The raison d'etre and central function of health insurers has had a slow time coming into the 21st century. But with both providers and patients demanding a better experience, the impetus for progress could bring a critical mass.
"Easy to understand, I'm not sure if that was there 10 years ago," said Raul Matas, Kaiser Permanente's director of claims strategy in California. "Are we as an industry going through a restructuring like auto?" Matas asked attendees of the Health Plan Claims & Service Operations Conference in Boston.
Exchanges are driving up competition, and consumers, providers and regulators are demanding "more and better for less," at the same time that insurance administrative costs get public scrutiny, with critics blaming insurers as key drivers of healthcare spending waste.
Industry-wide, though, it seems the whole claims process -- provider billing, processing, medical necessity review, determination, adjudication and payment -- has a long way to go. Hospitals and doctors complain of arduous claims filing systems and prior authorization, while manual internal processes that evolved in the 20th century generate inefficiencies, variation and uncertain (but certainly high) costs for the entire health system.
"Sometimes it's hard to stop doing things the old way and start doing them the new way," Matas said. Insurers are starting to try, though.
Among numerous other regional and national insurers, Blue Cross and Blue Shield of North Carolina started on the claims process transformation journey several years ago, and while adopting new technology and business systems was hard organizationally at first, it is has been paying off.
"When we started automating claims, the people on the claims floor were scared," recounted Leon Sabarsky, a lean project manager at BCBSNC, the state's largest insurer. "What if you get it wrong?" the claims department asked.
"Well, if it's wrong, it will be consistently wrong. Isn't that better than being inconsistently wrong?" Sabarsky responded, partly joking, alluding to the long-standing problem of variation in how healthcare claims were received, interpreted, decided and ultimately paid.
"We wanted to eliminate the variability: 10 people on the claims floor doing 10 different things with five different outcomes," Sabarsky said.
In 2008, early on in the transformation project, BCBSNC processed 660,000 automated claims. Last year almost 2 million were automated, and this year that figure is set to double. Some of the insurer's claims preparation tasks, a process needed to prepare some claims for automated systems, are also being outsourced, in an effort to prioritize staffers for more complex claims and customer service needs.
As BCBSNC's work shows though, sometimes claims have to be prepared before they can be automated, perhaps because of providers' propensity for paper-based billing, or because of insurers' long-time tradition of relying on paper.
Either way, it's clear that the entire claims process and lifecycle should be digital, and in some regions providers and insurers are collaborating rather than bickering to make that happen.
On the West Coast, Blue Shield of California is working with all of its provider network to streamline and rationalize claims via the Partnership in Operations Excellence and Transparency program, or POET.
It's not fully digital, but it is ready to free the insurer's claims of paper and offer two-way usability and adjudication, said April Barber, Blue Shield's senior provider relations manager.
The system offers providers a dashboard to view claims payment metrics, for instance, to see how they rank compared to the network average on claims denials, time to payment, appeals resolution and electronic submission rates.
Now, the insurer is experimenting with applying the digital methods to network segmentation and tiers and offering providers the chance to co-design integration platforms. "We're breaking down the assumption that we don't want to pay claims and only want to deny," Barber said.