Last week, I explored 8 Challenges Faced by Healthcare Payers in the Pandemic Era. As I indicated in that post, payers in several areas will experience significant pressure to survive COVID 19 and beyond. Of the most impacted areas will be claims processing. In this post, I will address processes that are ripe for automation using RPA, BPM and Data Extraction - the three key ingredients for intelligent automation.
The recommended auto-adjudication rate should be upwards of 85 percent to maintain a solid medical- loss ratio. An auto-adjudicated claim costs health insurers cents on the dollar, while one that needs human intervention costs about $12 dollars or more per claim, as per CAQH. There are also stiff penalties in many states for claims that are not settled in 30 days.
CAQH also provides some insights into the cost that can be avoided in the entire value chain. Figure 1 illustrates the overall savings opportunity. The medical and dental plans can save up to $13.3 Billion in admin costs.
Figure 1: Estimated Medical and Dental Spend Savings
CAQH estimates that the entire medical industry could save $42.5 per patient encounter ($29.27 for providers and $13.18 for plans) and the dental industry could save as much as $30.08 (including $22.99 for providers and $7.09 for plans). The highest cost per transaction being recorded in claim status enquiry, prior authorizations and eligibility and benefit verification.
A typical administrative workflow pre and post claim submission are indicated below.
Figure 2: The Administrative Workflow
Source: CAQH
Our study and assessment of payers also indicate scope to reduce transaction costs in member submitted claims (highly manual), coordination of benefits, vendor accumulations (both medical and pharmacy) and attachments (medical records).
As we delve deeper into the claims processing area that comprises of several of the processes indicated above and is the major function performed by a payer, we discover several processes that are ripe for automation.
At Lateetud, we analyzed claims processes of major payers and mapped them as per the automation potential using intelligent automation - or Hyperautomation as Gartner calls It. Intelligent Automation is the number one trend to watch for in 2020. We examined it from an end-to-end automation perspective and evaluated the applicability of three major technologies: Robotic Process Automation, Cognitive Data Extraction and Business Process Management (workflow). To find out more about Intelligent Automation and definition of these terms refer to blog post – What is Intelligent Automation?
“As no single tool can replace humans, hyperautomation today involves a combination of tools, including robotic process automation (RPA), intelligent business management software (iBPMS) and AI, with a goal of increasingly AI-driven decision making.” Gartner
The following are the top 6 areas of automation in Claims Processing areas using RPA, BPM and Data Extraction technologies.
The sooner healthcare payers act on implementing automation strategies the better customer experience they can provide. More importantly, as indicated above, this is a necessity to survive this pandemic and beyond. This “new normal” is here to stay for the immediate and foreseeable future, creating a clear need for healthcare payers to act quickly.
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