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EDI: NOVOCAINE FOR MANAGING YOUR DENTAL CLAIMS
-i-
EDI: NOVOCAINE FOR MANAGING YOU R
DENTAL CLAIMS
ALLISON LOPERFIDO MORGESE, M.P.S.
According to the author, submission of dental claims through
electronic data interchange technology is a cost-effective way for dentists to handle some of the administrative aspects of
managing their practice.
Understanding what's involved can take you a long way in your
decision to submit dental claims
electronically now and in the future. The author outlines the ad-
vantages of EDI and gives tips on how to incorporate EDI into
your office.
Qubmitting dental claims to payers and receiving prompt remittance should not feel as if you're pulling teeth. On the contrary, if you're using computer technology to streamline your administrative operations, you should be feeling a little euphoric. Success in reducing your administrative costs is at least partially dependent on the manner in which you handle the administrative aspects of your practice, including claims processing and accounts receivables. Computer technology-which enables you to handle your claims more efficiently, leading to cost savings-is available right now, and a growing number of dentists are already taking advantage of it and experiencing its benefits. In particular, they're using electronic data interchange products and services for exchanging claim and insurance information with dental payers, saving themselves time, effort and money. There is every indication that the number of dentists not only automating their offices but also submitting claims electronically will continue to increase (Unpublished data, NEIC, 1994).1 If you're considering switching from mailing claims to modeming them, but don't know what's involved or what the future holds, you're not alone. But a little bit of knowledge about the process can take you a long way in your decision. EDI: A BASIC DEFINITION
EDI is the computer-to-computer transmission of information, such as insurance claim forms. Think of EDI as an electronic postal system, one that enables dental practices and payers to exchange patient insurance information without paper in far less time than it takes to print a form, stuff the form into an envelope, address the envelope, affix a stamp, drop the envelope in a postbox and wait for remittance. The technology has been used for years in banking, retail, food and travel industries. An automated teller card is an example of EDI at work, as is immediate airline ticketing at a travel agency. BENEFITS OF SUBMITTING CLAIMS ELECTRONICALLY
Simply put, EDI and electronic claims submission benefit dentists by enhancing the efficiency and productivity of their offices. Claims submitted electronically are paperless and therefore are easier and 1670 JADA, Vol. 126, December 1995
PRACTICE MANAOEMENTI more efficient to handle; even better, they are never lost in the mail! Electronic claims also are automatically edited to catch errors, which means office personnel don't have to worry about costly delays in claims processing because something was incorrect or omitted. In fact, if there is a problem, your office will be notified within 24 hours, not the usual two weeks it takes to receive notice of a rejected paper claim. When you submit claims electronically, you'll notice a decrease in the number of days it takes for payment on a claim to arrive. Submitting claims electronically speeds up the claims processing turnaround time. Although a few payers process information received through EDI as paper claims, the system is designed to accommodate a computer-to-computer exchange. This eliminates the need for someone at the payer organization to spend time keying in and verifying the information that comes in on a paper claim. The exact information you submit is the information that's used to process the claim; transcription errors are non-existent. So you can receive remittance on claims faster, thereby improving your cash flow and accounts receivable. But perhaps most importantly, you can use one address and one standard format for submitting your claims-regardless of the payers to whom they're being sent-because they will automatically be formatted electronically to meet each payer's specifications. This means that your office personnel won't have to waste time trying to figure out which payer gets what information and in what format.
