Commercial insurers know firsthand just how cumbersome the coordination of benefits process can be. Estimates suggest that between .5% and 1.5% of policyholders have third party coverage. Year after year, carriers must touch claims multiple times, repeatedly reach out to policyholders, and produce extensive surveys to determine where this other coverage exists. Unfortunately, the response rate from members is usually low, and responses may contain erroneous information. So even after all that work, carriers are usually only able to identify a small number of health plan members with other coverage.
The administrative burden of this laborious, manual process costs carriers 25 cents per policyholder per month. For a 100,000-member plan, that could add up to $300,000 per year. But it doesn’t have to. Automated solutions are now available that can streamline the coordination of benefits process, reduce administrative headaches, and ultimately help insurers save big.
The advantages of an automated coordination of benefits solution include:
- Improved Medical Loss Ratio (MLR). The Affordable Care Act (ACA) limits the amount of a policyholder’s premium that carriers may use for non-medical costs. Automating coordination of benefits can significantly reduce carriers’ administrative expenses and improve their MLR.
- Quicker identification of secondary payers. By eliminating the manual back-and-forth from the coordination of benefits process, carriers can identify other coverage more quickly, resulting in gradual elimination of annual surveys, fewer overpayments, and less need for pay and pursue.
- Reduced provider, member, and employer abrasion. Fewer pending claims results in faster claims payment to providers. Reducing mailers and follow-up phone calls means fewer questions and happier members, and employers that purchase plans appreciate the high level of customer satisfaction.
- Improved compliance. Insurers are bound by prompt-pay laws to pay claims in a timely way. An automated coordination of benefits solution can help ensure compliance by speeding up the claims review process.
- Increased preparedness for health insurance Marketplace churn. Members’ insurance options may change more frequently when health insurance Marketplaces are implemented in 2014, which could lead to more instances of dual eligibility. An automated coordination of benefits solution is the best bet for ensuring that carriers do not pay for members who have coverage through a Marketplace plan.
By performing automated coordination of benefits matches on a regular basis, health plans can nearly eliminate the administrative headaches associated with the manual approach and are virtually guaranteed to experience greater returns on investment. To estimate how much you could save by implementing an automated coordination of benefits solution, click here.
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Tags: ACA, commercial insurers, healthcare cost containment, savings