2021 Supply Chain Outlook: Uncertainty Remains, Continued Disruption Expected

What happens when a backlog of COVID-related claims meets a mountain of faulty, false or missing data? Payers don’t pay on time — or at all. Here’s how the pandemic is impacting the health care industry’s chronic struggle with manual reviews.

Most states can levy huge, frequently multimillion-dollar, sanctions on health care payers that do not reimburse provider claims within the prompt-payment window. Although payers regularly struggle with this issue, COVID-19 has caused heightened sensitivity. As more and more claims fall out of the auto-adjudication process and into manual review work queues, the the backlog of pending claims and the potential for inaccurate and/or late payments keeps increasing.

Low-quality provider information has long afflicted the health care industry and is one of the main contributors of claims dropping to manual review. Pre-pandemic, an average of 20 to 30 percent of claims fell out of the auto-adjudication process, resulting in the need for manual review. An estimated 25 percent of claims falling to manual review, according to research conducted by LexisNexis, are the result of issues related to provider data quality, including incorrect, inconsistent, incomplete, duplicate or missing provider information.

The Many Challenges of Keeping Health Care Data Up to Date

Provider data includes demographic information such as address, phone number, specialties, office hours and new patient acceptance. It also includes configured provider payment terms like network participation, timely filing requirements, affiliations, discounts/sequestration, uniform rate increases and payment rates and terms. Maintaining the integrity of data significantly impacts both providers and members, including their satisfaction. COVID-19 updates have complicated the management of provider data due to the focus on expedited credentialing of roster additions, as well as the ability for providers to work across state lines.

Organizing provider information, confirming accuracy and maintaining rosters for ever-changing provider groups requires high-touch and consistent communication across multiple parties, both internal and external. Based on research conducted by LexisNexis linked above, an estimated 2 to 2.5 percent of provider demographic data changes monthly, not including other attributes, such as credentialing or affiliations.

Provider data management (PDM) is a highly manual and repetitive process that involves thousands of providers and piecing together the health plan’s network across multiple payer systems. The latter includes provider data management, credentialing, adjudication and the provider directory. As long as PDM continues to be managed through manual processes, exposure to the time-consuming and error-prone process will continue.

Payers’ outdated and inefficient systems rely on a fragile ecosystem of inputs: provider contacts, ever-changing provider alliances, frequently updated physician rosters and regularly revised credentialing data, on top of standard coding logic, payment policy updates and changes in member benefits. When membership shifts geographies or when behaviors shift (like in a pandemic), payers are exposed to changes in their provider networks, causing beyond-normal influxes in PDM updates, whether it be the addition of new providers or changes to billing or rendering information for existing providers. Provider claims that do not mirror the payer’s provider setup typically pend until either the provider onboarding/updating process is complete or the claim is manually reviewed for payment.

Reducing Sanctions Is Critical for Payers

Payers have a responsibility to reimburse claims within the prompt-payment time frames and any delay in reimbursing the provider results in owed interest. Incorrectly paid or denied claims result in sanctions on top of any owed interest. Additionally, sanctions may be levied when incorrect provider information is notated in the provider directory, such as participation, location, specialty or new patient acceptance. The sanctions (commonly referred to “penalties and interest” or “P&I”) have historically amounted to meaningful sums for payers. In many states, delays due to failure to submit accurate data on time can result in significant penalties.

Impact of COVID-19

While most states enabled payers to extend their timely filing deadlines during the pandemic period, health plans continue to be faced with constant updates to provider data. Provider groups are pressured to react to the needs in their local market. Front-line providers are facing urgency and increasing pressure on payers to reimburse promptly, or even ahead of schedule, to ensure their practices have a consistent cash flow during social distancing orders. Providers continue to incentivize staff by offering hazard pay to their health care professionals under these higher risk conditions while looking for ways to accelerate payments from payers.

In order to ensure member access to care, Centers for Medicaid and Medicare Services and state regulators were updating benefits and coding requirements multiple times a week. While this has slowed since the early onset of the pandemic, benefits have been expanded to allow certain provider specialties and places of service the ability to render specific services. New physician affiliations are enabling health care professionals to quickly meet local demands. These changes mean that payer configuration teams must react, update information and, in some cases, create novel payment structures that will exist only during the pandemic.

