The passing of the healthcare reform bill has sounded the drumbeat of change, bringing greater access to healthcare to U.S. citizens. For payer organizations, this will result in a greater number of enrollments, increased claims processing and additional customer service requirements. Other changes payer organizations have to contend with include operational challenges, such as conversion to standards and changes in medical coding.
The result: healthcare payer organizations will need to upgrade software and systems and have the resources to evaluate, implement, test and manage these new systems. Additionally, they'll need to implement new processes to facilitate compliance with the latest standards.
As the deadline for compliance approaches, the big question on everyone's tongue is what is the greatest path to compliance and efficiency? The options include managing the process in-house, taking a blended approach using internal resources and external support or electing to fully outsource to a Business Process Outsourcing (BPO) provider.
Going it alone: For many organizations it doesn't make sense to manage claims processing and compliance conversion in-house. In addition to diverting resources from core responsibilities and other strategic initiatives, organizations don't necessarily possess the expertise and knowledge to ensure compliance with increasing regulatory complexities. Managing claims processing in-house also requires maintaining and training staff as well as devoting significant physical space to house equipment and documentation ? real estate that could be devoted to primary profit-generating activities.
Partial outsourcing: Some organizations may elect a hybrid or blended approach to achieve ICD-10 and HIPAA 5010 compliance. That is, retaining some processes in-house with third-party support or employing a multi-vendor strategy. For example, a BPO provider might provide a Software-as-a-Service (SaaS) infrastructure for claims processing and the internal operations staff would handle the data entry. This allows for the sharing of cross-industry and cross-organizational knowledge and can provide insight to benchmarking and opportunities for streamlining processes. It offers the advantage of flexibility, but it also places more responsibility on the payer organization, requiring them to manage multiple processes and increases the risk of oversight while requiring additional staff to manage the relationship.
Total Outsourcing: Embracing an outsourcing strategy can provide significant opportunities to curtail costs, streamline processes and increase efficiencies while empowering healthcare payers to focus on core competencies. The benefits include immediate access to necessary expertise and qualified resources that eliminate backlogs and tighten turnaround times by as much as 50%.
With an outsourcing service partner, service level agreements provide predictability in service, and claims are processed in less than 24 hours. An outsourcing service provider will offer the flexibility to handle volume fluctuations. This enables payers to scale effectively and to focus on more value-added activities such as high-touch customer service. By ensuring timely claim processing, payer organizations can reduce the risk of penalties for non-compliance.
Outsourcing also provides rapid access to industry compliant technology solutions and electronic workflow tools that automatically route claims for review, action or approval. This results in greater efficiency. When delivered via SaaS, organizations alleviate the need for additional capital expense and gain access to a secure Web-based data repository and data protection via online backup and recovery. Administrative expenses and claims processing time is reduced and customer service improves as a result of smooth and accurate transactional activity. Payers also gain improved visibility into claims processing, enabling them to better manage internal operations.
Another benefit: outsourcing increases operational first pass rate improvement due to enhanced business rules and greater claim accuracy. It alleviates the need for manual adjudication, thus reducing the cost per claim. By improving the first pass rate and eliminating manual intervention, payer organizations are able to save millions of dollars each year, improve service to members and reallocate staff to value-added functions.
An outsource service provider will also be able to offer proactive solutions based on their experience with other payer organizations. By working with multiple plans, they can share industry best practices and provide additional savings through economies of scale. An experienced outsource service provider will help drive continuous improvement, ensure standardization of processes and integrate with the payer's corporate culture while delivering sound business practices and regulatory requirements.
A provider with a blend of onshore and offshore capabilities will further reduce costs and ensure best-in-class disaster recovery and business continuity. Payers can also take advantage of reduced costs through labor arbitrage without the challenging aspects of coordination, cultural differences and lack of local familiarity.
As organizations prepare for regulatory change and an influx of new member applications and customer service requirements, the need to increase operational efficiencies, reduce costs and ensure compliance with new regulations is essential. With the right access to resources and expertise, organizations can swiftly comply with the latest standards and effectively adapt to the changes and challenges brought on by healthcare reform. Change is underway. What's your plan to embrace it?
Michael H. Smith is the Senior Director of Business Development for SOURCECORP, Inc.. With more than 15 years experience in the outsourcing industry and a member of numerous industry advisory boards, Smith brings an informed perspective on trends and best practices in BPO solutions for the healthcare industry. He is also a Certified Information Capture Professional and Certified Document Imaging Architect. For more information, email MikeSmith@srcp.com..