Learn more about Electronic Claims Processing and Medical Billing
Many claims are filed electronically, in fact, Medicare
A new study recently released by
Health Insurance Plans (AHIP) shows that three-quarters of all health
insurance claims are now submitted electronically, up from 24 percent in 1995,
allowing 98 percent of claims to be processed within a month of receipt from the
health care provider.
The proportion of insurance claims submitted to health plans
electronically has more than tripled in the last decade, reducing administrative
costs and significantly speeding up payments to doctors and hospitals.
In 2002, just 44 percent of claims were submitted
electronically, compared to
There is often a significant delay before health insurance
plans receive claims from health care providers, especially
for those claims still submitted on paper. In 2006, nearly
3 claims in ten were received more than 30 days after the
date of patient service, with one-third of the paper claims
not reaching the insurer for 60 days or more.
Twenty-nine percent of claims were received from health
care providers more than 30 days after the date of patient
service, and 15 percent of claims were received from
providers more than 60 days after the service was provided.
Fourteen percent were pended or delayed due to incorrect or
incomplete information, taking an average of nine days
longer to process while more information is requested from
Electronic claims are less costly to process
than paper claims. The average cost of processing a clean
electronic claim was 85 cents, nearly half the $1.58 cost of
processing a clean paper claim. Pended claims requiring
manual or other review cost $2.05 on average per claim to
Nearly half of all claims (48 percent) were
pended due to the submission of duplicate claims (35
percent), lack of complete information or other information
needed to justify the claim (12 percent), or invalid codes
(1 percent). Twenty-four percent of pended claims were due
to coverage issues, including no coverage based on date of
service (8 percent), non-covered or non-network benefit or
service (7 percent), coordination of benefits (5 percent),
or coverage determination (4 percent). Other or
miscellaneous reasons were the cause of the remaining 28
percent of pended claims.
In FY 2006, the enrollment for Medicaid was
estimated at 47 million people, with a total outlay of $317 billion.
In the past few years, the healthcare industry has gone through some big
changes. Although many claims are filed electronically, there are many factors
that cause claims to go unpaid and there are many reasons why providers still
need your assistance.
One reason is that employers are moving toward high
deductible health plans (HDHPs) to cut costs. There is also a new trend where
consumers are moving to health savings accounts (HSAs). Both of these types of
health plans require the patient to pay more out of pocket. That means providers
must work harder at collecting their money.
employers will continue to shift the costs of health care to members by
moving them into high-deductible health plans (HDHPs) and reducing
benefit coverage. As patients bear more of the financial burden for
their health care, it will be harder to collect these larger amounts.
Providers should expect to re-evaluate how their offices are run to
improve collections from patients.
The use of automated technology is very important in today's age of getting
insurance claims paid; tools like electronic medical records (EMR), electronic
funds transfer (EFT) electronic remittance advice (ERA), real-time adjudication,
claim scrubbing services, coding software products and other technology tools
are becoming increasingly necessary. However, not all providers can afford to
invest in those technologies and some simply don't want to, making outsourcing
of the claims process an attractive alternative.
Additionally, while the skill
level necessary to get claims paid has risen each year, the skill level of the
person performing the task in many provider's offices has remained the same.
Insurance claims specialists utilize much of the technologies mentioned above,
typically allowing them to produce better results in less time than the average
Carriers are also using data mining to create literally
millions of edits to reduce payments and deny claims. They employ various ways
to improve on the previous technology, such as greater selectivity (applying
edits to some providers and not others), longitudinal comparisons (i.e. based on
patient history), and pattern matching (i.e. upcoding).
Experienced medical billers can effectively utilize technologies available to
them to get claims paid and to fight claim denials. Every day, it gets harder
for healthcare providers to collect insurance dollars. Individually, providers
have a great incentive to utilize outsourced billing solutions.