Claim Processing System In Healthcare – In an era defined by digitization, growing customer demands, changing customer demographics, increasing competition and new and aggressive market players, adopting a transformative approach to claims management and overall operations becomes paramount for health and non-health insurers.
Health insurers must contend with compliance—in the unique context of their industry—increasing healthcare costs, increasing cybersecurity and data protection risks, while driving customer loyalty and satisfaction amid escalating customer acquisition costs.
Claim Processing System In Healthcare
Health insurers are realizing that they must diligently prioritize certain aspects of their operating model to unlock cost-effective solutions in the near term, while revolutionizing their strategic claims positioning and customer relationship management.
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Innovating healthcare claims management would involve the use of technology and process improvements to improve efficiency, accuracy and transparency in handling healthcare claims.
This think piece explores the local context of health insurance in Nigeria and key elements of the health claims management journey, before highlighting areas of opportunity for innovation, celebrating some industry vanguards and issuing a call to action.
Health insurance is a vital mechanism for protecting individuals from the catastrophic financial burden of health care costs. Financial protection is one of the pillars of the health system and the cornerstone of universal access/coverage to health care (UHA/UHC). The importance of this financial risk protection cannot be overstated, as research shows that in 2019, nearly one billion people worldwide experienced financial hardship due to health care costs, and about 100 million families worldwide: of which 1.3 million are Nigerians; are impoverished as a result of health care expenditures each year.
The National Health Insurance Authority (NHIA) serves as the primary regulatory body that oversees health insurance operations in Nigeria. It was founded in 1999 and functions as a mandatory social health insurance program, which covers employees in the public and private sectors and their dependents. It sets standards and guidelines for the implementation of health insurance schemes, accredits and regulates health maintenance organizations (HMOs) and ensures compliance with established regulations. Other stakeholders include health service providers and private and public employers, and these entities play various roles in the provision, administration and financing of health insurance services in Nigeria.
The Value Of Pre Adjudication In Healthcare Claims Processing
Despite the existence of health insurance in Nigeria for more than 15 years, its uptake remains alarmingly low, with only 3% of the population having health insurance as of 2016, or approximately 6.18 million out of over 200 million people. This is largely attributed to low awareness, affordability and inequity in coverage distribution, among others. In comparison, 40% of Ghana’s total population was insured in 2016, 13 years after the establishment of its own NHIA.
Historically, insurance company growth has involved attracting customers from other insurers. It’s usually the same in health insurance. And, based on the nature of the business, customer experience and satisfaction, as well as the company’s growth, reputation and profitability, rely heavily on their claims management process.
Healthcare providers submit claims to healthcare facilities seeking reimbursement for services provided to their users. These medical claims ensure that the healthcare provider (clinic, hospital, pharmacy or gym) is paid for their services. After the enrollee pays the insurance premium and activates the insurance policy, he can access health care without paying at the point of service. A medical claim is initiated the moment an enrollee visits a physician for an appointment and can be submitted to the HMO after the appointment or after the patient’s journey is complete.
The claims management process follows a general framework although individual companies make slight variations to their own – many HMOs use the same third party provider to manage their claims process and therefore share the same process. This is a good strategy to optimize costs and simplify operations, however, disadvantages include low/no competitive advantage and significant risk to business operations in the event of downtime on third-party systems.
Steps To Improving The Claims Adjudication Process
Typically, the health care claim process begins when the claim is submitted by a provider, either physically or digitally, after receiving a client. There is usually a waiting period during which the provider contacts the HMO to verify that the patient/enrollee is eligible for the requested service.
This is a major pain point as customers can experience wait times ranging from minutes to hours before eligibility verification is completed. Some are denied access at this point – perhaps due to poor communication about benefit limits or the poor reputation of the insurer at the point of service. In some cases, the enrollee may end up paying out of pocket to expedite access to care.
