Innovating Claims Management in Healthcare Insurance
Introduction
In an era defined by digitalization, evolving customer demands, changing customer demographics, increasing competition, and new and aggressive market players, adopting a transformative approach to claims management and overall operations is becoming top-of-mind for health and non-health insurers.
Health insurers have to contend with regulatory compliance- within the unique context of their industry- increasing healthcare costs, increasing cybersecurity and data protection risks, while fostering customer loyalty and satisfaction amidst escalating customer acquisition costs.
Health insurers are realizing that they must diligently prioritize specific facets of their operational model in order to unlock cost-effective solutions in the immediate term while revolutionizing the strategic positioning of their claims and customer relationship management.
Innovating healthcare claims management would involve leveraging technology and process improvements to enhance the efficiency, accuracy, and transparency in handling healthcare claims.
This thought piece examines the local contexts of health insurance in Nigeria, and the core elements of the healthcare claims management journey, before highlighting opportunity areas for innovation, celebrating some vanguards in the industry, and making a call to action.
Institutional and Local Context of Health Insurance
Health insurance is a vital mechanism for shielding individuals from the catastrophic financial burden of healthcare expenses. Financial protection is one of the pillars of a health system, and it is a cornerstone of universal healthcare access/coverage (UHA/UHC). The significance of this financial risk protection cannot be overstated, as research shows that, as at 2019, nearly a billion people globally experienced financial hardship due to healthcare costs, and about 100 million families globally: of which 1.3 million are Nigerian; are impoverished as a result of healthcare expenditure every year.
The National Health Insurance Authority (NHIA) serves as the primary regulatory body overseeing health insurance operations in Nigeria. It was established in 1999 and it operates as a mandatory social health insurance program, covering both public and private sector employees and their dependents. It sets the standards and guidelines for the implementation of health insurance schemes, accredits and regulates Health Maintenance Organizations (HMOs), and ensures compliance with established regulations. Other stakeholders include healthcare service providers and private and public employers, and these entities play different roles in the delivery, administration, and financing of health insurance services in Nigeria.
Despite health insurance’s existence in Nigeria for over 15 years, its uptake remains alarmingly low, with a mere 3% of the population having health insurance coverage as of 2016, i.e. approximately 6.18 million out of over 200 million people. This is mostly attributed to low awareness levels, affordability, and inequality in the distribution of coverage, amongst others. In comparison, 40% of the total Ghanaian population was insured as at 2016, 13 years after establishing their own NHIA.
Historically, growth in insurance companies involves attracting customers from other insurers. This is typically the same in health insurance. And, based on the if-you-need-me-call-me or when-we-need-you-to-pay-we-remember-you nature of the business, the customer’s experience and satisfaction, as well as the company’s growth, reputation, and profitability, relies greatly on their claims management process.
Break it apart: The Claims Management Process
Healthcare providers send claims to HMOs requesting reimbursement for services rendered to their enrollees. These medical claims ensure the healthcare provider (the clinic, hospital, pharmacy, or gym) gets paid for their services. After an enrollee has paid their insurance premium and activated their insurance policy, they can then access healthcare without paying at the point of service. A medical claim is started the instant an enrollee visits the health provider for an appointment and it can be submitted to the HMO after the appointment or after the patient journey is completed.
The claims management process follows a general framework although individual companies make slight variations to theirs- many HMOs use the same third party provider to manage their claims process and hence, share the same process. This is a good strategy for cost optimization and streamlining operations, however, the downsides include low/no competitive edge, and significant risk to business operations in the event of downtime on third party systems.
The claims process typically looks like this:
The Typical Claims Process [adapted from 6 Degrees Health. Available online from: https://www.6degreeshealth.com/healthcare-claims-processing-steps-sdh/]
Typically, the healthcare claims process starts when a claim is filed by the service provider, physically or digitally, after receiving a customer. There is usually a waiting period during which the service provider contacts the HMO to verify the patient/enrollee’s eligibility for the requested service.
This is a major pain point as customers can experience waiting times between a few minutes to a few hours before eligibility verification is completed. Some have been denied access at this point- perhaps due to poor communication of benefits limits or bad reputation of the insurer at the point of service. In some cases, an enrollee may end up paying out of pocket to speed up access to care.
In the case of a quick and successful enrollee eligibility validation, the next steps in the process include evaluating the necessity of the service, assessing claims risks, validating details of the claims according to service level agreements (i.e. adjudication- does it include all the details that meets the HMO’s criteria for a valid claim? Or some details are missing?), before evaluating and updating the enrollee’s benefits package (i.e. reconciliation). These activities as well as a few other back office activities take place before the insurance company issues payment to the provider, usually within 30 working days of receipt of valid claims.
