Healthcare is a challenging profession. Providers understand that their mission of care delivery is fueled by the revenues they capture; after all, it is the business of healthcare. However, capturing revenues through the claims management process is burdensome and complex. Denials are all too common, hampered by inefficient workflows and manual tasks. As a result, it slows down reimbursement and impacts revenue. Moving toward reliable claim acceptance requires the strategic use of automation and technology to reduce denials. These initiatives accelerate the cycle of payments, improve cash flow, and ease strains on existing staff. This article takes a deep dive into the challenges of healthcare claims processing and strategies to help providers transform the claims management process.
Challenges of healthcare claims processing
The healthcare claims management process desperately needs modernization and optimization. Last year, an Experian Health survey showed that three out of four providers say reducing claims denials is their top priority. What’s making it so difficult for providers to get paid?
The healthcare reimbursement journey
Let’s start with the typical claims management process.
Step 1: Prior authorization
The first issue is that most generally accepted standard practices in healthcare claims processing create a long journey for provider reimbursements. This journey starts even before patient care, at eligibility and preauthorization. The American Medical Association (AMA) states, “Prior authorization is a huge administrative burden for physician practices that often delays patient care.” While prior authorization may help insurance companies reduce the cost of “unnecessary” treatments, the data shows it’s having the opposite effect on the providers themselves. An AMA physician survey shows that 86% of prior authorizations lead to higher overall utilization of services. The practice doesn’t appear to help patients, either; the AMA says 94% of doctors report care delays related to prior authorization, and 82% say patients abandon their treatment plans due to prior authorization struggles.
Step 2: Data capture
The second part of healthcare claims processing begins after the patient encounter. It involves many manual tasks, often leading to errors and claim denials. Intake and billing specialists must gather data from multiple sources for coding claims, including electronic health records (EHRs), physician notes, diagnosis codes, paper files, and the patients themselves. These workflows require significant manual data entry and review, which is impacted further when codes or insurance reimbursement requirements are out-of-date in provider systems. A recent survey shows that 42% of providers report code inaccuracies, and 33% say missing or inaccurate claims data as the top reasons for rejected claims.
Step 3: Processing claims denials
Post-submittal, there’s more work when claims bounce back. It’s part of the claims management process with the most inefficiencies and friction, costing the average provider millions annually. Healthcare providers experience Experian Health survey—but that number is rising. Responses from Experian Health’s State of Claims 2022 report revealed that 30% of respondents experience denials increases of 10 to 15% annually.
In June 2022, Experian Health surveyed 200 revenue cycle decision-makers to understand the current state of claims management. Watch the video to see the results:
These challenges illustrate the need for modern and optimized healthcare claims processing. With this lens in place, healthcare providers can apply more effective claims management strategies to increase claims accuracy and reimbursement and reduce denials.
Innovating your claims management strategy
Healthcare professionals and organizations can proactively address challenges in the claims acceptance process by implementing effective strategies to optimize revenue cycle management. This effort should include the following:
- A cohesive and comprehensive claims management process
New approaches to outdated claims management workflows will address gaps, inefficiencies, and errors. Upgrading to a turnkey insurance claims manager can reduce denials and speed up claims processing. - Address data quality and consolidation
The sheer volume of data required for healthcare claims processing increases the risk of errors. If the data isn’t accurate at the front end, it’s a fast track to denial. But claims go through multiple touch points in disparate systems without a single source of control and oversight. Organizations can employ standards for data intake to reduce inaccurate or incomplete patient information and duplicates and leverage technology to aggregate data from the multiple sources needed for claims processing. - Implement best practices for denial workflows
Claim denial management on the backend of healthcare claims processing is even more challenging than capturing patient data at the front end of the encounter. Managing claims denials is time-consuming, and delays reimbursements, but denial workflow technology can streamline all follow-up activities. With this support, billers have less administrative work and can stretch farther, alleviating the burden of staffing shortages. - Deploy tools for analysis and prioritization
A claims management platform can automatically analyze the components of each claim. With this information, the technology can prioritize denials workloads so high-impact accounts get the most attention. - Upgrade claims technology automation with artificial intelligence (AI)
Providers can transform claims management with a technology update. According to the State of Claims report, almost half of organizations replaced legacy healthcare claims processing technology in the past year. A vital component of this upgrade includes expanded automation capabilities that stretch the workforce further. Solutions like AI Advantage™ can help speed up the claims management process by predicting and preventing denials. - Add prior authorization software
Analysis suggests that healthcare could automate up to 33% of manual tasks. Research on the benefits of automation showcases its potential for decreasing errors and other reimbursement obstacles. With prior authorization software, task assignment is seamless, and AI adds even more functionality with predictive capabilities. - Accelerate claim follow up
Monitoring claim statusis another aspect of the payment ecosystem that heavily impacts provider cash flow. Technology automates much of this workflow. Organizations can adopt functionality that eliminates manual follow-up tasks to accelerate an unwieldy process. These solutions enable providers to respond quickly to issues, enhancing productivity beyond basic ANSI 277 claims status responses.
Technology is the unifying thread behind a cohesive claims management strategy for any healthcare provider struggling with a high rate of denials. While 61% of providers lack automation in the claims/denials process, increasing evidence shows these tools drive revenue cycle efficiencies that transform claims denials management. Forward-thinking organizations like Summit Medical Group Oregon—Bend Memorial Clinic (BMC) leverage Enhanced Claim Status and Claim Scrubber to achieve a 92% primary clean claims rate. Schneck Medical Center uses AI Advantage to denials by an average of 4.6% each month.
Implementing effective claims management strategies
Strategies rooted in reliable, practical technology transform the claims management process. Healthcare organizations benefit from AI-driven automation solutions as part of an overarching claims management strategy that streamlines workflows, reduces denials, and boosts cash flow. Experian Health offers a portfolio of provider claims management tools to help organizations realize effective claims management process improvements to get paid faster.
Learn more about the No. 1 Best in KLAS 2023 Claims Management and Clearinghouse tools or contact us to see how Experian Health can help improve your claims management processes.
