New Remedies for Healthcare Insurance Claims Processing Woes
While the first wave of document management technologies enabled healthcare insurance companies to make great strides in eliminating inefficiency in the processing of claims, these technologies could do little to alleviate the thorny problem of erroneous billing.
The new generation of advanced technologies offers new ways for healthcare insurers to overcome this costly problem by applying Intelligent Process Automation in the form of artificial intelligence (AI), machine learning, process orchestration, robotic process automation (RPA), cloud-based solutions, and more.
How big is the problem of erroneous billing? Studies by Medical Billing Advocates of America, Medliminal Health Solutions, independent auditors, and other researchers found that billing errors appeared in 80% to 90% of the hospital bills.
Overbilling costs healthcare insurers an estimated $750 billion in losses annually, which amounts to about one-third of every medical dollar spent, according to an Institute of Medicine study.
Claims Processing Impediments
The inability of health insurers to catch so many overcharges stems from the large volume of complex claims and corresponding medical records that must be processed within a small window of time.
A mid-sized insurer, for example, has more than 1.5 million members and receives more than 700,000 claims from hospitals every year. Verifying whether the claims are correct requires several hundred employees sifting through claims manually to compare the medical records to the bills received.
A majority of U.S. states have “prompt pay” regulations that require payment within a specified period of time, which can be as little as 10 days. These time constraints make it impossible for auditors to catch the numerous overcharges within the thousands of claims that arrive weekly.
Because clerical workers cannot comb through the avalanche of bills and medical records fast enough to catch the majority of overcharges, they are forced to focus only on the largest claims.
Gaming the System
Knowing that insurers are forced to scrutinize only the larger expenses enables hospitals to get away with overcharging for thousands of smaller items like medicines, bandages, instruments, and ice packs.
Other billing practices that are used to inflate charges include upcoding (changing a less expensive medical code for a procedure to a more severe procedure and expensive code), unbundling (separating charges that fall under a single billing code and charging as two separate procedures), and duplicate charges (billing for procedures multiple times).
Intelligent Process Automation to the Rescue
By accelerating the speed of processing while reducing the cost, the new generation of Intelligent Process Automation technologies gives insurers the means to significantly reduce the number of billing errors that have been able to elude them because of the constraints of manual processing.
Once hospital records and claims are digitized and made machine readable, AI and advanced analytics can be applied to cross-check bills and medical records to root out billing errors in a fraction of the time it takes human workers to do so.
An AI system can be trained to identify common procedures, services, and products that are overbilled, and to compare the charges to the acceptable range of pricing for those line items.
Repetitive and tedious manual claims processing tasks can be automated with RPA technology to speed up and streamline the claims management process and eliminate clerical errors.
Automating the adjudication process is another way for healthcare insurers to streamline and reduce the cost of claims processing. Automated adjudication systems are programmed with the appropriate rules and parameters for determining whether a claim should be paid, denied, or negotiated.
Automated adjudication systems can enable health insurers to reduce the need for human intervention by 90% or more. Claims can be processed more quickly and accurately, and the parameters can be adjusted and refined to achieve optimal results.
Gaining an AI Edge
As McKinsey & Company notes, while the benefits of automating healthcare claims processing can be significant, building an AI system is a complex undertaking that requires organizational readiness and specialized skills.
Automating health claims processing involves creating customized dictionaries and ontologies to recognize and extract information in medical records and the corresponding bills. The systems must be configured to recognize, extract, compare, and analyze information within a variety of forms, including UB-04 and CMS-1500 forms, and to recognize data such as CPT codes, ICD codes, drugs, dosages, procedures, and medical tests.
In addition, workflows, process orchestration, and integrations with various business systems must be configured, including mailroom systems, ERP systems, and any number of business planning, accounting, and financial systems.
Why Roth Automation for Healthcare Insurance Claims Automation?
Roth Automation is partnering with best of breed providers to create healthcare insurance claims automation solutions based on Conversational AI and Digital Intelligence solutions. These claims automation solutions can help insurers reduce costs up to three times lower per claim. Roth Automation’s expert consultants and developers can help you gain all the benefits in efficiency and cost-reduction that can be obtained through automated health claims processing.
To learn how your organization can benefit from healthcare insurance claims automation, speak with our expert consultants today.