BASICS OF EDI AND SUBMITTING ELECTRONIC CLAIMS
An electronic claim is a paperless claim generated at the time or shortly after a patient receives services. These claims use standard information most likely already entered into a computer or maintained in some form of patient record. If you already have a computer
I
Networks not only route the heavy volume of communications trafficflowing back andforth between dentist and payer, but also automatically reconfigure claim data into whatever format each payer requires, making sure nothing gets lost in the process.
and a practice management program, creating an electronic claim form can be as simple as selecting "generate claim form" from a list of choices on the computer screen. The computer then saves the claim for electronic transmission via modem to a clearinghouse or to your practice management vendor. The vendor arranges for claims to go through an EDI network for editing, sorting and forwarding to the appropriate payers. Claims can be transmitted on a daily, weekly or other specified schedule. EDI vendor software or billing companies typically provide support staff to help offices that use these computer systems to submit electronic claims. The EDI vendor can help your office manager untangle problems he or she may
have with the computer software or hardware. These vendors work through EDI networks, which act as links to the various insurance payers that accept claims electronically. Networks not only route the heavy volume of communications traffic flowing back and forth between dentist and payer, but also automatically reconfigure claim data into whatever format each payer requires, making sure nothing gets lost in the process. The network through which claims are sent acts in many ways like an electronic post office. Once received, claims are checked automatically by computer to be sure that all numbers are where they should be, letters are where they should be and that other parts of the claims have been properly completed. Then the claims are sent overnight electronically to the respective payers and are ready for processing or adjudication early the next day. If the insurance company requires additional information to process the claim, you'll be notified the next day through an electronic report, which accounts for each claim transmitted. Once the claim is processed, payment from payers is mailed to you, in a shorter time than would have been possible had the form been submitted conventionally. In the future, electronic funds transfer may even enable payers to directly deposit remittance on claims into your accounts. IS IT REALLY WORTH IT?
It may not seem worthwhile to you to invest in EDI unless the payers to whom you most often submit claims can accept those claims electronically. Consider, JADA, Vol. 126, December 1995 1671
PRACTICE MANAGEMENT then, that almost all of the large commercial payers that offer dental insurance have the capability to accept electronic claims.' Since these payers account for a significant percentage of all dental claims filed, you will find that you can send a large portion of your claims electronically. Generally speaking, 80 to 85 percent of all dental claims submitted electronically are routine and can pass through the insurance company adjudication process without delays.2 If the information you provide is correct and the claim does not contain controversial charges, such as $350 for a prophylaxis (as opposed to $35), then the claim shouldn't be rejected.2 Keep in mind, however, that some payers may place limitations on which claims they accept electronically. Some may take any claim in its entirety electronically, while others require paper submission of additional claim information, such as radiographs.' However, the day is soon coming when such additional information as dental radiographs or computerized images also can be submitted to payers electronically. It's been estimated that today it costs a dentist between
1672 JADA, Vol. 126, December 1995
$2 and $3 to generate and mail a paper insurance claim.2 The same claim can be generated and submitted electronically at a cost of between 20 cents and 50 cents,2 depending on the vendor.1 This savings, coupled with the savings of staff time and the value of receiving faster remittance on claims, can make the investment in EDI a sound business decision. EDI IS A TREND, NOT A FAD
There is every indication that the number of dentists using EDI for submitting claims and other transactions will continue to rise, laying to rest any thought that EDI and computerization of the dental office is just a passing fad (Unpublished data, NEIC, 1994).1 On the contrary, according to a 1993 survey conducted jointly by the American Dental Association and the National Electronic Information Corporation, more and more dentists in tune with technological advancements are moving toward automating their offices with computers and submitting their claims through EDI (Unpublished data, NEIC, 1994). Satisfaction on the part of their EDI-capable colleagues
may be one reason more dentists are using EDI. In the study, 94 percent of dentists who said they were submitting claims electronically said they are satisfied with this service. Dentists surveyed said their biggest reason for submitting claims electronically was the reduction in paperwork, which leads to savings in staff time and improvements in cash flow as a result of faster payments on claims. This fact will likely draw more dentists to consider electronic claims submission. In fact, according to a 1994 survey, one of the top 10 software features considered absolutely imperative by responding dentists is electronic claims processing.3 Electronic claims processing is one way to better manage patient and account information, which is the leading reason why dentists surveyed said they were computerizing their offices. GETTING STARTED
