The process of paying a medical claim involves multiple stages with built-in checks and balances. Yet because the process used by claims administrators is largely automated and complex, errors in claim payments persist, costing self-funded employers millions.
Health insurance companies acting as claims administrators for self-funded employers each use their own workflows for processing claims, some with as many as “20+ checkpoints that every claim must go through before it’s approved,” but the basic claims processing works as follows:
- A claim is filed by a doctor or hospital. While most providers submit claims electronically, in some cases, this is still done via paper submission. In those cases, the paper submission is either scanned or entered manually into the claims system.
- In some cases, prior to reaching the claims administrator, a claim is routed to a claims clearing house to check for accuracy and confirmation that it is technically within bounds.
- The first step in processing the claim is a technical review to check for errors such as misspellings and duplications.
- Each claim is then checked to verify the member’s insurance eligibility, followed by a check on the billing provider’s network status.
- Claim payment is determined based on benefits coverage, policies, and negotiated network rates.
- A small percentage of claims are reviewed manually for the reasonableness of the billed service, including a risk assessment for signs of improper payments.
- In the final step, once the appropriate payment is determined, checks are sent to the billing provider for approved claims.
Even with this detailed process in place, mistakes and errors slip through to claim payment. In reviewing self-funded employer claims after payment, overpayments from common mistakes such as unexpected units, duplicate payments for the same service to the same provider, and clerical keystroke errors exists. Examples of errors and mistakes found in claims after payment include the following:
- Duplicate payments were found in paid claims when the same service for the same member was paid twice to the same provider. Some duplicate payments slip through the automated claims processing due to having providers resubmitting the same service multiple times using different claim numbers and submitting the claims months apart. Other duplicate payment occurs when the same provider submits the same claim to different claims administrators, for example, a dentist bills anesthesia for a dental procedure to both the medical plan and dental plan.
- Simple clerical errors or fat-finger typos were found in each population of paid claims reviewed. The findings can show errors such as when one claim was submitted with 50 units of a chemotherapy infusion when only 1 unit would be medically expected for such a treatment. The error was a nearly $14,000 mistake that was caught after payment.
- Billing errors can be found in caseswhen the provider submits a claim in error, such as when a surgeon bills for one procedure during a surgery and the hospital bills for the same procedure plus additional procedures that the surgeon did not bill. This extra billing can occur when the hospital bills for the procedures that were prior authorized and not what was performed on the day of surgery. When viewed in context with other billing from the same day, the billing by the hospital was inconsistent or contradictory. Inferential analytic claim reviews, followed by clinical reviews, repeatedly identify claim billing errors post-payment.
These examples show a variety of instances of wasteful payments that pass through unnoticed in the complex adjudication of health care claims. If errors or mistakes are found quickly after payment , there are multiple options for remediation of the over payment. Catching and correcting these seemingly small errors can result in substantial refunds to an employer’s health plan.
Sources:
Anderson, Ashley Taylor; Drapos, Gabe; and Wirkes, Thorsten, “Better claims processing, better health care experience,” Oscar.
Hanson, Brinna, “The Medical Claims Process: A Simplified Guide,” December 5, 2020, SmartData Solutions.
Jeffries, Melissa, “Insurance Claims,” How Stuff Works.
“Health insurance claim errors waste $17 billion annually,” Continuum, CareCloud.
“Medical Claims 101: What You Need to Know,” Definitive Healthcare.
“Your Simple Guide to Understanding the (Not-So-Simple) Health Insurance Claims Process,” April 13, 2012, Anthem.
“6 features to streamline your payment workflow,” Change Healthcare.
Claims Data, National Library of Medicine.
