Health insurance companies are rapidly learning how Insurance outsourcing business processes allows them to address key issues without worrying about routine Insurance back-office functions. Companies that implement back office support services (BOSS) can grow their enterprises by focusing on core competencies including customer service, innovative plans, provider relations, underwriting and building networks.
BOSS leverages service providers to provide and manage an organization’s business processes and applications, such as data entry, billing and claims adjudication, to name a few. Partnering with a service provider delivers benefits that help health plans succeed in the marketplace. These benefits include the ability to reduce transaction costs; improve service levels; speed membership growth without adding infrastructure; and focus on core competencies and lines of business.
Many health insurance companies have determined this partnering model and engaging all or a portion of the administrative workload is the most economical strategic approach. Others want to keep administrative functions in-house but don’t want the responsibility of maintaining an expensive, complex network data center, which can include ongoing hardware and software maintenance and updates, electronic data interchange, IT staff costs and complex integration issues.
Health insurance companies increasingly are turning to BOSS to reduce overhead by streamlining business operations without the investments associated with in-house process administration. By outsourcing non-strategic functions to service providers, organizations can achieve savings of up to 30 percent on administrative costs. According to Gartner Dataquest, the trend is growing fast and 60 percent of health care organizations will spend more on external IT support, consulting and outsourcing services than on internal staff.
What Functions Can Be Outsourced?
Health Insurance can outsource some or all of their IT and administrative functions to service providers that have the human capital and advanced technology to perform business functions efficiently and effectively. Outsourcing enrollment and claims data entry, for example, can make a dramatic difference in meeting service level agreements. In addition, BOSS can enforce rigorous quality assurance standards pertaining to data entry, including code and field validation.
The following business processes can be outsourced:
- Claims imaging, adjudication and payment
- Customer, group and provider services
- Membership/enrollment processing
- Billing and collections
- Check and explanation of benefits processing
- Enrollment/eligibility processing
- Provider reimbursement
- Call center inbound and outbound services
- Medical management
BOSS providers can design a custom approach for health insurance needs and offer service level guarantees. Eliminate paper overload. Health insurance can direct their claims to a service provider for scanning, imaging and data entry through optical character recognition and sophisticated entry-from-image procedures. Some BOSS providers will perform claim archiving and storage and electronic claim management. The integrated claims processing solution can reduce overall paper claims data entry and adjudication processing costs by up to 40 percent.
Keep tabs on quality. When service providers have a quality assurance system in place, they can evaluate data entry personnel and other workers as well as review the processed claims audit trail. This type of system keeps a complete history of every claim processed. The history records exactly what information each worker enters, allowing the quality assurance staff to collect samples of any type of claim processed and any operator’s work. The staff can then compare work performed with the original claim form, mark errors, make corrections and record comments.
Prevent costly claims errors. A BOSS provider can adapt readily to a client’s specific business rules using a comprehensive health care platform and its user-defined workflow parameters. Claims may be routed according to dollar amount, specific diagnosis and other review criteria. BOSS providers that use of fully integrated claims edit system can prevent costly overpayments because medical overpayments attributed to up-coding of claims can automatically be detected and corrected. This type of system can help identify surgical, laboratory, radiology and medical procedures that are inappropriately coded. To speed processing, HIPAA-compliant claims and related transactions can be received directly.
Improve service offerings. BOSS providers have a responsibility to ensure that their quality level matches or exceeds the health insurance company’s expectations through pre-determined standards and measures. By continually enhancing service offerings for the health care payer marketplace, BOSS service providers can keep pace with industry trends. Some providers move beyond labor cost savings to pursue long-term operational improvements.
Insurance companies are increasingly looking at off-shoring to improve efficiencies and focus resources on core functions of product development and innovation. Off-shoring is similar to outsourcing when companies hire overseas subcontractors, but it differs when companies transfer work to the same company in another country.
Offshore BOSS provides businesses with the opportunity to reap the benefits of lower labor costs and enables health plans to develop competitive strategies that will leverage their financial positions in the global marketplace. Some advantages are:
- Cost savings
- Focus on core processes
- Speed to market
- Technology risk
- Specialized services
- Availability of credible service providers
Factors inhibiting offshore BOSS include cultural differences and a health insurance company’s perceived loss of control over business functions. An estimated 50 percent or more of all claims entry functions currently are performed offshore. Industry reports suggest that there are more than 15,000 people engaged in providing health care administrative services to the U.S. market in India alone. With its vast well-educated labor force, India is becoming the destination of choice for high-end transaction services, such as claims adjudication, membership services, and support for medical management and underwriting services. India offers the following benefits as an offshore BOSS service provider:
- Low-cost advantage
- Established outsourcing destination
- Near-shore services
- Solid relationships with large insurers; and
- 24-hour availability
By outsourcing data entry and claims processing to India and other offshore locales in different time zones, work can be completed after health plan organizations in the United States have closed for the day. As a result, providers get paid faster.
Some providers offer health insurance companies a blended onshore/offshore administrative model supported by highly trained, multilingual liaisons who can translate the health plan’s requirements and the type of reporting needed to an assigned BOSS team. Many providers hire only professionals with experience in U.S. and international health insurance administration procedures to guarantee quality in all facets of production. They use explicitly documented hiring, training and testing practices to ensure strict compliance with each health insurance company’s business rules as well as mandated regulations.
Finding the Right Match
When shopping for a service provider, look for best practices and value-added benefits such as continuous quality improvement to achieve accurate, consistent and measurable results. CQI requires grounding in proven methodologies such as Six Sigma, where root-cause analysis and mathematical formulas can be applied to determine the costs for improving quality, eliminating errors and ultimately deriving a greater ROI.
A BOSS provider should be customer focused and an extension of the health insurance company. When BOSS teams are composed of people who possess knowledge in business operations and technology, health plans can reap twice the benefits thanks to cross-pollination across operational units.
With the right BOSS partner, a strategic alignment will exist between the health plan’s requirements and the service provider’s strategy. Evaluate whether the service provider is delivering cost savings only through labor arbitrage, which might not be sustainable in the long term, or through a combination of technology, process improvements to the claims and administrative application, and selective off-shoring to the most appropriate locations.
Whatever the level of outsourcing, perform comprehensive due diligence, including a review of the risks, hidden costs and long-term benefits. Health insurance companies that work with a qualified BOSS provider can achieve long-term savings and quality benchmarks, freeing them to attend to critical issues while back-office functions are placed in capable hands.
About Vantage Agora
Vantage Agora (VA) is a global provider of back-office solutions, custom IT services and consulting services for companies in the insurance, finance, and healthcare sectors. As a SSAE 16 Type II audited company, Vantage Agora utilizes advanced data processing and quality control systems on a secured network to ensure efficient, comprehensive management of back-office functions such as insurance, accounting, financial and administrative tasks. Founded in 2004, Vantage Agora has offices in Cleveland and Dallas.