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Tech for Tomorrow

Doug Mow

Real Business Benefits for Real-Time BPM

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The weekend before last, the New York Times published a short article on claims processing in the U.S. healthcare industry. It mentioned the fact that "real-time claims adjudication" is the formal name of the initiative, which is ironic given the pace of adoption in the industry. The article also mentions that the median time to clear a claim is five to 13 days, but healthcare industry executives cannot seem to account for the time.

The author, Randall Stross, mentions that doctors must complete forms that include 14,000 diagnostic codes and 4,500 procedure codes. Well, that situation is going to get a heck of a lot worse with the ICD 10 code standard slated for 2013. At that time, the 18,500 codes will go up to 155,000. While the objective is improved care at reduced costs, it's going to take quite a bit of technology innovation to realize the benefits.

The business advantages are clear. Every time a claim fails auto adjudication processes and requires manual intervention, the cost is approximately eight to 10 dollars. The same claim that is completed through a completely automated process, with all associated transactions done electronically, costs less than one dollar. Adding manual check processing time, requests for additional information or attachments, or other human intervention extends the process and increases the cost.

I checked with healthcare industry experts and was told that only 50 to 80 percent of commercial claims are processed automatically. There seems to be plenty of room for improvement. This seems to be an obvious target for innovative applications that use BPM technologies for process automation.

Using BPM to improve auto adjudication for claims validation, routing, eligibility check and payment submission can deliver huge gains. Of course, this is an overly simplistic view. Healthcare companies have large and complex IT portfolios to manage and rationalize. Multiple systems exist for almost every function creating application maintenance and support challenges.

But those challenges are not unique to healthcare. Like claims adjudication, which function within your organization is the best target for improved efficiency and cost reduction? Is the resulting business benefit as large as 8X to 10X? Are you looking to BPM technologies to help create your next generation of application?

Doug Mow blogs from a business executive's perspective about IT trends, tech news and life in the trenches of an Enterprise 2.0 transformation.

Doug Mow

#CMO of Courion Corporation responsible for all branding, communications, messaging, online and offline marketing. Courion is the leading provider of access management tools that provide maximum access to corporate IT assets with minimal risk.

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