Conversion of paper claims to digital form could save $11 billion annually

Doubtless, MD On-Line CEO Bill Bartzak would like to make tons of money, but he's also a man on a mission. That mission? To help small medical practices move money in and out without touching a piece of paper. 

Right now, 25 percent of claims are submitted on paper each year. That's a whopping 3 billion claims still being handled the old-fashioned way, notes Bartzak, who spoke at yesterday's session of the World Health Care Innovation and Technology Congress in Alexandria, Va. The vast majority of those claims are being filed by small provider offices with one to five physicians.

Meanwhile, a full 90 percent of payments to providers come in the form of paper checks rather than electronic transfers, which puts practices behind even corporate employees with a single predictable paycheck.

"[Much of the industry] may be at phase III in this process, but the doctors we're trying to get out of paper are in phase I," Bartzak told the session attendees. "Under five-person practices are the biggest culprits." It doesn't make sense to focus on more advanced electronic data exchange options until you address the physicians who aren't on board, he suggests.

Changing the status quo is critical, according to Bartzak. Converting these remaining paper claims to digital form could save $11 billion per year, and full use of EDI technology could save $86 billion per year, he notes.

Bartzak, along with some other competitors, has started working with payers to streamline their claims and electronic payment processes. One of his clients is giant health plan WellPoint, which has been working to convert paper submitters to electronic claims.
Over the last 12 months, WellPoint has been able to convert more than 550,000 claims, that would otherwise have been on paper, to digital submissions. Last month alone, nearly 110,000 newly-digital claims were submitted by more than 5,000 practices.

To foster this kind of change across the industry, however, it may require getting tough, Bartzak argues. For example, he's in favor of a 2007 directive issued by the state of Minnesota requiring health plans and providers to file claims electronically. "Electronic claims are not an opportunity, they're a necessity," he says. "It's time to draw a line in the sand."