Medical claims clearinghouse vs. automated medical claims processing

Is automated medical claims processing replacing medical claims clearinghouses? Are the benefits of medical claims clearinghouses being eroded by new technology? Artificial intelligence is now an integral part of automated medical claims processing. Does the ability to learn on-the-job sound the death knell for clearinghouses?

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Time is very often of the essence when making a claim against your medical insurance. Historically there have been issues with incomplete claims documentation, which can lead to delays or even rejection. This led to the creation of medical claims clearinghouses, which were effectively a quality control check between healthcare providers and insurance companies. In recent times, we have seen the introduction of automated medical claims processing. Is this replacing the need for medical claims clearinghouses?

What is a medical claims clearinghouse?

The best way to describe a medical claims clearinghouse is an intermediary positioned between healthcare providers and insurers. In effect, a medical claims processing outsourcing service. Medical claims insurance forms come through the clearinghouse for checking before onward transmission to health insurance carriers. This removes what can be a time-consuming element of the claims process, allowing healthcare professionals to concentrate on delivering healthcare services.

What do medical claims clearinghouses do?

The format in which clearinghouses provide medical claims processing services means that everything is transmitted electronically. So whether we are looking at a UB-04 or CMS-1500 medical claim form, the progress of each medical claim can be tracked online. Considering that some US healthcare providers may have thousands of ongoing medical claims, this online dashboard is extremely useful.

Aside from centralised electronic transmission, some of the primary services provided by medical claims clearinghouses include:

• Insurance eligibility verification

• Individual status reports

• Electronic remittance advice

• Patient statements

• Detailed claims checking

The outsourcing of basic, time-consuming data entry jobs has undoubtedly assisted in reducing medical claims processing times.

How do clearinghouses fit within the medical industry?

Historically, claims submission processing in medical billing often involved outsourcing claim forms checking to overseas parties. As a means of reducing costs, this often involved companies based in the Philippines and India. The transfer of highly confidential patient data to overseas parties may have been cost-effective but led to numerous data protection issues. Step forward medical claims clearinghouses, based in the US, operating under US laws with highly effective data protection procedures.

There is no doubt that medical claims clearinghouses will continue to play a role in the industry in the future. However, significant improvements and developments in the automated claims process have given large insurance companies another option.

What is automated medical claims processing?

Automated medical claims processing has been a game-changer for many medical insurance carriers, facilitating controlled automation in the medical industry. These software packages use various ground-breaking technologies such as:

• Robotic Process Automation (RPA)

• Cognitive Process Automation (CPA)

• Artificial Intelligence (AI)

In tandem with state-of-the-art optical character recognition, it is now possible to automate the process of reading structured and unstructured medical claim forms. Consequently, the software will go looking for the information it requires and find it, no matter where it is placed on the form. Where the information is missing, this is noted, and the relevant third party is automatically contacted.

This automated medical claim data extraction procedure, allowing data to be transferred to the insurer's internal system, encompasses the role of a data entry clerk. The extraction process is highly accurate and much quicker than a human worker. Claims automation also allows the use of artificial intelligence to consider claims and take the appropriate action. This may involve:

• Payment of the claim in full

• Rejection of the claim

• Edge cases, or claims flagged for manual intervention

The ground-breaking automated medical claims software that we see before us today also can "learn on-the-job". It can also check for fraudulent claims, suspicious claim patterns and allow the insurance company to produce useful statistical reports.

See also: How does automation benefit the insurance industry?

How does this fit within the industry?

The review of medical claims forms has historically involved an enormous element of manual labour. While there were issues with accuracy and processing times, this also meant redirecting the skills and resources of individuals away from more productive activities. The outsourcing of such actions to overseas parties, and the more recent use of medical claims clearinghouses, certainly proved beneficial. However, new technology is even quicker and more efficient.

The use of AI, RPA, CPA and optical character recognition technology supports claims process automation from start to finish. The reduction in the cost of entering data allows savings to be redirected elsewhere. Historically, the processing of medical claim forms has caused huge bottlenecks and extended the settlement process. The detrimental impact on customer satisfaction did not go unnoticed.

See also: How to improve claims handling with automation

How does a medical claims clearinghouse compare to medical claims automation?

There is no doubt that medical claims clearinghouses deliver significant improvements over outsourcing to manually intensive third parties. However, with many large insurance companies now installing automated medical claims software, there have been even further cost, efficiency, and time savings.

Here at Roots Automation, we can deliver a 99% straight-through processing rate. Our fully automated software package is between 400% and 800% faster than a human worker. Installing such software in-house removes an additional layer of administration in the shape of medical claims clearinghouses. The benefits of the clearinghouse dashboard can be replicated by insurance companies when dealing with healthcare providers. The potentially huge returns on investment going forward, as the software utilises artificial intelligence, will benefit the insurance company instead of the clearinghouse.

Conclusion

Looking back over recent times, we can see the natural progression from internal manual processing to outsourcing, to the use of medical claims clearinghouses, to today’s in-house AI software technology. Automated medical claims processing software is already delivering numerous benefits with more to come. These include:

• Significant cost savings

• Redirection of staff to client-facing activities

• Automation of the claims process through to settlement

• Improved accuracy levels

• Faster processing times

• Improved customer satisfaction

The use of artificial intelligence is a bonus because the software will continue to learn and adapt with the potential to become even more efficient. In addition, the removal of manually intensive processing activities allows insurance carriers to fully utilize their employees' skills and experience. We have already covered the contribution to improved customer satisfaction, but this is also beneficial for the retention of employees.