The challenges that healthcare providers face when billing insurance companies and other payers are well-known. Verifying benefits eligibility, ensuring correct coding, and accurately invoicing can all involve significant time and labor. And even then, providers often have to wait in excess of three months to receive payment.
But at a time when claims management is getting more expensive, and relationships between providers and payers are becoming more strained, technology is stepping up to make the entire process smoother for both parties.
The Current Challenges of Medical Billing Insurance Claims
The current climate has healthcare providers facing a slew of challenges when it comes to claims management.
First, there is the cost of the entire process. Billing itself is expensive. Research led by Duke University's Phillip Tseng [registration required] found that the estimated cost of billing in an academic health system ranged from $20 (primary care) to $215 (inpatient surgical procedure). In primary care alone, "it takes $99,581 in billing and insurance-related work per year per primary care physician (PCP) just to get paid, assuming 4860 visits annually," Medscape reports, citing the research of Tseng, et al.
But when claims are denied and trigger an appeal process, the cost can be staggering. Research led by Joshua Gottlieb, an associate professor at the Vancouver School of Economics, estimates that the annual cost of challenged health insurance claims submitted by providers may be as high as $54 billion.
The crux of the problem is that claims are challenged frequently. Rajiv Leventhal at Healthcare Informatics reports that of an estimated $3 trillion in claims submitted by healthcare providers in 2016, 9 percent (or $262 billion) were initially denied.
It's not just a case of getting reimbursed, either, says Sandra Wolfskill, director of healthcare finance policy at Healthcare Financial Management Association (HFMA.) It's a case of getting paid correctly. Revenue integrity -- making sure that care is classified, recorded, charged, and paid correctly -- is becoming increasingly crucial. Even more so now that value-based payment, where reimbursement for treatment is tied to the quality of the treatment provided, is growing.
As providers struggle to get timely and satisfactory reimbursement from payers, they are also struggling to get payment from patients. Jonathan G. Wiik, principal of healthcare strategy at TransUnion Healthcare, highlights in a report how the percentage of healthcare costs absorbed by patients has been steadily rising as a proportion of the final bill, from 8 percent in 2012 to 12.2 percent in 2017.
But patients can't afford these bills.
As Merideth Wilson reports in MedCityNews, healthcare organizations are increasingly struggling to secure reimbursement from patients, as Americans struggle to keep up with their increased financial responsibilities when it comes to healthcare. In the past, bad debt incurred from uncollected patient invoices could be written off with minor impact, as payer reimbursement made up the most significant part of revenue.
Not anymore: Dwindling streams of income from both patients and payers are having a significant impact on healthcare providers' ability to remain financially sound. Staffing cuts and a lack of investment in new technologies are becoming increasingly common as a result.
4 Technologies Improving Medical Insurance Claim Management
Times are changing. In a survey conducted in 2017 by Navigant and HFMA, led by Erick McKesson, 79 percent of hospital and health provider CFOs surveyed reported that technology-related capabilities were their main focus for improving revenue cycle management in the year ahead.
What exactly should executives be focusing on? The four new technologies below make for an excellent starting point.
1. Clinical Documentation Improvement (CDI)
There are numerous reasons for claims denials, but most of them come down to some form of documentation error, according to Karen Meador at the BDO Center for Healthcare Excellence in New York.
If healthcare providers can reduce documentation errors, then the percentage of clean claims will rise, as well as the increased revenue and reduced costs that come with claims that do not require manual intervention and adjudication. Clinical documentation improvement (CDI) technology can help in this regard.
Doug Brown, managing partner at Black Book Market Research, believes that CDI solutions are crucial for ensuring timely and correct reimbursements from both insurers and payers. Research by his firm shows that almost 90 percent of hospitals with more than 150 beds and outsourced clinical documentation functions achieved at least $1.5 million in healthcare revenue, and claims reimbursement following CDI implementation certainly supports this.
Blockchain technology also has an important role to play in how providers can improve billing insurance claims. For one, blockchains can make the sharing of data between parties easier and more secure. Cara Sloman, executive vice president at Nadel Phelan, points out that current exchanges of information are hampered by a number of issues such as the need for a trusted intermediary, data interoperability, and inconsistent rules and permissions. With blockchains, health companies can create a complete picture and a single source of truth.
Blockchain technology doesn't just make it easier for providers and payers to share data, says Rahul Sharma, CEO of HSBlox. Because the blockchain can reconcile transactions in near real-time, it can also significantly speed up claims processing and remove the current reliance on third-party clearinghouses.
But that's not all. Technology reporter Michael Kordvani reports that because data stored in the blockchain has a clear audit trail and is so easily accessible, fraud detection will be improved and claims will be easier to audit.
In short, blockchains will make sharing data easier and safer, processing claims quicker, and fraud detection simpler.
3. AI and Computer-Assisted Coding
Automated tracking, real-time data, and artificial intelligence can be combined to make sure billing mistakes are greatly reduced. This is particularly true when it comes to automatically reading and translating medical reports, where AI can play a huge role in optimizing billing for providers.
Kumar Venkatesiah, an eLearning consultant, points out that while the notes that most practitioners and admin staff use are meant to speed up coding, they also contribute to numerous mistakes. Cumulatively, these errors are estimated to total $750 billion a year. But with computer-assisted coding systems, backed by AI, healthcare providers can meaningfully lower the number of these kinds of mistakes. A 2017 report published by WinterGreen Research and led by technical director Ellen T. Curtiss concurs, stating that with computer-assisted coding, 88 percent of the coding can happen automatically without human review.
David Bayer, VP at the Compreno Group, suggests that AI technology can "accurately extract entities, events, and facts," then recognize specific words and decipher their meaning and relationship to one another to ensure that medical records match bills.
That's not all AI can do, however. AI can also be used to verify benefits eligibility in real time. Knowing upfront whether a patient's insurance covers a particular procedure, and for what amount, can mean the difference between getting paid and coming up empty-handed.
4. Automated Systems and Processes Between Both Parties
Health IT professionals don't have to create artificial intelligence for software to be effective. Producing software that allows for automation is often enough.
For John Dugan, a partner at PwC, automation presents a huge opportunity. When it comes to the claims process, Dugan explains, there are still several manual processes that contribute to inaccuracies. The more of this that can be automated, whether through claim scrubbing or followup work, the better.
Indeed, both payers and providers spend huge amounts of time and labor costs communicating and approving requests by phone, fax machine, or email. But automation can largely eliminate this, says Dan Schulte, SVP Healthcare at HGS Inc. When payers and providers share data, automated processes can work much more effectively, thereby freeing up staff time and reducing the costs incurred by claims management.
This kind of technology is just as important for payers as it is for providers, says Medica's Kimberly Branson. Because financing healthcare between payer and provider is so complex, having a system that automates the workflow is critically important and improves both quality and compliance.
Improving Medical Billing Today
This isn't a prediction of the future. All of these technologies are available to healthcare providers today who want to optimize their medical billing insurance claims process and increase reimbursements.
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