This report originally appeared in the March 2009 issue of DOTmed Business News

One of the biggest issues on the minds of people in the health care industry today deals with transforming the entire medical community from a paper-based system to an electronic one. In fact, President Barack Obama has made it his mission to modernize health care in this way.

An area where we have already seen this occurring is the relationship between physicians and insurance companies. Over the past few decades, physicians have gradually made the switch to deal with insurance companies electronically as the number of health care providers submitting electronic coding and receiving electronic payments have gained momentum year after year.
"In many countries, like Austria, they are 100% electronic," says Tom Turi, Senior Vice President of Financial Services for Emdeon, Inc., a leading provider of revenue and payment cycle solutions that connect payers, providers and patients to integrate and automate key business and administrative functions throughout the patient encounter. "Our country in the last several years has finally crossed the tipping point where electronic transactions have exceeded paper."

Electronic coding provides a simple system. There are code numbers to identify any medical service or procedure and doctors have to make sure that these codes appear when they seek reimbursement from Medicare, Medicaid and insurers. The health care billing services need to be compliant with national medical regulatory programs like HIPAA, JCAHO and other specialized industry standards.

Ragui Selwanes, a partner with Philliou Selwanes Partners, LLC, a health care payment consultant, says that the pros of going electronic are obvious, in that it is faster, cheaper, eliminates paper, and causes less theft and fewer errors.

"You go to the doctor or hospital and get care. They treat you, and then later fill out a claim form, either paper or electronic, for what they did. They submit that form to the insurance company-in the electronic case through a clearinghouse, which routes the claim to the right health-plan," Selwanes says. "The insurance company scrubs the claim, applies their discount, or rejects it as it were, and adjudicates it [i.e. they tell you how much you owe, how much they owe, and the discount applied]. That claim is routed back through the clearinghouse or directly sometimes via the web. The inbound claim is called an 837, the outbound remittance [adjudicated claim] is called an 835. The codes on the claim form of procedures are called ICD9 or ICD10."

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