How Bad Can It Get?  Just Ask A Physician's Office.

In the wreckage that passes for our health care system, it is not just patients who get hit hard.  Physicians' offices, often shackled to draconian insurance company contracts, must battle daily with an industry that sees paying for medical care as a negative business practice.  What follows comes from a physician friend of ours.  It is a recent timeline that shows just one patient visit and its associated costs and wasted time - time that could have been spent helping Pennsylvanians. 

Don't worry: this isn't about accounting.  It's about how hard it is to deliver care in the face of a for-profit payment system.  Had the same patient seen the same physician under a single payer insurance system, it would have taken less than a tenth of the time and cost substantially less.  Remember as you read it that transactions like this happen millions of times every year.   

The Scenario   

A patient who we've cared for before is scheduled for a 9/20 visit at our medical office.  The patient requires a regular drug infusion for a chronic arthritic condition.  Prior to ordering the needed drug, which because of its expense we don't keep a large stock on hand, our insurance contract stipulates that we must pre-authorize the purchase.  Our office typically begins the process up to ten days prior to the patient visit in order to account for shipping or authorization delays.  We have had to create a position in our office, Insurance Clerk, just to handle some of the insurance details. 

09/10     Infusion nurse checks records for upcoming infusions.  Nurse determines that additional vials will need to be ordered.  Places order for 5 vials.   10 minutes

09/12     Drug arrives in our office.  Invoice also arrives in our office for $3000 cost of drug.  Payment is due to supplier in 60 days, which is 11/12.   5 minutes

09/13     Appointment clerk calls insurance company for pre-authorization of using drug in infusion via telephone.  After navigating their automated voice system, getting transferred 3 times, and put on hold, talks to a clerk who takes info on pre-authorization.  25 minutes

09/15     Appointment clerk checks online for status of pre-authorization.  Discovers that pre-authorization has not been issued.  Calls insurance company again, gets transferred 3 times, put on hold, and talks to a clerk who says pre-authorization will be expedited.  15 minutes

09/17     Appointment clerk checks online for status of pre-authorization.  Finds pre-authorization has been issued and generates referral record in our computer system to document the transaction.  5 minutes 

Note: The patient hasn't been seen at the physician's office, yet the office staff has had to expend a full hour in order to obtain medicine and approval to purchase and administer it.  45 minutes of that hour are spent dealing with insurance bureaucracy.  This is for standard treatment.  

09/20     Patient comes to office for drug infusion with office visit referral.  A physician examines the patient to assess disease, devise a treatment plan, change oral medications, and give clearance to receive infusion.  15 minutes

09/20     Infusion nurse administers drug infusion.  120 minutes

09/20     Patient checks out of office and pays their $10 co-pay.  Clerk enters procedure codes in the office computer system for claim to insurance company.  5 minutes

09/22     Insurance clerk electronically submits the claim for the visit and medication to the insurance company's clearing house.  2 minutes

09/24     Insurance company receives claim from clearing house.

Note: So far, this has been a normal medical office transaction.  A drug was approved for a patient, ordered and administered according to insurance company benefit guidelines.  Afterwards, the medical office submits a claim for the visit.  Total time elapsed: 202 minutes, of which about one quarter (52 minutes) was spent on insurance processing.

11/01     Insurance clerk reviews unpaid claims.  Notes that this visit remains unpaid.  Calls insurance company.  After navigating voice interactive system and getting put on hold, the clerk talks to an insurance representative about the claim status.  The insurance representative confirms the claim was received on 09/24.  Since the claim has not been processed on a timely basis, clerk offers to send it back for expedited handling  and issues a reference number.  10 minutes

11/12     Drug invoice payment is due.  As of this date, we have only received the $10 patient co-pay, which doesn't cover even a fraction of the $3000 medication cost, processing time, or physician's time.  We must defer payment for the drug.

11/26     We receive an insurance company check for $257.90 -- which again won't cover the expenses of the patient visit.  Just the drugs cost us $3000.  According to the paperwork accompanying the check, the drug code we submitted was not in their benefit plan. 

11/26     Insurance clerk calls insurance company about drug code.  After navigating voice interactive system, put on hold, company clerk states that we did use the correct code and will send claim for reprocessing with a new reference number.  We are told to allow 40 days for processing before we receive payment.  25 minutes

Note: At this point, more than a month after a pre-authorized office visit, we have received just $267.90 to recoup our $3,000 drug expense.  Our payment to our drug supplier is overdue.  Total time spent on this patient visit: 237 minutes.

01/4    40 days have elapsed from the reprocessing appeal without notification or payment from the insurance company.  After navigating voice interactive system and being put on hold, our insurance clerk speaks with a company representative.  She is told the claim is still being reprocessed, obtains a new referral number, and is directed to call again in seven days.   Insurance representative confirms that we used the correct drug code on our original submission and that no pre-authorization was needed.   20 minutes 
 

01/11    After seven days have elapsed without notification or payment from the insurance company, our insurance clerk calls them again.  After navigating a voice interactive system and being put on hold, our insurance clerk is told that the company does not have a referral for the office visit itself.  We explain we have a hard copy of their original referral from 9/17.  Insurance company will reprocess claim.  20 minutes

01/15     We receive a notice from drug company with late charges for unpaid invoice.  Company threatens not to deliver any future orders if we do not pay for drug.  We call them to explain that we have not been paid by insurance company.  Drug company doesn't withdraw their threat.  5 minutes

Total time spent thus far: 282 minutes. 

Where It Stands Today

Four months and about 4.5 hours of effort later, we still have not been fully paid.  $3000.00 is still pending from insurance company.  Our drug supplier is threatening to stop future shipments unless their invoice is paid.  But because this is just one of many unreimbursed treatments, our office is having trouble paying it.  The insurance company continues to change its reasons for not paying our claim.  And because of his contract with the insurance company, our physician is prohibited from billing the patient directly.  There is no one we can talk to at the insurance company to help unstick our paperwork.  We can't take legal action against the insurance company's actions, which, thanks to industry lobbying in Harrisburg, are technically permissible under PA law.

Editor's Note:  It's worth remembering that physicians offices are small businesses.  Just like their neighbors up Main Street, they have to pay rent, suppliers, utility bills, payroll, and taxes.  Unlike most American businesses, however, much of their income depends upon the tender mercies of an industry that would rather not pay them, an industry with unrivalled clout in Harrisburg and Washington.  That's why so many Pennsylvania health professionals support the single-payer health insurance we would get with sb400 and HB1660.  We urge all Pennsylvanians, patient and caregiver alike, to support the Family and Business Healthcare Security Act of 2008.   

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