Insurers Slow to Process Transactions Online

Online claims transactions between physicians and insurers have been "slow in coming," as insurers fear that "moving to the Internet strikes at the very heart of their business, which is transaction processing," the Philadelphia Inquirer reports. Although Internet claims processing could save "billions of dollars a year," insurers are wary of the "possible loss of corporate identity." Chris Downey, a Los Angeles partner in the health services practice of consulting firm Accenture, said, "Their angst is that, if all this administration happens automatically, then what business will they be in? What will be their core competency?" As a result, only "a few" health plans have signed on with Internet software developers such as NaviMedix Inc., MedUnite Inc., RealMed Corp. and HealthTrio Inc.. In addition, only about 1,000 of the nation's 200,000 physician practices use the Internet for insurance transactions.

While a move toward online claims processing would be cost effective, several hurdles still remain. For example, performing automated claims processing online would render the "hundreds" of people who currently handle claims obsolete, leading to a "huge number" of job losses. In addition, the Inquirer reports that "each insurer/developer alliance creates an Internet portal that handles transactions with only the sponsoring insurer," while most physician practices deal with multiple insurers. Furthermore, insurance companies are reluctant to sign on with software developers whose senior insurance company partners are competing insurers. Insurance companies that own the portals are at a huge advantage "because of the incredible margin on transaction fees," Downey said, while newcomers "would be only a junior partner on someone else's system, which could be a significant disadvantage." However, insurers "know that online transactions are inevitable and money-saving," Downey said. And physicians and billing managers eagerly await a transition to the Internet, as it would speed transactions such as claims approvals, cost estimates and patient eligibility checks (Knox, Philadelphia Inquirer, 2/26).