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Fam Pract Manag. 2004;11(2):31-32

Physicians' reimbursement claims face greater scrutiny

A number of health care insurers are increasing their audits of physicians' reimbursement claims, reports the Jan. 12 Washington Post, but not without resistance from physicians. Last year, Washington-area CareFirst BlueCross BlueShield decided to audit tens of thousands of claims from 2,800 doctors, based on a previous examination that found nine out of 10 claims to be inaccurate, according to the company. When hundreds of physicians refused to cooperate, the insurer scaled down the audit.

Medicare is expected to audit 150,000 claims by the end of its fiscal year this fall; the program audited 128,000 claims and 6,000 claims, respectively, in the two previous fiscal years.

Health plan critics argue that the real purpose behind such investigations is to pressure physicians into undercoding. Insurers maintain that audits are necessary to reduce inaccurate claims, which contribute to premium increases.

Insurers and physicians alike say the complex coding system is partly to blame for the dispute over proper claims. The Medicare Prescription Drug, Improvement and Modernization Act passed by Congress in November calls for studies into "simpler, alternative systems of documentation for physician claims."

Turning the tables

In a related story, the North Carolina Medical Society has filed a lawsuit against Blue Cross and Blue Shield of North Carolina alleging that it owes physicians "millions of dollars of lawful reimbursement." According to the lawsuit, Blue Cross used software to automatically deny or downgrade physicians' claims, refused to reimburse physicians for services that had been preauthorized, failed to reimburse physicians within 30 days (a state law), delayed reimbursements by requesting "redundant and excessive" medical records from physicians, and deducted overpayments from later claims when physicians refused to refund them. The lawsuit does not seek monetary damages, only revisions in the physician payment process.

Some good news

After settling its part of a class-action lawsuit with physicians in October, Aetna is trying to improve relations with physicians by establishing a national physician advisory committee. The committee, made up of nine physicians, will represent physicians to the insurer and recommend changes in business practices, as needed. William C. Popik, MD, senior vice president and chief medical officer of Aetna and an AAFP member, will chair the committee.


"The increase in health care spending is no surprise whatsoever. This is what the American people asked for when they abolished managed care."

Uwe Reinhardt, health economist at Princeton University, responding in the Jan. 9, 2004, New York Times to data from the Department of Health and Human Services that shows a 9.3-percent increase in U.S. health care spending in 2002, the largest increase in 11 years.

"Rational rationing" would improve quality, cut costs

To prevent the rationing of health care services as costs continue to rise, a number of hospitals, health plans and physicians are trying another approach: "rational rationing." By increasing efficiency, reducing medical errors and waste, and focusing on treatments that work, the health care industry could avoid facing difficult decisions about who gets care and who goes without, reports the Dec. 22 Wall Street Journal. Margaret O'Kane, president of the National Committee for Quality Assurance, said, "We need to take back the money that goes into waste and harm in the system and make it an ethical imperative to free it up for the things that really add value."

The United States could reduce its annual health care spending by 15 to 30 percent by increasing the health care system's efficiency and improving its quality, according to Donald Berwick, MD, MPP, president and CEO of the Institute for Healthcare Improvement.

Leading ideas to achieve rational rationing include 1) computerization of health care information and processes to reduce medical errors, better track quality, improve patient record management and reduce paperwork, 2) promotion of evidence-based medicine to help ensure the effectiveness of clinical recommendations, 3) creation of a payment system that actually rewards quality instead of waste, 4) improvement of disease-management programs to help patients with chronic conditions receive the care they need and stay out of the hospital and 5) greater involvement of patients so that they learn to make more informed, cost-effective choices.

PRACTICE PEARLS from here and there

Is your practice ready for change?

About a third of practices that claim to have a strong interest in improving their medical care are not really ready to make any changes. Three staff surveys at can help you determine where your practice stands. If, as a practice, you cannot complete and discuss the survey results or commit to spending 10 hours over three months on improvement activities, you are not ready to change — yet. Assess your practice again in the future to see if your readiness has improved.

