CAN HEALTHCARE AFFORD AUTOMATION?: Maintaining Legacy Auto-Adjudication Systems is Counter-Productive is the title of recent white paper/blog post by Information Services Group (ISG).  The report points out the significant and broad reaching transformational impact of the Affordable Care Act (ACA) on healthcare providers and payers.  It explains that because of ACA it is increasingly cost-prohibitive for healthcare payers to continue maintaining and upgrading legacy, automated claims processing applications.

ISG states that in the “relatively static healthcare environment” of the pre-ACA era, healthcare payers relied on “high levels of automation and heavily engineered custom applications,” to enhance operational efficiencies and reduce costs.  ISG says this was particularly true in the area of healthcare claims processing, where in some cases auto-adjudication rates of 90% were achieved.  ACA however mandates “significant changes in standards, requirements and regulations regarding how information is captured, coded, stored and shared.” 

Now, ISG reports, a new healthcare model is emerging that favors spending more on personnel and process optimization and less on automation and customized applications.   They call this a shift to a more “total cost of claims processing” view rather than the “tower centric” model of old.  ISG suggests this new “total cost of claims processing model” is distinguished by the following four characteristics.

Optimizing claims review processes.

“Fundamental and rapid changes in regulatory and reporting requirements” make process optimization far more a priority today than in the prior era.  Standards and guidelines for healthcare claims processing form the foundation for improving overall operational strategy, they point out.

Clearly defining compliance ownership roles and responsibilities between the payer organization and third-party providers.

Whereas today compliance “can still be a gray area between provider and payer,” ISG suggests payers are shifting that responsibility to the healthcare providers themselves.

Reducing customization of the claims processing environment.

ISG highlights prioritizing lower total cost solutions such as those available from out-of-the-box programs that can also increase levels of overall flexibility and agility.   They suggest that, “While requiring an increased investment in personnel, this strategy involves less customization and complexity, and reduces disruption when modernizing and replacing legacy systems.”

Optimizing investment in additional people through a combination of international and domestic delivery teams.

ISG suggests tried and true low cost, offshore labor arbitrage (international resources they call it) for rules-based tasks and functions.  Domestic resources (rural sourcing) ISG says can then handle more complex claims processing activities such as those requiring discretionary decisions.

The Role of Robotic Process Automation for Post-ACA Healthcare Payers

While ISG reports a solid case for scrapping “existing versions of ‘spaghetti-coded’ legacy systems” for more nimble applications, we know many payers will find this an easier said than done proposition.  Likewise, replacing complex automation with headcount sounds straightforward enough, but comes with it’s own challenges.  Particularly if an offshore / onshore blend of FTEs is the objective.

Consider Robotic Process Automation (RPA) as a hybrid approach for healthcare claims process automation.

Where ISG suggests using “international resources” for rules-based tasks and functions, RPA can typically meet the same requirements for far less the cost, at near zero error rates, and without the risks and challenges of taking a set of processes and critical data offshore.

Robotic Process Automation solutions help enhance and optimize healthcare Revenue Cycle Management for both providers and payers.  It’s capable of accelerating cash flow, reducing accounts receivables and minimizing un-collectable debt write-offs when applied correctly. Healthcare process areas to consider for Robotic Process Automation include:

  • Patient Scheduling
  • Coding
  • Claims Administration
  • Enrollment and Eligibility
  • Clinical Documentation
  • Charge Capture
  • Medicare Billing and Compliance
  • Audit Management
  • Secondary Claims Management
  • Accounts receivable/denial recovery
  • Patient Self-pay Administration

From patient registration to coding to claims to audit, by applying RPA to rules-based, labor intensive and error prone processes in the healthcare revenue cycle, Robotic Process Automation helps accelerate workflows, improve accuracy and free internal staff to focus on true process exceptions.   Does this mean ISGs findings are less relevant?  Far from it.  But RPA for healthcare can extend the life of existing applications, provide a less costly and more accurate virtual workforce compared to offshore labor, and enable analytics for the more stringent audit and compliance requirements of ACA.