The demand for more expedient and convenient services in the world of health benefits grows every year. And the boundaries of what constitutes an expected level of service are being pushed with the popularity of smart phones and tablet devices. But within this rush to embrace convenience, there are concerns that adjudication and audit standards are being relaxed, placing plan sponsors at risk.
Internet-based claims submissions were introduced several years ago by one of the country’s largest insurance carriers. Two additional carriers launched their member e-claims service last year. They have all expressed a dedication to minimizing the incidence of errant or fraudulent claims. Internet-based claims (IBCs) systems must be designed to promote the desired levels of convenience for all stakeholders while ensuring that a climate of abuse and fraud is prevented.
Online claims and benefits fraud
Fraud prevention tips for benefits plan members
What you should know about insurer technologyMany claims systems have a simple online interface where the member submits claims by either entering data manually or accessing pull-down menus that are preloaded with various providers of drugs, dental and extended health services, as well as products or information saved by the member in previously submitted claims. It is the responsibility of the benefits payer to make sure that the names entered in these pull-down menus are monitored for any history of mishandling or errant claims. An extensive protocol must be established to ascertain whether or not a provider is a member in good standing of any standards councils or self-regulating organizations. Unknown providers must be held in a pseudo online escrow while their legitimacy is established. Nonchalance can be a breeding ground for potentially abusive claims.
Before IBCs, the universal standard employed by the industry required all paper-based claims to be physically reviewed by a claims examiner for accuracy. IBCs were introduced to provide greater convenience for members to enter claims online and provide receipts to satisfy spot checks or audit investigations in the event that the claim is suspicious.
To satisfy the need for a base level of adjudication, several carriers adopted a schedule requiring that receipts for one in every seven or 10 claims be submitted by fax, email or traditional post. Plan sponsors became anxious that paper-based claims, previously reviewed 100% of the time, might be physically inspected only 10% to 14% of the time, exposing their plan’s expenses and perhaps putting their business at risk to runaway costs.
Understandably, their immediate reaction was that since a paper claim was being replaced by an electronic transmission, it would be far too tempting to submit a fraudulent or exaggerated claim to milk the system. It’s easy to understand how this new service was received with a healthy dose of skepticism. After all, IBCs offer greater convenience for plan members and lower processing costs and higher profits for carriers. Savvy business owners understood that the total costs and risks were being presented squarely at their feet.
Today, it is no wonder that plan sponsors, while being open to the idea of providing greater levels of service, want to ensure that they’re not assuming additional risk. If plan sponsors can be provided with assurances that they can maintain acceptable manual checks and balances, reviewing the number of receipts to meet their needs and comfort levels, then they might be more easily brought on board. In a sense, sponsors might then be more comfortable embracing technology.
Plan advisors are being asked to advise and help design those acceptable levels of adjudication. Only IBC solutions that provide a level of complete customization can accurately reflect a sponsor’s need for cost protection. Complete custom levels of control might even provide an additional way to differentiate between different divisions and classes of workers, offering an enhancement for senior-level managers and executives.
A dynamic and demanding owner may direct an advisor to process members’ claims and those of their partners and families without delay; after all, they’re paying the bills. At the same time, they might be concerned about possible runaway costs and excessive claims submitted by workers and demand a review to investigate every claim entered. Managers might be afforded a level of scrutiny somewhere in between.
The same owner might want to limit the dollar amount that can be submitted online by members by benefit type (drugs, paramedical services and appliances, etc.). This would allow for higher coverage amounts for senior-level executives, whereas lower spending limits—per claim submitted—may be set for hourly paid workers. In a sense, this would help the plan sponsor exercise an acceptable level of line-item control and risk tolerance.
Greater compliance requirements like these will help dissuade members from submitting fraudulent claims but cannot replace the need for carriers to investigate truly “suspect” claims. All the country’s major carriers and benefits payment companies belong to a collaborative anti-fraud subcommittee and frequently share information to help protect the integrity of the group benefits industry.
The demands for convenient online claims systems must be balanced with an enhanced facility to provide greater protection from fraud. Benefits payment firms and insurance carriers must temper this new market demand for electronic convenience with the comprehensive means to ensure that IBC systems are sustainable for the long term.
In the future, the advent of claims processed using mobile technologies will only serve to expand the use and adoption of IBC systems. Left unchecked, plan sponsors may be exposed to levels of cost and risk that they may not be prepared to handle.