A new claims payment pilot focuses on giving consumers a retail-like payment experience, while reducing the burdensome administrative costs of billing.
"We believe that reducing the time and money required to submit and pay claims will enable payers and providers to dedicate those resources to patient care instead," Sophie Pinkard, OODA Health's cofounder and Head of Product, tells HealthLeaders via email.
Right out of the gate, OODA Health's aspirations are novel and disruptive: It's working with Blue Shield of California on a cloud-based software platform that it will test with Dignity Health, which has locations throughout Arizona, California, and Nevada, and Hill Physicians, located in California.
"We are in the early stages of our collaboration with OODA Health. Right now, that means we're meeting with them to design the upcoming pilot program," Amanda Wardell, media relations manager at Blue Shield of California tells HealthLeaders via email. "Once we have results from this pilot, we'll know more about the best way to proceed, which may include additional partnerships and pilots."
But there are other questions, too: How will the technology work? How might it affect hospitals' revenue cycle and their bottom line? What are the pilot's goals?
We asked OODA Health's Pinkard and Tim Panks, senior vice president of finance and revenue cycle management for Dignity Health, questions such as these via email. Their answers below highlight the pilot's focus on giving consumers a retail-like payment experience, while reducing the burdensome administrative costs of billing.
Pinkard and Panks both pointed to a JAMA study estimating the administrative costs associated with physician billing and insurance-related activities in one large academic medical center with a fully implemented EHR system.
In that study, the authors estimated that "the costs associated with billing activities performed by physicians represented, as a proportion of professional revenue, 14.5% for primary care visits, 25.2% for emergency department visits, 8.0% for general medicine inpatient stays, 13.4% for ambulatory surgical procedures, and 3.1% for inpatient surgical procedures."
Pinkard's and Panks' comments have been lightly edited.
ON THE CHALLENGES, ADVANTAGES
Tim Panks: Currently, consumers still experience administrative friction with the healthcare system. We have a need to automate disparate administrative processes behind-the-scenes in a seamless, efficient manner. Our hope is that OODA Health's innovative technology will better unify our systems with the payers to make for a seamless experience for the consumer.
When payers and providers can collaborate in real time, we can eliminate a lot of the confusion about payment for health services. For example, the consumer can be sure in advance whether they have the right pre-authorization. They can be sure if an amount due applies to a co-pay or to a deductible.
ON HOW THE MODEL WILL WORK
Sophie Pinkard: Our goal is to streamline healthcare payments between payers, providers, and patients, leveraging modern technology to deliver the user-friendly payment experience we've come to expect in virtually every other industry.
Our model is analogous to a credit card transaction, in which a member [i.e., patient] swipes a card, and the provider is paid immediately (both patient and payer portion). Of course, we recognize that certain, complex procedures may require a bit more time to process, but we believe that the majority of routine care should be serviceable in this way.
ON REVENUE CYCLE CONSIDERATIONS
Pinkard: Removing some of the administrative barriers to payment will create value for both sides. For example, among some of our payer clients, approximately 50% of prior authorization requests submitted by providers are unnecessary.
Providers submit more requests than needed due to uncertainty about the rules and to avoid any chance of a denial. In this case, the administrative complexity creates unnecessary work and expense for both providers and payers.
Our solution will enable revenue cycle professionals to focus their attention on the unique, challenging cases that require human judgment; and less time on the routine, paperwork-intensive processes.
[In addition], we are working with our payers to create more standardization on the application of rules and policies.
ON SAVING MONEY AND TIME
Pinkard: Recent research reports, such as a JAMA study in February, have suggested that there is immediate impact to a hospital's bottom line by removing administrative expense associated with generating a claim for insurance. In fact, a hospital can save $200 [per claim] on average by streamlining the claims generation and processing.
OODA is committed to ensuring that hospitals retain more of their reimbursement by reducing the expense required to collect today. More details will come soon on our changes to the claims and denials process.
Panks: The patient's experience doesn't end when they leave the doctor's office, and we need to make it easier for patients to understand and pay their bills. Patients' first priority should always be their health—without the stress of anticipating a confusing medical bill.
Furthermore, physicians spend a significant amount of time each week on billing administration—as much as 12.5 percent.
Everyone benefits when physicians have more time to focus on providing quality care to their patients. We expect this collaboration will do just that, enabling our hospital system to focus on our healing mission.
ON THE PILOT'S GOALS
Panks: In healthcare, we need to be collaborative. By partnering with OODA Health, we hope to bridge the gap between payers and providers to make real-time payments a reality.
We are committed to making healthcare a retail-like experience for our patients. When healthcare administration happens in real time, we can lower costs, which means more people can be covered with the access they need—where they want it, with the right doctor, at the right time.
Alexandra Wilson Pecci is an editor for HealthLeaders.