Simplifying Claims Management

1. Simplifying Claims Management Alam Singh III Workshop, Feb. 24th, 2012

2. Agenda Key claims management objectives Strengthening claim management Options for simplifying provider contracting & claims management Additional thoughts

3. Key claims management objectives

4. Claims management: key objectives Detect fraud Reduce transaction cost Timely settlement of claims Reduce unwarranted excess payments & inappropriate billing Derive information for data driven contracting Monitor outcomes, promote provider transparency and accountability Promote customer involvement and awareness in managing claims

5. Common hurdles Resource mix availability Ad-hoc operations / workflow processes No standardisation in documentation, poor information exchange No or minimal provider contracting or agreements Market led packaged contracting rather than information based contracting Misaligned incentives in insurer – TPA contract Lack of common protocols / guidelines

6. Key success factors in claims management • Full and complete exchange of information, efficiently • Knowing what to do with the information, efficiently • Aligned incentives

7. Strengthening claim adjudication

8. Role of IT systems Desirable features in claims management system Workflow management / process management Policy and insurance checks through rules engine ICD Code specific processing checks Integrated clinical logic (Example) Usual & customary charges checks Provider profiling Ideally, system should aggregate benefit, beneficiary and claim information at single source (also referred to as policy, enrolment and claims data) Good rules engine with in-built logic key to auto-adjudication

9. Desirable features of IT systems Components required to achieve significant automation and reduce claims processing time. Reduces claims processing time and simplifies claims personals work Fraud management

10. Auto adjudication Objective: Automation of claims processing, partially or fully • Integrated rule engine or in-built logic can assist significantly if detailed data entry is done. • Enrolment checks: verification, eligibility, benefits and coverage • Benefit checks: sub-limits, person, policy, condition, procedure, equipment, facility and amount checks. Restrictions arising from underwriting (Example) • Clinical checks: medical appropriateness, excluded services or items, known patterns of inappropriate billing (Example) • Contracting checks: compliance with contracted or package rates. Can be additionally enhanced to check against usual & customary charges • Pre-conditions: quality & granular data, standardized policy terms, pre-authorization & claims form. Computerised provider billing at line item level.

11. Standardizes claims management Save costs as excessive unwarranted items not missed Improve efficiency as “clean” claims can be paid quickly Improves MIS and evidence based contracting with detailed bill entry Optimizes resource utilization as specialist resources used for specialist tasks Requires high quality in-put data, including accurate coding (skill?) Can detect abuse but cannot easily detect fraud. Well structured fraud “passes through” auto adjudication engines. Most fraud in India is manually detected (MS Word printed bills, no lab reports or surgical notes, no telephone number for hospital , same handwriting on all bills, etc ). Advantages & disadvantages

12. Rules and clinical logic to identify variations • ICD CPT mismatch (indications not met for the diagnosis given at authorization) • Delay in surgery flag • Length of stay mismatch • Duration of ICU stay mismatch • Excessive physician visit flag • Unwarranted specialist visit flag • Unwarranted assistant surgeon fee flag • Procedure not indicated for the age group / gender • Excessive investigations flag • Unwarranted investigation flag • Excessive consumables flag • Unwarranted consumables flag • Unwarranted drug use flag • Drug charged above marked price flag • Non chargeable consumable flag …. and more October 2, 2014

17. Data entry (capturing discharge details & bill) October 2, 2014

18. Data Entry - (investigations) October 2, 2014

19. Adjudication screen

20. Thank you Milliman India Pvt. Ltd. Plot No. 121, Second Floor, Institutional Area, Sector 44, Gurgaon – 122 022 Haryana (India) Tel: +91 124 4641 503 Fax: +91 124 4088 588 alam.singh@milliman.com