Achieving Powerful Post-Service Claims Management

We can do almost anything electronically these days, even a process as complex as securing a mortgage loan on a house. Yet, people can’t visit a doctor or have a surgery without slow, error-prone manual processes and a mountain of paper. It comes at a steep cost. The healthcare industry loses ~$20B annually from manual processes

, which doesn’t even account for the cost of paper, equipment, postage, and phone/fax lines.

Cascading effects of manual claims processes

Consider a typical scenario. A provider submits a claim and then has no idea what happens from there. If there’s no word in a couple of weeks, they follow up. On the payer side, incoming paper documents get scanned and indexed and may not be accessible immediately. When the provider calls to check the status, if the payer representative doesn’t identify the right claim, the provider proceeds to submit the claim again. When the original claim is identified, the provider now has duplicate claims, which causes a denial by the payer, leading to an appeal. It can be a vicious cycle.

In parallel, infrastructure costs continue to increase. In addition to paper, equipment and supplies, postage costs are also increasing. Medical claims must be mailed at the higher first-class postage rate due to HIPAA requirements. At 10,000 claims a month, that adds up to $72,000 a year just for postage. One more cost for payers and providers is maintaining physical office space for printing and mailing claims, even after many staff shifted to remote work during the pandemic.

In reality, no one wants to manage claims by fax and mail, because it’s not efficient, it costs more and it’s difficult to process for all stakeholders. Making the shift to electronic processes reduces the workload and speeds the payment process for everyone.

Steps to take now to reduce paper processing

Across the industry, some components of payment process, such as eligibility and benefit verification, have achieved higher electronic adoption rates. On the other hand, only 29% of attachments and 31% of prior authorizations were processed electronically.³[AS1]  Given that technology is available, there are immediate steps provider revenue cycle teams can take to reduce manual processing:

1. Actively maintain payer and plan profiles. It’s important to do a thorough review of all payer and plan profiles on a regular basis. Oftentimes, organizations will discover that a payer or health plan identified in their system as only accepting paper claims can now accept electronic claims. Or there may have been an error in the original setup. In either case, consistent review and cleanup of the system will keep better pace with payer updates and enable more claims to be submitted electronically. When $7.19¹ is the average cost of submitting a manual claim, the savings add up.
2. Edit claims before submission. Editing is one of the most critical components of claims processing that prevents denials and reduces manual rework. Using flexible, HIPAA-compliant editing tools, providers can complete eligibility and network checks, confirm that all data required is entered accurately, and account for custom requirements for special circumstances. By focusing on claim edits up front, providers can submit more clean claims, requiring less manual intervention downstream.
3. Submit attachments up front. The need for additional information to process a claim, in the form of a medical attachment, is one of the largest causes of payment delays and denials. In addition, it is one of the least adopted electronic transactions, resulting in nearly 80% of medical attachments being sent manually via fax or mail. Instead, use existing technology to identify and submit unsolicited attachments up front. This can be accomplished via secure file transfer from within the EHR workflow, which can marry the claim and the documentation together and send them to the payer as a complete package. One health system reduced attachment-related denials by 88% and saved 1,200 hours of rework in just three months. The cost savings are significant – each electronically submitted attachment saves $3.10 over sending a paper copy.²
4. More electronic processing means more visibility. An important outcome of shifting more claims to electronic processing is the increase in visibility. It’s critical at every step in the process for providers and payers to understand the status of a claim: when it was received by the payer, if more information is needed, if the medical attachment was received, if it has been paid, etc. Manual claim status inquiries, typically done by phone, cost a whopping $12.12 per inquiry more than checking electronically. Eliminating manual inquiries could save a provider 22 minutes per inquiry. Industry-wide, removing manual inquiries could reduce waste by $3.1B annually.³

Make Paper Fly Away for Cleaner Claims Processing

It’s time for the healthcare industry to let go of paper and fax machines – every other industry is far ahead of us. While there will always be some level of paper-based processing, the proportion can be reduced dramatically with collaboration among industry stakeholders and higher adoption of existing technology. Healthcare providers that have made the shift have gained a 75% reduction in staff time dedicated to managing paper claims and an 80% reduction in in-house paper claim volume. Let’s move forward with electronic claims processing that is not only less costly, but also results in faster payment for providers and faster account resolution for patients.

About the Author

Linda Perryclear is the Senior Director of Product Management at Availity, with responsibility for the Essentials Pro solution and post-submission claims management. Since joining Availity in 2004, Linda has held various positions in the organization including director of the provider support organization, as well as roles in client experience and account management. Throughout her career, Linda has worked in healthcare in both administrative and clinical roles, and also served in the US Navy for six years as a hospital corpsman. She holds a bachelor’s degree in finance and risk management from UNC Charlotte and works from her home base in North Carolina.