Pre-pandemic, an estimated 20 to 60 percent of provider online directories were inaccurate. For technology-enabled members, this could mean the difference between spending a few minutes to set up an appointment and spending an afternoon trying to access an available participating provider. During COVID-19, payers don’t want to be a hurdle in the delivery of care by either inadvertently sending a member to an out-of-network provider who is listed in the directory (resulting in higher member cost-sharing) or sending a member to an in-network provider that’s incorrectly configured in the adjudication system (resulting in payment delays, inaccurate payments, higher appeals volumes and increased administrative burden, among other issues).

Automation Has the Potential to Mitigate Payment Window Violations

In an ideal world with technology-driven automation, payers would make provider data changes and process claims without human intervention. During this pandemic period, health payer teams that typically manage provider data are likely working from home. Household challenges, connection issues and meeting distractions pose greater risk of manual error and reduced turnaround times, making the estimated 20 to 40 minutes required (according to LexisNexis) to update a single provider significantly even more difficult.

PDM for most payers requires repetition and consistent follow-up on validation. With interruptions, videoconferencing and the constant flow of emails, PDM productivity has room for significant enhancement. To increase processing efficiency and accuracy, the PDM workflow has the potential to be automated by utilizing digital technology solutions such as optical character recognition and robotic process automation.

Engaging the digital workforce to perform the routine and repeatable process quickly and efficiently allows time for the human workforce to coordinate with the provider network, significantly improving overall health plan effectiveness while also limiting errors.

In Summary

Payers spend millions annually in third-party fees to support the maintenance and ongoing audit of provider data. According to the CAHQ, commercial insurers alone invest over $2.1 billion annually to manage their provider data, which could be significantly reduced with better integration of an in-house digital workforce.

While the providers’ urgent need for quick, appropriate reimbursement is rising, the payers’ timeliness and accuracy is at risk. Whether claims are routine or related to COVID-19, payers need to continue to automate.

This article was published in Supply Chain Quarterly.

The post 2021 Supply Chain Outlook: Uncertainty Remains, Continued Disruption Expected appeared first on AArete US.

How Much Will Telehealth Go “Back to the Future” Following the Pandemic?

Prior to the COVID-19 pandemic, telehealth was more of a stretch goal than a reality for most providers despite the seeming prevalence of video conferencing.

Traditionally, although technology barriers were cited as a limiting factor, the gradual widespread adoption of high-speed internet and smartphones overcame that obstacle for most patients, but some of those least able to get to doctors, such as the elderly, may still require some assistance connecting.

With the bandwidth and hardware questions out of the way, technical concerns around security remained; highly secure systems that comply with HIPAA privacy requirements bring added costs that meant only larger practices and health systems invested in them. Beyond technology, other obstacles included credentialing and licensing requirements, like the prerequisite that a patient have an established relationship with a primary care physician, as well as reimbursement policies.

But when the pandemic hit, the realization that person-to-person contact needed to be significantly reduced meant some regulations under the purview of the Centers for Medicare & Medicaid Services (CMS) were quickly relaxed for the short term to ensure access to healthcare, which contributed to a rapid rise in telehealth use.

Over the course of the pandemic, insurers have paid out anywhere from two to ten times more per month for telehealth services in 2020 compared to 2019, with a huge surge in the spring, a reduction over the summer, and then a new resurgence as COVID cases spiked in the fall and winter.

In parallel to the manner in which companies that had resisted telecommuting came to learn how effectively people were able to work from home following this past spring’s stay-at-home orders, patients, providers and payers alike saw that telehealth, too, worked fairly well for all parties involved. But as the US looks to emerge from the pandemic, should we expect the rules for telehealth to remain relaxed? Or will telehealth become a thing people look back amusedly upon the way we will all remember practices like stocking up on toilet paper and attending online coffee breaks and happy hours? While we certainly expect to see some degree of tightening, we predict that telehealth usage will remain vastly increased compared to pre-pandemic times.