If your office generates 20 or more claims per week to payers equipped to handle EDI, you should consider submitting your claims electronically. To do so will involve interviewing several computer system/software vendors to find the right one to match your technical and budgetary requirements. Some vendors supply full practice management systems and software, while others offer only communications products and services. When considering EDI, you'll do well to ask colleagues for referrals, contact professional organizations and visit trade shows that concentrate on electronic claims and related transactions to become familiar with vendors in this industry. Taking time to incorporate the right
PRACTICE MANAGEMENIEDI system from the right vendor ensures that you will realize the full benefits of this timeand money-saving technology. In particular, there are several things you should ask when selecting a computer hardware/software and EDI service vendor. If you're just getting started, find out what type of equipment, software and staff training you will need. Don't be snowed by terminology, and don't let yourself be sold a bill of goods that you might not need. Find out what the total set-up and on going support costs will be. Keep in mind that payers may change their requirements for claim data, which means your electronic claims submission system will have to be updated to accommodate those changes. You'll want to choose a vendor that inspires confidence concerning on-going support. If you're adding EDI capability to an existing system, be sure to ask your vendor if its EDI module is flexible enough to accommodate your current software. Also, ask if your claims can be downloaded from your practice management system to avoid the need for rekeying by your staff. You'll also want to be sure the vendor uses recognized standard formats for claim submission and claim payment advice. Doing so will help ensure that the EDI module Ms. Morgess Is In corporate communications, National Electronic Information Corp., 500 Plaza Dr., Secaucus, N.J. 07094. Address reprint requests to NEIC, Corporate
Communications.
you invest in will meet your
need for administrative simplification, not create a greater burden for your office
personnel.
Most importantly, you should make sure that your vendor is connected to an EDI network with the breadth of payers necessary to make EDI worthwhile for you. For example, you should ask vendors to provide a list of dental payers with which they are connected. To simplify your communications, you should choose a vendor whose network is connected to the most payers, including commercial carriers, Medicaid and the like; this will allow you to submit the majority of your claims to a single source. The network also should accommodate claims to payers that are not yet EDI-capable by offering a print-and-mail service. A fullservice, dental, all-payer network is your best choice. You should also ask the vendor if its network accepts claims in one standard format, with the ability to meet all payer-reporting requirements. The network your vendor is connected to must be able to translate your claim data into the format acceptable to each individual payer and should adhere to industry claim standards such as those of the American National Standards Institute. Finally, keep in mind that the software and hardware you will use to simplify your administrative operations may seem high-priced, but the investment will pay for itself when you consider the time and effort your staff will save through automation. To get the most out of your investment, you will want to train your staff to use the equipment efficiently. This additional investment will ensure that your office's conversion to EDI will run as smoothly as possible. When making your decision about which EDI package
to purchase, remember that
staff likely will be using the system much more than you, so be sure to ask for their input after you have narrowed down the options. your
CONCLUSION
If you are looking to reduce the time and expense associated with managing the administrative aspects of your practice, EDI and electronic claims submission could be right for you. Connection to an EDI network with links to a variety of dental payers can save your staff the time and trouble it takes to format and sort claims. With a large number of major companies accepting claims electronically-including Delta Dental, Guardian, Aetna, CIGNA, MetLife, Prudential, The Travelers, John Hancock and Provident-you may even be able to send all of your claims electronically and eliminate the expense of the paper process. What's more, you'll likely experience a decrease in the time it takes for your claims to be processed, so you'll receive remittance faster, thereby improving your cash flow and accounts receivable. With a little investigation into the right software and hardware vendor to support your office's particular needs and with a connection to a dental all-payer EDI network, you'll soon be on your way to a more productive and efficient office. 1. Kaslow D. More practices are filing electronic claims. Dent Econ 1994;84(11):32-43. 2. Morgese AL, ed. EDI primer for the dental office: Where do I begin? Phoenix: The National Dental EDI Council; 1995. 3. Combs R. Computers playing major roles in dental offices. Dent Econ 1995;85(4):101-6.
