Academy, Partners Launch Coalition

Organization Aims to Reduce Physicians' Paperwork

By News Staff
2/21/2006

The AAFP has co-founded a coalition to simplify the burden and reduce the costs of administrative paperwork associated with operating a medical practice. Coalition partners are the American Health Information Management Association and the Medical Group Management Association.

"Complexity and duplication of effort frustrate all of us," said AAFP EVP Douglas Henley, M.D. "We hope to make incremental but significant changes to alleviate some of the dissatisfaction arising from our current, broken health care financing system."

The new organization -- the Healthcare Administrative Simplification Coalition -- will focus on

reducing redundancy in credentialing physicians and other professionals so they can participate in health plans and provide hospital care;
standardizing processes for identifying and confirming patient insurance coverage, including copayment and deductible amounts; and
instituting communications to broaden awareness among employers and patients of the cost of administrative complexity and redundancy.

The push to launch the coalition began after research demonstrated the escalating cost of health care administration. Research findings released in 2004 by the Medical Group Management Association indicated that in a medical group practice with 10 physicians

more than $247,500 per year was spent on unnecessarily complex or redundant administrative tasks;
$19,444 per year was spent on phone calls with pharmacies resolving drug formulary issues;
$38,761 was spent per year verifying patient coverage, copayments and deductibles for thousands of varying health plans;
$9,248 was spent per year resubmitting denied claims -- 73 percent of which were eventually paid (on average, 2.78 claims per full-time-equivalent physician are denied each week because of lack of information about the insurer’s requirements);
$7,618 was spent per year submitting credentialing applications for each physician;
$33,800 was spent per year negotiating insurance contracts with an average of 15 different health plans per year, and renewing six of those each year (administrators spend approximately four hours negotiating each insurance contract).

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