The expansion of telehealth has benefited many patients. People with chronic conditions such as diabetes and many types of heart disease can be effectively monitored with the aid of other technology like blood glucose monitors, EKGs and pulse oximeters. So, too, can newly discharged patients; in fact, these technologies allow for earlier hospital discharge as these monitoring devices substitute for in-hospital “nurse checks.” The growing use of these devices, increasingly employed by families to keep an eye on distant relatives during the various lockdowns, has ushered in an accelerated rate of adoption of remote monitoring that is likely here to stay.

These monitors, combined with the video interactions that characterize telehealth activity, are highly effective and efficient ways to provide high-quality patient care at reduced cost. Effective mental health treatment, occupational and speech therapy, and even eye exams are also being provided through telehealth technologies.

But the quality of patient care provided through telehealth ties into one of the reasons that we expect to see a reduction in telehealth following a return to relative normalcy. Specifically, we think that the following factors will result in a mild scale-back of telehealth:

The need for all healthcare communications to be HIPAA compliantThe requirement that there be an established doctor-patient relationshipThe return to reduced reimbursement rates for telehealth visitsA mild reduction in the current provider specialty expansionIncreased anti-fraud, waste and abuse efforts

Among the changes that made the current telehealth expansion possible was a loosening of the standards around HIPAA violations. Specifically, the Department of Health and Human Services (HHS) waived penalties for any such violations that occurred in the use of telehealth. Post-pandemic, we anticipate that previous security standards will be reinstated and full HIPAA privacy protections brought back as the healthcare system returns to its more traditional regulatory footing. It will be incumbent on the telehealth solution providers to maintain and or exceed HIPPA standards.

Secondly, we predict that HHS will once again enforce the requirement that there be an existing relationship between a patient and a practice before telehealth use between the two parties is permitted. As with HIPAA requirements, HHS did not actually waive this rule during the pandemic; rather, it made it clear that there would be no audits or reprimands related to this requirement over this time. It seems reasonable to expect that something akin to the old rule, in which a patient was considered “new” to a practice if she or he had not been seen by anyone there in the last three years, will be reinstated, with some likely leniency for some specific billing codes or types of new patients.

During the pandemic, providers were instructed to charge telehealth visits at the same rate as in-person visits in order to encourage providers to use telehealth. This practice will almost certainly cease following the pandemic, when most telehealth activity will likely once again be billed at 80 percent the rate of an in-office visit due to the reduced overhead associated with telemedicine.

Where telehealth previously was only permitted for practitioners like MDs, nurse practitioners and physician’s assistants, a range of others were allowed to utilize it during the pandemic, including physical and occupational therapists, speech therapists, social workers, psychiatrists and psychologists. The success around most of this expansion in terms of quality of care means that it is likely that it will mostly remain in place except for some specific codes for which quality of care mandates in-person visits.

Finally, attempts to stamp out fraud, waste and abuse will be more robustly applied to telehealth activity. For example, auditors and investigators are hard at work to identify outlier providers scheduling unnecessary follow-up visits, up-coding e-visits or virtual check-ins to telehealth visits, billing for unlikely tele-treatments such as personal care, or charging for excessive therapy visits. In addition, a few unscrupulous telemarketers have gone “fishing” and persuaded Medicare patients to share their member information, then used this data to do things like schedule unnecessary tests and order unneeded equipment.

Some abuse has also taken place with pharmaceuticals being over-dispensed because early refills have been allowed and increased quantities of medications have been disbursed under the guise of reducing the number of visits patients make to pharmacies. Considering how pricey some brand-name medications are, a single wasteful pharmaceutical claim can be highly lucrative.

Many of these issues point to the need for tighter regulations to drive best practices in telehealth and to mature the services that help support remote medical care.

There is no doubt that one unforeseen positive resulting from the COVID-19 pandemic has been an expansion of telehealth both in terms of patients’ ability to access it and the healthcare services they can receive. Because of the success of this expansion, we see a future in which people spend less time traveling to and from healthcare facilities while still receiving high-quality care virtually from their homes and other remote locations.

This article was published in Managed Healthcare Executive.

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Putting Automation Technology to Work to Improve Operational Efficiency

A pair of cost-effective, easy-to-implement technologies can make tremendous improvements in claims processing accuracy and other data management tasks.