JADA, Vol. 126, December 1995 1673
EDI: NOVOCAINE FOR MANAGING YOU R
DENTAL CLAIMS
ALLISON LOPERFIDO MORGESE, M.P.S.
According to the author, submission of dental claims through
electronic data interchange technology is a cost-effective way for dentists to handle some of the administrative aspects of
managing their practice.
Understanding what's involved can take you a long way in your
decision to submit dental claims
electronically now and in the future. The author outlines the ad-
vantages of EDI and gives tips on how to incorporate EDI into
your office.
Qubmitting dental claims to payers and receiving prompt remittance should not feel as if you're pulling teeth. On the contrary, if you're using computer technology to streamline your administrative operations, you should be feeling a little euphoric. Success in reducing your administrative costs is at least partially dependent on the manner in which you handle the administrative aspects of your practice, including claims processing and accounts receivables. Computer technology-which enables you to handle your claims more efficiently, leading to cost savings-is available right now, and a growing number of dentists are already taking advantage of it and experiencing its benefits. In particular, they're using electronic data interchange products and services for exchanging claim and insurance information with dental payers, saving themselves time, effort and money. There is every indication that the number of dentists not only automating their offices but also submitting claims electronically will continue to increase (Unpublished data, NEIC, 1994).1 If you're considering switching from mailing claims to modeming them, but don't know what's involved or what the future holds, you're not alone. But a little bit of knowledge about the process can take you a long way in your decision. EDI: A BASIC DEFINITION
EDI is the computer-to-computer transmission of information, such as insurance claim forms. Think of EDI as an electronic postal system, one that enables dental practices and payers to exchange patient insurance information without paper in far less time than it takes to print a form, stuff the form into an envelope, address the envelope, affix a stamp, drop the envelope in a postbox and wait for remittance. The technology has been used for years in banking, retail, food and travel industries. An automated teller card is an example of EDI at work, as is immediate airline ticketing at a travel agency. BENEFITS OF SUBMITTING CLAIMS ELECTRONICALLY
Simply put, EDI and electronic claims submission benefit dentists by enhancing the efficiency and productivity of their offices. Claims submitted electronically are paperless and therefore are easier and 1670 JADA, Vol. 126, December 1995
PRACTICE MANAOEMENTI more efficient to handle; even better, they are never lost in the mail! Electronic claims also are automatically edited to catch errors, which means office personnel don't have to worry about costly delays in claims processing because something was incorrect or omitted. In fact, if there is a problem, your office will be notified within 24 hours, not the usual two weeks it takes to receive notice of a rejected paper claim. When you submit claims electronically, you'll notice a decrease in the number of days it takes for payment on a claim to arrive. Submitting claims electronically speeds up the claims processing turnaround time. Although a few payers process information received through EDI as paper claims, the system is designed to accommodate a computer-to-computer exchange. This eliminates the need for someone at the payer organization to spend time keying in and verifying the information that comes in on a paper claim. The exact information you submit is the information that's used to process the claim; transcription errors are non-existent. So you can receive remittance on claims faster, thereby improving your cash flow and accounts receivable. But perhaps most importantly, you can use one address and one standard format for submitting your claims-regardless of the payers to whom they're being sent-because they will automatically be formatted electronically to meet each payer's specifications. This means that your office personnel won't have to waste time trying to figure out which payer gets what information and in what format.
