What’s the big deal about Coordination of Benefits (COB) claims?
If your organization processes U.S. medical claims, I don’t need to tell you how challenging that can be at times. This is especially true for COB claims you receive via mail, fax, email and FTP, which likely challenge you to use all of your capacities to efficiently route, ingest, process, review and handle exceptions.
Now, if you’re like other payers, I’m sure you’ve gotten very efficient using some very inefficient methods. For example, maybe you’ve developed a reasonably fast intake process to manually separate, sort, scan and route paper claims to the correct person or department. Then, after you apply any administrative or clinical business rules, you manually key the claim from an image into an existing system and use several largely manual steps and people to find and fix keying errors.
Yet despite your many efforts, you’ve likely tapped your ability to squeeze any more speed or accuracy out of these workflows. Chances are you’re left with a fairly fixed and undesirably high processing cost compared with the claims you receive electronically as EDI.
By the way, who would have thought that you would still be processing so much paper, several years after you convinced so many individual practitioners and institutions to adopt EDI as their main method for sending you claims?
What you may not know is that the prevalence of paper is especially high for COB claims; according to a recent study by the Center for Affordable Quality Healthcare (CAQH), nearly 45% of all COB claims are submitted in paper form today.1 Of course, handling and processing any paper-based medical claim means higher processing costs and longer processing times for you, whether or not COB is involved. Yet it’s undeniable that adding an explanation of benefits (EOB) or standard remittance advice (SRA) document into the mix introduces greater complexity, expense, and potential for errors. And the typically slow processing times for COB claims do you no favor as you seek to build better relationships with providers and subscribers.
Why do you receive so many paper COB claims? Will it continue?
There are several possible factors that contribute to the higher percentage of COB claims originating on paper. First, COB claims are often submitted from one health plan or processor (payer) to another payer or are submitted directly from the member to the payer. In many cases, electronic claim submission capabilities may not be established between payers and members. Second, it may take a while for payers to detect when members have multiple coverages. In this scenario, the payer who receives and pays the claim first may find out later that they are not the primary insurer, causing them to reprocess the claim post-payment and chase a refund from another payer; this process simply may not be feasible for your organization to handle electronically. Finally, the Affordable Care Act (ACA) has increased the number of insured and mandated changes to models of care that have resulted in more complex billing. For the foreseeable future, many bills will contain a combination of fee-for-service and fee-for-value billing (aka “mixed billing”) items that payers will need to decipher to avoid big increases in denial determinations and subrogation activities and expenses. Given this additional coding complexity and the inferred correlation in the aforementioned CAQH study between complexity and use of paper, it’s plausible to assume that payers will continue to receive a high percentage of paper COB claims—and may even see an increase in the number of paper claims that contain mixed billing overall.
Regardless of the reasons for the high percentage of paper-based COB claims, you need a way to minimize the time and expense involved in processing these claims so that you can adhere to COB legislation, maintain compliance and pay the full benefits to which your subscribers are entitled—as well as sustain or improve your operating margins. You need technologies that automate your manual and broken COB claim processes, increase your collaboration with other payers and with patients, and speed the reimbursement process.
Why are COB claims so time-consuming and expensive to process?
Both the COB claim and the corresponding EOB must first be digitized in order to review, process and determine how you will apply for benefits as a secondary or tertiary payer. You likely have an initial intake process for all paper claims; however, often the claim and the EOB document then follow different workflows. If you’re like other payers, you manually key the EOB into one system of record, and a COB specialist verifies it and works exceptions; next, you manually key the claim into a different system of record—the claim system—and a different examiner verifies it and works exceptions.
When all goes well with this initial, separate processing, the digitized versions of the EOB and the claim must be combined prior to adjudication. When all does not go well with this initial processing, the COB specialist or general examiner (or both) may need to collaborate with other payers, the provider or the patient to resolve discrepancies. These highly manual and discrete workflows involving multiple parties contribute greatly to the time and expense in processing COB claims.
Can paper-based COB claims processing be automated?
The short answer is yes. Claims Agility automates the ingestion of all paper medical claims. It automatically classifies the claim (as a CMS-1500 or UB-04 form), extracts all data from the form and validates the claim by enforcing hundreds of pre-built business rules. It also automatically detects the EOB and prompts an operator to enter the claim-level or line-level EOB data into a partially pre-populated form. Claims Agility enforces pre-built field and balancing rules for EOB data, converts the claim and the EOB data together into an 837 v5010 EDI file and delivers it to your downstream adjudication process. This highly automated solution requires a very low level of operator touch, allowing you to cut out many of the manual steps involved in separating, sorting, keying and readying any paper claim—especially COB claims—for adjudication. This single, consolidated process cuts your processing costs and improves accuracy, and with operational analytics wrapped around this entire workflow, you will have full visibility into the status of your COB and non-COB claims.
See also Think Big and Take Small Bites in Your Digital Transformation to learn how a claims automation project can help you realize your organization’s digital transformation strategy.
1 2015 CAQH Index® Report, Overview of Findings, Webinar, March 30, 2016