurance companies,” said Mr. Giles, a trial lawyer by trade and a former chairman of a West Coast bank.
Mr. Giles’ Houston-based Physician Capital Group (PCG) late last year unveiled software that allows a doctor to input billing information into a wireless handheld device - such as a BlackBerry or iPhone - immediately after seeing a patient. The information is downloaded to the company’s computers in Texas, which automatically determine the doctor’s compensation from the insurance company.
Within hours, if not sooner, PCG cuts and mails a check to the doctor for the amount - minus a 12 percent commission fee. The company later collects the full reimbursement from the insurance company.
While billing and collection services have been available to doctors for decades, PCG says its system of instant reimbursement to the doctors is a major step forward.
“Physicians are not particularly good business people,” said Dr. Marga Massey, a Charleston, S.C.- based plastic surgeon and PCG client. “That’s where companies like [PCG] have a very specific role, because they learn all these tricks, and they learn how to navigate the system, and that’s what you need.”
The battle to control health care costs is at the heart of the push by President Obama for a major health care overhaul bill this year. Mr. Obama met Monday with a broad array of industry players - including insurers, hospitals, health-care professionals and unions - on a proposal to cut some $2 trillion in U.S. health care costs over the next decade.
PCG is one of several firms and consulting groups in the health care field that see a business opportunity in the inefficiencies and bureaucracy that have grown up around the current system.
In Dr. Carson, PCG has allied with one of the country’s most well-known physicians.
Raised by a single mother in inner-city Detroit, he attended Yale and the University of Michigan medical school and is now one of the world’s most famous neurosurgeons. He has written three top-selling inspirational books about his life and work, and Academy Award winner Cuba Gooding Jr. played him in the made-for-television biographical film “Gifted Hands: The Ben Carson Story,” which aired in February on cable channel TNT.
Mr. Giles and Drs. Massey and Carson all say the insurance companies have deliberately created a billing system that is so complex and cumbersome that doctors, hospitals and medical groups often find it difficult to collect the full amount they’re owed.
“The insurance companies on purpose have created a system that is in complete chaos,” Mr. Giles said. “Because when you have a system in chaos, it gives them lots of reasons to be able to avoid payment, and the longer they can avoid payment the longer they hang on to their money.”
Insurers reject accusations that they are deliberating manipulating the billing system in order to fleece doctors.
The American Medical Association - not insurance companies - developed and maintains most physician billing codes, which number more than 10,000. New codes are continually being added and old ones dropped, while thousands more are updated annually.
“Health plans are committed to streamlining the administrative process - to improving efficiency throughout the health care system,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans (AHIP), the nation’s largest health insurance lobbying group. “And new advances in technology are making it easier to process claims electronically, allowing for greater accuracy and speed in the process of claims.”
A 2006 AHIP report showed that 30 percent of all physician claims were submitted within seven days, compared with 19 percent in 2002.
But many doctors wait weeks or months to submit bills to insurance companies. In 2006, 29 percent of all claims were received more than a month after the date of patient service, the report says.
And wireless billing systems only work as efficiently as the doctors using them. Some doctors still insist on a paper copy when submitting bills electronically, slowing the system even further.
“When you add these systems to physicians’ practices, you suddenly then are faced with changing your processes,” said Jocelyn Piccone, chief operating officer at Wright State University School of Medicine in Dayton, Ohio.
She added, “That’s a culture change, and that’s a fight … and so you end up doing a lot of ‘rework,’ where the whole idea of adding software is to get rid of rework.”
Inefficient processing of medical claims adds unnecessary costs to the system as a whole. A recent study by PNC Bank estimated that the problem increases total costs by as much as $210 billion annually.
Another report, conducted by the Advisory Board Company, a Washington-based research organization, found that about 90 percent of rejected claims are denied only because the billing forms were filed incorrectly by doctors or their staffs.
Physician practices are spending as much as 14 percent of their total revenue to ensure accurate reimbursement from health insurers, according to a 2008 study by National Healthcare Exchange Services.
PCG, which unveiled its PCG Manager software last year, has about 120 clients in 22 states, Mr. Giles said.
While it’s too early to tell how much money doctors, hospitals and medical groups can save using the PCG system, medical professionals say anything that makes it easier to navigate the complex web of insurance company billing is welcome.
And physicians say outsourcing their billing often is more about saving time than money.
“I probably pay [PCG] a little bit more than I would pay somebody in my office, but I don’t have to have the desk and I don’t have to have the phone line, and I don’t have to worry about vacations,” said Dr. Massey, who specializes in treating cancer patients. “It’s like MasterCard - it’s priceless, because I don’t have to worry about it.”