While many companies have responded well to the COVID-19 pandemic, the crisis has revealed or amplified weaknesses across the business world. Supply chain and manufacturing issues have affected a range of industries. IT departments across industries have been badly strained by the sudden surge in new remote workers needing virtual private network (VPN) access, video chat and other new capabilities. As the pandemic plays out, these technologies and others will have increasing value in the finance function across industries—including healthcare, insurance and financial services, and manufacturing. Here, while we’re taking a closer look at changes in these technologies as they relate to the healthcare ecosystem, we believe this discussion has broader relevance to many other businesses.

Now, at a time in healthcare when claims management teams struggle with productivity issues exacerbated by the remote environment, health insurers not only face the ongoing issues that cause inefficient and inaccurate claims payments, such as illegible forms and out-of-date physician rosters, but they also have to deal with the plethora of new irregularities and billing errors that result in an environment of new and frequently changing rules.

For health insurers—and, we would argue, for many other businesses that suddenly find themselves with a remote workforce that still has to deal with a centralized administrative system—it does not have to be this way. A pair of cost-effective, easy-to-implement technologies, optical character recognition (OCR) and robotic process automation (RPA), can make tremendous improvements in claims processing accuracy and other data management tasks. On their own or together, OCR and RPA help to save costs, reduce errors, increase productivity, and free up people to do more high-value work.

While it is a relatively old and seemingly humdrum technology, OCR tends to be underutilized in the payer claims environment, where providers continue to use their own home-grown, non-searchable means to communicate with payers, and payers continue to maintain information in inconsistent, non-searchable formats. OCR is about more than simply scanning documents.  Used to its full potential, OCR makes text searchable so pertinent information can be extracted from handwritten and word-processed faxes, forms, notes, images, and photocopies, including those files in portable document format (PDF). Just think of how, in order to process mobile deposits, banks are able to “read” checks from a photo taken by your phone. The text is translated to a consistent, searchable format that can be placed into workflows.

OCR is useful in claims processing, as certain providers continue to use faxes and the U.S. postal service to submit a significant percentage of claims, especially when electronic data interchange (EDI) is not a regulatory or contractual requirement.  The resulting manual entry of claim information tends to be time-consuming and prone to mistakes; OCR systems reduce both turnaround times and error rates.

In addition to adjudication, there are a variety of use cases impacting the claims process.  OCR systems can be trained to identify and pull out specific portions of provider contracts, such as contracted rates and carved-out payment terms, necessary to configure a payer’s adjudication system. Similarly, OCR can be used to improve the turnaround times for prior authorization requests as well as appeals by categorizing them for routing to the correct workflow. In healthcare, physician rosters and associated add/change/terminate forms are another area prone to slow turn-around times and significant error rates (and resulting payment inaccuracies) for which OCR yields significant improvement.  Additionally, OCR can be successfully applied in the areas of provider credentialing and invoicing.

Be it a result of illegible handwriting, darkened photocopies, or fax transmission deficiencies, some indecipherable text will still need to be examined by the claims team.  However, OCR enables parsing out documents into those that have been successfully translated and those at greatest risk of translation error, thus requiring manual review.  This brings significant improvement to the efficiency and accuracy of many payer processes. We estimate on average a task replaced with OCR reduces the need for over 90 percent of current manual review processes.

RPA, which is also known as intelligent automation, digital automation, or even simply by the colloquial term “bots,” centers on the use of software to do repetitive tasks of the sort that few workers truly enjoy performing. Any corporate employee at the level of middle management or below will be able to relate to the need for relief from an overabundance of busy work, especially now. For health insurers, this work tends to revolve around areas like provider data management, physician roster validation and standardization, and fee schedule management, all of which are susceptible to develop sizable backlogs. A properly programmed bot can quickly work through backlogs while avoiding the types of errors people are prone to make when doing relatively monotonous work, especially as the hours stack up.

RPA systems are much more sophisticated than commonplace tools like desktop scripts and macros. They essentially mirror human activity, driving applications through user interfaces to operate applications while following business rules and validating provider data at near 100 percent accuracy and at speeds up to five times faster than employees. As much as people are trained through decision trees, RPAs are programmed to follow predetermined pathways between their assigned tasks and data repositories, move or populate data, make calculations, perform actions, and even trigger downstream activities. They can also run around the clock, and never need a coffee break.

