Software Eats Medical Billing

How Healthcare Reimbursement is Ripe for Change

Software eats medical billing – I know it creates a comic visual – like a little Pac Man character running around chasing stacks of paperwork.

That Idea comes from and an interesting article by Marc Anderson called “Why Software Is Eating The World“. It’s about how software is transforming traditional industries and making traditional ways of doing business obsolete.

Marc feels like healthcare is one of the next industries to be transformed by software – and his venture capital firm is actively backing start-ups in these areas. He feels the healthcare industry which has traditionally been resistant to change is ripe for software entrepreneurs.

As I read that I thought “How would this apply to healthcare reimbursement?” Could software eat Medical Billing too?

A Fragmented Process

From our experience in medical billing and coding, the whole reimbursement process just seems to be very inefficient, labor intensive, full of holes and gaps that payments can virtually fall into. The whole reimbursement process seems very fragmented and disconnected. It seems like an industry ripe for innovation – especially considering the escalating cost of healthcare and the way providers are getting squeezed.

A good example of this fragmentation is hospital care. Think about the last time you or one of your family had to go to the hospital. It’s not uncommon to receive four or more statements from all the different providers and facilities that rendered your care.

I think if you scrutinized the whole process from patient encounter to billing the patient you would see a lot of processes that could be automated by software. I know some of the administrative simplification introduced as part of HIPAA legislation was done to provide standards in transmitting information electronically – and that’s great. But once standards are in place, that paves the way for electronic processes to replace manual ones – and that was at least part of the intent.

It just seems like some of the processes of dealing with insurance payers is so inefficient – but maybe they want it that way. After all its in payers best interest to make getting paid difficult in hopes that you will give up and go away – and not get paid.

If a doctor can send a prescription electronically to my pharmacy while I’m sitting in his office, why can’t we do something similar with claims? The doctors notes would be instantly converted to the appropriate diagnosis and treatment codes and transmitted electronically. I know there are big obstacles here. But it seems the whole process of converting a providers notes to codes and entering into claims would lend itself to the automation part of software eats medical billing.

The Need for Billers and Coders

Before I go alienating all those currently in billing and coding let me just say that changes in any field are inevitable. There will always be a need for people who know billing and coding. Someone has to manage these systems and solve problems when things don’t go smoothly. It’s important to understand where the technology will impact our work so we can have a say in your own destiny. When big changes happen you see two types of reaction; those that embrace it, make an effort to understand, and benefit from it – and those who just sit there say ” what happened?”

Technology in Place for Software Eats Medical Billing

Like Marc Anderson mentions in the article mentioned above, the technology needed to transform the healthcare processes is readily available and affordable. As Marc mentions, healthcare and education can expect big transformations in the near future.

Given the amount of money spent on healthcare, you can bet there are many players already looking for new ways of doing things – improve inefficiencies, add value, and close gaps. You can bet someone is already working diligently on solutions and tapping into the potential huge profits to be made coming up with a solution that saves time and/or money.

Sooner or later software will impact medical billing and coding – and the whole reimbursement cycle – whether we like it or not. You are probably already noticing the way technology – driven by software – is working it’s way into your healthcare services. Given the amount of money spent on health care you can probably count on seeing some significant changes within the next 5 years.

We’re already starting to see some ways technology is streamlining the billing process:

  • ERA (Electronic Remittance Advice) and the ability to electronically post insurance payments.
  • Cloud based practice management and EMR/EHR systems.
  • The capability of electronic medical records systems to communicate information needed for reimbursement.
  • Being able to electronically verify insurance eligibility.

Yes there’s still a lot of fragmentation with the technology and the costs to implement it have not yet made it widely adopted. But when these obstacles are overcome, you’ll likely see some dramatic changes to medical billing.

Somewhere there’s a start-up with a few people writing code and diagramming processes on a dry erase board – coming up with ideas that will disrupt and transform the industry.

Software Eats Medical Billing – What will it take?

Collaboration. The whole medical billing or healthcare reimbursement process has traditionally resistant to change and collaboration. In order for software eats medical billing to be successful, a lot of these barriers will have to be broken down. Look out for innovative and aggressive entrepreneurs who introduce software solutions that disruptive to the traditional silo mentality of medical billing and reimbursement.

Collaboration would require a network where information is easily shared between payer and provider that would include reimbursement, authorization, and eligibility information. The challenge with creating such a network is who will pay for it? Most likely this would be through federal or state incentives or grants.

There’s a great article from the Yale School of Management called “How can technological innovation help healthcare?” that discusses a lot of the challenges and opportunities where technology can make difference in reducing healthcare costs. It makes the point that the core financial issue most providers face is that their costs are rising faster than their reimbursements. Being involved in the reimbursement process for providers we have witnessed this first hand.

As the Yale article discusses, an opportunity for savings is where different and traditionally adversarial parts of healthcare are under one umbrella – The provider, the health plan, and the physician services. That way they can look at the complete cycle – not just the billing and coding – and drive out some of the inefficiencies.

Great Opportunities when Software Eats Medical Billing

There will be great opportunities when the medical billing and coding process is transformed by software and the technology it brings.There will still be a strong demand for those who understand the reimbursement processes.

How can you prepare if you are a medical billing or coding specialist? Stay abreast of changes in the profession. Read up on things going on in the industry. Keep your skills current – especially your software skills.  When new technology is introduced into a profession, those who understand it will be in high demand.

Got any ideas on how software eats medical billing – or improve the process. Please share them – or any comments you have using the form below and we’ll post on our site.

Need good medical software buying advice? Software Advice is one of the most reputable sources for guidance in finding the right software. They offer no-obligation advice and guidance to best suit your needs for Practice Management or EMR/EHR Software.

Your Comments

July 7, 2014 by Mark

I wonder if a lot of the people who are initially enthusiastic about changing health care get discouraged once they get into the details. I saw a recent interview with the founders of Google discussing health care and how the industry needs to be “disturbed”.

Sergey Brin commented that health care is heavily regulated and “painful” to be in because of all the regulation. Because of this regulation, it discourages many entrepreneurs from trying to take on health care opportunities.

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