Insurer Payment Lags to Physician Practices: An Opportunity to Finance Electronic Medical Record Adoption

Objectives: Physician payments from public and private payers are still largely paper-based, so significant payment lags are prevalent across all reimbursement systems. Electronic Medical Record use has the potential to reduce payment lag and improve health system performance. Methods: We use a claims data set of 100,000 covered lives from a national employer to examine mean accounts receivable (AR) payment times by provider type, physician specialty, and state. Eleven physician specialty disciplines are included in the analysis of mean AR and days of payment lag. We also include a coefficient of variation (CV) of physician claims processed by place of delivery and correlation (R2: r-squared) values between mean days of AR and mean CV. Results: We find significant variation in mean AR days by provider type and physician specialty. There is also a great deal of variation in payment processing lags by state. We find a range of correlations between mean AR days and mean CV by provider type of service (R2=0.6288), physician specialties (R2=0.662), and the state of service (R2=0.1247). Conclusions: Low EMR adoption rates impact how all payer types pay physicians. The elimination of paper-based claims (and their associated lag times) could be achieved through the adoption of basic practice management systems bundled with EMRs. There is sufficient health savings from shortening the AR lag time period for insurer payment to providers to finance EMR adoption even with without federal HITECH incentives to practices.