Table of Contents
1
Introduction
2
How does a claim get accepted or rejected?
3
Steps involved in the claim adjudication process
4
Auto-Adjudication of claims
5
Limitations to claims auto-adjudication
6
How to improve auto-adjudication
7
Benefits of Claim Auto Adjudication
Introduction
Introduction
After a medical claim is submitted, the insurance company reviews the claim and determines its financial responsibility for making the payment to the provider. This process is referred to as claims adjudication. The insurance company can decide to pay the claim in full, deny the claim, or reduce the amount paid to the provider.
How does a claim get accepted or rejected?
How does a claim get accepted or rejected?
During claims adjudication the payer evaluates the claim and decides two important things:
1. Whether the medical claim is valid, and
2. How much of the claim they will reimburse
If the claim is accepted, the payer will issue provider reimbursement and charge the patient for any remaining amount. The payer may deny the claim if the patient has insufficient coverage or did not get pre-authorization for a service. If a payer denies a medical claim, the patient may have to submit an appeal to gain coverage for the care costs.
The payer may also reject a claim. This happens when the claim does not meet formatting requirements or contains an error in medical coding. Rejected medical claims can be resubmitted for payment once the errors have been corrected.
Usually, when claims are submitted electronically, the software may help to avoid errors, such as incorrect or incomplete information before it is submitted for payment. This increases the chances of claim acceptance.
Steps involved in the claim adjudication process
Steps involved in the claim adjudication process
It is important to know the different steps of claim adjudication to understand how the insurance company determines how claims are paid, rejected, or denied.
Eligibility verification
In the initial process of claim review where we check the claims for simple errors and omissions, if left undetected can lead to significant costs. So, it is important to verify patient identity and eligibility to ensure that any missing data is immediately acquired for generating a complete claim. During the review, the reviewer must ensure that the data provided in the claim documents can be verified and backed by original source documents.
Verification of fraudulent/ duplicate claims
When a claim is submitted to the Payer for reimbursement, it is checked whether the claim is duplicate or fraudulent and if it needs checking on a few parameters. This involves checking if the insurance coverage is active, followed by ensuring that the diagnostics and procedure codes match the codes listed on the claim, filing of claims well after the deadline, and other types of fraud.
Coding, Bundling, and Diagnosis review
Evaluation of pre-certification or authorization records to identify cases where there is an absent or invalid pre-certification issue. Such cases are liable to take place when the diagnosis, procedure, or date of service cannot be correlated to the information provided in the pre-certification or authorization.
Detailed analysis of provider
Cross-verification of the claims should be conducted for evaluating the claims’ authenticity. It helps to rule out cases where unlisted procedures were implemented on patients despite not having a medical necessity. For this, it is important to verify if every necessary document is in the required order for the claim to be processed successfully. This helps to avoid delays and denials of claim settlements.
Benefit determination
Benefit determination is the process by which claims information is matched with benefit information to confirm whether the services delivered are covered under the terms of the member’s defined health benefits and if all the corresponding benefit adjudication rules are applicable.
Appeals processing
If your health insurer refuses to pay a claim or ends your coverage, you have the right to appeal the decision and have it reviewed by a third party. You can ask your insurance company to reconsider its decision and they have to explain why they’ve denied your claim or ended your coverage
A small population of members drives the majority of healthcare costs. Although accurate identification and categorization of members is just the starting step, it is critical in creating the roadmap for dealing with possible member healthcare costs and experiences. The internal departments of payers should act more connected than before to ensure a free-flow of member information, bringing in a 360-degree view of the member’s condition.
Most health plans consider this as an internal exercise, but involving the member will do more benefit to the program. Members should be aware of key initiatives and efforts of the payer to improve health by regular monitoring. This awareness helps in sourcing key data specific to socio-economic conditions, which are rarely captured in the clinical visits. The framework will be applicable for members enrolling in various types of plans like Medicare, Medicaid, commercial, or group health insurance. However, it is critical to consider the member’s demographic information while categorizing for risk calculations, accordingly direct the member to correct the department that can help members to improve health.
