An Intro to Healthcare Claims Adjudication

“Redundancy” is a popular practice in the tech world to avoid a catastrophic glitch or shutdown. This safeguard allows a system as a whole to run as it was designed, despite not knowing exactly what roadblocks it may encounter. 

In healthcare claims, adjudication serves a similar role. Insurance adjudication is the process by which a claim is checked and ensured for accuracy and relevancy before being fully processed by the Payer. 

Before automation, teams of administrative staff would work on this process; scoring documents, searching for errors and misspellings, and ultimately approving or rejecting the claim. Today, much of this work has been automated by software, drastically improving the speed and accuracy of insurance claims processing. 

However, not all insurance Payers are equipped with in-house technology to automate the scanning and reviewing of claims. This is when partnering with a technology solutions provider who specializes in healthcare such as Smart Data Solutions can bridge this gap to prepare claims for auto-adjudication downstream.

The definition of healthcare claims adjudication is the process of reviewing and paying or denying claims after determining the Payer’s responsibility with respect to the member’s benefits. when claims are submitted by a Healthcare Provider.

Before an insurance claim is delivered to a patient in its final form, both the Provider and the Payer must agree on their responsibilities. These workflows can be manual or automated, depending on the technology a Payer has access to.

Throughout any claim workflow, many areas can cause a potential hangup. Everything from coding errors, misspellings, or missing information may cause the system to flag the claim, slowing down processing, and potentially resulting in denial or manual review. This is where automation comes in. 

When applying automation to healthcare claims adjudication, a claim is quickly prepared for adjudication by flagging keywords to create an alert and route the claim appropriately.

Insurance Adjudication Process At A Glance

The adjudication process usually ends with one of three options: 

• Paid, meaning it’s been approved and the Payer will cover their portion of the claim in full.
• Denied, which is fairly straightforward, but the reason for denial varies and can often be appealed. 
• Reduced, meaning that the charge will be reduced based on that claim’s circumstances. 

This is the highly abridged version of what every healthcare claim goes through. While specifics vary based on circumstance, parties involved, deadlines, and requirements, this is the high-level workflow for claims processing. Healthcare claims adjudication is critical in making sure that the Payer documents accurate information and that it can make the right decision regarding its responsibilities.

Expedite Insurance Adjudication with Automation

If insurance Payers don’t possess the in-house systems or technical expertise to categorize claim data, partnering with a healthcare technology solutions provider such as Smart Data Solutions is a quick win for immediate benefits.

As noted on Instamed.com, “No one is particularly pleased with the healthcare revenue cycle.”  It’s too slow for patients, and often too inconsistent for both the Payers and Providers.

Having disparate systems work toward a standardized solution is an uphill battle. Even if there is a system of auto-adjudication in place, it may not work as intended and can require more staff corrections than originally anticipated because of upstream inconsistencies or downstream systems.

Benefits of Automating Healthcare Claims Adjudication

The benefits of auto-adjudication are apparent. Preparing claims for auto-adjudication by using automation and machine learning allows for a faster turnaround time on claims processing and payment, benefiting all parties involved. This process results in higher accuracy, which not only speeds the claims process but allows potential future claims from repeat patients to be processed quicker. Finally, it uses less manual effort, freeing up human capital to work on higher, more interesting, and more rewarding projects.

Offload Upstream Processes with Adjudication for Immediate Optimization

SDS’ systems can help streamline and speed up the insurance adjudication process while maintaining the rulesets necessary for compliance. SDS performs all the front-end edits such as name parsing and validation checks. We use automation to route this documentation to its proper destination (such as PPOs for repricing) and finally, send the claim back to the Payer so it can be adjudicated either manually or automatically on their end. 

The benefits of automating healthcare claim adjudication can’t be overstated. Automating a process that has the potential to require a drastic amount of brainpower is a win in any industry—but when it comes to healthcare, the benefits of automation are more pronounced because it affects everyday people who are waiting on the status of their claims.

Increasing auto-adjudication adoption is a priority for everyone at Smart Data Solutions. We continually improve our systems by using artificial intelligence and machine learning to support accurate, paperless claims adjudication. 

If you’re interested in learning more about adding automation to your claims workflows, check out our intro to auto-adjudication article. 

Think SDS might be a fit for your company? Get in touch and we’ll be happy to walk you through how our software can benefit your workflow.