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Health plan payers receive an enormous number of claims each year as they are responsible for reimbursing physicians and facilities for the services they provide to plan members. But the high volume and complexity of healthcare services, combined with the varying levels of coverage and the need for accurate reimbursement can make it difficult to process claims accurately.
To ensure payment accuracy, payers must have well-trained staff, effective processes, reliable technology, and accurate up-to-date information about the patient’s plan and benefits. But despite all the efforts, inaccurate numbers can still affect claims processing.
4 Factors Affecting Payment Accuracy
There are several factors that can affect payment accuracy. Here are some of them:
Complex Payment Rules
Health plans must comply with complex payment rules, including fee schedules, billing codes, and reimbursement rates, which can vary depending on different regions, specialties, and provider groups. This means that healthcare providers in different areas may charge different amounts for the same service.
This variation makes it challenging for health plan payers to determine the appropriate reimbursement amount for each claim.
Another factor that adds to the complexity of claim payment is member seasonal geolocation. Some health plans may cover members who travel or live in different regions throughout the year, and this can impact the cost of healthcare services. For instance, if a member travels to a region where healthcare services are more expensive, the cost of their care may be higher, which can impact the amount of reimbursement provided by the health plan payor.
Coding Errors
Medical coding involves using standardized codes to represent various medical procedures, diagnoses, and treatments. These codes are used by healthcare providers to submit claims to health insurance companies for reimbursement. However, errors in coding can result in incorrect payments, which can affect both providers and patients.
If a medical procedure is coded incorrectly, the health plan may pay too much or too little for the service. For example, if a patient receives a chest x-ray, but the medical coder accidentally codes it as an MRI, it will generate an incorrect billing amount. This can result in unnecessary costs for the health plan, which can ultimately lead to higher premiums for plan members.
Incorrect coding can also lead to delays in reimbursement, as health plan payers may need to review claims more carefully to ensure that they are paying the appropriate amount for the service provided. This process can result in delays and create consequential financial problems for healthcare providers.
Poor Interoperability
When two organizations come together, the different technology platforms they use may be incompatible. This can lead to redundancies, and inconsistencies in claims processing, which can have a significant impact on the quality of care provided to members.
In addition to the challenges of organization consolidation, many payer departments operate in silos. For instance, claims processing, provider network management, and member services may operate independently, each with its own set of tools and systems. This lack of coordination can lead to duplication of effort and errors, ultimately leading to higher costs and lower quality of care.
Read more: 5 Reasons Why Interoperability in Healthcare is Critical
Audit Requirements
Healthcare payers are subject to regular audits by regulatory bodies such as the Centers for Medicare and Medicaid (CMS). These audits require a significant amount of tracking and documentation to ensure compliance with regulatory requirements. The process of preparing for and passing an audit can be daunting, as it involves the collection and processing of a vast amount of data.
When an engagement letter is received from the auditor-in-charge at the CMS, it marks the beginning of a rigorous process that requires payers to fill out forms and provide appropriate documentation, like financial statements, policies and other relevant documents. The payer is responsible for ensuring that all documentation is complete and accurate. Any incomplete or missing information can result in the payer failing the audit and incurring penalties.
Additionally, health plan payers can also be affected by fraudulent or wasteful billing practices. This can include billing for services that were not provided or billing for services at a higher rate. All these factors can affect payment accuracy and cost payers a lot of time and money.
However, automation and technology can help improve payment accuracy by reducing errors and providing valuable insights into claims data. By leveraging different software and tools, payers can ensure that claims are handled efficiently and improve the overall quality of patient care.
Read more: 4 Reasons Why Audits Are A Necessity in Healthcare | Mirra HC
How Can Automation Improve Payment Accuracy?
Automation can help streamline claims processing by doing the following:
- Reduce errors from manual claims processing
- Help integrate with preexisting systems
- Maintain compliance with regulatory requirements
- Track all documentation needed for an audit
- Offer real-time tracking to identify issues as they arise
- Detect inaccuracies in claims data
Moreover, advanced machine learning algorithms, real-time analytics and predictive modeling can help payers identify high-risk claims and providers, detect potentially fraudulent claims and provide instant feedback on the accuracy of payments.
How Mirra’s Technology Can Help Health Plans Ensure Smooth Claims Processing
Mirra Health Care is your trusted partner for seamless claims processing. As a third-party administrator (TPA), we specialize in providing health plans with services designed to optimize
claims management. Here's why our services are the key to smoother claims processing:
- Enhanced Information Accuracy: We reduce manual entry of CMS-driven information, significantly reducing the likelihood of errors and ensuring the accuracy of your claims by encouraging submission of claims through EDI clearinghouses.
- Transparent Audit Trails: Our robust system maintains comprehensive audit trails, guaranteeing transparency and traceability throughout the claims processing journey.
- Efficient Payment Tracking: With our technology, tracking and reconciling payments from Low-Income Subsidy (LIS) and Social Security Administration (SSA) becomes effortless, minimizing discrepancies.
- Enforced Documentation: Our technology enforces rigorous documentation for manual adjustments and transfers, ensuring compliance and accuracy.
Visit Mirra Healthcare’s website to explore their Medicare in a box solution and Claims Adjudication service and learn how it can help improve the accuracy of your claims processing system. For more information, contact us.