These steps collectively make up a comprehensive and accurate claims process.
General challenges of healthcare claims management
There are general (and some uniquely contextual) bottlenecks observed within the current healthcare claims management process. They include:
Billing Errors: Incorrect or incomplete information provided on claims can lead to billing errors, resulting in claim denials, delayed payments, and the need for resubmission. Addressing these errors can require additional time and resources.
Claim Denials: Claims may be denied due to various reasons, such as incomplete documentation, lack of medical necessity, coding errors, or failure to meet specific payer requirements. Handling claim denials requires efficient tracking, investigation, and appeals processes, which can also be time-consuming and can lead to confusion, errors, and negative experiences for the service providers.
Fraud and Abuse: By the service provider and by enrollees. Identifying and investigating potential fraud cases can be complex and time-consuming. Manual and semi-automated processes can hinder proper fraud detection and operational efficiency.
Complex Payer Rules and Policies: Each insurance payer may have different rules, policies, and reimbursement structures. Navigating these complexities, understanding the guidelines, and ensuring compliance can be a challenge for healthcare providers and claims management teams.
Manual Processes and Paperwork: Many healthcare organizations still rely on manual processes and paper-based documentation, which can lead to inefficiencies, errors, and delays in claims processing.
Coordination and Communication Among Stakeholders: Communication gaps between stakeholders, including providers, insurers, and third-party administrators, can create bottlenecks. Lack of efficient communication channels and systems can result in delays, misunderstandings, and redundant information requests. Ensuring effective communication, timely exchange of information, and collaboration among these parties can be challenging.
Regulatory Compliance: Healthcare claims management must comply with numerous regulatory requirements. Staying up-to-date with evolving regulations and implementing necessary changes can also be demanding. This is an established pain point for current leaders and this trickles down into the customer’s experience.
Technology Integration: Integrating claims management systems with other healthcare IT systems, such as electronic health records and billing systems, can also be complex. Ensuring seamless data exchange, interoperability, and data security can pose technological challenges.
Timely Payments: Prompt reimbursement for healthcare services is crucial for providers’ financial stability. Delays in claims processing and payment cycles can strain cash flow, particularly for small practices and healthcare facilities. This contributes to negative customer experiences as enrollees are more likely to be denied access to care if they are affiliated with such an insurer.
Evolving Healthcare Landscape: The healthcare industry is continually evolving, with changes in regulations, payer policies, and disruptive new players. Staying updated and adapting to these changes requires ongoing training, education, and keeping pace with the global and local industry trends. Constraints created by outdated regulatory environments and legacy systems can make this difficult.
Addressing these challenges requires a combination of effective technology solutions, design thinking, deep stakeholder engagement and collaboration, as well as streamlined processes, human capacity and capability building, and continuous monitoring and improvement.
Innovation Opportunity Areas
We have established that 6 million out of 200 million population is a very low level of coverage. However, the volume, variety, and velocity of the current data is large and extensive. Health insurance companies are essentially health data banks- they deal with a significant amount of data due to their operations and this data encompasses various aspects, including policyholder information, claims data, medical records, provider details, and financial records. This poses challenges but also great opportunities for digital transformation, including automation, AI, and data analytics.
Some potential avenues for innovation in healthcare claims management are:
Automation and AI
AI models can analyze claims data, detect anomalies, and flag potentially fraudulent or erroneous claims for further review, while the abundance of data necessitates automated processes for efficient handling and analysis. Automation can streamline routine tasks such as data entry, claims processing, and document management, freeing up human resources for more complex and value-added activities.
Health insurance companies can leverage AI models and machine learning algorithms (just like the banks already do) to analyze large volumes of data and extract meaningful insights. These technologies can aid in fraud detection, risk assessment, identify patterns, detect anomalies, and help insurers make data-driven decisions to personalize customer experiences.
Automation and AI capabilities can also facilitate tailored recommendations and targeted marketing. Customized coverage options can be developed based on individual preferences, behaviors, and risk profiles.
Electronic Claims Submission
The adoption of standardized electronic claims submission systems, such as electronic data interchange (EDI), can facilitate faster and more accurate claim submissions. This reduces paperwork, minimizes manual data entry, and consistently improves data quality.
