• Skip to main content
  • Skip to footer

SmartLight Analytics

Reducing healthcare costs for self-funded employers

  • The Problem
  • The Solution
    • Frequently Asked Questions
    • Testimonials
  • About Us
    • Jobs at SmartLight
  • News & Blog
    • Whitepapers
    • SmartLight Blog
    • Press Releases
    • Case Study Fort Worth
  • Contact

June 15, 2022 By SmartLight News Desk

High volume of small errors can add up to millions in waste for your health plan

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:

  1. 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.

Share this:

  • Twitter
  • Facebook
  • LinkedIn
  • Print

Filed Under: costs, healthcare Tagged With: claims process, errors, Waste

ambulance architecture building business

Inappropriate ER use has gone from serious to critical

November 1, 2021 By Franklin Baumann, MD

Correcting ER overuse has the potential for substantial cost reductions for employers and improved health outcomes for employees.

Who’s Watching the Money?

October 28, 2021 By SmartLight News Desk

Examining exactly where healthcare dollars are spent is not just a budget management or cost-saving practice for business, as plan sponsors are reminded often, it is also a fiduciary responsibility under the Employee Retirement Income Security Act (ERISA).

SmartLight Analytics opens new Plano, TX headquarters

September 16, 2021 By SmartLight News Desk

SmartLight Analytics opens its new Plano, Texas, headquarters this week beginning a new chapter for the growing team of data and clinical experts working to help self-funded employers to reduce healthcare spending by identifying and eliminating fraud, waste, and abuse in healthcare claims.

Footer

4965 Preston Park Blvd. Suite 350
Plano, TX 75093
Phone: 214-501-1046
Fax: 214-501-1208

About Us

SmartLight Analytics combines the best inferential analytic models with a team of analytic  and clinical experts to find fraud, waste, and abuse in self-funded employer health care plan claims data.
Learn More >

Connect

  • Email
  • LinkedIn
  • Twitter
SmartLight Analytics has been named finalists in D CEO Magazine Excellence in Healthcare Awards 2020 for Outstanding Service Innovation.

Copyright © 2023

  • The Problem
  • The Solution
  • About Us
  • News & Blog
  • Contact
Close