So, how can you decide whether RPA can help your organization? In our experience, the best-fit criteria for this type of solution are processes that:

Are rules-based and repetitiveEmploy standardized, structured, or digitized dataHave fluctuating demand or backlogsRequire extensive people timeHave high cycle timesRequire low error rates

Any of this sound like you? Using bots to automate processes brings many benefits. They improve the quality of provider data, lower administrative costs and help to gain operational efficiencies around the processes they are programmed to perform. They are scalable and flexible and improve data security because fewer people “touch” the data. Perhaps the biggest benefit is the time that RPA frees employees to work on higher value tasks and projects to drive improved business results by ensuring claims are paid accurately and on-time.

In many industries, technology has been advancing more slowly than the COVID-19 pandemic is demanding. For example, while the delivery of healthcare itself continually advances, both providers’ and payers’ back offices tend to be rather low tech. Their systems are antiquated, and their processes tend to be cumbersome. The pandemic has amplified this reality, as newly remote workers in the health insurance industry have struggled to keep up for want of ready access to the fax machines, multiple-display setups and other outdated tools they typically use in the traditional office setting. Better usage of OCR and deeper, more widespread adoption of RPA will help insurers and a broad swath of other industries enjoy the many benefits of present-day technology and prepare them for the new normal post-COVID-19, which will include much more remote work than required in pre-pandemic times.

This article was originally published in Mass Market Retailers.

The post Putting Automation Technology to Work to Improve Operational Efficiency appeared first on AArete US.

Provider Data Management Needs an Update

Better PDM could ease administrative burdens on doctors and hospitals — and help everyone save money.

As payers and providers work together to face the financial storm created by the coronavirus pandemic, they are operating in an environment with little room for increases in provider rates or health insurance premiums.

One step payers and providers can take to make things better is to reduce the administrative costs that result from inaccurate and late claim payments, by improving provider data management (PDM). Too often, payers have incorrect or incomplete information about a provider, or no information at all.

New technology can help solve this problem, and increase the speed and accuracy of the payment process.

For providers, that can mean reduced administrative burdens, improved satisfaction, and an offset for some of the financial impact of COVID-19.

For agents and brokers, PDM technology matters, because anything that reduces providers’ administrative burdens can help improve the quality of care while helping to hold down increases in spending.

Why Focus on Provider Data Management?

A hospital system and a payer may have millions in disputed claim denials. These disputes affect one in every 10 claims. For the hospital system, resolving the concerns leads to high administrative expenditures .

Opaque payment policies, changes in authorization requirements, and updated benefits are commonly perceived drivers of denials. However, the payer’s management of provider data is increasingly driving payment errors, especially with the mergers, acquisitions and growth of physician groups, delegated physician entities and independent physician associations.

One of our colleagues, Erica Nelson, a director in AArete’s healthcare payer practice, has described the  problem this way:, “The rapidity of changes affecting physician groups has had an astronomical impact upon payers and their ability to pay claims timely and accurately. As a result, payer/provider relationships can be unnecessarily strained due to increased volumes of pended claims, late payments, appeals, post-pay adjustments, and sanctions.”

One solution is provider data management automation.

How PDM Works Now

PDM consists of the information, processes and systems required to manage the provider network. Payers use provider data to communicate network participation to health plan members, validate credentialing, and configure adjudication systems to reimburse providers based upon contracted rates. The resulting provider data is housed across many different, separate systems, and the data formats in these systems — including the PDM, adjudication, provider directory, contract repository, and credentialing systems — are often inconsistent.

Gaps or errors in provider information are sometimes identified quickly. Other problems may go undetected over long periods of time. A physician might be missing from a roster. A practitioner may be inadvertently overlooked by the credentialing department. An NPI may not be aligned with other providers practicing under the same taxpayer identification number and in the same network. One provider may have duplicate entries with different participation and contract identifiers.

Often, denials gradually accrue until the accumulated impact eventually sounds an alarm. Ultimately, gaps or errors in provider data create significant downstream risks that impact the members’ ability to access care, expose the payer to a significant increase in costs, and cause provider abrasion.

