Skip to content Skip to navigation

Claiming Benefits

June 1, 2007
by Andria Jacobs
| Reprints
Claims adjudication enhancements fight fraud, reduce abuse and contain cost, which add up to a bigger bottom line

Andria jacobs

Andria Jacobs

Healthcare payer organizations process thousands of medical claims per day, determining payment based on complex government codes as well their own additional guidelines. In doing so, organizations must balance accuracy with strict response deadlines and the cost of processing each claim. If an organization accidentally overpays for care or pays a duplicate bill, the money comes directly from profits.

The costs for incorrect billing and denied claims due to abusive billing practices are extensive for the providers billing for services. Yet in an industry that processes more than 4 billion health benefit transactions per year, how can a payer or provider examine every claim for fraud or abuse?

Healthcare payer organizations need to move toward solutions that reduce the cost of healthcare and address the challenges of identifying fraudulent and abusive billing practices. Enhancing resident claims adjudication systems with cost containment can help.

Adding to adjudication

While automated claims adjudication systems have drastically improved the manual claims review process for payers, the systems have not proven effective in identifying unclean claims, code exceptions, outliers and abusive billing practices. To remain competitive, payers need to augment existing claims adjudication systems with enhanced editing software that monitors the internal claims process — allowing payers to maximize financial recoveries and contain costs.

Cost containment solutions allow healthcare payer organizations to enhance current claims adjudication systems with millions of edits — some with more than 30 million — while addressing 100 percent of the claims. This is much more than an auditor can remember and many more than a claims examiner can research while meeting performance standards. Edits need to remain current and be based on rules transparent to providers submitting their claims for payment.

These solutions allow the payer to customize edits by provider and line of business, as each payer has different contracts and network requirements. And, with the ability to process thousands of claims per hour, these cost containment solutions reduce the need for healthcare organizations to maintain massive claims and administrative staffs.

But effective claims and code adjudication should be more than just millions of edits. Cost containment solutions need to evaluate claims for third-party liability/coordination of benefit recoveries, case management opportunities and physician billing education needs.

Detecting abuse

Augmenting a payer's resident claims adjudication system with a cost containment solution can also act as an effective anti-fraud and recovery program that directly affects healthcare insurance and employer/employee costs.

Payers looking to move toward solutions that identify fraudulent and abusive billing practices must have a leadership commitment and a quality improvement approach to enhancing provider billing practices. As such, payers need to identify and implement systems that:

  • Analyze and report fraud trends and dollars recovered.

  • Improve operational efficiency and profitability.

  • Reduce the amount of internal resources dedicated to manual claims review.

Patient billing is daunting in its complexity. And in an era where ballooning health insurance costs and employer and member angst are common, it is a critical success factor to look at systems innovation. Advisories and help from the payer in the form of an automated cost containment solution can effectively assist each provider partner in doing a better job billing and slow the escalating costs of healthcare.

Andria Jacobs is chief operating officer at PCG Software, Malibu, Calif.