As an increasing number of patients converges with decreasing reimbursement rates, pressure is rising in the healthcare industry, particularly in the area of claims management, according to Jacqueline LaPointe at RevCycleIntelligence. This is big news, because this is a market that is expected to reach $13.93 billion by 2023.
Meanwhile, claim denial rates from major insurers can be as high as 5 percent, notes Vera Gruessner, writing at the same site. Gruessner also points out that both payers and providers have roles to play in improving claims management -- including ensuring that claims management processes are focused on supporting the overall growth of the healthcare industry.
Here, we look at several key reasons that effective, efficient claims management is essential for healthcare practice and industry growth.
Patients Aren't Patient
Healthcare hasn't been immune to the shift in consumer expectations toward a more personalized approach. However, in their quest to provide a more consumer-friendly patient experience, healthcare providers have largely ignored claims management, and the coding, billing, and collections it entails.
Billing is often a source of frustration for patients, especially the lack of transparency involved in claims processing, and the inefficiency in how payments are handled. This frustration has consequences, as providers transition to a value-based model and patients -- especially those who adopt high deductible health plans -- increasingly comparison shop for healthcare, says Mary Richards, executive director at Partners for Better Care.
As patients increasingly shoulder a larger portion of healthcare expenditures, their own satisfaction with the billing process becomes a greater concern.
Yet providing the care that patients demand can go hand-in-hand with more efficient claims management. A focus on reinvestment in the claims management system, as well as on evidence-based medicine practices, is helping some providers "get it," says John Dugan, CPA, who oversees PwC's healthcare provider practice.
"Having those standardized levels of care that are supported by data analytics for them to understand what the outliers are in the cost to treat, that's where you're seeing savings driven out of the system," Dugan says. "The winners in the game are going to be the ones who really focus on patient/consumer - those patients now become their own payer class."
Here is where process automation intersects with not only claims management itself but also improved patient satisfaction.
"It's a cliché but the term is meeting people where they are," says Ryan Rossier, VP of platform solutions at Medullan. "I think that expression, when done appropriately, can actually create a very high sense of satisfaction."
Improving Reimbursement Frees Up Resources For Growth
Insurers and providers alike need resources for sustainable growth, particularly as the number of patients seeking healthcare continues to increase. From an insurer's perspective, this can be difficult: Up to 80 percent of health premiums are spent on claim payments and associated charges, says Healthcare Finance News' Susan Morse.
From a provider's perspective, it's difficult, as well. Medical practices spend about $15,000 each year on denied claims, says Michelle Tohill, director of revenue cycle management at Bonafide.
Better claims management can help address both problems. By embracing technologies that can spot errors, enhance communication, and streamline claim acceptance or denial, both insurers and providers stand to avoid time- and money-consuming resubmission or appeals processes, giving both parties a more reliable sense of the number, type, and value of claims handled.
Much of the technology necessary to improve claims management and free up resources for growth is already available.
One example is artificial intelligence (AI) as a means to systematically identify and correct errors, according to Steffen Hehner et al. at McKinsey & Company. The researchers note that in Germany 8 to 10 percent of all filed claims are incorrect, and that many of these errors are the type that artificial intelligence can catch and fix without costly human intervention.
Growth Is More Efficient With Real-Time Analysis
Big data analytics have transformed the way the healthcare industry gains clinical insights and improves patient care. These tools can also improve the effectiveness of claims management.
"As awareness of big data matures, we are seeing faster and more widespread adoption of [IT operations analytics] technology, and the importance of wire data as a source of insight has become a key topic in conversations with our customers," says Jesse Rothstein, CEO of enterprise technology company ExtraHop Networks.
Vitally important within these conversations is the need to de-silo healthcare information and data, ensuring that important details aren't walled off by legacy systems that don't communicate with one another, says Arien Malec, VP of data platform and acquisition tools at RelayHealth.
Data analysis tools that can work within an interoperable system provide feedback on the entire claims management system, which is essential to long-term improvement says Joncé Smith, VP of Revenue Cycle Management at Stoltenberg Consulting. "When focus is placed on only one phase of the revenue cycle, a performance improvement spike may occur, but it will not be long lasting," Smith explains.
Instead, the most effective improvements to the claims management cycle account for how every phase and component of the patient-provider interaction affect the revenue cycle. With real-time analytics, providers can better understand how various factors affect their claims management, making adjustments where needed to improve efficiency and effectiveness.
Technology continues to change our way of life, including our methods of providing healthcare -- ensuring that providers are promptly and accurately reimbursed for their work, and that patients have more transparency into the process
Yet to secure sustainable growth for the healthcare industry, Health Catalyst senior advisor Dr. John Haughom suggests that what we need is more disruptive innovation, not less.
"In recent decades, the majority of innovation in healthcare has been centered on the development of new diagnostic procedures, therapies, drugs, or medical devices," Dr. Haughom says. To continue growing, the healthcare industry now needs to turn some of that creative fervor toward technological innovation in claims management.
Claims management is often an afterthought to healthcare providers, whose training and passion focuses on patient care. Yet effective claims management processes, analyses, and oversight are essential not only to effective financial management, but also to the sustainable growth of individual medical practices and the healthcare industry as a whole.
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Tags: Health Innovation, Healthcare consumerism