Merritt Personal Lines Manual: The Bureaucratic Barriers

Claims-related administrative burdens on physician offices are driving up costs for physicians.

According to Mary Valdez, the manager of patient accounts for the Indianapolis Women -- s Health Partnership (WHP), despite "doing everything we can to automate everything we can," WHP still faces a cost of $7.42 to get paid for a single claim. And, the problems are industry-wide.

"When I switched from the banking industry to health care, I was alarmed at the lack of sophistication of the computer systems and the lack of industry benchmarks. I was used to moving hundreds of millions of dollars in a matter of minutes. I was amazed to have to send a $10 claim to an insurance company three times to get it paid," said Valdez.

"Electronic Data Interchange (EDI) has cut two weeks off our claim payment cycle. Instead of two and a half months for the average claim to be paid, it now takes two months. Even with EDI and an intense focus on sending a clean claim, 30 to 35 percent of all WHP -- s claims are denied for some reason," said Valdez. And, claim rejection rates were compounded by problems with electronic claims systems.