BASICS OF EDI AND SUBMITTING ELECTRONIC CLAIMS
An electronic claim is a paperless claim generated at the time or shortly after a patient receives services. These claims use standard information most likely already entered into a computer or maintained in some form of patient record. If you already have a computer
I
Networks not only route the heavy volume of communications trafficflowing back andforth between dentist and payer, but also automatically reconfigure claim data into whatever format each payer requires, making sure nothing gets lost in the process.
and a practice management program, creating an electronic claim form can be as simple as selecting "generate claim form" from a list of choices on the computer screen. The computer then saves the claim for electronic transmission via modem to a clearinghouse or to your practice management vendor. The vendor arranges for claims to go through an EDI network for editing, sorting and forwarding to the appropriate payers. Claims can be transmitted on a daily, weekly or other specified schedule. EDI vendor software or billing companies typically provide support staff to help offices that use these computer systems to submit electronic claims. The EDI vendor can help your office manager untangle problems he or she may
have with the computer software or hardware. These vendors work through EDI networks, which act as links to the various insurance payers that accept claims electronically. Networks not only route the heavy volume of communications traffic flowing back and forth between dentist and payer, but also automatically reconfigure claim data into whatever format each payer requires, making sure nothing gets lost in the process. The network through which claims are sent acts in many ways like an electronic post office. Once received, claims are checked automatically by computer to be sure that all numbers are where they should be, letters are where they should be and that other parts of the claims have been properly completed. Then the claims are sent overnight electronically to the respective payers and are ready for processing or adjudication early the next day. If the insurance company requires additional information to process the claim, you'll be notified the next day through an electronic report, which accounts for each claim transmitted. Once the claim is processed, payment from payers is mailed to you, in a shorter time than would have been possible had the form been submitted conventionally. In the future, electronic funds transfer may even enable payers to directly deposit remittance on claims into your accounts. IS IT REALLY WORTH IT?
It may not seem worthwhile to you to invest in EDI unless the payers to whom you most often submit claims can accept those claims electronically. Consider, JADA, Vol. 126, December 1995 1671
PRACTICE MANAGEMENT then, that almost all of the large commercial payers that offer dental insurance have the capability to accept electronic claims.' Since these payers account for a significant percentage of all dental claims filed, you will find that you can send a large portion of your claims electronically. Generally speaking, 80 to 85 percent of all dental claims submitted electronically are routine and can pass through the insurance company adjudication process without delays.2 If the information you provide is correct and the claim does not contain controversial charges, such as $350 for a prophylaxis (as opposed to $35), then the claim shouldn't be rejected.2 Keep in mind, however, that some payers may place limitations on which claims they accept electronically. Some may take any claim in its entirety electronically, while others require paper submission of additional claim information, such as radiographs.' However, the day is soon coming when such additional information as dental radiographs or computerized images also can be submitted to payers electronically. It's been estimated that today it costs a dentist between
1672 JADA, Vol. 126, December 1995
$2 and $3 to generate and mail a paper insurance claim.2 The same claim can be generated and submitted electronically at a cost of between 20 cents and 50 cents,2 depending on the vendor.1 This savings, coupled with the savings of staff time and the value of receiving faster remittance on claims, can make the investment in EDI a sound business decision. EDI IS A TREND, NOT A FAD
There is every indication that the number of dentists using EDI for submitting claims and other transactions will continue to rise, laying to rest any thought that EDI and computerization of the dental office is just a passing fad (Unpublished data, NEIC, 1994).1 On the contrary, according to a 1993 survey conducted jointly by the American Dental Association and the National Electronic Information Corporation, more and more dentists in tune with technological advancements are moving toward automating their offices with computers and submitting their claims through EDI (Unpublished data, NEIC, 1994). Satisfaction on the part of their EDI-capable colleagues
may be one reason more dentists are using EDI. In the study, 94 percent of dentists who said they were submitting claims electronically said they are satisfied with this service. Dentists surveyed said their biggest reason for submitting claims electronically was the reduction in paperwork, which leads to savings in staff time and improvements in cash flow as a result of faster payments on claims. This fact will likely draw more dentists to consider electronic claims submission. In fact, according to a 1994 survey, one of the top 10 software features considered absolutely imperative by responding dentists is electronic claims processing.3 Electronic claims processing is one way to better manage patient and account information, which is the leading reason why dentists surveyed said they were computerizing their offices. GETTING STARTED
