Pitfalls for Insurance Claims Processing

Egor Kobelev, Software Delivery Manager at DataArt, discusses the challenges in insurance claims processing and ways to solve them.

“As of today, different sources report that up to 75% of claims are electronic, with the vast majority following the EDI X12standard. Seems pretty good at first glance, doesn’t it? Yes, until you realize that X12 was formed in 1979, its insurance subcommittee established in 1991, and that the remaining 25% of claims are still done on paper. Even after a quarter of a century, we still haven’t been able to relegate paper claims to the periphery of claims processing – they still make up a significant portion of the insurance market – and have not moved past the 35-year-old X12 standard, which claims the highest industry adaptation.

… Filing a claim involves supplying the appropriate diagnosis and procedure codes accompanied with appropriate modifiers pertaining to the treatment performed. However, simply filing those codes into a claim does not guarantee that it will actually be paid. Significant numbers of claims submitted to insurance companies get denied or rejected because of mistakes in diagnosis and procedures encoding. To make it clear, those are not exactly mistakes but rather discrepancies with certain carrier guidelines. So “scrubbing” refers to an intricate cleaning of a claim prior to its submission aimed at decreasing the percentage of denied claims, shortening account receivables, and increasing collections. … Probably the major issue here is how the rules necessary for scrubbing are provisioned. Simply put, there is just no unified process for obtaining it. Claim scrubber software companies hire physicians and nurses who work full time evaluating real-time medical necessity data posted by insurance companies around the country on their websites. Here, it appears that automated scrubbers just shifted manual efforts down the line instead of eliminating them altogether.

While the industry may be moving in the right direction, it’s not moving quickly enough and if it continues on this same pathway of growth, it will have little chance to catch up with technology. What the industry really needs is a bit of an acceleration so that it can move the technology needle forward and finally get some real benefit out of it.”

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