Practice Management News

Can Automation Investment Keep Insurance Claim Costs Down?

"The vast majority of healthcare organizations are relying on outdated means to automate claims follow-up, outsourcing it, or doing nothing at all."

By Jacqueline DiChiara

- Hospitals are focusing on various outsourcing endeavors or different manual approaches to maintain a healthy revenue cycle. But is it working as planned? Perhaps only at a steep price. Expenditures for late payment follow-up by insurance companies are apparently much higher than conventionally believed. 

healthcare revenue cycle management claims automation

Two in three hospitals utilize an exceptions-based claim processing to automate claim follow-up, according to a new online survey of 80 healthcare finance professionals from Recondo Technology (Recondo).

Exception-based processing is indeed accessible to help automate what is often considered a quite convoluted claim follow-up process, says Recondo. But hospitals may not be implementing it.

“There is a tremendous amount of opportunity with automation,” says John Dugan, CPA, Partner with PricewaterhouseCoopers, to EHRIntelligence.com.

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  • “From a claims processing perspective, there are still a number of manual processes as you go through the entire revenue cycle, which in and of itself contributes to inaccuracies. That is why there is a huge need for claims scrubbers, follow-up work, etc.”

    More money, more problems?

    Most hospitals are dependent on either legacy outsourcing endeavors or employed manual approaches, says Recondo within yesterday's press release. But neither of these tactics may be helping to keep costs at bay.

    “The nation's healthcare providers submit an estimated 3.1 billion claims annually, meaning claims follow-up could be costing them $3.1 billion more than is commonly believed,” Renando asserts.

    A strong investment focus on automation is apparently slow to become mainstream across the healthcare industry. Says Recondo, survey respondents believe “the technology is widely viewed as lacking timeliness and specificity.”

    As hospitals follow-up on insurance claims, they are apparently spending significantly more money than was initially thought, Recondo finds.

    “Various industry estimates have pegged the cost of this time-consuming manual process at between $2.75 and $3.25 per claim. However, 70 percent of survey respondents said the actual cost for their organizations is $4 per claim, 33 percent higher than the average $3 estimate,” writes Recondo.

    Fifty-three percent of survey respondents confirm their organization utilizes manual follow-up tactics for claims follow-up automation.

    “Not only is it costing the industry more than is currently believed to find problems within the healthcare revenue cycle and remediate them, but the vast majority of healthcare organizations are relying on outdated means to automate claims follow-up, outsourcing it, or doing nothing at all," said Jay Deady, Recondo’s CEO.

    "By contrast, exception-based processing that uses web-sourced data can immediately remove over half of soon-to-be-paid claims from the work queue, freeing up staff for more important duties and saving money for the organization."  

    The checks and balance solution

    “There’s some great technology out there that most practices don’t know about, don’t understand, or are not taking advantage of,” explained Monte Sandler, Executive Vice President of NextGen RCM Services, to RevCycleIntelligence.com. “Software allows practices to automate. But, providers still continue to struggle, big time.”

    “Diligence is needed to scrub claims to make sure they’re clean before they go out the door. Every practice should know if a patient is eligible before the doctor sees the patient. Plenty of tools allow you to check eligibility two or three days prior to a patient even coming in. It’s solvable if the right checks and balances are in place.”