Health Claims Processing Gets Automation Boost
Insurance Networking News, October 1, 2008
"Processing health insurance claims has historically been an intensive, rules-based endeavor," says David Rubenzahl, president and company counsel for The Maxon Co., a third-party administrator located in Irvington, N.Y. "As recently as 20 years ago, decisions regarding claims were entirely in the hands of claims examiners, who made decisions based upon their own knowledge and industry standard manuals. As computers became more sophisticated, more and more of the rules that apply to health insurance claims were incorporated into the processing applications, freeing the examiner to concentrate primarily on data input and the ultimate decision of pay or deny."
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UnitedHealthcare, for instance, recognized that its adjudication process often lasted weeks, and launched a real-time claims processing site in January 2007 to enable physician office staff to adjudicate many doctors' office visit claims within seconds. Office staff submitting claims through the site can receive a fully adjudicated claim in seconds, reducing administrative burden and allowing patients to pay for services before even leaving the doctor's office.
The 70-million-member system, based in Minneapolis, now processes about 100,000 claims this way-a small but growing fraction of its total claims volume of 10 million a year, says Daryl Richard, VP of communications for UnitedHealthcare. While the new system is currently limited to physician's office visits (versus hospital-based procedures, for example) Richard sees this as a model for future claims processing across the company. The new system "literally enabled us to take a workflow that once could take up to 60 days and reduce that to a mater of seconds-often less than 10 seconds," he says.
For other payers, establishing partnerships with third-party claims processing specialty firms not only has helped to accelerate movement into more streamlined electronic claims processing, but also enabled the insurers to focus on core business concerns. At Gateway Health Plan, all claims are automatically routed to a third-party outsourcer (DST Health Solutions, which is headquartered in Birmingham, Ala.) that applies auto-adjudication against a rules engine. The result has been substantial improvements in turnaround of claims, which now number more than 3 million per year, according to Margaret Worek, VP of operations with Pittsburgh-based Gateway Health Plan. The insurer, which covers Medicare and Medicaid benefits, currently has 270,000 members in the Pennsylvania and Ohio region.
Margaret Worek
Prior to working with DST, Gateway had a labor-intensive Medicaid member enrollment process requiring 26 enrollment staff. DST worked with Gateway to redesign this process, and today, only eight clerks are needed. In addition, a modification to the system by DST helped reduce the membership load error rate to less than 1%. The percentage of claims that can pass through with no manual intervention has more than tripled. "When we signed with DST in 1997, we had no ability to auto-adjudicate our claims," Worek relates. "Now, we are at upwards of around 50% to 60% auto-adjudication." In addition, she notes, Gateway was able to reduce its administrative cost ratio below 8% compared to an industry average of 12% to 15%.
CHALLENGE
Health claims processing is part of a complex series of transactions that form the foundation of health insurance plans. Even in electronic format, there are still many checks and balances that are part of the process that leads to reimbursement. "Processing claims is but one piece of the puzzle," says David Rodriguez, director of product marketing for Concuity, Vernon Hills, Ill. "In order for a provider to receive accurate reimbursement, claims must be submitted in the correct format, with correct coding, containing all the appropriate diagnosis codes, clinical codes and numerous other components, not to mention any invoices or attachments that may be required by the payer. Many factors and departments are involved in assembling this critical piece of information."
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