Physicians 1st Billing and Claims
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Physicians 1st is entering their first year of operation. Electronic medical claim filings has been well received and marketing will be critical to drive demand. Physicians 1st offers a well-designed system of electronic claims filings and billings for medical practitioners. The basic market need is an easy to use claim filing system that is more accurate, faster, and more efficient.
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Physicians 1st possesses good information about the market and has a good grasp of who the target customers are. This information will be leveraged to better understand who is served, their specific needs, and how to better communicate with them.
|Practices of <10 physicians||2%||654||667||680||694||708||2.00%|
|Practices of >10 physicians||3%||410||422||435||448||461||2.97%|
Physicians 1st is providing its customers with efficient claim submission and billing processes that allow them to recover some of the disappearing profit margins. Physicians 1st seeks to fulfill the following benefits that are important to customers:
One of the most prevalent trends in the medical industry is a reduction of profits from the physicians by the insurance companies. Insurance companies negotiate allowable fees for every procedure and if the physician is to accept this type of insurance, they must agree to the allowable amount. The insurance payments have forced physicians to achieve efficiencies in their practice in order to maintain a sufficient profit margin. This trend in the medical industry has fueled growth in electronic filing industry.
The broad electronic filing market is currently in its infancy. Electronic filing is not just present within the medical industry, it is growing within the legal field as well as many other professional and administrative areas. The growth of electronic filing can be attributed to the cost efficiencies that are gained through electronic submission and storage.
The Federal Government's influence is quite positive. In May, 1996, the Health Care Financing Administration, the governing body for Medicare, established what they call "payment floors" for Medicare claims. Carriers contracted to pay Medicare claims were told to hold paper claims' payments until "at least the 27th day after receipt." Electronic claims were to be held until the 14th day, but had to be paid by the 19th day. If "clean claims" (claims that are error free) were not paid by the 19th day after receipt, the Federal Government would have to pay interest on the claim amount. No payment penalties were placed on paper claims. Program Memorandum AB-92-5 described above, was beneficial for the electronic medical claims industry.
Several states have passed mandates of their own since 1996, but until now there has been no real action by the Federal Government on this issue. It is expected that Congress will mandate electronic submission of Medicare claims in the near future and the cut-off date for paper claims will follow soon after. After the cut-off date, paper Medicare claims will not be accepted.
If history is any indication and current trends continue, commercial insurance carriers will follow suit within a short period of time. It is in their best interest as well. Statistics show that it currently costs a commercial carrier between $2.60 to $20.00 to process a claim. The same claim can be processed electronically for approximately $1.10. The conversion costs of moving from paper to electronic processing can be extensive, but in the long run these savings will be substantial.
The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing the industry.
Physicians 1st main competition is Bi-State Medical Consulting. They provide full service medical claims management.
Their strengths are:
Their weaknesses are:
The strengths and weaknesses, however, seem of little consequence as the local market by all accounts is untouched, and no other company in this area can offer the software features or the dedicated service that Physicians 1st Billing and Claims is able to offer.
The bottom line of Physicians 1st's ability to compete lies in their ability to provide any and every physician with free practice management software, two-way computer communications which allow for next day patient records updating, and substantially improved cash flow for the physician.
Physicians 1st Billing and Claims' number one goal is to provide outstanding service.
Physicians 1st shows their dedication to service by providing the medical professional one-stop shopping for all his or her billing and claims needs. The services they provide are as follows:
The computer software that is the crux of Physicians 1st Billing and Claims' medical reimbursement business is state of the art. Physicians 1st Billing and Claims is running in Windows 98/2000/XP. The software was specifically developed as a tool for medical reimbursement consultants. This is important because some software being sold is written to manage a doctor's office and does not necessarily incorporate all functions that are needed for consultants. The software also includes the latest features needed for managed care organization management, including tables for the numerous fee schedules which may be required, and customized reports to evaluate contacts.
The ET&T clearinghouse, which verifies the claims data, is highly respected in the industry. They are members of and have been certified by AFECHT, a national policing organization. They utilize the American National Standards formats recognized by Medicare and most commercial insurance carriers. They guarantee claims are 98 percent accurate before being sent on to carriers.
Since 1990, the Federal Government has been urging the health care industry to submit insurance claims electronically. Statistics prove that electronic submission can save millions of dollars annually for the industry. Presently, 95 percent of all pharmaceutical claims and 70 percent of hospital claims are submitted electronically. Physicians and dentists trail far behind, with only 25-30 percent.
The Federal Government is not happy with this situation so in 1996, Congress mandated that physicians are required to file claims on behalf of all their Medicare patients. Many doctors were not prepared for this deluge of paperwork. Eight years later doctors are still climbing out from under the paperwork. In 1999 the motions calling for electronic submission of all Medicare claims were being echoed throughout the halls of Congress. No mandate was passed but the paperwork continues to mount up and as baby boomers near retirement age the paper problem will only get worse and those echoes will turn into screams. This year in the U.S. over 1 trillion dollars worth of medical charges will be issued. This amounts to 9 billion medical claims. Medical practices will be forced to meet the mandates, and growing mountains of paper, and most are not currently equipped to handle the transition. The sensible solution is to out-source the process to experts that are prepared to save the practices money, produce a much faster return from insurance carriers, and handle the claims with a high degree of accuracy. There aren't many businesses that can say the Federal Government is behind them all the way.
The first key to success is addressing this soon mandated environment of electronic submissions.
A second key to success will be flexibility. Physicians 1st Billing and Claims understands that each medical practice is unique. Even practices of the same specialty will have different staff and offer different services. Physicians 1st Billing and Claims will evaluate the needs of each practice and offer solutions to help the practice become more efficient. Some may want all the services Physicians 1st offer and some may select only a few. The billing will be customized to each office's needs.
A third key is our diversified services. Physicians 1st Billing and Claims offers a one-stop-shopping experience for medical administrative services.
Physicians 1st is still in the speculative stages as a start up venture. The critical issues that they face are:
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