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What Are You Doing to Monitor Your Claims?

Posted on June 18, 2015 I Written By

The following is an interview with Vishal Gandhi, CEO of ClinicSpectrum as part of the Cost Effective Healthcare Workflow Series of blog posts. Follow and engage with him on Twitter @ClinicSpectrum and @csvishal2222.
Vishal Gandhi
As practices prepare for the rollout of ICD-10, we’re seeing practices and hospitals make investments in upgrades to their technology to be able to support ICD-10. They’re investing in ICD-10 training in order to be ready for ICD-10. Some are even spending time and resources dual coding to make sure they’re ready for the change. While each of these are important, it’s surprising to me that we don’t see more healthcare organizations budgeting for additional help in following up with insurance companies to make sure that claims are being processed.

From my experience across hundreds of healthcare organizations, I’ve found that 20-25% claims are stuck in cyberspace at any one time. I’m talking about claims that practices assume have been delivered to the insurance company and are being processed, but instead the insurance company never received them or the claim was missing something and has gotten stuck in the insurance company’s claim process.

How many practices have a process for ensuring that their claims are being processed efficiently and effectively? Not many. That means they aren’t getting paid in a timely manner and in some cases aren’t getting paid at all.

When we send off an email or SMS, we don’t really think about whether those things are delivered to the recipient or not. We trust that they’re going to get there without issue because they usually do. It seems we’ve applied that same confidence to claims and that’s a problem. We can’t trust that claims have actually been delivered appropriately and are being processed since there are so many ways that they can fall through the cracks.

On October 1, 2015 (assuming no delays), ICD-10 is going to make this problem even bigger. ICD-10 presents a tremendous opportunity for insurance companies to lose more of the claims you’ve submitted. If you’re not checking with the insurance company regularly, you’ll have no way of knowing if an insurance company’s switch to ICD-10 has caused a glitch in their claims processing or not. The insurance company won’t care because the practice or hospital will be the ones left holding the bag.

This problem can be solved pretty easily. Your practice just needs to randomly select 100 or so claims and call (or hire an outside company to call) each insurance company to get an update on the status of those claims and verify that the claim is being adjudicated. We suggest you do this about 10-20 days after the claim is filed.

By checking on these claims, you’ll pretty quickly see which insurance companies are processing claims effectively and which ones are having issues so you can address the problem(s). Plus, you can evaluate if there are any workflow issues on your end with the claims your submitting.

Especially as we start implementing ICD-10, but also today it’s extremely important to verify how well your claims are being processed. If you’re not doing so, you’re probably not getting all your claims paid in a timely manner and could be missing out on additional revenue for your practice.

The Cost Effective Healthcare Workflow Series of blog posts is sponsored by ClinicSpectrum, a leading provider of workflow automation solutions for healthcare. ClinicSpectrum offers a Claims Watchdog service which monitors your claims for you to ensure you’re getting paid in a timely manner. Connect with Clinic Spectrum at HFMA ANI 2015 in Orlando, Booth #1256 or by tweeting @ClinicSpectrum.

What Is The Cost Of Fraud Prevention In Healthcare?

Posted on May 1, 2014 I Written By

Kyle is CoFounder and CEO of Pristine, a VC backed company based in Austin, TX that builds software for Google Glass for healthcare, life sciences, and industrial environments. Pristine has over 30 healthcare customers. Kyle blogs regularly about business, entrepreneurship, technology, and healthcare at

Among other things, credit card companies prevent enormous volumes of fraud. In exchange for their services, credit card companies typically charge about 2.5% of merchant revenue. The cost of fraud prevention for most merchants is no more than 2.5% of revenues.

But healthcare is rarely paid for by credit card. The vast majority of payments are directly transferred from payers to providers.

So what is the cost of fraud prevention in healthcare?

If providers were angels and never frauded payers, then the entire claims system would have no reason to exist. In this utopian world, providers would simply bill payers accurately and payers would gladly pay knowing that the claims were honest.

But that’s unrealistic. Payers are extremely skeptical of providers. There is an enormous amount of friction between payers and providers to ensure that providers aren’t overpaid: the technology vendors at every layer of the stack (provider, clearing house, payer), the billers, coders, claims departments, prior authorization departments, insurance agents, AR departments, etc. All of these people, processes, and technologies exist to ensure that providers aren’t overpaid.

Although I cannot find any explicit numbers, it’s not unreasonable that the sheer administrative costs of the claim system is greater than 10% of all healthcare costs.

In addition to compliance costs, actual Medicare Fraud is estimated at about $50B, which is about 9% of all Medicare payments.

The takeaway of the story is that providers can’t seem to stop frauding Medicare. The irony is that physicians – who are generally respected by the public – are those whom the system works most diligently to ensure aren’t overpaid.