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Donald H. Alexander

Physicians and practices have long battled with insurers about the correct reimbursement for services rendered.

Through a class action suit filed several years ago against major national for-profit health insurers, receiving the appropriate reimbursement is getting easier to ensure. The Physicians Advocacy Institute Inc. (PAI) has developed a national Health Claims Data Warehouse, MDEdge, that will finally allow physicians to review what has actually happened to each claim they have submitted to a health insurer for payment.

MDEdge is a business intelligence tool developed by the PAI founding member state medical associations. The Tennessee Medical Association (TMA) is a founding member of PAI, and Donald H. Alexander, TMA’s chief executive officer, serves on the PAI Board of Directors as its secretary. He has been integrally involved in the development of the Health Claims Data Warehouse so that Tennessee physicians can benefit from its analysis.

“For too long,” Alexander said, “insurers have controlled all of the claims information and physicians have been in the dark about whether they are even receiving the correct reimbursement. MDEdge finally allows physicians to be in control of their claims data analysis and review whether they have been paid accurately.”

In 2006, the Physicians Advocacy Institute Inc. was established from funds from the Multi-District Litigation (MDL) class action settlements against major national for-profit health insurers. The class action lawsuit known as Managed Care Litigation (MDL No. 1334) was originally filed in 2000 and was a combination of several cases filed around the country on behalf of physicians against for-profit health insurance companies. Among other complaints, the basic allegation was that these health insurance companies systematically denied, delayed and/or reduced payment to physicians who had delivered services to covered patients.

“While the settlements have resulted in retrospective relief to physicians, the real value of the settlements for physicians was the prospective relief provided,” said Mary Jo Malone, executive vice president and chief executive officer for PAI. “The settlements offered protection to physicians (class members) going forward, including a compliance dispute procedure and a billing dispute procedure, which allowed physicians to have a process for resolving disputes with the defendant health insurers over such issues as downcoding, bundling, refusal to recognize modifiers, prompt payment and a number of other protections.”

As plaintiffs, state and county medical associations wanted to continue the momentum to restore fairness in managed care business practices gained through the lawsuits and resulting settlements, so they formed the Physicians Advocacy Institute. The Tennessee Medical Association was an original plaintiff in the class action litigation, which explains why TMA has been so integrally involved in PAI and the development of the Claims Data Warehouse.



The PAI is a not-for-profit 501(c)(6) advocacy organization with a two-fold mission of monitoring compliance with the settlements by these health insurers and developing projects and tools for the future that guarantee the viability of physicians’ medical practices and the ability of physicians to deliver quality patient care. The PAI believes it is imperative that health insurers continue to be held accountable to the terms of the settlements to which they agreed and that these same health insurers keep the settlement provisions in effect after the settlements end.

“Specifically, the final settlement requires that settlement funds be used to address issues relating to abuses of managed care, through assuring compliance and identifying and addressing future health plan practices that burden the ability of class members to be paid fairly for their services,” said Malone.

The priority project for the PAI became the development and implementation of the Health Claims Data Warehouse, MDEdge. It was specifically designed to help physicians, their practice management teams and their advocacy organizations (state, county and national medical specialty societies) evaluate what has actually happened to each claim a practice submits for payment to a health insurer.

“MDEdge helps physicians and medical practices answer questions like has the claim been paid correctly or has the health insurer applied inappropriate edits not agreed to in the physician’s contract,” said Malone. “It is estimated that physicians lose significant amounts of revenue each year through inappropriate manipulations of CPT® and modifiers or the use of non-applicable fee schedules by health insurers.”

In 2011, PAI entered into a collaborative agreement with National Healthcare Exchange Services to enhance MDEdge. Physicians will be able to evaluate their payment accuracy by using the Exchange Services product eobResolve. This product allows the automatic generation of appeal letters so physicians can recover legitimate payments. Physicians will have access to MDEdge benchmarks through the Exchange and will be able to subscribe and participate by purchasing the varying levels of claims analysis offered through the Exchange suite of products.

“PAI will focus on using MDEdge to provide assistance to state, county and national medical specialty societies strictly for advocacy purposes,” said Malone. “MDEdge enables medical societies to compare insurers and their claims payment metrics across a broad range of criteria related to claims submittals and payments (remittances). These medical societies may then use this information for direct dialogue with insurers about the findings and how insurers can improve their performance.”

“PAI believes use of the MDEdge technology will finally put physicians in a position of knowledge and strength regarding their claims payments and payment trends for all physicians across the country,” said Alexander. “And we especially want Tennessee physicians to use and benefit from this great business intelligence tool. The Health Claims Data Warehouse will finally provide physicians with the capability to understand what has happened to their claims once submitted to the insurer. Other companies offer claims analysis capabilities, but only MDEdge will allow physicians to compare themselves to others in the state and nation across a wide range of metrics.”

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