In the event of a rapid and successful enrollee eligibility check, the next steps in the process include assessing the necessity of the service, assessing the risk of the claim, validating the details of the claim against service level agreements (i.e., making a decision – whether it includes all the details that meet the HMO’s criteria for valid claim? Or are some details missing?), before evaluating and updating the enrollee’s benefit package (ie, reconciliation). These activities, as well as several other back office activities, take place before the insurance company makes payment to the supplier, usually within 30 business days of receipt of valid claims.
There are general (and some unique contextual) bottlenecks observed within the current healthcare claims management process. That includes:
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Billing Errors: Inaccurate or incomplete information on claims can lead to billing errors, resulting in claim denials, delayed payments and the need for resubmissions. Resolving these errors may require additional time and resources.
Claim Denial: Claims may be denied for a variety of reasons, such as incomplete documentation, lack of medical necessity, coding errors, or failure to meet specific payer requirements. Handling claim denials requires effective follow-up, investigation, and appeals processes, which can also be time-consuming and can lead to confusion, errors, and negative experiences for providers.
Fraud and abuse: by service providers and by enrollees. Identifying and investigating potential cases of fraud can be complex and time-consuming. Manual and semi-automated processes can hinder proper fraud detection and operational efficiency.
Complex payer rules and policies: Each insurance payer may have different rules, policies and reimbursement structures. Navigating these complexities, understanding the guidelines and ensuring compliance can be challenging for healthcare providers and claims management teams.
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Manual processes and paperwork: Many healthcare organizations still rely on manual processes and paper documentation, which can lead to inefficiencies, errors and delays in processing claims.
Coordination and communication among stakeholders: Gaps in communication between stakeholders, including providers, insurers and third-party administrators, can create bottlenecks. Lack of effective communication channels and systems can lead to delays, misunderstandings and redundant requests for information. Ensuring effective communication, timely exchange of information and cooperation between these parties can be a challenge.
Regulatory Compliance: Healthcare claims management must comply with a number of regulatory requirements. Keeping up with evolving regulations and implementing the necessary changes can also be challenging. This is an established pain point for current leaders and it trickles down into the customer experience.
Technology Integration: Integrating claims management systems with other healthcare IT systems, such as electronic health records and billing systems, can also be complex. Ensuring seamless data exchange, interoperability and data security can present technological challenges.
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Timely Payments: Prompt reimbursement for healthcare services is critical to the financial stability of providers. Delays in claim processing and payment cycles can strain cash flow, especially for small practices and healthcare facilities. This contributes to a negative customer experience because enrollees are more likely to be denied access to care if they are affiliated with such an insurer.
Healthcare Evolution: The healthcare industry is constantly evolving, with changes in regulations, payment policies and new disruptive players. Staying current and adapting to these changes requires constant training, education and keeping up with global and local industry trends. Constraints created by outdated regulatory environments and legacy systems can make this difficult.
Addressing these challenges requires a combination of effective technology solutions, design thinking, deep stakeholder engagement and collaboration, as well as streamlined processes, building human capacity and capability, and continuous monitoring and improvement.
We found that 6 million out of a population of 200 million have a very low level of coverage. However, the volume, variety and velocity of current data is large and extensive. Health insurance companies are essentially banks of health data – they deal with a significant amount of data as a result of their business and this data covers a variety of aspects, including policyholder information, claims data, medical records, provider details and financial records. This presents challenges but also great opportunities for digital transformation, including automation, artificial intelligence and data analytics.
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AI models can analyze claims data, detect anomalies and flag potentially fraudulent or erroneous claims for further review, while the abundance of data requires automated processes for efficient handling and analysis. Automation can streamline routine tasks such as data entry, claim processing and document management, freeing up human resources for more complex value-added activities.
Health insurance companies can use AI models and machine learning algorithms (just like banks already do) to analyze large amounts of data and derive meaningful insights. These technologies can help detect fraud, assess risk, identify patterns, detect anomalies and help insurers make data-driven decisions to personalize the customer experience.
Automation and AI capabilities can also facilitate customization
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