PayerView - The Best and Worst Payers Revealed

If you visit the provider portal of a health insurer’s Web site, you’ll invariably encounter them - photographs of smiling doctors. Trim and plucky, they seem tickled to do business with that particular insurer, which pledges nearby that it’s absolutely committed to making claims processing and reimbursement as easy as possible.

Those smiling “doctors” are models, of course.

So what’s the real world like? Which insurers truly warrant smiles - or frowns?

The fourth annual PayerView has some answers.

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PayerView is a data-driven ranking of national and regional insurers based not on how much they pay but on how well - how quickly, easily, and completely. PayerView comes from

athenahealth

, the nation’s largest physician-billing company, which compiles the rankings by running data on millions of claims through an algorithm that weighs performance measures according to their relative importance to doctors.

PayerView, in short, ranks payers according to their level of hassle-factor: how quickly they pay you, and how much they hogtie you with denials, delays, and red tape. These rankings can help you negotiate contracts with payers - and walk away, if need be. The comparisons also keep the payers on their toes, and even inspire them to vie for a number-one ranking.

The good news is that at a time when reimbursement amounts are declining, PayerView appears to be having the affect we intended when we launched it with athenahealth in 2006. It looks as if payers are, in fact, working harder to work with you better. (Curious about changes from previous years’ data? Check out the 2007 and 2008 PayerView results.)

Let’s have a look at the numbers:

Aside from dismal state Medicaid programs, payers are generally doing more to earn your trust. For athenahealth clients, days in accounts receivable and denials dropped in 2008 despite obstacles posed by the National Provider Identifier, or NPI, taking effect last year. “I didn’t expect as great of a performance as we got,” says Melissa Lukowski, athenahealth’s director of payer outreach. “With everything that could have gone wrong with NPI, its impact was minor.”

(*See our complete payer rankings broken out by payer and region.)

Four forces

The improving numbers stem from four positive forces. One is the corrective spotlight of PayerView. Also, athenahealth’s work with payers to solve claims-processing bottlenecks is improving things for its clients, whose experiences are reflected in the numbers. Another force is the sheer onward movement toward computer automation. “More doctors are submitting claims electronically, and payers are implementing real-time adjudication,” says Todd Welter, a management consultant in Denver who specializes in payer contracting.

The fourth positive factor was a massive class-action lawsuit brought by organized medicine in a Miami federal court against the nation’s leading health insurers almost 10 years ago. Its goal was to make them repent of slow-paying, automatic downcoding, improper code bundling, and other nasty tricks. The plaintiffs described themselves as “hundreds of thousands of doctors being systematically cheated out of small amounts of money.”

Six defendants eventually settled, vowing to make their claims processing faster and fairer (and coughing up hundreds of millions of dollars in restitution as well). Not surprisingly, the three highest-ranking national commercial insurers in PayerView - Humana, Aetna, and Cigna - were among the first to settle.

“Slow pay hasn’t disappeared, but most payers have sped up,” says Deborah Winegard, an Atlanta attorney who has represented organized medicine in enforcing compliance with the settlements. “The settlements fundamentally changed the dialogue between doctors and payers, but that doesn’t mean all the problems have gone away.”

Meanwhile, patient responsibility rates have yet to become the bogey man that some predicted. Placing more of the financial burden directly on patients, who are harder to collect from than insurers, has long been expected to strain physicians further, but so-called consumer-driven healthcare seems to be growing more slowly than many expected. “Some trade publications have predicted 20 to 30 percent growth in consumer-driven healthcare plans,” Lukowski says. “But we have actual data, and it shows the growth is not that aggressive.”

Yes, there are still problems. And the current recession could sour things even more. However, the view from PayerView represents some precious good news.

What PayerView examines

The claims-processing data analyzed by PayerView comes from doctors who rely on athenahealth for their billing. So the information doesn’t represent a given payer’s entire network. Still, the PayerView sample size is large enough to be instructive: almost 19,000 providers in 40 states who billed 172 payers in 47 states during 2008. Their total claims represent almost 42 million charge lines. Delving into this data, PayerView compiles scores based on the measurements described in this table.

None of these metrics involve how much or little insurers are paying you. For that information, download our 2008 Physicians Practice Fee Schedule Survey results.

National payers

According to PayerView, Humana ranked as the easiest national payer to deal with in 2008. Except for requiring documentation on more pended claims, the company improved in every performance metric, and led the pack with the fewest days in A/R (26.65) and denial rate (5.3 percent). Lukowski says Humana’s roll-out of real-time adjudication (RTA) with athenahealth clients - which tells the doctor’s front desk at the time of service what Humana will pay on a claim, and what the patient owes - was a big reason why its days in A/R decreased by 3.45. (Disclosure: Physicians Practice publishes a provider newsletter for Humana.)

Mark Smithson, Humana’s vice president of provider process and network operations, says promoting RTA works for his company as well as the practice. “The faster we turn claims around, the less work we have on our end,” says Smithson.

Humana’s settlement in the federal class-action lawsuit filed by physicians had nothing to do with the company’s top ranking in PayerView in 2008, according to Smithson. “What we agreed to do were things we were already doing.”

(*See our complete payer rankings broken out by payer and region.)
In contrast, Aetna, which slipped from first place to second among national payers, acknowledges the settlement as a push toward being physician-friendly. “It was a changing event,” says Paul Marchetti, the company’s head of national networks and contracting services. “We realized we needed more of a customer-focused strategy, whether the customer was a provider, a plan member, or a plan sponsor.”

Cigna finished third among national payers in 2008, improving on key measures such as days in A/R.

