There’s a long article from CNET about the problems that WebMD is facing:

While the true scope of WebMD’s “lost” or HIPAA non-compliant claims is hard to ascertain from this article, it appears that payers, providers and the AMA are taking the opportunity to shake down the company for more “hand” in negotiating rates on clearinghouse services:

According to Eric G. Brown, vice president and health care analyst at Forrester Research, “WebMD’s problems with customers seem to stem more from attitude–the arrogance of a dominant player–than from technology failures. “They’re perceived as the Microsoft of the health care sector.”

Kimberly Grose, vice president of network services and operations for Harvard Pilgrim, based in Wellesley, Mass. adds that “Thirty-five cents may not seem like much, but it adds up quickly for Harvard Pilgrim because it handles 19 million transactions annually.”

All of this portends bad news for WebMD’s Envoy business:

Forty-eight percent of the plans already exchange claims directly with at least some providers.

“While large providers and payers can bypass middlemen, Envoy is becoming a clearinghouse ‘for leftover claims’ from small providers that don’t want to be bothered by the effort of setting up direct connectivity with hundreds of payers, said Sean Wieland, a research analyst with W.R. Hambrecht.”

At least WebMD has its online content business to drive profitability… right?