The Coming Age of
Net-Based Claims Processing
By Terry Lee
Can you really make money on the Net?
Thatís the cyber-question of the day, and it is one risk managers are answering with an emphatic "yes" as payors nationwide blaze profitable new trails at the frontier of Electronic Commerce. In fact, forward-thinking insurers are already leveraging the combined power of the Internet and newly-emerged Extranet technologies to bring electronic claims processing to thousands of healthcare providers.
Analysts estimate that insurers can save anywhere from $1.75 to $10 per transaction when claims are submitted electronically. Risk managers also know that the more quickly a claim is settled, the more likely it will be settled to the advantage of the insurer.
In the healthcare industry that processes more than four billion claims a year, this massive potential for savings is the driving force behind a market-wide shift towards Net-based transactional processing. Currently only about 35 percent of all medical claims are filed electronically, and until very recently, the high cost of software, personnel training and user fees have excluded most smaller healthcare providers from the revolution in Electronic Commerce.
So there are millions and potentially billions of dollars to be made on the Net. The challenge today, particularly for healthcare insurers, is to find a medium capable of translating this enormous potential into real-world payback for providers, payors and healthcare consumers.
The Extranet Solution
Fortunately, an innovative new application of Extranet technology is now opening a smooth and cost-efficient data pathway between insurers and healthcare providers. Extranets create a highly-secure doorway between the Internet and a companyís internal computer network. Once open and protected by multiple-level security features, an Extranet allows partners, vendors, customers and others to share sensitive, user-specific information maintained on back-end server systems.
Extranet technologies utilize todayís most advanced multi-user server software to deliver highly-efficient, user-oriented claims processing applications across the Internet to medical, dental and outpatient offices nationwide. These robust solutions create a thin client/server design that dramatically reduces the cost of application ownership, and gives providers a fast, secure LAN-like access to electronic transaction processing. Extranets eliminate the need for massive front-end investment in infrastructures, leased lines and dial up services, and create a powerful information pathway that can easily be customized to meet specific system requirements.
Because application-thin client architecture and the Internet dramatically reduce the operating cost, electronic claims processors can earn very acceptable levels of income from volume-based payor revenues. Thus, this service can be offered at no additional cost -- with no heavy software startup investments, no monthly fees and no per-claims charges Ė to small healthcare providers who were once excluded by the high cost of traditional electronic claims processing.
Benefits to the Provider
This new Extranet technology gives healthcare providers easy access to a powerful, simple-to-use electronic claims processing system. Providers use a standard desktop PC and a simple Internet connection to submit and edit claims through a secure, private Extranet service.
The most advanced Extranet-based systems automatically compare the claim to a database of thousands of provider codes, identifies and prompts the user to correct any errors, then forwards the claim to the appropriate payor. Providers have access to 24-hour processing of all claims including HCFA 1500 and ADA 1990, smooth compatibility with popular practice management and A/R accounting software, and the privacy of the systemís extensive security protection.
Providers who utilize Extranet-based electronic claims processing experience faster reimbursement and lower administrative costs. And because this system eliminates multiple data entry and corrects many common errors, providers receive far fewer claims rejections and delays.
Proven Data Security
The security of patient data is of course a key concern in the healthcare industry. Current Extranet-based solutions provide a very high level of data protection. Unlike paper-based claims processing methods, in which hard copies of patient information travel from desk to desk, an Extranet creates a direct and secure data pipeline between the healthcare provider and the insurer. In comparison to most dial-up electronic or fax-based claims filing systems, which offer little in the way of patient data security, an Extranet Web-based system can incorporate multiple-levels of powerful data protection.
A fully-capable Extranet claims processing application may provide up to seven levels of
security, including user passwords, firewalls, multi-layer encryption technologies and additional proprietary security features. Security at the physical site where the Extranet service is managed should include formal site monitoring, code-only access to the network servers, redundant lines and power supplies, and other measures.
The Future of Extranets
Because it is secure, easy-to-use and can be provided at no cost to small healthcare offices, this Extranet solution eliminates the traditional barriers to electronic claims processing. Astute insurers now recommend this technology as a way to encourage providers to adopt electronic transaction processing.
While Extranets are ideally suited to the task of providing rapid and cost-effective claims processing, the data path they create can also be used to deliver a dazzling array of provider-specific industry news, payor updates, employee training and other services. In the future, refined Extranet services will create even more direct and cost-effective lines of electronic communication between providers, payors and healthcare consumers.
Some may still wonder if you can really make money on the Net. Meanwhile, payors are busy earning millions -- soon to be billions -- in revenue-enhancing savings with this most recent example of Net-based Electronic Commerce.
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Terry Lee is executive vice president of claimsnet.com. Founded in 1996, Dallas-based claimsnet.com offers healthcare transaction processing services. For more information, visit claimsnet.com online at http://www.claimsnet.com.