Auto-Adjudication of claims
Auto-Adjudication of claims
Auto-adjudication is the process of paying or denying insurance and public benefits claims quickly without reviewing each claim manually.
Limitations to claims auto-adjudication
Limitations to claims auto-adjudication
Adopting new technologies like auto-adjudication reduces the time taken to adjudicate a claim through a manual process, but there are a few limitations.
There are multiple reasons which could prevent auto adjudication. As it is a new technology and still in the development phase, some adjudication platforms have limitations regarding accepting certain loops or segments carried in the EDI. In these cases, things such as primary payer adjustments, and other PPO contractual adjustments may cause claims to be pending for review.
Claims auto-adjudication can be subject to even more causes such as billing errors, and mapping data from downstream data sources. Additionally, factors such as name mismatches can also cause pends for many platforms. If a provider bills the claim as Jenny but the patient is on file is Jennifer, how does yourplatform handle that?
How to improve auto-adjudication
How to improve auto-adjudication
Validation checks such as member matching, provider matching, and business rules and edits can help improve auto-adjudication to handle those discrepancies.
Member Matching
Member matching can help to reduce pends by normalizing differences between proper names and nicknames of the members. Additionally, this type of data validation and cleanup can resolve additional inconsistencies such as members being billed under their Social Security Number instead of their correct member ID.
Provider Matching
Provider matching works similarly to member matching and can help ensure only clean normalized claim data is presented to the system. Provider name variations, ID numbers, tax IDs, and other billing identifiers can be normalized through prior validation processes
Applying Business Rules and Edits
Other adjudication edits can be used to screen for other business cases preventing auto adjudication. This can include EDI edits and can go further such as ensuring that all diagnosis codes used are specific enough for payment. Custom or proprietary business rules can be enforced such as mapping provider contact information.
Benefits of Claim Auto Adjudication
Benefits of Claim Auto Adjudication
• Validation of data against adjudicating systems and computation of the valid claim amount for profitable collections.
• Machine-assisted adjudicated claims process with result-driven project plans tailored to your needs.
• Process transparency for enhanced collaboration with our clients; client-specific training for operational excellence.
• Compliance with HIPAA regulations and ever-changing guidelines for the maximum security of confidential information.
The final thoughts
The US government spends billions on healthcare, and considerable time gets wasted in claims processing and claim denial management. Claim auto adjudication with adaptive technologies can help in ensuring value by increasing accuracy, claim denials, reducing manual efforts, and accelerating the entire process. Though there are multiple claim adjudication systems today, they are not enough for the US Healthcare industry owing to their less user-friendly approach. However, with emerging AI technologies coming to the fore, we are optimistic that old adjudication systems will soon be replaced with new age adaptive adjudication systems.
Contributor
Srinath Avantsa
Business Analyst, Innova Solutions
Charan Gandhe
Business Analyst, Innova Solutions
About Innova Solutions
Innova Solutions is a leading global information technology services and consulting organization with 30,000+ employees and has been serving businesses across industries since 1998. A trusted partner to both mid-market and Fortune 500 clients globally, Innova Solutions has been instrumental in each of their unique digital transformation journeys. Our extensive industry-specific expertise and passion for innovation have helped clients envision, build, scale, and run their businesses more efficiently.
We have a proven track record of developing large and complex software and technology solutions for Fortune 500 clients across industries such as Retail, Healthcare & Lifesciences, Manufacturing, Financial Services, Telecom and more. We enable our customers to achieve a digital competitive advantage through flexible and global delivery models, agile methodologies, and battle-proven frameworks. Headquartered in Duluth, GA, and with several locations across North and South America, Europe and the Asia-Pacific regions, Innova Solutions specializes in 360-degree digital transformation and IT consulting services.
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