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Trends: Practices Are Moving to Electronic Claims

by Communications Staff

More and more practitioners who file insurance claims are considering and making the switch from paper to electronic claims filing. The reasons are varied, but the bottom line is often a matter of savings — in time, money and hassle.

Psychologists can consider several options for electronic claims filing. Some practitioners choose to submit claims directly to individual third-party payers using proprietary software that the payer provides. Certain larger practices might consider buying and maintaining their own electronic data interchange system, though this option tends to be cost-prohibitive for smaller or solo practices.

Yet another possibility is to use a web-based electronic claims service to file and track claims. This allows practitioners to submit all their claims to a single clearinghouse where the claims are formatted, checked for accuracy, and transmitted to the appropriate payer. These claims services often can accept both electronic and paper claims and translate them as needed into the appropriate format for processing and payment.

Practitioners who have made the switch to an electronic claims service see some definite pluses. Michelle Emick, PhD, of Denton, Texas, typically files 120 to 150 claims per month with approximately 20 different payers. She has found several advantages to using a claims service compared to the payer-provided software and paper claims she formerly used.

Costs in staff time and supplies factored into her decision to switch to a claims service. For Dr. Emick, some of the time savings results from the claims service tracking the status of every claim filed.

She said her office manager used to spend hours each day being transferred around insurance companies checking on the status of unpaid claims. By contrast, the electronic claims service is "armed with data about who (in the insurance company) received the claim and when." The claims service also allows for quickly checking patient eligibility for benefits online.

Accuracy was another factor that prompted Dr. Emick to change. When her practice used proprietary software, payers sometimes would return claims or pay them incorrectly because their scanner did not accurately read the claims. That often required Dr. Emick's staff to complete and submit a new claim.

An electronic claims system "edits" all claims by checking them thoroughly for accuracy before they are submitted for payment. Error rates are extremely low. By contrast, many paper claims are rejected due to inaccuracies, omissions or other problems.

Dan Sherman, PhD, of Pasadena, California, has found additional benefits in using an electronic claims service. His payment turnaround time is shorter compared to paper claims filing. And he found that, after an initial learning curve, it's been easy for him to use the service.

Despite the clear advantages for some practitioners, using a claims service may not seem appropriate for other psychologists. For example, some consider using a payer's proprietary software a viable option if they submit claims to only one or two payers.

Whatever your practice situation, it's important to know about electronic insurance claims filing, and to be aware that there are certain factors encouraging its growth. Health insurance payers are likely to move increasingly toward requiring electronic claims submission as they look for ways to lower their administrative costs. Medicare payment policies also may help drive a trend toward greater use of electronic claims.

Further, the Health Insurance Portability and Accountability Act (HIPAA) Transaction Rule involves requirements related to using standardized formats for electronic claims transmission. 

In short, for many practitioners, the time to consider options for electronic claims filing is now.

Date created: 2004