- Accessed Jan. 19, 2004.

PRACTICE PEARLS from here and there

Helping patients get politically involved

To make it easier for patients to voice their concerns on health care-related issues, equip your waiting room with form letters and envelopes preaddressed to local, state and national legislators. Letters can address a variety of timely health-related topics, such as the need for tort reform. "I believe it's up to us as doctors to help our patients understand the health care issues from a perspective other than the media," says Gregory Lyon-Loftus, MD, PhD, of Mont Alto, Pa.

Through the AAFP's "Patient Voices in Washington" initiative (, physicians can download a flyer that explains to patients the health care legislation currently before Congress.

- Postings from the AAFP's practice management listserv, Jan. 10, 2004.

New CPT code for online consultations

Last month, the AMA issued a temporary CPT code to enable reporting of online consultations with patients. The code will become official in July but was released early to give practices and payers sufficient time to pro-gram it into their information systems. Code 0074T should be used to cover the sum of communication (e.g., related telephone calls, prescriptions and lab orders) pertaining to the online patient consultation. Although the new code will make it easier for doctors to bill for online visits, the reimbursement decision remains in the hands of insurers.

Malpractice premiums

Malpractice insurance premiums increased an average of 15 percent between 2000 and 2002 due to rising damage awards in malpractice lawsuits, reduced income from insurer investments and short-term factors in the insurance market, says a Jan. 8 report from the Congressional Budget Office (CBO). The CBO noted that while caps on damages in malpractice lawsuits do lead to lower premiums, they do not lead to an increase in medical injuries, as opponents of damage caps have argued.

Choosing a specialty

More medical students are choosing specialties based on lifestyle considerations, according to a study in the Sept. 3 Journal of the American Medical Association (JAMA). Specialties perceived to place greater demands on physicians' time, such as family medicine and surgery, have seen a decline in interest in recent years. A controllable lifestyle, which includes free time for leisure, family and avocational interests, accounted for 55 percent of the variability in specialty preferences from 1996 to 2002.

More isn't always better

Contrary to previous research, new studies are showing that performing more procedures isn't necessarily linked to better care. Two studies in the Jan. 14 JAMA reported only slight differences in mortality rates between high-volume hospitals and low-volume hospitals for patients who underwent coronary artery bypass graft procedures and for infants with very low birth weights, respectively. Both studies concluded that volume is not an adequate indicator of quality of care.

Physicians respond quickly to HRT evidence

After studies in July of 2002 found that hormone replacement therapy (HRT) could increase heart disease and breast cancer risks, overall prescriptions for HRT decreased 38 percent, according to a new study in the Jan. 7 JAMA. "This example shows effective information dissemination of scientific evidence and clinical guidelines to patients and physicians, which has resulted in prompt changes in clinical practice," wrote the researchers. "Our findings support prior literature suggesting that physicians may rapidly abandon well-established therapies when studies demonstrate harm." A separate study in the Jan. 7 issue ofJAMA found that doctors were slower to act on new findings about blood-pressure medications.

AHRQ report assesses quality of care

Two recent reports from the Agency for Healthcare Research and Quality (AHRQ) mark the "first national comprehensive effort to measure the quality of health care in America and differences in access to health care services for priority populations." The reports highlight some positive findings (e.g., 83 percent of U.S. women receive prenatal care in their first trimester) as well as areas for improvement (e.g., only 42 percent of acute heart attack patients who smoke are counseled to quit while in the hospital). For more on the reports' findings, go to

Increasing health insurance costs

This could be another costly year for employers - and employees. A recent survey of nearly 650 companies conducted by Hewitt consulting firm revealed that many companies expect a 14-percent increase in health insurance costs for 2004. The companies plan to absorb only a 9-percent increase, which means higher premiums and payments for their employees. The survey projects employees will pay about 23 percent of their individual insurance premiums for 2004, up from 21 percent in 2003. Premiums to cover dependents will increase from 25 percent to 27 percent.

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