The future of healthcare claims: AI technology takes center stage

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Healthcare organizations continue to struggle with the management of claims processing and denials. With more than 100,000 payer policy changes regarding coding and reimbursement occurring between March 2020 and March 2022, hospitals and health systems are experiencing more claims denials than ever before. In fact, in a recent Experian Health survey, The State of Claims – 2022, nearly one-third of respondents reported that their number of denials has increased between 10% to 15%.¹ Clarissa Riggins, Chief Product Officer at Experian Health, said that claims submissions and denials continue to be a significant source of waste across hospitals and health systems.

"Claims denials result in billions of dollars of wasted money. It's both wasted effort from reworking denied claims, especially given the staffing shortages we've seen across the industry, and lost revenue from claims that never are recouped," she said. "Since these wasted dollars can potentially lead to higher prices for all in care delivery, it's a challenge that must be addressed – and one that can be addressed with the use of emerging technologies like artificial intelligence (AI) and machine learning (ML)."

During the pandemic, many healthcare organizations were forced to rely on digital technologies to continue to deliver care to patients even as they had to physically shut their doors. As Riggins noted, technologies that once seemed novel became a necessity – and more organizations grew to understand the value in adopting modern solutions that could make them more effective and efficient. With claims denials continuing to increase beyond COVID-19, she argued that the time is right to adopt AI/ML to optimize the claims management process – and to eliminate as many claims denials as possible.

"Claims submissions and managing claims after denial are highly manual processes – and they are both extremely error-prone," she said. "You can take AI/ML and apply it to these repetitive, rote tasks in these workflows. AI/ML can then learn from the data patterns in your claims to provide insights on where your claims are being denied most frequently. These solutions can also provide decision support to staff to help them to prioritize the work within their current claims processes, to avoid unnecessary denials in the first place and then to optimize their work to ensure a cleaner claim rate."

These algorithms can also help healthcare organizations better understand which denied claims are most likely to be paid out after re-submission.

"Hospitals want to focus their efforts on where they'll have the most positive results," she said. "When you have an algorithm that can evaluate the probability that a denial will be overturned, you can make sure that staff are working on the claims with the most potential for yield. Taken together, these solutions can help ensure that hospitals and health systems are getting paid for the good work they do in delivering care."

As noted in The State of Claims – 2022 survey, healthcare organizations understand that claims management must become more of a priority in operations. In fact, an astonishing 78% of respondents stated that their organizations will likely replace their current claims management solution in hopes of improving claim denial rates. Riggins said that as these organizations evaluate different solutions, they should be open to embracing new technologies with the power to make significant improvements to their claim yields.

"Being open to the idea that there may be a better way – not only to expedite but to potentially automate claims processes – is half the battle," she said. "Educating staff about technologies like AI to help support their claims processing and revenue cycle management goals is important to realizing the benefits that these solutions can provide."

While some healthcare organizations may be resistant to adopting AI/ML solutions, Riggins believes these technologies represent one of the biggest opportunities to help hospitals and health systems improve operations – and, consequently, the revenue cycle.

"This is the direction in which hospital operations are going," she said. "AI/ML has the power to augment what your staff is already doing. It allows you not only to automate common, frequent tasks, but also to take intelligence from what you've already done and apply it so your staff can focus on truly value-added work. This technology can help reduce friction in your operations and recoup every possible dollar for provided care, and with all the challenges healthcare organizations face today, that's exactly what they need."

Reference

1. Experian Health. 2022. The State of Claims – 2022 Report. https://www.experian.com/healthcare/resources-insights/thought-leadership/white-papers-insights/state-claims-report.