If your office generates 20 or more claims per week to payers equipped to handle EDI, you should consider submitting your claims electronically. To do so will involve interviewing several computer system/software vendors to find the right one to match your technical and budgetary requirements. Some vendors supply full practice management systems and software, while others offer only communications products and services. When considering EDI, you'll do well to ask colleagues for referrals, contact professional organizations and visit trade shows that concentrate on electronic claims and related transactions to become familiar with vendors in this industry. Taking time to incorporate the right
PRACTICE MANAGEMENIEDI system from the right vendor ensures that you will realize the full benefits of this timeand money-saving technology. In particular, there are several things you should ask when selecting a computer hardware/software and EDI service vendor. If you're just getting started, find out what type of equipment, software and staff training you will need. Don't be snowed by terminology, and don't let yourself be sold a bill of goods that you might not need. Find out what the total set-up and on going support costs will be. Keep in mind that payers may change their requirements for claim data, which means your electronic claims submission system will have to be updated to accommodate those changes. You'll want to choose a vendor that inspires confidence concerning on-going support. If you're adding EDI capability to an existing system, be sure to ask your vendor if its EDI module is flexible enough to accommodate your current software. Also, ask if your claims can be downloaded from your practice management system to avoid the need for rekeying by your staff. You'll also want to be sure the vendor uses recognized standard formats for claim submission and claim payment advice. Doing so will help ensure that the EDI module Ms. Morgess Is In corporate communications, National Electronic Information Corp., 500 Plaza Dr., Secaucus, N.J. 07094. Address reprint requests to NEIC, Corporate
Communications.
you invest in will meet your
need for administrative simplification, not create a greater burden for your office
personnel.
Most importantly, you should make sure that your vendor is connected to an EDI network with the breadth of payers necessary to make EDI worthwhile for you. For example, you should ask vendors to provide a list of dental payers with which they are connected. To simplify your communications, you should choose a vendor whose network is connected to the most payers, including commercial carriers, Medicaid and the like; this will allow you to submit the majority of your claims to a single source. The network also should accommodate claims to payers that are not yet EDI-capable by offering a print-and-mail service. A fullservice, dental, all-payer network is your best choice. You should also ask the vendor if its network accepts claims in one standard format, with the ability to meet all payer-reporting requirements. The network your vendor is connected to must be able to translate your claim data into the format acceptable to each individual payer and should adhere to industry claim standards such as those of the American National Standards Institute. Finally, keep in mind that the software and hardware you will use to simplify your administrative operations may seem high-priced, but the investment will pay for itself when you consider the time and effort your staff will save through automation. To get the most out of your investment, you will want to train your staff to use the equipment efficiently. This additional investment will ensure that your office's conversion to EDI will run as smoothly as possible. When making your decision about which EDI package
to purchase, remember that
staff likely will be using the system much more than you, so be sure to ask for their input after you have narrowed down the options. your
CONCLUSION
If you are looking to reduce the time and expense associated with managing the administrative aspects of your practice, EDI and electronic claims submission could be right for you. Connection to an EDI network with links to a variety of dental payers can save your staff the time and trouble it takes to format and sort claims. With a large number of major companies accepting claims electronically-including Delta Dental, Guardian, Aetna, CIGNA, MetLife, Prudential, The Travelers, John Hancock and Provident-you may even be able to send all of your claims electronically and eliminate the expense of the paper process. What's more, you'll likely experience a decrease in the time it takes for your claims to be processed, so you'll receive remittance faster, thereby improving your cash flow and accounts receivable. With a little investigation into the right software and hardware vendor to support your office's particular needs and with a connection to a dental all-payer EDI network, you'll soon be on your way to a more productive and efficient office. 1. Kaslow D. More practices are filing electronic claims. Dent Econ 1994;84(11):32-43. 2. Morgese AL, ed. EDI primer for the dental office: Where do I begin? Phoenix: The National Dental EDI Council; 1995. 3. Combs R. Computers playing major roles in dental offices. Dent Econ 1995;85(4):101-6.
JADA, Vol. 126, December 1995 1673