Reforming Claims Processing with Real Time Adjudication

Apoorv Surkunte, Lead Business Analyst USA

Real Time Claims Processing significantly reforms how healthcare claims are submitted, adjudicated, remitted and paid and helps make the process far more efficient. Adopting real-time adjudication may result in administrative simplification mandates driving real time claim processing.

Unlike sectors such as banking and retail where business transactions with consumers take place over few minutes, US healthcare still lags behind on efficient transactions processing front. After patient visits provider and receives the services, it takes days to settle the claim for various reasons. This scenario however could be reformed with implementation of real time claims processing.

The American Medical Association in its National Health Insurer Report Card 2010 has stated that seven major payers which received claims submitted electronically took 5 to 13 median number of days to respond with claim processing details. There are delays in provider’s office as well while submitting the claim owing to various activities such as documentation, medical coding and billing.

As a result of the rising healthcare costs, patients are paying more out of their pocket for their healthcare which puts increased burden on providers to seek collections from patients. It may take days to know amount payable by members, after which members would initiate payment settling process with providers. This factor is even more prominent in Consumer driven Health plans where members pay larger amount out of pocket. A Report by AHIP shows that the number of people covered by high-deductible health plans (HDHPs) totaled 10 million in January 2010. With growing number of CDHP members, account receivables due from patients are going up and increase the risk of bad debt and reduce the cash flow for providers.

As CDHP enrollment grows, medical offices that experience growing receivables have a promising option in real-time claims adjudication. With the Real-Time Claims Adjudication system, provider may collect the member payable amounts at the time of member office visit after services have been provided and the claim has been processed real time. Providers would be able to bill for service and receive an explanation of benefits (EOB) at the point of service before the patient leaves the office premises.

Here is an example as to how it would work. Member Greg goes to see the physician Dr Derek and seeks healthcare services. Dr Derek examines and renders the services to Greg. Right after services are provided, Dr Derek / his support staff verifies that Greg belongs to plan which supports real time claim processing. Staff member then files the claim with help of EHRs or payer website. Payer's system processes the claim real time and sends the details of payable amount to the provider and the amount owed by patient. Greg could make the payments while he is in hospital and discuss with the staff about any queries he may have pertaining to bill. Dr Derek would receive amount payable by payer within a day or two with Electronic fund transfer (EFT). The whole process could be as quick and simple as this, from the present scenario where it takes days to settle a claim.

Benefits with RTCA implementation

RTCA implementation helps reduce administrative burden and excess paperwork which eventually helps to cut down the costs related to administration.

Members need not spend time and energy to follow up and resolve their health care billing issues. They need not wait for weeks to receive statement in the mail. Members also can discuss the EOB with hospital staff while they are in hospital.

Provider staff would spend less time on administrative activities such as following up with payer on overdue claims. The risk of bad debts associated with patients receivables would go down as providers would be able to collect these while patient is in hospital.

Providers would receive the payment from member right after the encounter and the remaining payment from payer over Electronic Fund Transfer in few days. Quick turnaround in reimbursement improves the cash flow of providers / hospitals.

Payers would have fewer people working the telephones to answer claim and benefit inquiries. The satisfaction levels of providers and members would go up due to efficient claims processing systems and payers would be able to use this as a differentiating factor.


RTCA implementation substantially alters the existing workflow of providers. Claims need to be keyed in while patient is in hospital. When patients get their bill in real time, they would have questions about bill and would expect the answers from the staff in hospitals which mean hospitals will have to invest on personnel and infrastructure to support real time processing.

Many providers are not able to prepare bills for claims submission for at least few days owing to various activities involved. The hospital staff needs to navigate through thousands of diagnostic and procedure codes while generating the claim. This activity gets even more complicated when the provider is a generalist and deals with large number of medical conditions.

Provider offices have been keying in the claims in a batch mode system for long time. Change in mindset would be required to implement RTCA, it also would have financial and administrative implications for provider.

Providers need to have proper practice management setup to submit real time claims. This could be accomplished by implementing Electronic Health record systems.  However, EHR implementation could be financially burdensome and impact productivity of provider and staff by about 30% over first year of implementation.

Along with providers, payers also need to upgrade their systems to support RTCA. However, not all payers offer this option of RTCA to providers. Payers' claims processing for long have relied on batch processing. Migration to real time processing would be costly and complex.

Road ahead

RTCA significantly reforms how healthcare claims are submitted, adjudicated, remitted and paid today and helps make the process far more efficient. In future, we may see administrative simplification mandates driving real time claim processing.

While it may still seem far off, progress is being made towards the adoption of real-time adjudication with payers like Humana, BCBS FL, BCBS Highmark, and BCBS WV implementing and pushing RTCA usage. There is also increasing interest among providers about usage of RTCA systems. With EHRs being implemented as part of HITECH act across USA, we may expect significant growth on RTCA implementation front.


The Real-Time Claim Adjudication process provides the capability to submit and receive ASC X-12N transactions in a real-time mode. Payers need to implement functionalities that will have members’ benefit details and provider’s contracted rates and can accurately process submitted claims in a matter of seconds.

Providers need to set up IT infrastructure and communication channels with specific payers which are offering this service.  RTCA uses the electronic data interchange (EDI) channels for communication with payers.  Communication can be performed through web link, a B2B software setup or third party vendor.

Providers could deploy Electronic health record systems to enter claims, submit the claim to the Payer with a click of a button and within seconds have a response back about adjudicated claims.

Usage of smart cards for patients would help providers to collect member information related to eligibility and personal health record instantly and eliminate manual information keying in part.

Author BIO

Apoorv Surkunte works as Lead Business Analyst in Healthcare IT area with one of leading Health insurance companies in USA. His areas of interest include health reforms, healthcare innovations and insurer side applications such as provider networks and claims. Apoorv is certified Fellow, Academy of Healthcare Management (FAHM) and project management professional (PMP).

Author Bio

Apoorv Surkunte
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