Though a large portion of physicians’ administrative costs include expenses incurred while interacting with health insurance plans, there seems to be very little data about the level of these interactions. Nevertheless due to the high costs incurred physicians have for a long time shown discontent with the time their administrative staff ends up spending on these activities.

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How Much Does It Cost Your Practice To Interact With Payers?
Though a large portion of physicians’ administrative costs include expenses incurred while
interacting with health insurance plans, there seems to be very little data about the level of
these interactions.
Nevertheless due to the high costs incurred physicians have for a long time shown discontent
with the time their administrative staff ends up spending on these activities.
Industry Standards State
 A survey result showed physician practices while dealing with patient health
plans incur an average cost of nearly $68,274 per physician each year
 While interacting with health plans - physicians reported spending 3 hrs per
week; whereas nursing and clerical staff spent much more than 3 hrs per week
on these activities
 National time cost to practices of interactions with plans was calculated to be
between $23 bn. - $31 bn. per year (time converted to dollars)
Additionally administrative costs incurred by US physician practices are nearly $83,000 per
physician each year, approximately 4 times the sum spent by their Canadian counterparts.
Hence US physicians use nearly 12% of their net patient income in covering administrative costs
and can save nearly $27.6 bn. in annual health care spending by matching Canada’s
administrative costs.
Practices can drastically improve their bottom-line by reducing some of this time and
money spent!
Facts about patient interaction in US
 Time spent on an average on patient interaction by physicians 3 weeks; nursing staff
23 weeks and clerical staff 43 weeks, roughly per physician per year.
 Only a small part of this time is spent on quality of data – 2 hrs per year by
the average physician, and little more by the staff.
 Primary care providers’ mainly small practices spend more time on health plans

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interaction compared to other specialists.
 The estimated cost due to health plans to physician practices equals 6.9% of all U.S.
expenditures for physician and clinical services.
Interaction with health plans across varied types of interaction, staff, specialty and practice size
involve few specifics- Prior authorization, Pharmaceutical formularies, Claims, Credentialing,
Contracting and Data Quality. Majority of physicians’ spend maximum time on dealing with
formularies, and then on authorizations. Other health plan interaction related costs include-
equipment, supplies, telephone, fax, office space, or time spent by NPs and PAs.
How can physicians benefit from health plan interaction?
Administrative costs can never be nil, also these interactions may produce benefits -
 Prior authorization and formulary requirements may reduce costs and improve the
quality of care by promoting appropriate procedures and medications
 Interacting with multiple health plans, though expensive with varied requirements can
help provide physicians with increased patient choice
Addressing the Problem – Due to a multi-payer system practices needs to deal with multiple
insurance products and different rules and administrative standards compared to a single-payer
system, hence facing high administrative costs. Adoption of new payment models like bundled
payments; innovative methods of organizing health care delivery along with ACO’s have been
introduced to help reduce administrative costs in the long term. However physicians need to
also proactively also work towards reducing these costs.
Reducing plan-interaction costs without reducing benefits with MBC
MBC strives to balance costs with possible benefits; by working towards improved interactions
between practices and health plans hence reducing costs for both. Our billing experts -
 With in-depth industry knowledge assist our clients in standardizing
transactions and processes with automation to help reduce costs and
administrative burden
 Help physicians understand the complexity of varied patient insurance
plans including different benefits, payment rates and billing procedures,
through regular industry updates
 Ensure proper documentation, regular reporting and payment follow-up

3. End to End Medical Billing Solutions
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http://www.medicalbillersandcoders.com
www.medicalbillersandcoders.com
Copyright ©-2013 MBC. All Rights Reserved.
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and collections to help reduce the chance of billing error and disputes
 Assist in improved interaction to restore trust between payers and
physicians in order to achieve real-time prior authorization at the point
of care
Increased trust between physicians and payer helps provide a huge opportunity for improving
efficiency in a multi-payer health care system. As most of the costs are due to inefficient
processes, MBC services help practices save money in terms of –
Reduced reliance on in house staff + Improved
interactions with payers
Increased collections improving cash flow
MBC the largest consortium of billers and coders has been providing medical billing services
across US for over a decade now; meeting necessary requirements for medical necessity and
claims stipulations. Our team is constantly working to identify opportunities which help improve
accuracy, compliance and productivity in a multi-payer health care system.