Patient access staff make many phone calls trying to find answers on coverage, regardless of whether something needs an authorization, or the status of claims. When they finally reach someone, it is not always a health plan representative.

“Health plans are increasingly working with third-party business partners to manage certain operational activities,” reports Julie Ingraham, managing director of healthcare practice at Huron Consulting Group. Claims processing, claims adjustments, and authorizations are common examples.

Health plans are looking for ways to lower costs. “The third party may have better technology, a better algorithm, or return on investment to meet the demands of investors and employers,” Ingraham says.

For patient access, it could mean more claims denials and authorization hassles. Tying lost revenue to third party involvement can be tricky. “It is important to know specifically what has been outsourced, to whom, and when,” Ingraham stresses.

Patient access might be able to pinpoint surging claims denials to the month a third party became involved. Some research might reveal the third party shared incorrect information on authorizations. “Trending reports prove that your challenges are not anecdotal. This can influence future negotiations with the payer,” Ingraham explains.

Medicare, one of the largest payers in the world, has been using third parties for decades, notes Jonathan Wiik, principal of healthcare strategy at TransUnion Healthcare. Medicare administrative contractors have been setting plan rules for use controls, administering claims, and other functions for Medicare Part A claims.

Now, more commercial insurers are using third parties to manage high-cost claims: imaging, pharmacy, oncology, durable medical equipment, and behavioral health. “These third-party benefit management firms often have restrictive authorization and precertification requirements,” Wiik observes.

The rules can constantly change, resulting in claims denials and lost revenue. “Denials have been a pervasive issue, and still represent the largest source of earned revenue loss for most provider organizations,” Wiik notes.

Claims are not denied for no reason. “Somewhere along the line, the hospital failed to follow a plan rule. Claim denials are simply a function of not following an agreed-upon process,” Wiik says.

To prevent so many denials, identify accounts that do not meet requirements before claims are sent. Also, monitor payer payments with technology and artificial intelligence. Finally, use real-time (or as close to real-time as possible) data that identify the root cause of non-payment and what exactly should have happened differently. “I have seen so many dashboards and reports with denial management efforts that end up having a fruitless outcome,” Wiik laments.

Lack of good, actionable data is the reason. Third-party claim administrators use sophisticated algorithms to manage costs. “Providers must meet them toe to toe with innovative solutions that can protect their earned revenue,” Wiik adds.