Broken System: #1 The Distance Between Work and Pay


I think people missed my point.  Let me say again to those who misunderstood my last post: I am talking about the health care system being broken, not health care itself.  Our system is broken, which means that the money put into it is being wasted in staggering amounts.  Yes, we are getting some amazing results in regards to the care itself, but those happen despite the system, not because of it (most of the time, at least).  My first item of broken-ness will make the point.

Our office is not getting paid this year.  We used our credit line to fund my last paycheck.

Bad business?  Not at all!  We have worked very hard, seeing lots of patients in the usual surge that happens at this time of year.  So, one would expect, more work means more pay, right?  Not in our system.  While we do collect some money from patients up front, most of our billing goes to a third-party (insurance or government), and in many cases a fourth party (supplemental insurance).  The most important bill we send for our work goes to the "carriers," not to the patient.  We have all accepted this as the norm, and it may be the only way to do health care in some circumstances.  But this year there is a major glitch in the system.

I was actually not 100% truthful in my statement about who we bill.  The truth is, we don't actually send our bills to insurance companies.  Since there are a gazillion insurance companies, all with different contracts with different doctors, we actually send them to a clearinghouse.  These companies (not to be confused with those who present giant checks at people's doorsteps) take electronic submissions from doctors' billing systems and re-routes them to the appropriate insurance vendor.  This saves us the hassle of remembering where to send each bill, which would be nearly impossible.  They do take a little bit of our money in the process, but the time it saves us is worth it.

Assuming the clearinghouse gets it right and sends the bill to the proper place, the insurance company then either pays on the claim, or denies it.  The news of their decision then goes back through the clearinghouse and to us.  If it is denied (which it often is), we figure out why that happened, and whose fault it was.  Sometimes the insurance company made a "mistake" and denied it in error.  Sometimes the clearinghouse sent it to the wrong branch of Blue Cross or got our identifiers wrong.  Sometimes we submitted it using a bad diagnosis or other technical error.  Sometimes the patient forgot to tell us their insurance changed or lapsed.

This is the day-to-day complexity of medical billing in our system.

But things aren't working this year.  The problem is in the clearinghouse part of the equation.  As of January 1 there was a new standard that clearinghouses had to comply with, called the "5010 of the x12 HIPAA transaction and code set standards."  It puts me into a dazed stupor when I read the explanation of just what this is, but the HIPAA part has to do with patient privacy, so I suspect this is a patch to some privacy leaks in the billing system.  This also has to do with the change to ICD-10 (another broken thing I'll hit on in future posts), which is the code we have to use to submit our bills to the clearinghouses and ultimately to the insurers.  The problem is, many of these clearinghouses are not compliant with the 5010 rule.  Since it was a government rule dealing with HIPAA and since these clearinghouses are not paid if they do not run through transactions, I assume it was a highly complex and confusion standard.  In other words, they had a hard time doing all the things the government required.

But the upshot of this for us: nothing is going through.  Nothing.  And that means that we don't get paid.

Word on the street is that this is a nationwide problem, and we aren't the only practice not getting paid.  The insurance companies have no problem with this, as they are hanging on to "their money" a little longer.  The clearinghouses are frantically trying to fix this, but we're not sure when that will happen.  When it does, the queue for submission will be enormous, and so the payments will undoubtedly be more delayed.

All of the complexities in our system add cost, and the billing/payment system is mind-boggling in its complexity.  The bottom line is that there is always a long separation between the work I do and the payment I get.  There are many steps requiring many people and giving room for many problems.  These problems, of course, give more people work to do (all of whom get paid faster than I do) cleaning up the mess made by the confusingly complex system.

It reminds me of the game I played when I was a kid, where one person whispers "Llamas hygiene is next to godlessness" to the person next to them, and that person in turn whispers what they heard to the next person.  When it gets to the end of the line of people, the last person tells what they heard, usually something like "the elevator spins in an ornate bathtub."  This translation is often similar to what happens in our payment system, with payments not quite resembling the bill that was sent.  It is, of course, our responsibility to find any errors in the payment, re-submitting them through the chain to get the payment we should get from the billing.  It is our responsibility because everyone else got paid.  We used to have multiple employees to do this, but now have a company that specializes in this to do the job (they get a cut of what they collect).

This gives a glimpse into a reason the cost of care is so high.  I have to negotiate a higher bill than I need because of all of the other people earning money off of the transaction.  I have to count in the cost of the complexity of the system.  This happens everywhere a medical transaction is made, with a very large percentage of people working in health care only doing so because of the onerous complexity of the system.  All of those people between those who work and those who pay them will get more work to do if that distance gets further.

It's just like that game, except: "I worked hard" translates to: "Error.  Please resubmit with proper documentation and coding."

It's crazy folks.

It's broken.  It's also #1 out of 53 so far.

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