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Tensions between healthcare providers and insurers are at an all-time high, and the claims process is a major contributor.

Nearly 40% of physicians consider insurance and regulatory tasks one of the most undesirable parts of their job according to the 2018 Survey of American Physicians by The Physicians Foundation. In a 2020 Burnout Survey, Pain Physician Journal reported that 67% of physician respondents believed that billing and coding in-house was responsible for their stress and burnout.

Payers who want to continue to serve their members without being cast as the villains of the story should work aggressively to prevent relational dynamics that alienate their members’ healthcare providers. One of the best ways to do this is to make the healthcare claims process easier for providers, physicians and their staff to increase the chance that insurance claims are paid on the first submission and without the need for appeals. Given the complexity of the healthcare system, this is no easy task, but payers can succeed by focusing on three critical steps of the process.

Step 1: Preauthorization

A major pain point for healthcare physicians and their staff in the claims process is preauthorization. Payers require certain procedures and medications to be preauthorized before they are administered. However, because there is no industry standard for the way payers approach preauthorization, the result can often mean patient wait times ranging from five to thirty days.  According to a 2021 article by the American Medical Association, the current weekly workload for a single physician’s preauthorizations consumes two whole days of staff time. Additionally, 90% of physicians believe preauthorization has a negative impact on patient outcomes.

A typical healthcare practice may carry a thousand patients, with each patient having varying levels of coverage. Medical and clinical staff will generally consult the payer insurance plan to determine if a patient’s prescribed treatment requires preauthorization. The usability of the chart — how easy it is to read and understand — is one small area in which payers can have a big impact on making sure that preauthorization doesn’t result in a denied claim.

Of course, that isn’t the only touchpoint in preauthorization that needs improvement. Payers should conduct a comprehensive data analysis to determine which treatments cause issues in preauthorization and why. In most cases, payers will find that problems with preauthorization can be greatly reduced with impactful, thorough communication strategies that target the right moments of payer-provider/staff interaction and make it easier to understand requirements. Payers striving to be user-friendly will find themselves in greater demand with both providers and members.

Step 2: Data Requirements for All Submissions

While preauthorization can seem dauntingly complex, many inefficiencies in claims processing come from the simplest step — improper submission of data. In too many cases, when a health insurance claim is denied, it is because of a simple entry error; the wrong date or a misspelled patient’s name on the submission form, for example. Unfortunately, such mistakes are more likely to happen at small practices in remote or underserved areas that rely on manual claims submission rather than claims submission software programs with the capability to flag such errors.

Payers can help reduce the costly and stressful inefficiencies of data-based claim denials with an analysis of which errors cause denials. A carefully designed provider outreach program with active communication of data requirements and advance notice of requirement changes can greatly reduce these glitches in the system.

Step 3: Getting It Right the First Time

When a claim for payment is rejected, typically the only explanation the payer offers is an obscure code that the provider must look up in a policy guide in order to interpret. Payers can do a better job of explaining upfront what sorts of network, patient or treatment issues will result in a denied claim. With clear command of such knowledge, it is less likely there will be a decision that will result in a denial, creating frustration and possibly financial difficulty for both provider and patient.

Payers should examine rigorously how providers come to understand standards for payment and address any breaches in awareness with strong messaging and educational services about payment. Ultimately, payers who improve communication on all steps in the claims process will be rewarded with greater long-term loyalty from their provider and patient community.

As it stands, according to a 2019 blog post from Experian Health, more than 76% of claims initially denied in the adjudication process are later paid. This is an indication that in some cases it is not the physicians/clinical staff but rather the process that is the cause of claims submission issues. Payers who proactively adapt to the needs of providers and patients to reduce abrasion will have a clear business advantage.

Northridge offers healthcare solutions for making the claims process easier for providers and improving the overall physician and patient experience. Contact us to learn more.


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