Humana Calls the Doctor

Healtheon/WebMD announced Wednesday that it will bring one of the U.S.'s largest managed health care companies online in a deal that promises to offer physicians instant electronic payment of medical claims.

The agreement with Louisville, Ky.-based Humana calls for Healtheon/WebMD to provide online claims processing, referrals and other services to Humana's 330,000 doctors via the WebMD Web site. Humana's six million patients will be able to go to WebMD to enroll in health plans, choose doctors, obtain medical records and review bills. Atlanta-based Healtheon/WebMD also will create individual Web sites for Humana doctors. The value of the deal was not disclosed. Humana will pay for one-year subscriptions to Healtheon/WebMD's services for its 330,000 physicians at a cost of $9.9 million.

Healtheon/WebMD's planned "auto-adjudication" of medical claims may appeal most to cash-strapped doctors, who often must wait weeks or months before getting paid by insurers for medical services. Family doctors in particular find themselves increasingly squeezed by high overhead costs generated by large practices.

However, by year's end, Humana doctors will be able to submit a medical claim after seeing a patient and have the claim approved and payment deposited in bank accounts within minutes, according to Healtheon/WebMD chairman Mike Long.

"The last mile to the physician is probably through his pocketbook," Long said Wednesday. "Auto-adjudication is not currently deployed on any scale anywhere in the industry."

Healtheon/WebMD, however, must first integrate its Web-based technology with Humana's bill processing system. That integration will take up to a year. Other services for Humana physicians and patients will roll out within the next few months, Long said.

The deal moves Humana's online operations to the WebMD site, tying the company's Internet strategy to Healtheon/WebMD. Humana executives could not be reached for comment.

In a statement, Humana senior VP Bruce Goodman said "We will use Healtheon/WebMD's substantial marketing, branding and media assets to drive adoption and extend the reach of the Humana brand in the online world."

As part of the agreement, the two companies will create a joint marketing program that can be deployed through Healtheon/WebMD's alliances with partners like News Corp. and CNN.

"I think Humana is a company that is repositioning its business model," Long said. "They're making a major future bet by essentially moving most of their services to the Internet."

The Humana agreement comes on the heels of an agreement announced Monday that makes pharmacy giant CVS the exclusive online pharmacy for Healtheon/WebMD.

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