Medical claims processing is the foundation for any health insurance provider since it is the point when the insurance business begins to process medical data, preparing to deliver on its agreement with and commitment to customers by reviewing, approving and paying out on a claim. Businesses and employees invest in the insurance process, and the medical claims process allows them to collect their rightful compensation when the time comes.
Since Americans spend $8,000 annually per capita on healthcare, and much of that money goes into health insurance, it is important for insurance companies to find solutions to manage the volume. The fact is that, among all the areas where technology takes the lead in healthcare, claims processing remains dismally behind, still manual, prone to error and inefficient.
An increasing number of companies are searching for solutions to reduce the inaccuracy and inefficiency of manually processing claims, which entails arduous research and reviews and inputting data by hand. Businesses are exploring medical claims processing automation resources to measurably decrease loss adjustment expense (LAE) and offer customers a streamlined experience that ensures satisfaction. (2)
What Is Medical Claims Processing Automation?
Medical claims processing automation falls into the arena of business process automation (BPA). With BPA, businesses rely on technology to automate regimented, repetitive and often redundant daily processing tasks. The automated process speeds up the way work gets done by distributing data to the right person in the processing chain, relying on user-defined actions and rules.
Health insurance organizations use BPA to streamline processes such as those related to medical claims, accounts payable, contract management and employee onboarding. Top companies specializing in medical BPA use specialized methods to capture of information found on paper claim files and digital medical claims. This step alone helps companies process claim forms more accurately and cost-effectively. Ideally, automated systems support all standard medical claim forms, such as HCFA/CMS-1500, along with any relevant attachments. (3) BPAs use precise data extraction technology to ensure peak accuracy and accountability in reviewing a customer’s billing, accounting and related healthcare data. Paired with automatic validation rules, businesses can ensure that their customers’ billing, accounting and healthcare claims management applications receive correct data, with a minimum of human involvement. (4)
Learn the Basic Structure and Progression of the Medical Claims Process
To learn why investing in the automated medical claims process has become so attractive, it helps to understand the complexities of the manual claims process in the healthcare industry.
1. A Healthcare Provider Treats a Patient
Each time a healthcare provider sees and treats a patient for anything from an annual visit to major surgery, the medical billing insurance claims process begins. After each patient visit, the healthcare provider sends a bill to the designated payer, which is most often a private health insurance company engaged by the patient’s employer, or a public insurance provider, such as Medicare or Medicaid. The payer then relies on its team of medical coding and billing employees to evaluate the claim, based on various factors to determine reimbursement. (5)
2. The Policyholder Pays Their Share
The policyholder, or the patient, becomes financially responsible for the insurance deductible after each visit since their employer has paid their share. The deductible is amount that the policyholder agrees to pay before their insurance kicks in and starts. By giving the provider their insurance information, the transaction between the healthcare provider and policyholder is complete.
3. Medical Billers and Coders Do Their Work
The healthcare provider keeps a record of all the healthcare services and costs they have provided to the policyholder. The record is also known as the bill, or the medical claim. (6) Medical coders and billers begin the manual claims process, creating the official medical record and sending out claims to the policyholder’s insurance company.
Who Are Medical Claims Processors and What Do They Do?
It is important to remember the people who have performed these daily tasks for several decades to provide an idea of what automation will do to streamline processes. Today’s medical claims processors have a strong working knowledge of medical billing and coding. They know the current procedural terminology and classification of injuries and diseases. Medical claims professionals ensure the accurate and timely adjudication of healthcare claims. using a software program, such as Windows. Medical claim processors look at several factors when making a determining, such as co-pays, co-insurance maximums and provider reimbursements. The final and most important step for the medical claims processor is ensuring the resolution of each claim, which may include:
- Review and accept each service and agree to pay the bill in full.
- Deny the claim because of a billing error, such as a piece of incorrect patient information. In such cases, the medical claim staffer returns the bill to the healthcare provider to make appropriate corrections.
- Reject the claim completely in cases where services do not fall under coverage within the policyholder’s health plan.The policyholder must then pay for the services out-of-pocket.
- Identify markers for potentially fraudulent medical claims, which most often are perpetrated by a small number of dishonest healthcare providers, according to the National Health Care Anti-Fraud Association (NHCAFA). (7)
What Are the Benefits of Investing in Medical Claims Processing Automation?
By reviewing the tasks of medical claims professionals, it is clear that the claims process is multi-faceted and, in some cases, complex. Medical claims processing automation can revolutionize the way everyone receives the appropriate services and payment for such services in full and on time.
Take a look at some additional benefits to investing in medical claims processing automation:
- Reduces overall costs and increases efficiencies at every point in the process and for all parties.
- Helps healthcare organizations achieve goals in improving patient service excellence and cost-efficiencies.
- Decreases human involvement in mundane tasks, such as the monitoring of services.
- Executes tasks faster and more effectively through technological solutions.
- Allows the organization to focus on core tasks that require specialized and clinical experience.
- Provides a clear and detailed claim entry process, allowing for greater control over the process and improved visibility.
- Reduces need for reconciliation intervention by stakeholders.
- Diminishes manual tasks, paper-based transactions, hard copy filing and telephone interactions.
How Can Medical Claims Processing Automation Make a Business More Productive and Profitable?
Most business leaders are looking for ways to streamline processes for improved productivity and profitability. Many are finding solutions through various BPA options, with medical claims processing increasingly at the forefront.
Here are a few ways health field-related automated processing boosts productivity and profitability.
Reduces Spending Through Reduced Human Resource Costs
Since health insurance sits high at the top of the list for insurance processing costs, everyone is looking for ways to tighten their budgets. While businesses value employees, one way to minimize expenditures is to reduce staff. Before BPA took center stage, such a consideration was not possible. However, through improved automated medical claims processing, businesses can work toward lowering headcount while still strengthening their market position and maintaining, or even improving, cycle times.
Consider the findings of an America’s Health Insurance Plans (AHIP) study in which it was found that electronic automation was nearly 50% less expensive than the cost of processing paper claims. (8) Enhanced processes and accelerated time cycles—automated processing times reduced to a week or two from the 30-60 days it takes to process manually—can ensure proper payouts, clean the slate and move forward in record time.
Increases Accuracy and Reliability
Key factors in claims processing are accuracy and reliability, and automation ensures that a business performs all the necessary tasks in the proper sequence and on time. The simple fact that the automated process carries on, regardless, compared to times when a key employee in manual processing is out for vacation or illness. Further, workers can become stressed, tired and burned out, which often results in a decrease in reliability. Even if businesses only reduce staffing while introducing automation, it provides relief for workers, giving them a chance to boost work-life balance and concentrate on tasks better.
Raises Customer Satisfaction Levels
The combination of speed, accuracy and reliability associated with automated claims processing benefits customers, which is always a boon. Any time a business can provide peak customer service, clients remain satisfied since it allows them to stay on course and on budget. With satisfied customers, businesses can enjoy increased loyalty and the benefit of good word of mouth marketing.
Allows for a Reduced Need for Storage
Businesses may find that they can open up new space in the office, thanks to the reduced need for as many paper files. Since much of the data from automated processing stays in the cloud or in an electronic filing system, the traditional file archiving system is moving closer to large-scale reduction and eventual obsolescence in many industries.
Is Medical Claims Processing Automation for Every Business?
As the healthcare industry continues to grow exponentially, with no signs of slowing, it becomes increasingly important for businesses to streamline as many complex processes as possible. Medical claims is historically complex, paper-heavy, time-consuming and expensive, making it a prime process for automation.