Real-Time Adjudication
New technology can enable systems to conduct real-time adjudication of claims, enabling immediate feedback to healthcare providers and reducing the need for manual reviews and delays in reimbursement.
Blockchain Technology
Although the adoption and integration of blockchain technology into existing systems and processes is still evolving, some of the main challenges associated with the volume, variety, and velocity of data handled by health insurance companies- namely data privacy, security, regulatory compliance, and the availability of robust data governance frameworks- can be overcome with blockchain technology.
Blockchain can enhance data privacy and integrity, streamline interoperability and the sharing of information between stakeholders, accelerate claims settlement (using smart contracts to automatically verify eligibility, coverage, and network participation), as well as reduce fraud and duplication.
Telehealth Integration
Integrating telehealth capabilities into claims management systems can contribute to a more positive customer experience- similar to the satisfaction digital banking gives- as well as aid the processing of claims and reimbursement.
Mobile Applications
User-friendly mobile applications empower health insurance customers with greater control, convenience, and access to their information. It holds one of the greatest potential for simplifying processes, facilitating communication, and promoting proactive health management for the insured and the insurer.
Developing user-friendly mobile applications with entry points for providers, patients, and payers to access essential information (including digital ID cards), conveniently submit claims, receive real-time updates and notifications, integrate wellness and health tracking features, and access customer support and assistance- in the form of live chats, direct messaging, chatbots, etc; can revolutionize the customer experience, leading to higher engagement, satisfaction, improved health outcomes, customer loyalty and increased profitability.
Realizing the full potential of these innovations requires collaboration among healthcare providers, insurance companies, technology vendors, and regulatory bodies, while prioritizing data privacy, security, and regulatory compliance throughout the process to ensure patient confidentiality and enhance trust in the healthcare system.
Current Global Trends in Claims Management Innovation
There are quite a few well-known claims management systems that are widely used and have a strong presence in Africa and the Middle East. Some of them are:
SUREmed by KonnectNET: SUREmed is a comprehensive healthcare claims management system easing health data exchange in New Zealand, Australia, and Africa. It offers features such as claims submission, adjudication, fraud detection, and reporting.
CAREWare by Jembi Health Systems: CAREWare is an open-source health information system that includes functionality for claims management. It is designed to support healthcare programs and organizations across Africa, particularly in the HIV/AIDS domain.
Medscheme Claims Management System: Medscheme is a prominent healthcare administration and managed care organization in Africa. They offer their own claims management system to facilitate efficient claims processing for healthcare providers and payers.
Other prominent purveyors of innovative claims management in Africa are Reliance Health and Curacel.
In the Middle East, there are:
Cerner Millennium: Cerner is a leading global healthcare technology company that offers a comprehensive suite of solutions, including claims management. Their Millennium platform is widely used in the Middle East, providing features for claims processing, reimbursement, and analytics.
InterSystems TrakCare: InterSystems TrakCare is an integrated healthcare information system that includes modules for claims management. It offers end-to-end functionality for managing claims processes, integrating with other healthcare systems, and enabling streamlined workflows.
eClaimer by HIMES: HiMES is a provider of healthcare IT solutions in the Middle East region. Their eClaim system focuses specifically on claims management, supporting healthcare providers and insurers in efficient claims processing, adjudication, and reporting.
What’s Next?
Industry leaders are recognizing a compelling need for digital transformation across the value chain in order to exponentially improve their capacity and capability to manage and protect the health and well-being of the modern customer, and remain successful in an increasingly digital economy.
We have been engaging with leaders in the health and non-health insurance space and we are stoked that the insurance space in Nigeria and Africa is entering a disruptive era. New technologies are birthing new competitors, disrupting traditional customer/consumer relationships, unsettling the legacy systems, and catalyzing conversations.
There is an unprecedented opportunity to reverse the trend of low insurance awareness and coverage and pave the way for substantial improvements in health insurance uptake. By revolutionizing the way claims are handled, streamlining processes, and embracing digital advancements, we can break down some of the barriers that impede enrollment and empower a wider population to access the financial protection and peace of mind that health insurance provides.
Embracing a holistically transformative approach to claims management, we can lay the foundation for a future where health insurance becomes an indispensable aspect of every individual’s life, ensuring comprehensive coverage and mitigating the devastating impact of healthcare expenses.
Engaging with local healthcare technology vendors, consulting industry experts, and conducting thorough stakeholder research can help identify the most suitable claims management system for your specific organization. The improvement or transformation you need depends on your specific requirements, budget, scalability, integration capabilities, and regulatory compliance needs.
