How Much Does Health Insurance Cost Medical Providers?

Breaking the Bank
A study conducted in 2006 published in HEALTH AFFAIRS estimated that the average medical practice spends over $68,000 communicating with insurance companies. This figure did not include the cost to communicate with Medicare. Another study published in HEALTH AFFAIRS in 2011 suggested a figure of almost $80,000. This suggests that physician practices in the United States spend 30-35 billion dollars per year communicating with insurers. This number does not include the costs of communicating with Medicare. To some this sounds outrageous. I agree it sounds outrageous. Unfortunately to physicians and their practices it is fact. It hits home to their bottom line, their time management, their practice satisfaction and the overall health of their patients. . How much cost is there in faxes, telephone calls, data and chart review to complete prior authorizations for medications, and procedure requests? How much does it cost to pay billing and coding specialists to review our charts? What about referrals for tests, specialty care, and procedures. As primary care providers we are often required to fill out prior authorizations for tests that specialists order. How did we get into this mess? In my office a part time administrative assistant specializes in prior authorizations and referrals. How about the time spent by nursing staff completing the forms and then they must be reviewed, signed and returned. Any employer knows the hourly cost of an employee is not just their hourly rate. Workers compensation, health insurance, SSI, Medicare, and other expenses add to this cost.

Following are some examples of the burden a physicians office faces. These examples occurred in my office in just the past month. We received a prior authorization request for a medication. Information was returned. The next day we received a fax that more information was required. This fax was time stamped at 7:00 am. The information was required by 9:00 am, the same day to be valid. Nobody in the office read the fax until after 9:00 am. Because of this the entire process started again with another form being completed. Does that sound outrageous? I recently completed a 4 page prior authorization for a medication my 87 year old patient had been on for 20 years without event. It was denied and I needed to schedule an office visit and change the medication. Does that sound outragous? We received prior authorization requests for generic blood pressure medication because the preferred medication was another generic. Both medications are on the Walmart 4 dollar list. Does that sound outrageous?

We have computer access interfaces that allow this to take place in real time and sometimes rapidly. However, how many times do prior authorizations for studies get refuted and go to peer review? Far too often. With the case number in my hand I call insurance companies to wrangle with their hired gun, supposedly, a practicing primary care provider. I make the call myself. I listen to the computer telling me what options to select. I even wait to listen to them all because their “menu has recently changed”. After holding the minimum required time of “eternity” I finally get to speak to someone. Now, this person is not my peer. They are not a primary care provider. They are not a nurse. They ask me the same questions that my secretary filled out on the computer interface based on my chart. Funny thing though. They give me an approval number. Spending 15 to 30 minutes on the phone I gain approval for the procedure. Playing this game for 22 years I actually spoke with a peer, a primary care provider, on two occasions.
It takes me 30 seconds to refer the patient to specialist. This specialist will order the same tests, often come to the same conclusions and treatment decisions. Unfortunately this will result in a delay to the patients treatment. This will take more time from their busy life. This will require another day off from work. From a business standpoint what decision makes sense? From our patients standpoint, what decision makes sense?
There has to be a better way of doing this.

The American Medical Association offers sample insurance contracts and advice to its members to help negotiate contracts with insurance companies. There are consulting firms who are willing to provide advice for a fee. It is against antitrust laws for physicians to group together and discuss or set prices for fee for services unless they are completly merged. Independant Practice Associations (IPA’s) and Clinical Integrated Physician Networks can negotiate with Health Mantenance Organizations and insurance companies where “financial risk” is involved. I think there must be a central location where physicians and medical offices can go to find information concerning insurance company negotiations and let their voices be heard without breaking the law.

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