Medical billing & Claim management software

Posted on 2007-11-28
Last Modified: 2013-11-15
Hello Experts,

My company is in the process of developing a medical billing/Claim software.
Any ideas on how and where to start; Please no advise of buying thrid party software.
Do we have a database of all the health insurance providers and how does the communiation for claims happens with insurance companies. Is it same for all insurances. Any text, help from software development perpective is appreicated.

Question by:neokeet
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Expert Comment

ID: 20370152

I have been in this business for some years and have worked for the biggest Practice Management vendor in the country.   If you are doing this for 1 practice... don't.  It doesn't matter how much they think they are going to save by doing it inhouse, they will lose money the first time they have to recode the rules to meet HIPAA and Insurance Carrier standards.  Right now, developing a practice managemet system, (one that actually works) requires a ton of overhead post release... just to keep up with Insurance Carrier Changes.
Some items:

 -  1st -  With regards to Insurance Carriers and transmitting claims. - there is NO standard.  Each insurance carrier has its own set of requirements that must be met.  So for each claim, you will have to qualify the, Carrier Group, Specific Carrier, and claim type. (ie, if its an office visit, you can bill one way, if its a procedure you have to bill this way...etc.)  Once you do that, then you can determine which information is transmitted and in which order it is transmitted.  Again, each insurance carrier wants something different.  What i would suggest is to figure out who the big players(insurance carriers) are in your area and start with them.   You will have to call each of them and work with their staff to develop the specifics.

 - 2nd - Hl7.  You are going ot have to provide Hl7 support for interoperability.  hl7 as a standard doesn't work becuase nobody likes to stick to it...including insurance companies.  

 - 3rd - There isn't a "database" of insurance carriers as they are constantly changing.  I know that we have to spend hours with clients trying to update insurance information on regular basis.  Again, Insurance Carriers, in general, only have one common trait.... their desire to NOT PAY.  They will find all kinds of fun ways to "delay" and hopefully,  deny claims for myraid of reasons that have nothing to do with the patient.  For instance, constantly changing the required information in Box34a so that claims are more often rejected than not.  Or, they change their name and billing address.
Also, each Carrier has its own set of "allowances" with each particular client that change often and the system has to be able to handle that.

 - 4th - HIPAA - Got to make sure your product is HIPAA Compliant.

 - 5th - Each state is going ot have its own rules and regulations about patient data aswell, you will need to check with your state to figure out what applies to you.

 - 6th - The Government will be stepping in after this next election, its all a question of what they will do about Healthcare in this country.  It could mean that your product is obsolete before you finish.  (don't overlook this one, there has been talk for the past 5 years from all parties to get this fixed and  if we are moved to a socialized system, it will more than likely make Practice Management programs obsolete as billing will all be handled by a central agency.)

Here are some links that maybe help if you still want to move forward... which I HIGHLY recommend against unless you plan on making a living out of selling this software.(which still may not be a good idea as there are thousands of Software vendors out there who have a huge head start on ya)  -  A list of competeing Practice Management Vendors..... it isn't small.

Bottom line, PracticeManagement programs require CONSTANT attention inorder to stay funcitonal throughout the year and we can think the lousy Insurance Carriers for that.... or our governement depending on which side of the fence you sit.

 - Brugh

Expert Comment

ID: 20370160

Author Comment

ID: 20370432
Hello Brugh,
Thanks for the information. Yes we are tyring to develop an EMR module. So do you suggest going into partnership with some third party vendor for implementing/integrating billing and claim management section.

You provided some great insight in the field. Thanks again.

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Accepted Solution

Brugh earned 500 total points
ID: 20378591
So, there are two schools of thought on this and each has plenty of resources to back it up
 - 1 Best of Breed - As a developer you are probably familiar with these terms.  Best of breed means that the practice purchases all the pieces separately in order to acheive maxium effeciancy and functionality from their IT Infrastructure.  
 - 2 All in one - 1 vendor, 1 applicatoin.  They do it all, Scheduling, Billing, Patient records. - some reading on this.

There really isn't a trend either way as the bigger software players in the maket all have multiple offerings and just use hl7 interfacing to make the products appear seamless.

The advantages vary depending on need.  A smaller practice with limited funds would most likely try to find an all-in-one as having the best software isn't as important as ease of ownership and price.  Howver, a bigger practice may want to find the best software they can that fits their needs.  In most cases, they will find that Company A's EMR is more suited while company B's Billing software is favorable.   If the two vendors can show that their products play nice together, then the sale can move forward, if not, the practice will have to decide which one to switch out.  (normally the PM loses that battle as EMR's tend to "grab" clients with their fancy pictures and all. hehe)

Another consideration is that of the Medical Billing Companies. (MSOs).  There is a trend for smaller practices to outsource their billing.   The practice will hire a Billing company to do their billing. The Billing company will then provide the Practice Management Software to the client at little or no cost to the client. Normally they offer the products through ASP, SAAS or some other Thin Client model.  The Practice will use the system for Scheduling and reporting and the Billing Copmany will utilize the A/R functions.  It's a win-win for both parties.  If your EMR can handle being deployed across WANs then this is a great way to get your product out into the market.

The only other major component to developing the EMR has to do with how you want to deploy it.  As i mentioned earlier, SAAS and ASP are "hot topics" right now as most owners don't want to spend money on IT costs and they are lead to believe the SAAS will save them money and headaches.  While they may save some upfront money, they will still have to provide a means for each user to access the data, just like in a straight client-server relationship with the major difference being that the server is hosted elsewhere and that the client is COMPLETELY dependent on their internet connection for their ESSENTIAL busiess software. So, when writing the EMR, you are going to need to decide, do we want to deploy via SAAS or true Client-server type relationships. (be it thick client or thin client w/ thick network)?

If you can do em all, even more power to ya. :)

So With that said, if I were developing an EMR (which i have done), i would:
 - Design a best of breed EMR that integrates using Hl7 standards.  
 - Work with specific Practice Management vendors in your area, (the bigger players) to nail down the Interface between the products. This will allow you to walk into most practices and sell them an EMR sytem that Integrates with their existing Practice Management System.  (which means you can get them to purchase your product for a lot less upfront cost since they don't have to replace their current infrastruce)
 - Find some Medical Billing MSOs and work with them to integrate your EMR product into their Client's offices.
 - If the product takes off, then look into designing or purchasing a Practice Management Piece to compliment your Software, however, i would always keep the Hl7 Interface option open as "all in ones" tend to limit themselves very quickly with inferior pieces.

again, hth

 - Brugh


Author Comment

ID: 20378827
Hello Brugh,
Thank you so very much for your insight. You answered more than I asked for.


Author Closing Comment

ID: 31411553
Very good explanation went above and beyond to explain the business aspect

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