Helping MDs survive billing cycle

Health insurance companies in Massachusetts and across the country aggressively promote ''transparency" in physician costs and performance. But when it comes to their own payment policies, opacity is the rule, says Jonathan Bush.

Physicians are frequently shortchanged, often without their knowledge, because of less-than-transparent insurance company practices, says Bush, chief executive of Athenahealth Inc., a Waltham information technology firm. He is also a first cousin of President Bush.

The rapidly growing company has contracts to help 1,000 doctors in Massachusetts and 6,000 nationwide to penetrate the methods of insurance reimbursement.

While the firm operates in an arcane world of computer protocols and billing codes, its work is increasingly relevant to a healthcare system fraught with skyrocketing costs, shrinking health coverage, and frustrated doctors and consumers.

''Physicians are experiencing a shadow cut in pay that is really big," Bush said. ''We would have to be Sigmund Freud to figure out how deliberate it was. At best it's incompetence. At worst it's malfeasance."

Nationally, some big insurance companies like Wellpoint Inc., Aetna Inc., and Cigna Healthcare have settled class-action suits with doctors after they were accused of conspiring to deny and delay payments to physicians. None of the big Massachusetts health plans, which are nonprofit, were named in those cases.

Massachusetts insurers say they are making efforts to help physicians navigate their claims systems. But the systems, with numeric codes for medical procedures, are complex and confusing, said Dr. Allen Hinkle, medical director for Tufts Health Plan in Massachusetts. ''It's the nature of the beast."

Tufts has a ''transparency committee" of payment specialists that meets regularly to identify how it can eliminate confusion, Hinkle said.

Blue Cross and Blue Shield of Massachusetts also said it is making efforts to simplify, while still guarding against fraudulent claims.

''While the vast majority of providers do not bill inappropriately, our customers expect us to screen claims for appropriateness," said Deborah Devaux, senior vice president for healthcare contract management at Blue Cross.

''We are very committed to making sure that the policies and the payment procedures of Blue Cross are well understood," she said. ''Providers can call us with any questions."

But doctors are increasingly frustrated and increasingly looking for outside help. Athenahealth's sales of $39 million in 2005 won it a ranking of 77th on Inc. magazine's list of fastest-growing US firms.

Other firms that do similar business are IDX Systems Corp. (which was recently purchased by GE Healthcare), Emdeon Corp., and Misys Healthcare.

Athenahealth executives sum up the goal as smoothing out complex insurance billing problems that plague physicians and their staff every day, problems that trickle down to consumers in the form of incorrect bills and unfair collections efforts for covered services.

''There's 20 million reasons why they won't pay you," said Cynthia Childs, administrator for Heywood Medical Group, a 16-physician multispecialty doctors group affiliated with Heywood Hospital in Gardner that contracts with Athenahealth.

Heywood Medical's claims are now screened using Athenahealth's systems before they are submitted. Making sure that claims are filled out correctly and in the precise way each insurer wants, decreases chances of denial. The firm also keeps close track of arcane and ever-changing reimbursement rules imposed by insurers.

That is important if doctors want to combat practices like ''bundling," say Athenahealth executives. Some doctors who, like orthopedic and cardiac surgeons, perform complex procedures lose up to 5 percent of their annual income, because insurance companies bundle multiple claims relating to a single operation into one, less-expensive payment, say Athenahealth executives. Then the insurance companies ''zero pay" the associated claims.

Because the associated claims are ''paid" with a goose egg, doctors are not alerted to the fact that the associated claims have been effectively denied, Athenahealth executives said.

In some cases, the discounts may not comply with a physician's contract with the insurance company, and Athenahealth can appeal and win more money for the doctor, said Todd Park, chief development officer, who cofounded Athenahealth nine years ago with Bush.

Because disagreements over bills are reduced, the systems cut down on bills unfairly sent to patients, Park added. ''As a patient, you don't get caught in a firefight between the physician and the insurance company."

Tracking claims, submitting forms multiple times, and trying to learn why claims have been rejected are tasks that consume enormous amounts of time and are a major cost and drag on the healthcare economy, said James L. Heffernan, chief financial officer for the Massachusetts General Physicians Organization, which has 1,700 physicians and is the largest group practice in New England.

He estimated that 9 to 13 percent of the group's operating expenses are related to insurance paperwork. That does not take into account the expense of handling claims multiple times at the insurance companies.

The Mass. General physicians group gets about 88 percent of its claims paid on the first try, which is good for the healthcare industry, but would be unacceptable in virtually any other industry, Heffernan said.

Instead of wasting time and money on a computerized claims arms race, he said, insurance companies and providers' offices should agree on a transparent reimbursement system.

''It will be fantastic if we can get people to think about how we can take this cost out," he said.

Christopher Rowland can be reached at crowland@globe.com.