Solutions to the Challenges of Payment Assurance



By Jay Ratcliffe, Director of Payer Product Management

Imagine this: Patient Jane Doe arrives for an appointment. Upon check-in, the front desk staff verifies eligibility and finds that the patient has a $2500.00 deductible of which $350.00 has already been used. Ms. Doe sees the physician for a new patient visit and the physician orders an in-office sonogram which is also performed. The physician reads the scan and creates a plan of care with Ms. Doe. At check out, the clerk checks the encounter data, accesses the patient eligibility, adds diagnoses and procedure codes, and asks for patient liability. Moments later, the clerk turns to the Ms. Doe, hands her an insurance Explanation of Benefits and a statement which indicates the results of insurance processing and the balance due.

Sound like science fiction? In reality, this type of scenario is getting closer every day. In October 2007, a group of insurers, hospitals, providers and vendors met to explore the challenges of real-time claiming at the WorkGroup on Electronic Data Interchange (WEDI) and X12 joint meeting on Health Savings Accounts and Real-Time Claim Adjudication. Emdeon had the opportunity to present a vision of a many payer/many vendor/many provider network of real-time claiming supplemented by patient responsibility estimation. Attended by both providers and payers, feedback and concerns for where the industry is headed was plentiful. Providers expressed concern that the results of initial adjudication may be adjusted later on, and the payers in the room acknowledged that while adjustments do happen after adjudication, they are rare exceptions that also occur today and are supported by the batch electronic remittance advice and electronic payment processes. The group agreed that the results of adjudication should be considered final and reliable, and discussed detailed transaction flow models which have been published by WEDI, defined a common glossary of terms and looked at the experience of proof of concept systems from the perspective of providers, payers and vendors.

What is real-time claim adjudication? It is a change to the reimbursement cycle to allow providers and insurers to communicate around claims in real time. A single claim is submitted, and within seconds the payer returns the results of adjudication. In exception cases where the claim does not successfully adjudicate, the plan would respond indicating the information or action required for the claim to move forward. The provider would also potentially have the ability to request an Estimate of Patient Responsibility based on allowed amounts for the procedures and the current state of the patient's accumulated usage towards benefit limits.

This whole process can present quite a challenge, however. According to Bob Booz, VP Distinguished Analyst for Gartner, "Because providers have that direct contact with the member/patient at the point-of-service, a provider can be turned into the customer service department for the payer. Unless and until there is transparency available to that member from the health plan at point of service (including complete EOB, information on benefits, etc), providers can find themselves in a difficult situation. When designing a real-time claim adjudication system, you are also taking on a real-time customer service function."

Payers are actively working to improve auto-adjudication rates and to tie real-time EDI interfaces into their claim adjudication systems. Payers are responding to pressure from employers to reduce costs through rapidly growing plan models based on high-deductibles, many of which are linked to health savings accounts (HSAs) or health retirement accounts (HRAs). Membership in these consumer-directed health plans (CDHPs) has consistently increased since the introduction of this model. Market research indicates that approximately 10 million members are currently enrolled in such plans nationally.

Consumer-directed health plans change the status quo for providers and patients. Rather than collecting a nominal copay and sending batch bills to the insurer for the majority of the balance, the patient is responsible for much of their health care spending. Providers are now responsible to collect from the patient amounts which reflect adjustments based on the provider's insurance contract. Booz noted "An EOB, supplemented with the printout of a plan document or summary plan description, allows the provider's office to give a patient the EOB and an explanation of what it means. In this scenario, health plans are both helping the member understand their coverage and maximizing a provider’s ability to serve their patients."

A small number of vendors and payers have begun to offer real time claiming. This is frequently done through a web application which enables providers to manually enter claim data and view a response on a web page. While this proves the concept that plans can process claims in real time, provider adoption of these single-payer tools has been low. Emdeon believes that in order for real time claiming to reach a tipping point and become a mainstream option, a national transaction network with access to multiple payers is needed. Today, Emdeon has this network in place and is actively working with payers and providers to merge real-time interaction with insurers into their claiming products while also working with numerous POMIS and HIS vendors to tightly integrate with the clinic front-desk process. The market will continue to evolve and require tools that can support the shift toward consumerism and real-time claiming is one of the key changes that will enable that transition. Still sound like science fiction? Remember, it was less than two decades ago that the health insurance industry thought a more than 80 percent electronic claims processing rate was science fiction!

Jay Ratcliffe is the director of payer product management at Emdeon Business Services. Have a question or are interested in learning more about where the industry is headed with real-time claiming? Email him at jratcliffe@emdeon.com
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