Which of the following adjudication outcomes requires a manual review of the claim by the payer?

Author

Brinna Hanson

Brinna is a marketing professional and graduate of the University of Minnesota. Brinna joined Smart Data Solutions in 2019 to assist the marketing department reach new heights with a focus on the HubSpot inbound process. From her time at Smart Data as well as at previous internships, Brinna has been able to gain knowledge in many different aspects of marketing as a whole.

Every industry adjudicates to some degree. While adjudication is a common phrase in insurance circles, the term ultimately means “to determine.” 

Depending on the circumstances and context, adjudication can follow a distinct process that results in unique outcomes, but at the core of the determination, the logic is simply “yes/no” and “if/then.” For example, if my car is in an accident, then my insurance will pay me for the damages.

Simply put, the claim adjudication process checks for accuracy and relevancy, with consideration of a member’s benefits, before the claim is covered by the Payer.

Claim Adjudication Process

The claim adjudication process in healthcare follows a thorough review workflow from all parties involved, including Payers and Providers, to determine one of three outcomes for the claim: paid, denied, or pending.

Over the last few decades, this process has moved more toward automation and auto-adjudication with the help of advanced technology and the expert teams behind it.

However, when Payers don’t have in-house technology to standardize files for auto-adjudication, the process can be hindered, leaving manual review as the only option. Smart Data Solutions (SDS) has 22+ years of experience working with Payers to use technology solutions to help create processes that improve auto-adjudication rates, reduce overhead and increase the speed of workflows.

Claims Adjudication Workflow

The claims adjudication workflow is a simple progression of logic and generally adheres to a path like this:

1. The claim is accepted into the system. Then it’s given a basic information check that ensures it’s not a duplicate, the patient’s personal information, including plan ID number, is correct, and there are no omissions or errors on the claim.
2. The claim then moves on to the detailed information check, which will look for diagnosis and procedure codes, and match patient ID to patient DOB, which is verified by Payer internal records. In this stage, the patient is confirmed to be a participating member of the insurance plan, and their member number is cross-referenced to determine coverage. 
3. Finally, a decision is made: paid, pending, or denied. Once the decision is made, claim adjudication results in an Explanation of Benefits (EOB) or Electronic Remittance Advice that explains how the Payer came to that decision.

While this process seems simple enough, the lack of standardization across the industry means execution can be drastically different from Payer to Payer. This video from the IPS Learning Institute walks through the claims adjudication process in healthcare to break down each step for a better understanding of adjudication. 

Why Do Claims Get Denied? 

Of the three categories — paid, pending, or denied — only one needs further explanation. 

Denied claims fall into three categories: administrative, clinical, and policy. The vast majority of claim denials come from administrative errors or unclean data streams that feed auto-adjudication. Denials can happen for a number of reasons including patient eligibility, missing or invalid Payer ID, duplicate claims, missing or invalid diagnosis codes, and more.

When a claim is denied, it’s most often appealed, which then triggers a review and the rectification of any errors. However, this extra step extends the time it takes to process a claim — plus each Payer has their own standards for when claims need to be submitted or resubmitted. Automation can catch these errors earlier upstream allowing for an accurate EOB the first time or a faster review of an appealed denial. 

Optimize the Claim Adjudication Process in Healthcare with Advanced Automation

By using proprietary intelligent automation, SDS excels at analyzing current workflows, technology, and processes to identify where automation can create a smarter approach and make pre-adjudication easier.

We use validation checks over a number of criteria that allow claims to pass through systems quickly and accurately. By partnering with SDS, Payers have the ability to utilize and maintain state-of-the-art technology without the expensive workforce on the payroll. 

Claim processing doesn’t have to be a headache. By utilizing SDS technology, both Payers and Patients can benefit. Simplified workflows, fewer errors, and ultimately lower expenses are possible by preparing claims for auto-adjudication.

Learn more about SDS’ approach to Medical Claims Management or reach out for a consultation today!

Author

Susan Berndt

Susan is a creative marketing professional with a demonstrated history of working in the hospital & health care industry. Susan joined Smart Data Solutions in 2016 focusing on marketing strategy, campaign execution and creating an inbound marketing funnel. She has over 10 years of marketing/advertising experience and over 12 years of customer service experience.

Medical claims adjudication refers to the determination of the payer’s responsibility with respect to the member’s benefits and provider payment arrangement. The insurance company has a few actions it can take – they either pay the full amount of the claim, deny the claim, or reduce the amount that is paid to the provider per contractual rates. Improving auto-adjudication can drastically improve how quickly and precisely claims can be processed.

