Magazine Article | July 5, 2012

Claims Processing Headaches Got You Down?

Source: Health IT Outcomes

Edited by Vicki Amendola, Editor, Health IT Outcomes

Automating claims processing can help providers conquer critical revenue cycle concerns, from billing accuracy to more timely reimbursement.

The healthcare revenue cycle isn’t all about processing claims for payment, but claims certainly do account for an enormous — and important — chunk of that cycle. And submitting healthcare claims for payment gets more convoluted every day, with different rules and requirements demanded by a multitude of payers from Medicare and Medicaid to private and commercial insurers.

Diane Watkins, VP of Revenue Cycle at Saint Luke’s Healthcare, understands this completely, and she understands the complexity involved in managing the claims process to ensure claims are submitted correctly and quickly. In this conversation, Watkins shared her thoughts with me on the advantages of bringing automation to the claims process, as well as ideas on the topic of outsourcing your claims processes alogether.

Q: Why should providers consider automated/electronic claims processing solutions?

Watkins: I think it is almost a necessity to file your claims with some type of automated or electronic process. An automated electronic claims processing solution really helps providers ensure the accuracy and quality of the information that they are submitting on their claims. In a manual process, you’re relying on what you remember — every detail you need to put on a claim and also what each specific payer wants or doesn’t want. Often there are edit and review prompts built into electronic claims processing systems, so it is without a doubt going to improve your accuracy.

Electronic claims processing can also improve timeliness. Many times you are working on exception-based processing, so instead of looking at every claim you only have to look at those claims where edits and entries have been flagged, which allows you to be more productive. Providers are able to get claims filed faster, which in turn speeds up cash flow.

Q: Is automated claims processing a worthwhile venture for smaller provider facilities?

Watkins: Overall, streamlining claims processes is a worthwhile venture for providers and facilities of all sizes. Even our very small critical access hospitals, which are situated out in the rural community, file their claims electronically. Hospitals with a very small number of licensed beds are filing claims electronically, just as our largest hospital, which has close to 600 licensed beds, does. It really is something that both small and large facilities can benefit from.

The factor that sometimes comes into play is that a small, independent hospital often faces a greater challenge trying to find a solution that fits into tighter budget constraints. Smaller providers that are actually a part of a larger health system may have the advantage in this aspect. Providers that are part of a larger health network can get a much more robust solution simply by being part of a network than they could probably afford on their own, simply because of the price.

Q: What are the biggest challenges of an automated claims processing solution?

Watkins: There can be many challenges, and they will be different for every provider. Sometimes integration with your IT systems can be a challenge. Often the biggest challenge can be the overall cost of the solution, with provider IT budgets getting stretched to the max in reaction to healthcare reform. Some of these systems are very expensive . There are many different levels of systems that you can purchase. The other big challenge is really getting the specific edit fields in place correctly. Each payer requires different data to be entered. We talk about claims as if they are standardized, but a standardized claim is something that doesn’t exist.

“Automating the claims process has the very real impact of improving the satisfaction level of your employees, simply because they are working with a tool that actually makes their job easier.”

Q: What is the biggest benefit of automated claims processing?

Watkins: I think the biggest benefit is being able to have all of the data fields for payer-specific claim requirements in place, so that your claims are cleaner when they are first submitted. This helps speed your revenue process to get more claims paid upon first submission, with fewer denied claims returning to your billing office. Automation also enables your facility to handle increasing volumes of work without having to supplement your staff, largely because you are working more on exception-based processing. Also, automating the claims process has the very real impact of improving the satisfaction level of your employees, simply because they are working with a tool that actually makes their job easier.

Q: Should providers consider options to outsource claims processing?

Watkins: I think this is a decision each individual provider has to make, based mostly on their own internal technology resources. Do they have the technical or human resources it would take to manage the daily aspects of electronic transactions going back and forth? If they opt to do it themselves and keep automated claims processing in-house, do they have a resource that either has or can get the expertise that can handle that technical work? If so, they can probably identify cost savings. However, for many providers, working with hundreds of different payers and trying to stay in sync with them becomes very complex to manage in-house. Providers may choose to use a clearinghouse or outsourced claims processing provider to manage all those individual payer relationships because, as stated, that is a lot for any provider to manage.

Q: What are some pros and cons of inhouse versus outsourced processing?

Watkins: One of the pros is that it can be less expensive to follow the DIY (do-it-yourself) path and process claims in-house. But, tied directly to that would be the downside of having to manage all of the individual payer relationships and also all of the inner-technology interactions between all of the different payers.

The advantage of outsourcing claims processing is that the clearinghouse will be already set up to manage the multitude of payer relationships, changes, and edit fields. Outsourcers leverage this benefit by having the technology people in place who are serving multiple clients, instead of just trying to manage relationships on a case-by-case basis as an individual hospital would.