Claims paid by health insurers are either based on pre-determined rates and payment policies defined by Medicare, Medicaid, and other governmental programs, or on fee schedules negotiated between payers and providers. The government-based prospective payment frameworks are subject to change almost daily and falling behind these updates greatly increases the risk for inaccuracy, costly manual claims reviews, disputes, and time-based fees and penalties.
Handling rapid government updates, and its impact on the decision-making process within claims systems, requires new ways of operating. Traditionally, the compliance burden has been on the internal IT and business operations to implement government and/or third party software updates. The timeframe for executing a process change business-wide can range from three weeks to more than six months, depending on the organization. Even efficient and aligned entities are challenged by the complex and constantly evolving healthcare IT ecosystem. The standard antidote for inaccurate payments due to compliance updates? Maintain scores of claims processors to research and rework claims. This remedy includes the FTEs required to maintain the IT infrastructure necessary to sustain homegrown systems. The result is millions of dollars in lost time and efficiency.
In response to this waste, the Software as a Service (SaaS) delivery model has become increasingly accepted as a basis for efficiently navigating change in the healthcare industry. In July 2014, Forbes reported that 66.9% of Healthcare IT executives were using SaaS-based applications. In the SaaS delivery model, software is licensed on a subscription basis and is centrally hosted in secure data centers. SaaS reduces internal IT costs and scales computing resources based on business demand. Using SaaS as “a single source of truth” helps avoid the delays, inaccuracies, and rework inherent in managing conflicting versions of homegrown or third party software. The SaaS model also includes a powerful, but less obvious, benefit in its support of “just in time” compliance updates using the latest government or third-party data. With SaaS, organizations can increase first pass claims payment accuracy, by adhering to new regulations, and by staying ahead of government policies and rates. Essentially, organizations are compliant before the updates take effect.
However, SaaS solutions aren’t all the same. The industry must be wary of SaaS solutions from vendors whose software and internal Software Development Life Cycle (SDLC) is not designed for rapid change and scalability. It not uncommon to see third parties that “host” their legacy installed software but advertise a SaaS delivery model. Hosted solutions may alleviate some of the health insurer’s IT burden, but the claims adjudication process will still be subject to slow software updates and limited performance scalability, since the software architecture is not designed to leverage the data center’s resources. Without due diligence, expensive compliance issues persist long after IT platform migration funding has been exhausted.
To avoid being tricked “by a snail in SaaS clothing,” consider these questions:
- How frequently will my data center be updated with the latest healthcare content?
- Will my data center be secure, and feature failover protection?
- How quickly will my organization be able to operationalize updates?
- Can my team test healthcare changes before they take effect?
- Will the data center updates include retroactive rate and policy changes?
- Will this SaaS application allow increased efficiency and reduced manual claims processing/adjustments through an industry-standard calling procedure?
- Will integrating this SaaS application allow us to expand the capabilities of our existing core claims system?
Leading SaaS solutions achieve business objectives by providing workflow improvements unavailable within core claims systems. Returning information beyond standard claim pricing details (such as how a claim was routed or messages that can serve as workflow triggers) will ease provider disputes and reduce inefficiencies caused by inappropriate adjudication and high volumes of pending claims.
Integrating a claims system to a SaaS application through secure, industry-accepted technologies (e.g. Web Services) enables communication of meaningful information. The unparalleled advantage of solutions that fully leverage SaaS capabilities is addressing compliance headaches through seamless, immediate integration of frequent data updates and providing access to regulatory compliance data before effective dates. Don’t be fooled by a snail legacy system in SaaS clothing: choose a single-source, fully integrated SaaS model to successfully navigate the ever-changing healthcare landscape.