by Patrick Appel

A reader writes:

The reader in this post mentioned the codes. Until about a year ago I worked for a non-profit children's hospital.  I was on a team implementing electronic medical records and other software.  One of our tasks was to find a way to automate the insurance referrals/authorizations process, which was essentially impossible given the inefficiencies inherent in the system.  Here's the whole gory process.

The hospital employed a group of about 30 people whose job it was to get authorizations from insurance companies before planned outpatient visits & procedures.  (There was a different group who worked on the inpatient side.)  Here's a day in the life of one of those employees:

1. Pull up a list of upcoming appointments, along with the code for the expected procedure.
2. Find Patient A's record.
3. Locate the phone number for their insurance company (this is why they photo copy your insurance card - it's on there somewhere).
4. Call the insurance company and wander through their phone tree.
5. Sit on hold.
6. When the person on the other line answers, identify the patient and recite to them the code of the procedure.
7. Wait until the insurance company representative decides if they will pay.
8. If they agree to pay, the insurance company representative recites a different code back indicating their approval.
9. Write down the insurance company's code and hang up.
10. There's a system that actually records these phone calls so the hospital has additional proof that the insurance company agreed to pay.  The employee now writes down yet another code from the voice recording system - the "receipt" for that call, essentially.
11. Input all of this into the hospital's record keeping system.

Lather, rinse, repeat.

Of course we know that just because the insurance company says they will pay, it doesn't mean they really will.  There's a whole different team of people who have to pick it up on the back end in that case.

A reasonable person would think that this approval process is simple for the hospital and the insurance company to automate--there's no need to have two people sitting on the phone all day reading numbers to each other when computers can send numbers back and forth all day.  The only problem is that the hospital would have to automate it with every insurance company, and the insurance companies don't have much of an incentive to bother with it.

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