Health Insurance Claims Adjudication

Summary

Dr. Eric Bricker discusses health insurance claims adjudication, a crucial but often overlooked process in healthcare. He explains that most claims are auto-adjudicated by software, which can be problematic due to outdated systems like COBOL. The video highlights issues with auto-adjudication, such as high costs for manual processing and potential for fraud, using examples like a $10,984 COVID test claim. Bricker emphasizes the importance of understanding adjudication for those in healthcare and insurance, and the possibility for employers to catch errors in the system.

Takeaways

• 📚 The video is about health insurance claims adjudication, a crucial process for healthcare professionals, employees, and insurance companies.
• 💼 Dr. Eric Bricker, the speaker, acknowledges the topic as being 'boring' but promises its importance for those in the healthcare and insurance industry.
• 💻 Auto adjudication is the process where claims are handled by software without human intervention, accounting for about 85% of all claims processed.
• 💰 Manual adjudication of claims is costly, with each claim costing approximately $20 to process, motivating the preference for automated systems.
• 🔍 The adjudication process involves several steps including mass adjudication, claim check, and secondary audit, each with specific checks and balances.
• 🔒 The entire adjudication process is proprietary to the insurance company, meaning details may not be fully disclosed.
• 🛠 Problems with auto adjudication include reliance on outdated software, such as COBOL, which is difficult to maintain due to a dwindling number of skilled programmers.
• 🚫 Insurance companies often set dollar thresholds for manual review to avoid the high costs of manual adjudication, potentially allowing inflated claims to pass through.
• 🤔 The speaker raises concerns about the effectiveness of the adjudication process, citing an example of a $10,984 claim for a COVID-19 test that was auto-adjudicated and paid.
• 🏥 Quest Diagnostics implemented internal claim screening for their employee health plan, catching errors and fraud that the insurance carrier's adjudication system missed.
• 🔑 For employers with access to detailed claims data, there is potential to identify and address fraud, waste, and abuse within the adjudication system.

Q & A

What is the main topic of Dr. Eric Bricker's video?

The main topic of Dr. Eric Bricker's video is health insurance claims adjudication.

What is the definition of 'adjudication' in the context of health insurance claims?

Adjudication in the context of health insurance refers to the process that occurs between the submission of a claim by a healthcare provider and the payment of that claim by the insurance company.

What percentage of claims are auto-adjudicated according to the video?

Approximately 85% of claims are auto-adjudicated.

Why do health insurance companies prefer auto-adjudication over manual adjudication?

Health insurance companies prefer auto-adjudication because it is more cost-effective; manual adjudication costs about twenty dollars per claim to process.

What are the steps involved in the auto-adjudication process as described by Dr. Bricker?

The steps in the auto-adjudication process include mass adjudication (checking eligibility, prior authorization, covered services, plan design), claim check (examining the codes like ICD-10, DRG, CPT, and HCPCS), and then moving to either pay or deny status, followed by a secondary audit if in pay status.

What is the significance of the secondary audit in the auto-adjudication process?

The secondary audit is significant as it checks for timely filing requirements, coding accuracy, and the place of service to determine provider tax ID, in-network or out-of-network processing, and whether the service could have been provided as an outpatient service instead of inpatient.

What are some of the problems associated with auto-adjudication as mentioned in the video?

Some problems with auto-adjudication include the use of very old software, often written in COBOL, which has a shrinking pool of programmers due to retirements, and the setting of dollar thresholds which may allow incorrect or fraudulent claims to pass through without manual review.

What is the consequence of the auto-adjudication process for individual patients and health plans?

The consequence for individual patients and health plans is the potential for fraud, waste, and abuse to go undetected, leading to incorrect payments and increased costs.

How did Quest Diagnostics address issues within their own employee health plan?

Quest Diagnostics addressed issues by internally screening their own claims for fraud, waste, and abuse, and then communicating errors back to their insurance carrier.

What advice does Dr. Bricker give to employers who receive detailed claims data?

Dr. Bricker advises employers to review the detailed claims data to potentially identify and catch fraud, waste, and abuse that may be slipping through the adjudication system of their carrier.

What is the final point Dr. Bricker makes about the adjudication process?

Dr. Bricker's final point is the importance of understanding the adjudication process due to the 'big black box' that exists between claims being submitted and paid, especially for those working in benefits, healthcare, and health insurance.