Wall Street Journal Examines Controversial Claims-Checking Software
The Wall Street Journal today examines the controversy over the growing prevalence of claim-checking software that insurers contend cuts fraud and physicians say cheats them out of proper compensation. With health care costs reaching $1.3 trillion in 2000, more than 450 health insurance plans across the nation -- nearly two-thirds of all plans -- have begun using software programs that automatically "slice and dice" physicians' bills to reimburse for what the insurance company deems is appropriate. For example, if a physician charges for an exam and a biopsy, the insurer's software could decide that a biopsy would have included an exam, and therefore the insurance company will only send payment for the biopsy. Insurers argue that the purpose of the software is to guard against physician overbilling for services, while physicians contend that they are being cheated. "They call it claims processing. I call it fraud against doctors," Dr. David Rogers, a Texas gynecologist, said.
The American Medical Association contends that the software deprives physicians of hundreds of millions of dollars each year, the Journal reports. The dispute stems from the five-digit coding system devised by the AMA 36 years ago that is "a minefield of nuances open to interpretation." Insurers say many physicians do not understand correct coding principles and billing procedures or purposefully abuse the system for their own advantage. A 2000 Journal of the American Medical Association study found that 39% of doctors surveyed admitted to some degree of exaggerating a patients' condition or changing billing diagnoses in order to inflate their bills. A spokesperson for Cigna Corp., a health plan that uses the software, said, "Because providers and their staffs often make errors -- and some providers file fraudulent claims -- it is important to have software that looks for inappropriate charges." Last year, a judge in Madison County, Ill., granted class-action status to a suit representing nearly 300,000 physicians filed against Cigna over use of the software. In addition, the Florida attorney general has been inquiring about the "automatic bill cutting" and other health insurance practices. An assistant U.S. attorney in Philadelphia is also examining the issue, although no suit has been filed (Martinez, Wall Street Journal, 7/31).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.