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With physician billing, there's $11-54 billion of challenged revenue each year, study finds

Billing private insurance is tough, but Medicaid is harder.

Jeff Lagasse, Associate Editor

Billing costs are often a tough financial burden for physicians, and a new study published in Health Affairs quantifies that burden.

Physicians deal with at least $11 billion a year in challenged revenue from insurers -- although the number could be as high as $54 billion, according to the study.

While conventional wisdom holds that it should be more challenging for doctors to bill private insurers, the results show that billing Medicaid is in fact the bigger challenge.

The authors were able to measure the complexity of billing Medicare, Medicaid and private insurers while controlling for differences in physicians' billing ability and the complexity of the patient. 

They found Medicaid was two to three times as difficult as Medicare or private insurance for doctors to bill. Medicaid managed care programs -- those in which states pay fixed annual fees to private insurers who insure Medicaid patients -- had slightly lower billing complexity than state-run fee-for-service Medicaid.

The study evaluated 44 million claims from 68,000 physicians, worth a total of $8.4 billion.

In total, the authors estimated that the disputed bills amounted to $54 billion annually across all insurers, and $11 billion could be saved if all billing efficiency were improved to the best level observed in the data.

The study also found billing complexity decreasing over time, especially for Medicaid. The researchers said this is good news, as it could encourage more physicians to treat Medicaid patients.

While payer denials can often be a source of frustration for physicians, there are ways to mitigate the problem, such as using technology to earmark claims that are candidates for denial -- giving practices the ability to fix any problems before submitting the claims.

The authors said practices should be concerned if they have a denial rate above the average of 5 percent.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com

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