Electronic claims-processing

Nov. 1, 1998
What has been happening in the world of electronic claims-processing? Several years ago, many thought that the paper claim was going to quickly disappear. Now, we see conversion occurring much more slowly than anticipated.

Carol Tekavec, RDH

What has been happening in the world of electronic claims-processing? Several years ago, many thought that the paper claim was going to quickly disappear. Now, we see conversion occurring much more slowly than anticipated.

Currently, less than half of all dental offices submit claims electronically. In fact, estimates from some industry analysts indicate that fewer than 20 percent of all dental claims are submitted via computer. While there are many issues involved with the utilization of electronic-claims transmission, two significant situations seem to be holding up conversion:

(1) The standard insurance re-quirement for attached radiographs, photographs, perio-probe readings, and other documentation.

(2) Reluctance of dentists and insurance carriers to invest in EDI hardware and software.

Because attachments are mandatory for many payment authorizations, attachments continue to force the need for paper claims. While scanning and digitizing documents can eliminate loose "attachments," such hardware and software still are considered expensive by many. The majority of both dentists and payers have not purchased it. In fact, many dental offices and third-party carriers do not have the capability of sending or receiving even a simple electronic claim, let alone one with scanned documentation.

These facts - and increased competition within the industry (more third-party administrators and managed-care programs) - are causing insurers to re-evaluate their priorities. Sectors within the industry are lobbying not for increased utilization of digitized attachments, but for elimination of attachments. These factions consider that, without attachments, claims can be processed more quickly with fewer and less-educated personnel.

Evaluation of radiographs requires the education, expertise, and expense of a dentist-consultant. The cost of policing potentially inaccurate claims is removed in favor of possible increased profits from faster processing.

Other industry sectors argue that high-speed claims-processing is de-signed primarily to facilitate billing, not treatment decisions. They are concerned that organizations or companies responsible for implementing EDI are not adequately addressing fraud. Issues surrounding patient privacy also are of concern. Safeguarding computer information and eliminating the chance for data-tampering and loss are important.

If many dentists and insurance carriers are reluctant to convert to electronic claims-processing, what is fueling the drive to change?

The answer is twofold: 1) the federal government and 2) the electronic-clearinghouse industry. The federal Health Insurance Portability and Accountability Act of 1996 requires payers to invest in equipment necessary to provide for electronic processing by the year 2000. The focus of the act is the government`s desire to make claims payment easier for consumers who change jobs, as well as to take the first steps necessary for national health-tracking of individuals. Speed, convenience, simplification, and continuity are given as reasons for the government`s push to EDI. EDI clearinghouses are in a position to provide the vehicle to make this happen and they have an economic interest in making it happen as soon as possible.

With this in mind, software companies are targeting private insurers with simplified and user-friendly programs. If the payers use the programs, dentists who wish to be paid by these carriers will have to comply. Clearinghouses also are investing in EDI education for both providers and insurers.

What does all of this mean for the average dentist? Primarily, it means more dentists will be using EDI in the future. Dentists who currently utilize electronic claims-processing like the faster payment offered by electronic-claims transmission. "Paper-claims offices" typically wait five weeks longer for payment than their EDI-using colleagues. In addition, paper claims are estimated to cost around $3-$4 to process, compared to approximately $1 per electronic claim. Combined with faster turnaround, EDI can be a profit-enhancing technique.

Electronic claims-processing is here to stay. EDI will become mainstream when patients, employers, dentists, and insurers can all embrace the process and share in the benefits.

Carol Tekavec, RDH, is the author of two insurance-coding manuals, co-designer of a dental chart, and a national lecturer. Contact her at (800) 548-2164 or at www.steppingstonetosuccess.com.

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