Pricing Healthcare Claims Automatically No Matter How Complex the Contractual Terms


Jim Donnelly
Managing Director of Payer Operations Solutions
DST Health Solutions

Pricing healthcare claims quickly and accurately is becoming more difficult for payers as provider contracts grow increasingly complex. While detailed and highly precise contractual provisions can help payers manage medical costs more effectively, the difficulties these contracts create within the contract-modeling and claims-pricing processes can add substantially to administrative costs.

That’s because most claims administration platforms can’t automatically price claims against complex contractual terms and because many pricing engines and modeling solutions available on the market today are expensive and hard to use.

This leaves payers to choose between controlling medical costs and controlling administrative costs.

In our last blog, we discussed the impact of complex contracts on contract modeling and testing, noting that payers face difficulties in this area because commonly used technologies can’t accommodate today’s provider contracts.

Similar issues arise in claims pricing.

Once a provider contract has been approved by a payer, the agreement needs to be moved from the payer’s modeling system to the core administration system and/or pricing engine. This is typically a laborious manual process. Keying errors can lead to costly inaccuracies in claims pricing, and incorrectly priced claims can damage provider relations and trigger financial penalties.

If the contractual terms are highly complex, the payer’s claims-adjudication staff may have to price claims manually. That also drives up administrative costs as well as the likelihood of errors, delays, and customer dissatisfaction.

Misinterpretation of the contract could also become an issue, with some claims adjudicators manually pricing a claim according to one interpretation, and other adjudicators manually pricing identical claims according to their own interpretations. This also opens the door to errors, delays, provider dissatisfaction and fines.

Advanced technologies can resolve these issues.

There is a solution; new technologies available on the market today enable payers to negotiate highly precise and detailed contractual agreements without driving up administrative costs or creating a processing nightmare. The best of these solutions include both modeling and pricing capabilities in a single, integrated package.

Once a contract has been approved, it can be moved automatically from the modeling system to the pricing engine, without the need for manual rekeying. The pricing engine will automatically price the claim according to the applicable rates and terms, regardless of complexity.

These new Java-based applications are highly flexible, enabling you to manage a wide range of agreements, including date-sensitive contracts. When new fee schedules arrive, your staff loads only the pertinent changes. Because they don’t need to re-enter the entire agreement, you save additional time, work, and money.

Advanced technologies can take you beyond the limitations of traditional methodologies such as fee-for-service, per diem, per stay, and flat fees. These applications can use multiple pricing methodologies, when these are part of a contract, to automatically price the provider service. The solution will select the correct methodology from the contract and apply it accurately.

For example, a hospital contract might call for reimbursement of most inpatient claims on a DRG basis while carving out certain conditions for payment on a per-case basis. The agreement might also include stop-loss provisions for claims that exceed a certain dollar amount; these could be paid as a negotiated percentage of allowable pricing. An effective tool will handle all of these variables automatically.





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