Payor Adjudication in the times of COVID-19

The COVID-19 pandemic has created varying situations for payors. While in some cases it is an opportunity, there are several instances where it poses to be a challenge. Payor adjudication is one such area impacted by the pandemic..

Payors process large volumes of claims annually which are normally in the order of millions. Most of these claims are auto adjudicated by validating member eligibility, provider’s contract and benefit limits among other things, to arrive at the final amount to be reimbursed. This is possible due to the availability of standard code sets, provider identifiers, field locators and formats, in-built in the adjudication platform used by the payors.

The claims pertaining to COVID-19 treatment necessitates significant changes to these in-built adjudication logics. It also necessitates changes in coverage, benefits, and exception to provider network rules, etc

Updated Code Sets

There are also updates in the code sets with the Centers for Disease Control and Prevention [CDC] issuing a new diagnosis code for COVID-19. Also, the Centers for Medicare and Medicaid Services and the American Medical Association recently issued new procedure codes for testing procedures related to COVID-19.

Benefits and Coverage

Health payors have also altered benefits and coverage rules for claims related to COVID-19. The Families First Coronavirus Response Act directs payors to waive patient responsibilities and pre-authorization requirements for testing procedures related to COVID-19. The Coronavirus Aid, Relief, and Economic Security (CARES) Act has brought about a host of benefits funding the health expenses for the public, in lieu of the pandemic. Health plans and insurance payors are to cover without deductibles or cost sharing. This also includes other services, items and immunizations provided to prevent or mitigate the virus and its spread. The Act extends even to the uninsured, be it treatment for COVID-19 or just testing and related visits. Adjudication of claims for the non-insured would require careful review and processing to ensure timely reimbursements. Chances of such claims to be rejected are higher warranting significant automation of processes to avert such situations.

Medicare beneficiaries are now eligible to partake health services from a bigger expanse of providers thanks to the rampant adoption of telehealth services. Some health plans would now have to expand coverage to include telemedicine and telehealth services for planned/regular health checkups too.

All these deviations require alterations in the system configuration to appropriately process claims. The claim processing system also has to be updated and upgraded to accommodate the new code sets to ensure the billing and reimbursement is in compliance with these government Acts. These changes would also have to be deployed on all the plans offered by a particular payor.

Out-of-Network Providers

To increase provider availability, payors may alter the methods by which reimbursements are made to Out-of-Network Providers in case of specific services related to COVID-19. Consequently, system reconfiguration and alteration on manual processes would be needed for maintaining the accuracy of claim processing.

Impact of increase in Claim Volumes

Due to the increase in the incidences related to COVID-19, the number of claims received by the payors has been increasing exponentially. This would affect the efficiency and timely processing of claim translating to delayed payments to providers and consequent interest charges to be paid by payors. The staff adjudicating the claims manually will be over-burdened due to the increased volume of claims requiring manual intervention

The staff count at the payors is maintained for a normal inventory. A sudden surge due to the pandemic, would result in huge backlogs in claim processing impacting the manpower requirements of the payors. Such situations call for powerful automation solutions that can help manage the varying volumes of claims to be processed.

Possible situation post COVID-19 emergency

The changes due to COVID-19 are not permanent. Once the currently prevailing emergency situation passes, all the processes have to be brought back to the way they were before the outbreak of the pandemic. Hence the expenses made to effect the changes in system configuration and processes as required by the COVID-19 emergency situation, cannot be recovered by payors. Under the normal conditions, the payors would spread-out the expenses to a long-term and thereby recover the expenses.

The irrecoverable nature of expenses on the changes for COVID-19 would compel the payors to decide whether or not to use auto-adjudication for handling the claims. Some system changes have to be reversed to normal settings when the emergency situation is over.

This has put the payors at crossroads, where they are forced to bring in some changes as demanded by the current situation. Compliance requirements necessitate these changes though temporary in nature, adding to their difficulties.

Accurate and efficient adjudication of claims is even more critical to maintain a healthy revenue cycle. This also lays down a great emphasis on the importance of coding which is the first step for a successful adjudication. Automated solutions can help navigate such volatile scenarios with ease and also help achieve better reimbursement rates.

To conclude, payors will need to navigate the COVID–19 induced operational challenges with a combination of higher automation and process changes, while providers have to brace themselves for a potential delay in reimbursement which can be avoided by focusing on improving accuracy at the front end processes like registration and billing.

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