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Streamlining Insurance Collections with HIPAA Electronic Transactions

By Drew Barrows 
Reducing the time to collect payment is the primary means of increasing revenue and cash flow. Using HIPAA electronic transactions can significantly streamline the insurance collection process.

Electronic Submission (837 Professional and Institutional) versus US Mail

Although sending claims electronically is now common, it is important to point out how electronic claims have improved the process of collecting payments efficiently. In the past, claims were mailed to the payer. The claim waited for the mail to be picked up and sent through the postal service and finally delivered to the payer where the claims were sorted and distributed to employees charged with evaluating the claim and approving payment. All paper claims were reviewed manually for errors and incomplete information. The time elapsed could take up to several weeks.

With electronic filing, you send your file directly to the payer or to a clearinghouse. The payer’s computer system reviews the claims for missing information or unmatched subscribers. The status of your claims can be viewed online. With a good practice management system, the claim status is posted to the claim and if errors were found, immediately worklisted for follow-up. The process to check a claim for errors is reduced from weeks to a few days.

Electronic Status Requests and Responses (276/277)

Days pass and payments have not been received. Prior to electronic status requests, your staff would have to call the payer to inquire about the status of the claim. Waiting on the phone for this kind of follow-up wastes hours of time. With electronic status requests, you can electronically send a status request and get an
immediate response. You will know immediately if the payer did not receive the claim, the claim is being reviewed, the claim is being paid or the claim is denied. The time to obtain the status of a claim is reduced from hours to seconds.

To further improve the process, a good practice management system would be able to send the electronic status requests automatically and have the response automatically posted. Even better, the practice management system can interpret the response and decide to worklist for manual follow up. It can decide to wait if a payment is indicated or if the claim is still being processed. It can worklist immediately if there is a denial or a problem. In addition, the practice management system can automatically resubmit the claim if the payer is indicating they did not receive it. No time is spent on routine payer calls—the system does it all.

ERA - Electronic Remittance Advices (835)

The claim is paid and a paper remittance advice is sent. The remittance advice must be reviewed 
and interpreted and finally the payment can be posted. This process is slow and the balancing process is time consuming. With electronic remittance advices (ERA’s), the payments can be automatically posted by your practice management system. You can concentrate your time on denials and partial payments and to start the patient collection earlier. The time to post remittance advices can be reduced from hours to minutes.

A good practice management system will allow you to review the ERA payments prior to posting. In addition, it automates the process by automatically worklisting denials and partial payments. If the remaining balance was sent to a secondary insurance, the system should automatically release the secondary claim and start tracking it for payment. More time is saved by a good practice management system that automates the workflow and tracking of claims.

Electronic Attachments

Attachments have always been a problem, slowing down the process and keeping the claim from being electronically sent to the payer. Well there is good news, payers are starting to recognize the problem and are starting to support electronic attachments. Today, if the payer requires an attachment you have to print the claim and attach the paperwork. 

Paper claims are penalized and your payment time is significantly increased. If you send claims 
electronically, you can fax your attachment but there is no guarantee the attachment will get to the same person reviewing your claim. You can send the claim electronically and wait for the payer to request the attachment, again sending the claim and attachment manually. Attachments slow down the process by weeks.

With electronic attachments, you can scan your document and send it electronically to a clearinghouse that sends the attachment to the payer. These clearinghouses assign document ID’s to the attachment, allowing the claim to be electronically tied to the attachment. Payers reviewing the claim can also open the attachment with the claim. Some payers are only accepting requested attachments and some are accepting attachments with the claim. When an attachment can be sent with the claim, the time to process the claim can be reduced from weeks.

A good practice management system will allow you to automate attachments and will streamline the workflow by looking for scanned attachments and if found, automatically filing the claim and attachment together. In addition, it will worklist claims that require an attachment that is not scanned and ready. A good practice management system automates the attachment process, further reducing the time the biller takes to manage attachments.

In summary, electronic transactions enhance your profitability by managing your insurance claims, streamline the process, improving your cash flow, and reducing labor costs. A good practice management system will enhance these benefits by managing the workflow for you.
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