What Makes Auto-Adjudication Better Than Manual?

Auto-adjudication is the process of paying or denying insurance and public benefits claims quickly without reviewing each claim manually. Auto-adjudication uses advanced AI software to scan for errors then match key details to make the decision of approval, denial, or a change to the claim automatically.

Auto-adjudication isn’t just a tongue twister, it’s changing the entire way claims processing is done. It creates a seamless channel that is both paperless and humanless. We’ve talked about how long it can take to process a medical claim from the day of the appointment, to finally getting paid by the insurance company.

What Could Be Limiting Auto-Adjudication? Internal & External Influences

Internally there are multiple reasons which could prevent auto adjudication. Some adjudication platforms have limitations regarding accepting certain loops or segments carried in the EDI. In these cases, things such as primary payer adjustments, and other contractual PPO or bill review adjustments may cause claims to pending for review. Additionally, many procedures could be flagged by the payment system to ensure that medical necessity or prior approval was provided for the services.

Externally claims adjudication can be subject to even more causes such as billing errors, and mapping anomalies from downstream data sources. Billing errors can generally be detected upstream through standardized SNIP edits but each payer is unique regarding their provider relations, error management, and validation rules. Additionally, factors such as name mismatches can also cause pends for many platforms. If a provider bills the claim as Jenny but the patient is on file is Jennifer, how does your platform handle that?

How Do We Improve Auto-Adjudication?

A number of upfront validation checks such as member matching, provider matching, and business rules and edits can help improve auto-adjudication to handle those discrepancies.

Member Matching

Pre-adjudication member matching can help reduce pends by normalizing disparities between proper names and nicknames of your members. Additionally, this type of data validation and cleanup can resolve additional inconsistencies such as members being billed under their Social Security Number instead of their correct member ID. Even for cases where all of the information is correct, the claim may be for an individual who truly is not a member of your plan or perhaps a member who had coverage at one point but not during the dates of service for the claim. For those cases, rejection kick-outs can remove those claims from your upfront workflow allowing only clean normalized data to pass into your adjudication system thus improving auto adjudication rates.

Provider Matching

Provider matching works similarly to member matching and can help ensure only clean normalized claim data is presented to your system. Provider name variations, ID numbers, tax ids, and other billing identifiers can be normalized through upfront validation processes done at the clearinghouse level or other pre-adjudication processes. This validation can also identify new providers flagging them for entry in your system allowing your team to examine the new provider information and make sure that it can be added to the system exactly as it should be. Provider matching also can have additional benefits beyond auto adjudication in that it reduces the number of duplicate provider records which could be created due to minor variations in name or address listings.

Applying Business Rules and Edits

Other pre-adjudication edits can be used to screen for other business cases preventing auto adjudication. This can include EDI SNIP edits and can go further such as ensuring that all diagnosis codes used are specific enough for payment. Custom or proprietary business rules can be enforced such as remapping provider contract information from notes fields to other segments of the EDI. Smart Data Solutions’ customized services ensure business rules are applied and mapping requirements are executed prior to adjudication. Many of our clients also prefer the simplicity of using a single vendor gateway, rather than managing multiple vendors.

SNIP Level Validation

SNIP validation includes seven guidelines for industry-standard levels of verification for electronic data compliance. SNIP is an acronym for the Strategic National Implementation Process, developed by the Workgroup for Electronic Data Interchange. The seven tests for data compliance are integrity, requirements, balancing, situational, code set, line of business, and trading partner. 

The seven levels of testing play a significant role in the development and implementation of auto-adjudication by creating a guideline for maintaining compliance across all levels of your workflow.

These SNIP level edits and testing ensure that your business is capable of auto-adjudication. Using SNIP level validation early on in the claims process helps to avoid common issues like billing errors, and mismatched claims.

Improving processes and increasing auto-adjudication rates is a top priority for us at Smart Data Solutions. Using SNIP level edits, machine learning, and advanced AI solutions develop streamlined claims processing free of errors and eliminate much of the risky manual processes. 

Increasing auto-adjudication rates is a top priority for Smart Data Solutions. We strive to constantly improve by utilizing machine learning and advanced AI solutions to provide error-free, paper-free, human-free claims processing. Take a look at what we are doing to automate and eliminate manual processes.