By Craig Evans
According to Forrester Research, the U.S. healthcare system spends more than $1 trillion a year on administrative costs, and claims resolution is a large component. But are those dollars being spent wisely and efficiently? Healthcare organizations are under intense pressure to provide exceptional service to consumers while navigating a burdensome claims payment eco-system with insurance companies that can strain an organization’s economic viability. On the revenue side of healthcare, maintaining a consistently reliable claims collections capability is essential as the life blood of every healthcare company. This is particularly true given the extensive and rising cost obligations across labor, infrastructure, technology, lab testing, regulatory compliance and more.
Revenue cycle management, or the ability to effectively create and implement a claims collection/resolution system, has never been more important. The often adversarial role of insurance companies in paying claims heightens the gravity of this issue for healthcare organizations, because collecting and resolving claims is by nature a difficult task as insurance companies look to deny or extend payment timing for their own economic benefit.
Healthcare organizations must weigh the pros and cons of whether to handle revenue cycle management with internal resources or contract with a third-party company specializing in this capability. What’s most essential is that the appropriate people and technology resources are brought to bear in either scenario. It’s a very labor-intensive undertaking. If an organization opts to keep this critical work in-house, it can’t be penny-wise and pound foolish when it comes to investing in what’s needed to get the job done the right way. This means providing proper training and developing a sound methodology, with redundancies, that streamlines the collection process and maximizes efficiency across the claims resolution process. An essential element of this process is the coding of healthcare procedures on the front end, before claims are submitted to insurance companies, as coding is often the weak link in the claims resolution chain. It’s an area that insurance companies look to exploit when denying or delaying claims, so those healthcare organizations that run a tight ship on coding stand a better chance of claims resolution success. Healthcare organizations are also at risk regarding overbilling and potential fraud for government payments, and technology can provide protections in this realm.
For those healthcare organizations that elect to contract claims resolution to a third-party company, it’s important to conduct thorough due diligence before selecting a vendor. This includes determining whether the firm has proper employee training and implements effective technologies, such as AI/machine learning. The firm will have some access to your systems, so it’s important to understand their security protocols and tailor access in a way that doesn’t overexpose data and privacy on your end. Most important is daily oversight by a trusted, senior level employee to ensure that your preferred protocols are followed by the vendor and that collections from insurance companies are occurring in a timely manner.
Regardless of the claims methodology a healthcare organization selects, whether using internal or external resources, the importance of technology can’t be overstated, particularly artificial intelligence. AI is helpful in many ways, including the critical matching/resolution process pairing a given portion of money to its intended individual claim. Millions of dollars are paid by insurance companies at any given time, and AI is highly efficient at parsing dollar amounts to be matched with their associated patients/claims via explanations of benefits (EOBs). A traditional, manual claims resolution process is tedious, more costly and subject to a greater error rate when it comes to matching EOBs and money. Some current AI tools have impressively demonstrated up to 66 percent faster claims resolution rates in the healthcare sector.
Despite the importance of emerging technologies in revenue cycle management, the human element is essential to maintaining the financial well-being of healthcare organizations. The ultimate responsibility comes down to the people involved in oversight. New technologies, while exciting and game-changing, can’t supplant exceptional executive leadership given what’s at stake when it comes to financial viability.
Crain Evans is Senior Vice President, National Head of Healthcare Banking, BankUnited. In this role, he guides the bank’s efforts to support the financial needs of a wide range of healthcare organizations.
