Doctors Want WebMD Rx

Poor service by WebMD Corp.'s medical claims processing division has cost doctors "hundreds of thousands of dollars" in delayed and denied claims from health plans and other payers, according to the American Medical Association and seven other physician organizations.

In a January 8 letter to WebMD chief executive Roger Holstein, the physician organizations said they had received numerous complaints from doctors about lost claims, incomplete transmissions and poor connections between WebMD's systems and those of insurers and doctors. The letter also said the doctors felt that WEbMD's response was to blame the health plans or the physicians' offices for the problem.

WebMD spokesman Jennifer Meyer acknowledged there have been some problems and said they were being addressed. A meeting is being scheduled between the AMA and WebMD, she added.

Meyer said the difficulties stemmed from the need to comply with portions of new federal regulations called the Health Insurance and Portability Accountability Act which went into effect last October. That portion requires that nine types of medical transactions must be sent electronically on standardized forms between different players in the health care system.

The letter said the problems started around then.

AMA spokesman Robert Mills couldn't say how many complaints were received or if anyone had switched providers because of the service issue at WebMD. He said it was difficult for doctors to find new providers because WebMD dominates the market.

For the third quarter ended September 30, WebMD medical claims processing division reported revenues of $132 million. The company's total revenues were $250.6 million.

According to Forrester Research, the second largest medical claims processing firm is ProxyMed Inc. Its revenues for the third quarter totaled $18.1 million.

The other organizations that signed the letter were: American Academy of Family Physicians, American College of Physicians, Arkansas Medical Society, Colorado Medical Society, Iowa Medical Society, Kentucky Medical Association and Texas Medical Association.

By Theresa Agovino