For modern health plans, enhancing auto-adjudication rates is more than a technical upgrade. It is a strategy for payers aiming to stay competitive by increasing automation, improving efficiency, and strengthening organizational agility.
Current statistics show that a significant 15 and 20% of claims still require manual processing. This not only increases costs by up to $25 per claim, but also extends processing times by days or even weeks. In this blog, we cover why auto-adjudication rates can decrease over time, the benefits of enhancing your claims auto-adjudication process, and how HealthEdge® can help clients unlock the full potential of their health plan technology.
How Do Auto-Adjudication Rates Impact a Health Plan’s Business?
Auto-adjudication rates directly impact a health plan’s operational costs and efficiency. Achieving higher auto-adjudication rates means fewer claims require manual intervention and review resulting in reduced processing times and minimizing the risk of errors. Lower auto-adjudication rates mean more claims require manual reviews, which lead to inflated administrative costs and payment delays.
Manual claims processing can lead to workflow bottlenecks and reduced operational agility. Inefficient adjudication processes also strain health plan resources and can lead to compliance risks and member satisfaction issues. Improving auto-adjudication rates helps ensure the business runs optimally while keeping providers and members happy with timely and accurate payments.
[H2] What Causes a Health Plan’s Auto-Adjudication Rates to Decline?
Auto-adjudication rates are impacted by several factors. Regulatory changes and new payment rules require health plans to update their system configurations to remain compliant. When new payment rules go into effect, some health plans rely on manual reviews until they update internal systems. But over time, manual interventions can accumulate and drag auto-adjudication rates down. Updating configurations to align with new rules can reduce the need for manual reviews and improve payment accuracy.
Some health plans also face auto-adjudication issues when introducing new lines of business. Internal teams may replicate configurations for existing lines of business that are not optimized for the new offering. If not addressed, health plans can face workflow inefficiencies and a permanent decrease in auto-adjudication rates.
A third barrier is that many health plans miss opportunities to leverage the full spectrum of features or capabilities their technology solutions deliver. Staying up to date with system upgrades can enable more streamlined workflow automation and more accessible configurations.
What Are the Impacts of Decreased Auto-Adjudication Rates?
Falling auto-adjudication rates don’t just impact operational efficiency—they impact a health plan’s financial health. Manual claims review costs time and money, which could otherwise be allocated to strategic priorities. It also introduces the risk of human error, which can lead to expensive rework or member dissatisfaction.
Relying on manual reviews also creates inefficiencies in handling claims. For example, reviewers might need to investigate multiple systems to process a single claim. That additional complexity drives up processing times and fragments workflows, making it harder for teams to deliver consistent results.
3 Common Issues That Can Impact Auto-Adjudication Rates
1. Claim Authorization Matching
A claim may be denied if it does not clearly align with the service provided. This is common in areas like inpatient hospital stays or physical therapy services, where the nuances of care delivery can create multiple mismatches.
2. Coordination of Benefits
Effective coordination of benefits means determining the order in which multiple insurers are responsible for a claim. This process is incredibly complex and highly specific to configuration. If the data being fed to the system is delayed, incomplete or inaccurate, it can cause pending claims that require a significant manual effort to resolve.
3. Shifting Regulations
Regulations and payment guidelines are constantly shifting, with some—like the No Surprises Act—directly impacting auto-adjudication rates. When a wide-reaching regulation like this is introduced, health plans may elect to pend relevant claims while they update their configurations to align with the new rules, causing delays.
Improve Auto-Adjudication with Advanced Solutions from HealthEdge
At HealthEdge, we work closely with our health plan partners to understand their holistic needs and how we can support them in achieving their optimization goals. Our Global Professional Services team is comprised of healthcare industry veterans who can partner with your organization to better leverage the HealthEdge solutions available to improve auto-adjudication rates and enhance your claims processes.
What is the Process to Improve Auto-Adjudication with HealthEdge?
We start with an optimization assessment. This is where our internal experts examine a health plan’s existing workflows and configurations and deliver a set of actionable recommendations. Following the assessment, our team can be contracted for additional engagements to support the execution of the optimization assessment recommendations. To start, our team works with the health plan to prioritize recommendations based on their potential return on investment (ROI) and operational readiness. Available resources, like staff availability, often determine both the approach to the engagement and which recommendations get tackled first.
Our team can also offer a collaboration engagement with a health plan’s configuration and testing teams to assist with implementing the suggested changes. This involves developing test cases, running scenarios, and demonstrating proof-of-concept solutions. While each health plan ultimately owns the changes to their operations, our team acts as their guide to help direct the process and maximize results.
This collaborative approach ensures health plans not only address their current challenges, but they are also enabled to future-proof their configurations for ongoing improvements.
One customer was notably struggling to match claims with authorizations. By working with HealthEdge to assess their systems and identify opportunities to improve their claims-authorization matching, this customer was able to achieve a 56% reduction in their pend rate for authorization-related claims—that’s a 56% reduction in claims requiring manual work.
How Do I Know if My Health Plan Would Benefit from Enhanced Auto-Adjudication Support?
The healthcare payer landscape is constantly evolving— and so are the digital solutions available. Most health plans could benefit from regular evaluations and updates to their configurations with a focus toward auto-adjudication improvements. We do see areas where optimization can have a significant impact.
First, health plans undergoing significant growth or bringing on new lines of business typically face challenges that make an optimization assessment especially valuable. The more complex their digital ecosystem, the greater the potential for impactful improvements.
Second, health plans whose systems have not been optimized in several years or who have smaller configuration teams often achieve significant improvements. These organizations are more likely to have areas for configuration improvement that an optimization assessment can help identify and address quickly.
Are you a HealthEdge customer interested in optimizing your claims processes? Contact your Customer Success Executive to learn more about optimization assessment.
