The AMA (American Medical Association) recently stated that the rise in claims processing errors is causing unnecessary costs for the healthcare industry. Not all of the factors that influence claims payment are within your control, but you can take steps to lessen at least some of the frustration and unnecessary expense associated with claims delays and denials. Managing medical claims effectively is an extremely complex task. Each process has numerous steps and variations which makes it difficult for insurers to bring about consistent improvements in the claims operations. Medical Insurers also need to find a better way of reducing claims processing expenses as insurance payouts forms a substantial part of an insurer’s costs. But an insurance policy holder’s service needs and their right to receive an equitable and fair settlement must never be compromised for cost efficiencies. A policy holder’s loyalty and satisfaction is largely dependent on their claims experience and therefore, medical insurance companies must give high-quality experience more importance. The National Health Insurer Report Card by the American Medical Association has stated that a rise of 2% in claims processing errors caused an unnecessary administrative cost of $1.5 billion to the health system.
Factors that influence payment of claims are rarely within the control of the insurers but steps can be taken to mitigate frustrations and unwanted expenses which are usually associated with claims denials and delays. Insurance companies find it difficult to operate when the claims system involves complex, confusing steps and manual procedures which in turn results in inefficient, error-prone structure which drastically affects the company’s performance. The goal must be to prevent operational issues in claims from arising by observing and dynamically managing processor productivity and behaviors and pinpointing opportunities to improve compliance, accuracy and productivity. Health insurance companies can significantly increase their return on investment (ROI) by streamlining methods to operationalize claims processing and reduce the steps involved in claims processing. From improving your accuracy and productivity to preventing operational issues and errors, here is how you can make a success out of medical claims processing.
- Electronic Claims Submission
Electronic claims process in one-third the time required for paper claims. Electronic submissions also reduce errors, prevent unnecessary claim denials, increase cash flow, and decrease costs. HIPAA regulations make it mandatory for claim transmissions to be made electronically. Though this is ideal, as it saves a lot of paperwork and reduces errors, not all claims are submitted electronically. Electronic claims also takes 30% less time to process compared to paper claims. Electronically submitted claims usually take around one to two weeks to process. Once the claims are submitted, claim status along with remittance advice can be viewed online, prior authorization can be requested, provider profile can be maintained and member eligibility can be verified. Once all of this is done, claims are usually settled in two hours or less. Electronic submissions also prevent unnecessary claims denial, decreases costs and increases cash flow. A steep increase in cash flow, lack of unnecessary denials and reduction in cost are the other benefits of submitting your claims online.
- Checking for inaccurate / inadequate information
Delays in claim processing are usually due to errors. Rejections could happen for inaccurate insurance IDs, CPT codes, address, patient names, date of birth or ICD codes. Rejected claims will have to be corrected and resubmitted. On most occasions patient financial responsibility statement is not collected before the commencement of the treatment which results in patients forgetting their checkbook or walking out without paying. During registration at the front desk, copays must be collected. Before any additional charges are levied on the patient, it is advisable to review the patient’s account so that prior balances, if any, can be collected. If a deductible shows up in the insurance verification, a small deposit amount must be collected from the patient up front and balance amount must be settled after the treatment. If the patient has already met their deductible elsewhere, it is cheaper of the insurance company to mail refund checks rather than to follow up and write off uncollectable balances.
How do you submit clean claims, without any errors?
The answer is simple. If the information is difficult to read or does not look right, go back and refer the original documents like the patient insurance card. Make sure that each and every patient is questioned for any changes in their patient/insurance information. By keeping patient information up-to-date, errors can be identified and resolved quickly, helping you stay within the time limits required for submitting a claim.
- Collection of deductibles, co-payments and patient balances
On most occasions patient financial responsibility statement is not collected before the commencement of the treatment which results in patients forgetting their checkbook or walking out without paying. During registration at the front desk, make sure that copays are collected. Before any additional charges are levied on the patient, it is advisable to review the patient’s account so that prior balances, if any, can be collected. In case of a deductible, a small deposit can be collected from the patient and the balance amount can be settled after the treatment. If a deductible shows up in the insurance verification, a small deposit amount must be collected from the patient up front and balance amount must be settled after the treatment. If the patient has already met their deductible elsewhere, it is cheaper of the insurance company to mail refund checks rather than to follow up and write off uncollectable balances.
- Sending invoices on time
As soon as the explanation of benefits (EOB) is posted, the patient invoice must be sent. If a patient receives the invoice sooner, the more likely they will pay up. The patient invoices must clearly detail each and every aspect such as services performed, date of service, payments already collected, insurance reimbursement received and any other balance amount. The invoice must be easily comprehensible and must have a patient friendly feel and look. Ensure that the invoice is easy to understand and clear to read. Various insurers accept credit card payment over the internet or the telephone which accelerates payment and reduces costs and saves customers the time of writing and mailing a check.
- Use of Analytics to get an edge
There is high pressure on insurance companies to improve their performance and visibility and comply with all the regulations. With so many areas coming into the picture, analytics is the best option. You can use analytics to improve your performance and comply with regulations at the same time. Analytics and automation helps insurance companies to bring about improvements in the operations, bridge process gaps and improve services rendered to the members. In the current scenario, insurance companies are usually in the dark about the source of the errors and problems. Analytics will provide insurance companies the right capabilities to avoid common errors and handle complex claims due to which performance variability can be removed, operating costs can be reduced and the people with the best skills can be deployed in the right areas, all with the help of analytics.
Following these best practices in medical claims processing will help improve efficiency and streamline processes. The National Health insurer Report Card has stated that close to $17 Billion can be saved annually by eliminating claims errors. It would be unrealistic to think that claims processing errors will be completely eliminated in the future. But insurance companies can take a dedicated step towards reducing errors that can benefit a large number of people who avail medical insurance. Medical insurance companies can effectively overcome the challenges of processing speed, accuracy, volume, regulatory compliance and administrative costs by outsourcing to an expert medical insurance claims processing service provider and improve customer satisfaction levels.