Knowledge is Healing

But repercussions of its attempts to get physicians to cooperate in the plan's controversial attempts at insurance rescission are just beginning.

California State Assembly Member Hector De La Torre drafted legislation that would require health plans to gain final approval from the Dept. of Insurance or Dept. of Managed Care before cancelling policies. Later, Los Angeles City Attorney Rocky Delgadillo launched his department's own investigation into health insurers' practices, putting up a Web site (www.protectingtheinsured.org) for consumers and physicians to send information about possible malfeasance.

The issue also caught the attention of Calif. Gov. Arnold Schwarzenegger, who said it was another indication of the need for comprehensive health system reform. "People who are not insured have to live in fear, and people who are insured have to live in fear," he said. "That is outrageous."

Shortly after the governor's remarks, Blue Cross announced that it would stop sending the letters, saying it had "determined this letter is no longer necessary, and in fact was creating a misimpression and causing some members and providers undue concern."

A copy of the letter obtained by AMNews said in part:

While experts agree there really isn't a recession-proof industry, they also agree that if there were, health care would be it. When someone has a broken arm, fixing it isn't an optional expense.

But the patient's ability to pay for that care does ripple through the health care industry.

A credit crunch occurs when the secondary lending market collapses, causing banks to hold on to more loans, leaving less money to lend. Two or three years ago, when banks were able to sell loans as fast as they were making them, it was easier for businesses and individuals to secure a loan. Experts point at this ease as the root of the crunch, as subprime loans were made to people who couldn't afford them. Many of the borrowers defaulted, or landed in deep financial trouble.

Physicians are not immune to problems with personal finances. And a credit crunch may impact the financial standing of a private practice. Even physicians not in business for themselves may feel the crunch when it comes to where they work and their ability to find a new job.

Reimbursement issues are nothing new to physicians. But it's the private payers most likely to cause problems during a nationwide credit crunch. Private payers, including those who have insurance but also high deductibles and co-pays, have less money to spend. And health care may not be a priority.

In late January, California insurance regulators offered their own numbers to measure how badly they believed United mishandled the PacifiCare deal.

One number was a fine of $3.5 million by the California Dept. of Managed Health Care, over mishandling claims, the largest penalty that department has ever issued.

Another number -- $1.3 billion -- is the maximum fine the California Dept. of Insurance could levy on the health plan. While analysts consider that amount unlikely, United still could face a hefty fine depending on how many of its apparent violations of state laws and regulations on paying medical claims are deemed "willful." Each "willful" violation is a maximum $10,000 fine, and each not considered intentional is a maximum $5,000.

Even if all are considered non-willful, then United could face as much as a $650 million fine -- about 50 times greater than any penalty the department has ever imposed, and a similar proportion greater than the $12 million paid last October in a 36-state settlement over payment practices.

That's because of one more number: 133,000. That is how many violations the insurance department said it uncovered, representing a period between June 23, 2006 and May 31, 2007. Meanwhile, the managed care department said 30% of the medical claims it reviewed were improperly denied. The insurance department regulates PPOs, while the managed care department regulates HMOs, and they conducted a joint, eight-month investigation into PacifiCare.

"Electronic processing makes a world of difference. I can't imagine doing all of this by paper," says Burgon. Then he points out that his 30-physician, Orem, Utah-based practice has had to tweak its electronic claims processing a few times since submitting its first electronic bill seven years ago.

Certainly, the issue of whether to process claims electronically or by paper favors the former. A study by America's Health Insurance Plans, a trade association in Washington, D.C., shows that 75% of claims were submitted electronically in 2006, up from just 24% in 1995. Overall, about 85% of all physician practices process claims electronically, according to estimates from industry experts.

Both health plans and physicians like the relative ease and lower expense of electronic claims. The Centers for Medicare & Medicaid Services reports that the health care industry saved more than $25 million as physicians and hospitals submitted only 80 million paper claims in 2006, compared with 114 million in 2005.

With electronic claims processing now the norm, the goal for Utah Valley and other practices across the country is no longer merely the adoption of electronic methods but the optimization of such efforts.

The need for better -- not just more -- electronic claims processing is becoming a hot-button issue. Faced with dwindling reimbursements, medical groups no longer can muddle along with less-than-optimal claims processing solutions.

Clinic operators across the country are moving into airport terminals, past the security checkpoint, hoping that instead of reading or grabbing a cup of coffee, passengers will get their blood pressure checked or have that achy head examined.

Until recently, the on-site clinics have been content to be located off the beaten path, with most of the clients being airport or airline employees, or passengers who were sent there by someone in the know.

But when some of these clinics recently set up flu shot kiosks in the passenger terminals on the other side of security, they started to realize the benefits of a location with heavy foot traffic. And taking a clue from the retail-based clinic model, they also saw the value in convenience.

The University of Illinois at Chicago Medical Center, for example, has had a clinic at Chicago's O'Hare International Airport since 1995. Even though it's located inside the secured area, it's still off the beaten path, says John Zautcke, MD, medical director of the clinic.

The clinic decided to expand its flu shot program last year by setting up kiosks adorned with the clinic logo throughout four terminals at the airport. The feedback was so great that the clinic is in the process of starting a year-round program at the kiosks.

Passengers will be able to receive several diagnostic blood tests for which results can be checked online via a secure Web site once the passengers arrive at their destinations. In addition, patients can receive a health identification card detailing pertinent medical history. While passengers can't be examined for illnesses at the kiosks, Dr. Zautcke said their presence acts as an advertisement for the actual clinic.

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