Breaking down the life of an insurance claim | Webinar
To start off our webinar series on Managing the Healthcare Supply Chain, we broke down the life of an insurance claim. We looked at two distinct but equally important processes: a member’s journey from being referred to (or otherwise deciding to get) care to actually receiving that care, and then the journey of a claim itself from creation to payment.
For our example claim, we used a theoretical member on a Flume Open Access plan who is referred for back surgery at the local hospital. Back surgery typically doesn’t just come out of nowhere and this member almost certainly had other care episodes leading up to this point, but for this webinar we decided to focus on this one specific procedure and the accompanying claim.
Here’s a quick breakdown of what we covered. For a more detailed explanation, watch the webinar recording above.
Phase 1: Pathways to care
After a member is referred for the procedure, they need preauthorization. In this case, preauthorization is handled by Flume’s Medical Management partner, Ault International Medical Management (AIMM). AIMM is looking to answer three main quesitons:
- Is this the next best step for the patient’s care?
- Is this the right facility for the care to happen at?
- Is this the right doctor to provide the care?
AIMM affirms that back surgery is appropriate for this member, but learns that the surgeon in question doesn’t have a particularly high quality rating, and that the hospital is charging an excessive amount for the procedure. So AIMM, working with the group’s account management team at Flume, conducts a review of alternative facilities where the member could receive care, all within driving distance.
We also bring in Sano Surgery, another vendor incorporated into the plan. Sano Surgery contracts directly with facilities to provide surgery with bundled prices. Through Sano, we find an independent surgical center that has a higher quality rating for this procedure than the referred l hospital, and is also significantly more affordable.
Now it’s time to take this information back to the member. We’re not telling the member they can’t go to the referred hospital and they have to go somewhere else. We just want to make sure they’re aware that there is a potentially better option, and that there are proper incentives in place if they do choose the plan’s recommended option.
In this case, those incentives look like the plan agreeing to waive the member’s out-of-pocket costs and pay for transportation to and from the surgical center, if they choose the recommended facility.
The member chooses the plan’s recommended option and schedules a date for the surgery. The procedure goes well, and the member and his family are pleased with both the surgeon and the facility. Now it’s time for the plan to pay for the care.
Phase 2: Paying for care
First, the claim has to be created and sent to Flume Health. The provider processes a claim for the visit using their Electronic Health Record system, and sends that claim to their clearing house. The provider’s clearing house then sends the claim to Flume’s clearing house, who routes it into our system using rules that we’ve provided.
Now it’s time for adjudication. Once the claim is in our system, it will be automatically matched to the patient and provider, and will be associated with that member’s specific benefits plan. Based on the specifics of the plan, our automated system may deny particular service lines that aren’t covered But in this case, the care in question is fully covered, so we’re good to go.
Once the claim has been matched with a benefits plan and approved, it’s time to generate the payment. Our system sends a payment file to our third-party fulfillment partner, who generates both an explanation of benefits and an explanation of payment.
The explanation of benefits goes to the member. It explains how much the plan is paying and how much the member’s out-of-pocket obligations are. In this case, there are no out-of-pocket obligations, since the plan waived them when the member chose to go to the recommended surgical center.
The explanation of payment goes to the provider and explains why we’re paying them the amount we are. In this case, that’s the bundled price that was agreed upon in advance.
The fulfillment vendor passes the payment information along to our payments partner, who takes that information, figures out the best way to get the payment to the provider, and sends the payment.
Managing the healthcare supply chain is an essential part of any unbundled health plan, and it has to happen both before and after a member’s care. If your TPA has the relationships, know-how, and technological sophistication to be able to effectively and efficiently handle both member’s pathways to care and payment for care, you’ll be set up for success.