Week 4: General Administrative Expenses and Claims Processing Systems

General Administrative Expenses (10 minutes)

  1. We are looking at the resources in your HMO devoted to the following functions: (1) cost containment; (2) health plan administration; (3) consumer service; (4) financial administration; (5) regulatory affairs; (6) provider network administration; and (7) rate development, in other weeks and (8) claims administration in another section of this hearing. In this section, please identify the following:

    1. Any administrative functions not specifically dedicated to the eight above-listed functions (the "identified administrative functions");
    2. The manager(s) responsible for each of the identified administrative functions;
    3. The number of internal or external staff dedicated to the identified administrative functions;
    4. The average percentage of your annual expenses (not including claims paid) over the past five years that are devoted to each of the identified administrative functions; and
    5. The steps that your organization has taken to reduce the costs of or need for the identified administrative functions.

Claims Administrative Expenses (30 minutes)

  1. Identify the division and/or individuals responsible for your company's claims-processing, for claims submitted by health care providers or their representatives for services provided to covered members.

    1. Identify the number of staff and proportion of health plan administration expenses devoted on an annual average to processing health care provider claims, including all correspondence with health care providers regarding submitted claims, over the past five years.
    2. Explain generally the different steps your company uses to receive and process claims.

  2. Identify the following regarding the receipt of filed claims in 2008:

    1. The proportion of claims filed and received in electronic format;
    2. The proportion of claims (in dollars) filed and received in electronic format;
    3. The proportion of claims paid electronically;
    4. The reasons that any claims continue to be submitted in paper form; and
    5. Whether the electronic processing of claims is less expensive than the processing of claims in paper format. If so, identify the relative cost difference and explain the steps that your company is taking to increase the number of claims submitted electronically.

  3. Identify the following regarding claims-processing in 2008:

    1. What does your company recognize as a "clean" claim?
    2. What is the average number of working days that it takes your company to process an electronically-submitted "clean" claim?
    3. What proportion of electronically-submitted claims is not processed because they are not "clean" claims?
    4. What proportion of electronically-submitted "clean" claims is not approved for payments?
      1. identify the reasons that such claims are not approved and for each reason, the proportion of all disapproved claims that are denied for the noted reason;
      2. identify the process used to notify the filer that a claim is disapproved and the process used with a provider who routinely submits claims that are disapproved;
      3. identify how many claims, and the proportion of total claims, that require direct contact with (a) the claim filer, (b) the health care provider, or (c) in the case of coordination of benefits, with another insurance company;
      4. identify how many disapproved claims are subsequently resubmitted and approved; and
      5. identify how many claims are disapproved due to coding problems.
    5. What proportion of electronically-submitted "clean" claims are approved with payments processed according to the following periods:
      1. 1 - 15 days
      2. 16-30 days
      3. 31-45 days
      4. Over 45 days
    6. What is the average number of working days that it takes your company to process a "clean" claim submitted in paper format?
    7. What proportion of paper claims are not processed because they are not "clean" claims?
    8. What proportion of "clean" claims submitted in paper format is not approved for payments?
      1. identify the reasons that such claims are not approved and for each reason, the proportion of all disapproved claims that are denied for the noted reason;
      2. identify the process used to notify the filer that a claim is disapproved and the process used with a provider who routinely submits claims that are disapproved;
      3. identify how many claims, and the proportion of total claims, that require direct contact with (a) the claim filer, (b) the health care provider, or (c) in the case of coordination of benefits, with another insurance company;
      4. identify how many disapproved claims are subsequently resubmitted and approved; and
      5. identify how many claims are disapproved due to coding problems.
    9. What proportion of "clean" claims submitted in paper form are approved with payments processed according to the following periods:
    1. i. 1 - 15 days
    2. 16-30 days
    3. 31-45 days
    4. Over 45 days

  4. Explain any different practices or expenses in processing a claim submitted for services provided to members in each of the following markets:

    1. Medicare/Medicaid;
    2. Individual/small employer (50 or fewer eligible employees) insured plans;
    3. Large employer (over 50 eligible employees) insured plans; and
    4. Administration of self-funded plans.

  5. How does your company make health care providers and other claims filers aware of changes to the claims processing system? What incentives or penalties do you apply to any filers based upon their adherence to claims processing guidelines?

  6. Identify how your company measures satisfaction with the way that your company administers its claims processing system. If your company surveys claims filers, explain the frequency of the surveys, present any results, and explain the ways that your company uses the results. Identify what your company has done over the past five years to change your claims processing system and explain, for each of these changes, how the change has improved service and/or reduced your claims processing administrative expenses.

  7. Explain the types of audits or examinations (internal and external) that are conducted of your claims processing operations and the following details about these audits and examinations:

    1. a. the reasons they are conducted;
    2. the frequency at which they are conducted;
    3. the persons or firms who conduct them;
    4. the average annual cost of conducting them;
    5. internal staff time, resources and cost necessary to prepare materials for them; and
    6. your company's return on the time and resources invested on these audits.

  8. Describe any retrospective claim audits that you may perform on provider submitted claims. Including the following:

    1. a. the reasons they are conducted;
    2. the frequency at which they are conducted;
    3. whether they are performed by the carrier or a third party;
    4. the average annual cost of conducting them;
    5. the average amount recovered as a result of such audits;
    6. the average number disputed by the provider and the number overturned as a result of any such dispute; and
    7. your company's return on the time and resources invested on these audits.

  9. What regulatory requirements related to general administrative expenses or claims processing does your company find to be duplicative or to provide little or no value to the member compared to the amount of time and resources it takes to meet the requirements?