Affordable Care Act: a Compelling Reason to Improve Back Office Efficiency

For insurance companies and providers, errors in claim processing can often expose the organization to poor customer satisfaction and regulatory fines. Paperwork errors force many companies to refund payments collected from providers.

As a result of the Affordable Care Act and the Individual Mandate, beginning in 2014, each state will be compelled to operate a health insurance exchange. This represents an unprecedented opportunity to expand the market for insurance, allowing health care insurers to sell to smaller companies and eventually, directly to consumers through health insurance exchanges. Organizations and individuals will be able to compare policies sold by different companies and choose the policy that works best for their circumstances. This represents a significant new source of revenue for health care insurers.

This new opportunity comes with new challenges as well. Billing and collection issues should be sorted out before insurers can reap the financial benefits. Upwards of 80 percent of consumers using the exchanges will have the costs subsidized by the federal government, and may be covering co-pays through a variety of sources, including check or cash equivalents, relatives or charities. Multiple payment sources will present challenges for the insurer.

To meet these challenges, companies are looking to improve their claims processing systems. One in 10 medical claims is currently inaccurately processed; and while this statistic is improving over previous performance, improving back office claims processing is a strategic imperative for insurers. Technology tools help health care companies optimize their back office processes to meet the growing demand for their services and fulfill their service level agreements with customers, therefore ensuring the long-term viability of the enterprise.

Although no one knows for sure, it is widely speculated that the Affordable Care Act will drive up the cost of insurance premiums because of the increased expense of managing more complex claims in the back office. However, with the right approach and tools, insurers can minimize rate increases by optimizing their back office efficiency, making them more competitive in the market place. 

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