As payers look to reduce costs, providers work to operate their practices and members search for affordable and accessible care experiences, the complexity around healthcare claims continues to increase.
The healthcare industry has made significant strides in care quality improvement, but its approach to submitting and paying claims is still overly complex. To combat the lack of aligned incentives and remove unnecessary friction between stakeholders, payers need a new platform. But not just any platform — one that promotes integration over fragmentation.
30% of healthcare resources are currently tied up in administrative costs. (That’s 14% of total annual spending in the US.)
Physician practices spend over $30B each year on billing costs.
According to a Deloitte survey, 54% of health plan technology leaders cite disparate systems as their most significant challenge in the way of digital transformation.
Decades of regulation and other market forces have created an unwieldy collection of technology used to manage healthcare payments, and health plans now find themselves weighed down by legacy systems. But fragmentation, inefficiency and complexity are simply the byproducts of how health payers arrived at the present moment.
How did we get here?
When a doctor starts a practice, the first thing they need is patients. To do that, the practice must contract with health plan directories.
Once the practice has joined networks and has established patients, they face the “rule” dilemma (e.g., eligibility verification, pre-authorizations, utilization management review, claims submissions, denial management, etc.).
And if those two steps weren’t already difficult enough on their own, now take into account all the separate processes that go along with each payer network.
All of that must happen before a claim is even submitted.
To submit a claim, the practice sends each claim to a revenue cycle management system, clearinghouse or chargemaster to optimize said claims and ensure reimbursement.
Once the claim goes to the payer, the payer sends that claim out for repricing, editing and out-of-network negotiation. The claim can be denied in full, in part, bundled or unbundled. And so on and so forth. Meaning: it often takes months for a provider to get paid.
Now toss in member responsibility.
Each day that passes between service and payment leads to decreased ability to collect the member’s responsibility (which can only be billed after the payer determines how much they will pay). Talk about stressful.
American consumers demanded choice, but, you know what they say… “be careful what you wish for”.
In reality, increased choice has only added to the complexity of the healthcare system. With 400-500 payers, including TPAs and self-insured plans and 800,000 doctors (all of whom provide different services) it’s no wonder this system has created the perfect foundation for complexity.
And while technology can be an enabler of change, a lack of aligned incentives led to the creation of spot solutions over many decades, most of which are now causing more harm than good.
Mitigating the complexity around claims and payments and streamlining overall operations is crucial for health plans to improve both the provider and member experience.
An integrated payment and communication platform reduces complexities and costs, freeing resources to provide a modern consumer experience to members. But payers must first make an honest assessment of their current payment systems.
After assessing their own disparate systems and points of concern, organizations should look towards a strategic technology partner that guarantees access to powerful technology.
What should I look for?
The payment space is made more efficient through a network effect (aka the concept that states the value of a solution increases when the number of people who use it increases).
As such, utilizing a specialized vendor that links the most payers and providers and members possible in one system is key. Plans can then leverage and integrate solutions to streamline efficient, simple and secure payments.
But that’s not all.
Your vendor should offer an integrated payment and communication platform to reduce the administrative complexity that inherently comes with healthcare.
The wrap up
A failure to address the root causes of inefficiencies in core administrative systems prevents your organization from evolving to meet changing demand, especially as healthcare consumerism continues to impact the care experience.
Streamlining across the entirety of claims management saves payers time and money, enabling providers and members to have meaningful interactions that lead to better outcomes and reduced costs.
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