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Bifurcated Billing

June 26, 2008
by Daphne Lawrence
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Separate billing for hospital services and faculty practices can be a serious integration challenge for CIOs.

Russ rudish

Russ Rudish

Faculty practice billing often makes up a big chunk of hospital revenue, so a high denial rate can impact the bottom line in a big way. Today, many hospital-affiliated and -owned practices still struggle with outdated billing systems and the onerous task of installation and maintenance across multiple practice sites. Lately, however, many say software as service architecture is making it easier to accurately bill out of these physician groups, all with minimal outlay from the IT budget.

“Back in the day, the revenue gotten on the physician side was much lower than it is today,” says Russ Rudish, health care providers sector leader, Deloitte LLP (New York). “People didn't pay a lot of attention to it.” Today, however, more doctors are going back on the hospital payroll because they can't make it on their own. “Even the specialists are worried about financial stability,” he says. Add to that patient demands for billing transparency, changes in referral patterns, and improvements in the IT space, and the faculty practice bill is heading for a paradigm shift.

But which way will it go?

“When we help health systems make selections these days,” Rudish says, “the move is to get away from mom and pop billing.” He says best practice is for the doctors or groups to not do their own billing, but for that billing to be done comprehensively as part of the hospital's bill.

Comprehensive billing is also being demanded on the patient side. “I want to know how much I'm going to owe, not just the hospital, but the hospital and Dr. Jones,” says Rudish. “And that's a seamless front end.”

Today, in some cases the hospital bills on behalf of the physician group and in some cases the doctors do it themselves. “Twenty years ago, billing was very decentralized and all over the place,” Rudish says. "Some docs did it well and some did it poorly. They complained about it but nobody ever did anything about it.”

In the past, some hospitals set up well-run management services organizations or retooled their billing departments to meet physician needs, particularly if the hospital had an ownership stake in the practice. Many faculty or physician practices have a separate organization, often outsourced, that does billing for physician professional services (as opposed to hospital facility-care billing).

Getting the hospital information into the physician billing system is not always easy. “When I talk to other CIOs, people are using any method of getting that data into the billing system,” says Praveen Toteja, CIO of Washington, D.C.-based Medical Faculty Associates, (MFA) Inc., of George Washington University. “Some are primitive ways, basically bringing reports and entering them by hand. Fortunately, we never went through that.”

MFA is comprised of 300 providers taking care of 65 percent of the hospital's patients, and Toteja says billing and interfaces are written and maintained out of the hospital, which uses Malvern, Pa.-based Siemens Invision. “I maintain the interfaces,” he says.

Toteja, who uses U.K.-based GE's IDX for billing and has written most of his own code, says he believes most systems do not support the professional billing. “People like us in IT figure out Band-Aid solutions to get the billing up and running and then what's happening behind the scenes is forgotten,” he says. “If I leave here, you can imagine all that history of how to do things would leave with me.”

Most agree that physicians have an inherent distrust of hospital billing. Why? A typical hospital bill will average $20,000 per case, while the professional component of that may be $600. Physicians often feel the hospital's larger bill will have priority. “The hospital is more worried about its $200 million dollar charging than $200,000 for the provider,” Toteja says. “But the provider lives by that $200,000.”
Edward sullivan

Edward Sullivan

The issue becomes how to get a comprehensive bill. Some say interfacing physician-friendly practice management software like Watertown, Mass.-based athenahealth is a solution. But according to Rudish, “athenahealth is not an enterprise system. If athenahealth is part of the answer, it has to integrate with a hospital's clinical system. The question is how hard is it going to be to do it, how hard is it going to be to sustain it, and that is a risk that some people are willing to take on and some people are not.”

One individual willing to take on that risk is Edward Sullivan, director of physician services at 230-bed Winchester Hospital, in Winchester, Mass., a suburb of Boston. Sullivan says the practice mostly deals with community physicians. “We do the ED physician billing, the urgent care location billing and some OB/GYN billing,” he says.

The hospital uses Westwood, Mass.-based Meditech, and Sullivan says the physician billing services group, which uses athenahealth's PM system, interfaces with Meditech. “We get a download every night of all the patients that were seen in those two environments, and the demographics of those patients that were seen that day.” The practice uses Westborough, Mass.-based eClinicalworks on the clinical side in addition to athenahealth practice billing. “The claim doesn't go out the door without athena scrubbing the heck out of it,” Sullivan says.