Health Insurance claims cycle is one of the most intricate processes one could ever imagine. Navigating through various stages of a health insurance claims process can be intimidating for the customers and insurance associates alike. This can be attributed to numerous inefficiencies that are an integral part of the cycle, constant changes in the regulatory framework, an ill-trained workforce, and many more reasons. Before delving into the details let us first understand the stages of a Health Insurance claims cycle.
As shown in the above infographic, the entire Health Insurance claims process can be divided into three stages
Stage 1: This stage comprises the journey from a claimant registering a request with the insurance company to the generation of the claim in the insurance company’s database. One of the key sub-processes of this stage is coding. Coding is the way of standardizing the documentation of various diagnoses, medical procedures, and medical services offered to the patient. Insurance codes are essential to identify the eligibility for authorization requests and play a prominent in deciding how much is to be paid for the service provider.
Stage 2: Once the claim is generated in the database, the processing of claims is initiated. The key sub-process here is the Adjudication of the claims. Adjudication is the process where a decision is made whether to pay or deny the insurance claims. Initially, the claims are routed through an Auto-Adjudication route which eliminates the need for manual intervention. However, if a claim is rejected in Auto-Adjudication then the Manual Adjudication process kicks in. In Manual Adjudication, the claim is routed through a business partner such as an outside vendor, MCR (Medical clinical review team), Eligibility team, and NDM (Network data management team) to get a detailed view of the claim. Upon validating all the Explanation of Benefits (EOB) and Explanation of Payments (EOP) the payment is made to the claimant.
Stage 3: This stage involves post-payment analysis, managing Accounts Receivables calls, a compilation of the claims, and maintenance of records.
Challenges in Health Insurance Claims Process
Though digitization has improved the access to medical information and eased the storage and retrieval of vital patient information, the Health Insurance claims cycle is still plagued by numerous challenges.
- Intricate Policies and Procedures – The entire process of medical billing and coding is highly complex. This complexity results in claim errors. These errors directly impact the quality of service, claim rejection, revenue, and penalties if any.
- Frequent changes to SOP’s – Health Insurance is highly regulated in many countries across the globe. Any change in the regulatory framework mandates a change in the Standard Operating Procedures (SOP’s) of the Health Insurance companies. Hasty modification and improper implementation of SOP’s result in process errors and affect the efficiency of the entire claims process.
- Uniformed Patients – Many patients end up opting for services that are not a part of their health insurance subscription and face difficulty while claiming their insurance. This is partly due to their negligence and partly due to the negligence of the health insurance providers. Countless terms and conditions, policy changes, and procedures make it a daunting task for patients to stay up to date with policy norms.
- Payment Errors – This includes untimely payments resulting in penalties, payments struck due to incomplete information, multiple claims by the claimants, and improper account information.
- Quality Errors – High production targets force the workers to process claims with faulty information. Improper management of the workload on the claims associates and unrealistic targets increase the stress on employees resulting in quality errors.
- Resource Crunch – Attrition rate is very high in the Health Insurance industry in general and claims process in particular. This is due to the high production targets and improper training. Resources need hand-holding during the initial phases and planned training and revision sessions must be held to boost the confidence of the resources.
- Software Limitation – Faulty software integration and legacy systems cause difficulties in processing the claims even with the right information.
- Claim Rejection – All the above challenges add to the woes of the insurance companies and the claimants in the form of claim rejections.
Improving the Health Insurance Claims Process Experience
There are certain things that Health Insurance companies can do to smoothen the claims process. The below infographic highlights a few points that can help health insurance companies tackle the inefficiencies in their processes.
- Patient Education – Patients must be kept informed about their policies, and full disclosure of all the included and excluded services must be made. Any changes in the terms of service must be immediately communicated via all the available communication channels. This ensures that there is no ambiguity in the minds of customers related to the policy benefits and builds trust in the minds of the customers.
- Maintaining Accurate Patient Data – Maintaining centralized data repositories and regular updates of the databases and systems is a must to simplify the claims process. This helps in automating the storage and retrieval of vital information. Excessive dependence on manual activity and legacy systems affects the accuracy of patient information.
- Training and retaining talent – As mentioned earlier regular training and refresher sessions should be mandated to keep the workforce up to date with all the relevant information. The workload must be evenly distributed and targets must be set depending on the availability and skill set of the workforce to avoid burnout and high attrition.
- Eliminating Quality Errors – Quality errors must be reviewed and corrective and preventive actions must be planned and executed to prevent recurrence of those errors. SOPs must be regularly revised and the workforce must be trained on the new SOPs as early as possible.
- Root Cause Analysis – In case of repeated errors health insurance providers must perform a root cause analysis to identify the deep-rooted issues. A lean approach should be adopted and all the erroneous and non-value added activities must be eliminated.
How Digital Solutions can help
The below infographic shares a few points on how digitization can help health insurance companies to improve their processes.
- Improved access to Medical Records – Digitization empowers the patients and health insurance provides alike to store and retrieve accurate information. With all the information required just a click away, the speed of decision-making is improved
- Reduced Redundancy – Digitization helps in the identification and elimination of duplicity of the efforts, improves vendor coordination, and automates claim generation.
- Shorter Cycle Times – Digitization helps to reduce the time taken per claim from initiation to final settlement. This can be achieved by automation of key processes using macros and Robotic Process Automation (RPA).
- Automated Calculations – Key calculations related to claim eligibility, settlements, and allowable amounts can be automated with the help of digitization. Coding can be made simpler and identification of discrepancies becomes easier.
- Reduced Paperwork – By going digital countless man-hours consumed in complex paperwork can be eliminated. It enhances the user experience and reduces the errors in the claims process.
How to start and not stop at the end of this article piece?
I would recommend starting simply by just taking this approach, which has negligible risk, simple and yet an amazingly effective positive step towards our goal of a proactive strategy
A) Take pen-paper or manual method (start now)
Start implementing the recommended strategy using your existing technology resources for a known and low-risk segment of customers within your business to find out what works and what doesn’t. Indeed, this causes efforts, but this will pave the way for better clarity around unknown risks.
B) Take help from technology
Work towards making it unattended, assisted by using Super-fast digital solution such that it works autonomously without losing its efficacy by engaging a solid, affordable Business and Technology solution partner.
If you are a CEO/COO/CIO/Managing Director/General Manager who is spending more time in reactive/preventive mode than future-facing, please reach out for an exploratory conversation.
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Amit Bhagat (Director – Business Strategy)
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