Medicare slipped to fifth place, perhaps in part because of the NPI switch, which temporarily clogged its payment pipeline. “Medicare was the biggest stickler on adjudicating claims based on the NPI,” notes Lukowski. “From March through September last year, denials and days in A/R spiked, but then they precipitously declined.” Overall for the year, Medicare nudged its days in A/R down slightly and held the line on denials.

Wellpoint, Champus/Tricare, and Coventry Healthcare rounded out the bottom three. This trio also represented the bottom rungs in 2007 and 2006. Coventry, one of several defendants in the class-action suit that didn’t settle (a federal judge dismissed the case in 2006 in favor of Coventry and UnitedHealth Group, the remaining defendants), finished last for the first time in the latest rankings.

Days in A/R for Coventry in 2008 stood at 38.54, top among all national insurers and almost 3 days higher than in 2007. One possible explanation for the payer’s poor numbers, says Lukowski, is its piecemeal business structure, consisting of more than 15 affiliated health plans. “More affiliates mean more adjudication systems, which is a challenge to manage,” she says. Coventry didn’t respond to a request for an interview by press time.

Regional payers

The top five payers in each of our four PayerView regions - Midwest, South, Northeast, and West - include at least one local Medicare carrier. In the Northeast, Blue Cross Blue Shield of Rhode Island held onto the top spot, paying doctors on average in 15.4 days and boasting a denial rate of 3.36 percent. No other insurer, national or regional, could beat those numbers. The Rhode Island Blues owes much of its success to being the dominant payer in a small state, which reduces administrative complexity, according to Lukowski.

(*See our complete payer rankings broken out by payer and region.)

At the same time, the Blues as a whole made a good showing in PayerView, placing second in both days in A/R (31.30) and denial rate (7.44) among payer groups after the major commercial nationals (Aetna, Cigna, Humana, and UnitedHealthcare, minus their affiliates). The Blues’ regional roots generally make them easier to deal with, explains Lukowski. “They pride themselves on having a local presence, and they tend to be more transparent about their guidelines.”

Medicaid underperforming

It’s hard to find something nice to say about one set of regional payers - state Medicaid programs. Collectively, their days in A/R rose 21.7 percent in 2008, while other payer groups drove that number down. At 68.57 days in A/R on average, state Medicaid programs are paying doctors about twice as slowly as everyone else. That’s when it pays at all: Medicaid’s denial rate of 21.73 percent is roughly three times the norm.

Part of the problem is Medicaid’s shaky financial footing. Relying on a combination of state and federal funds, and often the target of state budget cuts, Medicaid programs sometimes run out of money. Consequently, these pinched programs generally haven’t invested in the sophisticated claims-processing systems used by other payers, says Lukowski. Another problem is inadequate training of Medicaid call-center employees, who pass on misinformation to doctors’ offices, gumming up their billing operations.

There’s also a cloud of sleepy indifference that hangs over Medicaid bureaucracies. “The attitude you often encounter in Medicaid is, ‘That’s the way it is. Our hands are tied,’” says Lukowski.

Once again, New York’s Medicaid is the nation’s worst. You’d better sit down for these numbers: The average New York Medicaid claim takes nearly five months - 160.95 days to be exact - to get paid, and it denied or pended more than a third of all claims. (The program puts its denial rate at 23 percent, but that figure doesn’t include pended claims).

Sources of the quagmire include complex authorization requirements, proprietary paper claims forms that must be ordered from the state - can you believe that? - and, for doctors who bill electronically, the need to annually enroll for this electronic relationship. Once a check for payment is cut, the state program automatically waits two weeks before mailing it. Lukowski says much of this inefficiency stems from New York’s overzealous efforts to prevent Medicaid fraud.

How to use PayerView

While collecting from most payer groups - other than Medicaid - generally got easier in 2008, the outlook for 2009 is uncertain, given an ailing economy. Earnings last year declined for every commercial national payer in PayerView. Whenever their bottom line suffers, commercial payers typically try to recover by squeezing doctors, says Susanne Madden, president of The Verden Group, which has its own system for rating payers on physician-friendliness. Ailing insurers “cut reimbursements and require more preauthorization and precertification,” says Madden. It’s possible that insurers also could sit on claims longer, lengthening days in A/R, adds Lukowski. “It’s unclear what will happen.”

Insurers, however, say they intend to be your friend, regardless of their latest earnings report. “We’re not here to take money out of a provider’s pocket,” says Aetna’ s Marchetti.

Still, you must negotiate contracts with them. Whatever payers say about making nice, the negotiation process is warfare fought with data. PayerView can help even the odds for you, says Todd Welter.

Start by calculating days in A/R for each of your payers. For those whose days in A/R exceed their PayerView averages, arrange a meeting and highlight this discrepancy, says Welter. Use the following script: “We know you’re paying claims in X number of days according to PayerView. Why aren’t we being paid like everybody else? It’s costing us time and money to collect from you. We should be compensated for that by receiving a higher fee.”

You may not necessarily receive higher fees, but the payer may nevertheless speed up payment. Or it may identify inefficiencies and coding errors on your end that drag out the billing cycle, says Welter. “It’s too easy to blame the health plans. Doctors need to get their own act together on claims.”

At the same time, PayerView can help identify payers that may not be worth your business. “It’s one thing to put up with slow pay from a payer that sends you lots of patients,” says Welter. “But if a payer accounts for only a sliver of your volume, and the pay is low and slow, while the hassle factor is high, why bother with them?”

*See our complete payer rankings broken out by region and payer.
Robert Lowes is an award-winning journalist based in St. Louis who has covered the healthcare industry for 21 years. He can be reached via physicianspractice@cmpmedica.com.

This article originally appeared in the June 2009 issue of Physicians Practice.