Providers and payers face the following provider data challenges:

Accuracy of provider data: Only about half of all provider data is accurate.Elongated timeframes: Changes take too long to implement resulting in significant backlogs.Provider dissatisfaction: Strained relationships between payer and provider partners.Member abrasion: Surprise billing, member complaints and member churn.Increased costs: Sanctions, member refunds, interest, penalties, and high labor/administrative costs.

In light of the coronavirus pandemic and the over-extension of the medical system, we cannot afford time wasted by health professionals in tracking down simple gaps and errors. The overall system will benefit from access to correct and complete provider data that is essential to efficient and accurate payment of claim, maintenance of provider relations and controlling increasing costs.

 The Robots Can Help

Health plans are leveraging robotic process automation (RPA) through the application of machine-learning robots that reduce the burden of manual work and downstream operational issues, while increasing productivity and accuracy specific to many health plan functions including provider data updates, as well as contract configuration setups, prior authorization approvals, appeals routing and accounts payable invoices. In this time of COVID-19, the use of technology becomes even more critical to address the workforce constraints, productivity issues and system limitations that result from working with a remote labor force.

PDM is a strong candidate for the use of RPA due to the process involving simple, repetitive and rules-based tasks using standardized, structured and digitized data, like adding a practitioner to a roster or updating a physician practice location.

In addition, repeatable PDM procedures, such as configuration of boilerplate contracts and assignment of participation status, can easily be configured without human intervention.

Of course, adopting RPA solutions can be limited by a lack of collaboration that may exist between payers and providers. This can be mitigated by ensuring the timeliness and consistency of inputs necessary to ensure bot accuracy levels are achieved. For example, the use of standardized rosters and change request forms will improve processing times and reduce discrepancies. An alternative to standard forms is the use of optical character recognition (OCR) to translate scanned contracts and record roster revisions with a high degree of accuracy. A third option is the use of a fully integrated, on-line provider portal that serves as a repository of provider information (e.g., demographic, credentialing, participation, licensing data) and facilitates real-time updates across non-integrated systems that rely on provider data.

Certain vendors in the current market do offer access to extensive provider databases; however, a vendor solution or centralized data base, without a real-time automated feedback loop between both parties, and across the payer’s disparate systems, will result in continuing invalid provider directory information and incorrect claim reimbursements. As a result of these limitations, immense potential exists for payers to drive the integration of an automated PDM solution consisting of a joint provider database accessible and editable by both payer and providers.

From a payer perspective, the return on investment in OCR, RPA and online portal technologies will result from an immediate decrease in the backlog of provider changes, pended claim volumes, inaccurate payments, penalties/sanctions, post-pay adjustments, member refunds, member churn and interest-bearing late payments.

Speeding up the payment process and improving the accuracy can reduce the number of grievances and appeals, make providers happier, and help providers overcome the hardships resulting from the coronavirus pandemic.

This article was originally published in Think Advisor.

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AArete Helps Health Plan Achieve up to 13% in Recoupment and Prospective Savings through Contract Configuration


A managed care organization was experiencing provider abrasion correlated to incorrect reimbursement per provider’s contractual terms and needed to conduct a root cause analysis of their configuration. The insurer approached AArete to perform a detailed review of major provider contracts for ancillary services against claims data to identify overpayments for recoupment, financial volatility, and root causes to correct the configuration system for future cost avoidance. 


AArete worked closely with client stakeholders to acquire the necessary data elements, including provider contracts, claims data, and an understanding of the current provider landscape. Using our proprietary configuration process, we applied a customized algorithm to identify providers with both over and under payment discrepancies based on their contract terms. Our process identified misalignments between the configuration system and professional payment rates. We proposed and assisted in the implementation of multiple strategies to update the configuration system to reflect our findings, and conducted provider outreach for any required billing adjustments, while being sensitive to specific provider relationships. 


Leveraging AArete’s analytics, the client was able to identify the pre- and post-pay concerns that had been plaguing their configuration team. We identified between 5% to 8% in recoupment opportunity based on the selected recovery timeframe and implemented configuration fixes, accounting for 5% in prospective annual savings. 

Download the PDF here.

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