A Beginner’s Guide to Electronic Claims Processing

Innovations like electronic claims and electronic healthcare records are the start of a revolution in healthcare; one that promises to dramatically simplify the way billing offices, practices and hospitals get paid. In this article, we will cover a brief definition of electronic claims, why they are important to the medical billing industry, and ways you can adopt this new technology for the betterment of your patients and your practice.

Reduce the length of your medical billing cycle by 30-days between charge post-date to first payment through electronic medical claims processing.

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Electronic Claim Definition

What is an electronic claim? An electronic claim is a form generated electronically for communicating a patient’s demographic information, insurance and treatment between the payer (or clearinghouse) and healthcare provider. Electronic claims essentially eliminate the need for paper records and are quicker this manually submitting a patient’s information.

Adoption of electronic claims began in 1975 when the National Uniform Billing Committee (NUBC) began developing a standard data set used nationally by healthcare institutions, providers, and payers. These standards took into considered the need for information against the burden of providing that information and culminated in the adoption of the national uniform bill, or UB-82, seven years later. These standards established one nationally accepted health billing form. Smaller committees were formed on a state level to implement the UB-82 manuals.


Paper Claims vs. Electronic Claims

A lot of time and money can be saved by not having to print out forms, complete them manually, and sending them via snail mail to health insurance companies or payers. Through electronic claims and the absence of manual labor, the human error quote goes down. Old paper claims were hand written and illegible. Claims sent electronically receive an error rate between 2-3 percent, while claims submitted on paper have an error rate of around 28%.

Software systems are also not without its flaws. Especially, if there is a glitch in the system or the internet is down, it may be difficult to access certain data which would not be the case with manually filed claims. All in all, this is not supposed to happen and is very unlikely to last longer than a fraction of a day which makes electronic claims still advantageous over manually claimed files. Paper files on the other hand must be stored safely for a very long time and can be destroyed without the chance of getting them back which is very unlikely to happen when submitted claim files electronically.


Automated Electronic Claims Submission

Automated electronic claims submission integrates your electronic claims to your existing workflow. First, paper claims are converted electronically through optical character recognition imaging (OCR). Next, your medical billing software aggregates and scrubs each claim for potential denial triggers that could delay the cycle. Third, the clearinghouse sends the claims electronically to the insurance carrier through a secure, HIPAA compliant connection for real-time visibility into the status of the claim. Last, the claim is accepted, and your organization receives reimbursement. An integrated business intelligence tool like ImagineIntelligenceTM can be used to compile a report of the most common causes of claim denials to mitigate potential loss in productivity later.


Other Advantages of Electronic Claims

What are the benefits of submitting claims electronically? Electronic claims can be stored on a data server and submitted one of two ways: either directly to the payer through direct data entry, or through a clearinghouse. Both methods are more accessible and less fragmented than paper claims when shared among specialists. Billing offices, practices and hospitals typically see a reduction in processing time with electronic claim submission clearinghouses between confirmation that the electronic claim was received and real time status checks on when the claim has been approved. Likewise, there is less of a chance of claim files being lost on the way to the healthcare provider when compared to paper claims.

With electronically submitted claims, hospitals, primary care providers and other physician offices can gain efficiencies through more automation and less staff work. Considering providers spend anywhere between 10 to 30 minutes per claim on manual tasks, the potential savings is huge when considering the savings on paper, postage, ink, staff, and envelopes. Health insurance companies can also process electronic claims faster and with less effort.


Electronic Medical Billing

Earlier this year we wrote a blog article on the benefits of eliminating paper from your revenue cycle through electronic medical billing. In the article, we mention medical providers could save at least $1.1 million labor hours per week by transitioning to full electronic claims processing. Electronic medical billing is easy to use and helps practitioners reduce the time spent filling out forms. When integrated with electronic patient collections, practice owners can reduce overhead while generating additional revenue through more efficient revenue cycle management.

The healthcare industry is moving swiftly in the direction of digitizing the entire revenue cycle. In 2017, just over 6 percent of healthcare claims were submitted as paper forms. Financial organizations big and small have a lot to gain through integrating electronic claims processing with other parts of the revenue cycle. Schedule a live demo today to find out how the Imagine Team can work with you to integrate electronic claims processing into your existing workflow.

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