In a recent survey of health plans and related organizations, commissioned by GTESS Corporation and conducted by Porter Research of Atlanta, GA, a majority of executives confirmed their plans to invest in automation technologies to drive cost and process improvements in the front-end, or pre-adjudication, portion of their healthcare claim processing. While many of the firms surveyed indicated their EDI receipt rates and auto-adjudication rates have increased dramatically, they remain challenged by complex, manual pre-adjudication processes such as provider and member matching, plan complexity that surpasses existing automated systems’ abilities, and paper claim handling, keying and processing.
"The survey demonstrates just how challenging the IT planning and purchasing environment is today for health plan executives," said GTESS CEO Deborah M. Gage. "They face increasing plan complexity and regulatory requirements, aging internal legacy systems and -- in the case of many organizations that are merging or acquiring -- sudden need to scale to handle significant new claim volume."
"The results of this study confirm a national focus of healthcare organizations on cost-containment of their core, operational processes," said Cynthia Porter, principal of Porter Research. "The majority of health plans we interviewed strongly believed that front-end pre-adjudication software would lower their costs and improve quality. Knowing what we know about GTESS’s performance with installed clients, the results of the survey position them very well to impact the market."
Survey Results - Download PDF
When asked specifically about their plans to evaluate alternate solutions for pre-adjudication process, 41% of health plan executives surveyed stated they were either evaluating or planning to evaluate alternative ways to handle pre-adjudication processing of claims.
Cost drivers were most often cited as reasons to consider full front-end automation, and 65% of survey respondents mentioned achieving reductions in cost and improvements in overall value as the trigger events to adopt an automated pre-adjudication process solution. Almost half, 48.8% of those surveyed, mentioned achieving quality improvements as another trigger event. When asked about their concerns of adopting a fully automated pre-adjudication solution, 33% of respondents reported the complexity of their business was such that automating the pre-adjudication process would be very challenging. These respondents represented medium-sized organizations: the Tier 1 (largest health plans in the US) respondents did not echo these concerns.
Plan type and claim format (paper/EDI) contribute significantly to auto-adjudication rate, the rate at which claims are paid without human intervention. In another survey, conducted by the Center for Policy and Research at America’s Health Insurance Plans (AHIP), respondents reported auto-adjudication rates increasing for paper and EDI claims, with 44% of paper claims auto-adjudicating, on average, and 71% of EDI claims auto-adjudicating. In the GTESS survey, respondents noted that while auto-adjudication rates are climbing, their organizations are planning major initiatives to further increase those rates, automating processes for improved EDI handling, provider networking and repricing.
The Impact of Consolidation
The ongoing consolidation of the healthcare industry creates operational challenges that often impact those automation and technology investment decisions. Almost a quarter of respondents indicated that their organizations had been involved in merger and acquisition activity in the past two years, and, of that 24%, the majority believed that system migration/integration issues and adjusting to increased volumes were the biggest challenges. "Our clients that have been acquired or merged with another health plan describe system integration projects that continue more than three years, increasing claim volumes by hundreds of thousands at a time," said GTESS CEO Gage. "Maintaining standards – even ensuring business consistency – in that environment is crucial for post-merger or acquisition success."
About This Survey
The survey, conducted in the summer of 2006, included telephone interviews with executives and relevant health plan personnel. These executives represented organizations that process 7.5 million claims annually on average, segmented by organization size into three main groups – Tier 1 (more than 11 million claims annually), Tier 2 (between 2.9 and 11 million claims annually) and Tier 3 (between 1.2 and 2.9 claims annually).
About GTESS
For more information on GTESS' Claims Processing Survey, please visit www.GTESS.com. GTESS is an innovative healthcare claim transaction technology company that delivers automated pre-adjudication claims processing on a pay-as-you-go basis to healthcare payers who need to decrease costs and enhance customer service. Unlike other technology applications, error-prone offshore operators or internal solutions, GTESS is 100 percent focused on the healthcare industry, providing a claims processing solution that can save health insurers millions of dollars annually by lowering the cost per claim and dramatically improving accuracy, consistency and customer response. GTESS is headquartered in Richardson, Texas with technical operations facilities located in Dallas and Irvine, California.
About Porter Research
Serving the B2B market since 1989 with research and analysis services, Porter Research, based in Atlanta, GA, uniquely combines the essential qualities required to help IT companies gain the market and competitive advantage they need. With a passion for research, years of direct experience in the information technology industry and a pattern of continuous innovation, Porter Research focuses on providing quantitative and qualitative knowledge of market opportunities, customer loyalty and CRM, win-loss sales analysis, brand awareness and more. One special area of expertise for Porter Research has been Healthcare IT, distinguished by complex regulations and shifting governmental requirements and its recent movement into new technologies like wireless and the internet.
