Health + Tech | Health insurance adjudication made easy in Jamaica

Jamaica is far ahead of the United States (US) in certain areas of healthcare. About 20 years ago, Jamaica started the process of digitising the health insurance industry, allowing providers to submit claims online in real time.

The system is simple but robust, and improves efficiency for the health insurance companies and providers with all the sophistication in the back end. The software is user-friendly and the health cloud is available every hour of every day with offshore disaster recovery and almost no down-time over 16 years. The data is also secure and Payment Card Industry-compliant.

The provider - doctor, dentist, ophthalmologist, radiologist/lab or hospital - simply installs the software, a swipe device for the health cards and a printer for receipts and claims, and these can be adjudicated in real time with payments guaranteed.

The system gives an immediate response, ensuring that the provider benefits by always accessing his/her payments.

In the past, when mostly paper claims were used, there was no way of telling whether a patient had exhausted his/her insurance benefit. The provider would lose because it would take weeks for claims to be processed by the insurance company, and by then the claim may not be honoured. Reports were of up to 20 per cent in claims losses.

The Provider Access System (PAS) protects the provider from this possible loss at a minimal cost to them. The charge 1.75 per cent for each transaction comes out to a maximum of US21 cents for a regular doctor's visit or approximately US33 cents for a specialist visit. This is minimal when compared to how much was being absorbed through losses and credit card charges.

How does the American system compare? Recently I asked US-based insurance consultant, Larry Thompson, to do an analysis. He stated that the process being used in Jamaica is far more efficient and cost-effective.

While our system has simplified the process, providers in the US have to go through several steps before they can be paid for their service. They spend at least 21 cents of every dollar of revenue administering, billing and collecting health insurance payments. They also have to go through more pre-certification and justification for their services, as well as to verify the eligibility of patients before they are paid. In Jamaica, it's just the swipe of a card, which takes less than a minute.

Thompson pointed out that claims adjudication in the US is much more complex and payments take considerably longer. The US has significantly more players and each has its own rules and requirements, placing a bigger burden on the provider.

HIGHER COSTS

Providers in the US spend much of their time and resources collecting receivables, with higher staff costs for this and other manual processes.

If they do venture into electronic claims submission, there are equal, or even higher, clearing house fees and more hurdles to cross to justify the procedures, after which there is still a much longer waiting period for payments.

There are multiple methods for electronic claims submissions in the US. The most common is submission through a billing contractor and a clearing house.

Clearing houses alone charge based on volume and range from US five cents to US25 cents per claim each way. In addition, this is not real-time adjudication, so after all of this, payment is not guaranteed.

US fees are per employee per month and payable whether or not there is a claim. When one takes into consideration the US submission costs plus the adjudication and payment costs, these would average about two to three times what PAS charges today.

Thompson opined that Jamaica's health insurance adjudication system is "more timely, reasonable and efficient than any such service offered in the US. At roughly 50 per cent of what providers pay to the bank for credit card processing fees and less than charges in the US with more guarantees, it's a win for all stakeholders - patients, carriers and providers".

After a demonstration of Jamaica's claims processing system at a conference in the US recently, five health insurance claims payers expressed interested in the system, with discussions far advanced to process medical health claims here.

- Doug Halsall, is chairman and CEO, Advanced Integrated Systems. Feedback:Doug.halsall@gmail.com