Unlocking the Potential of Healthcare Automation

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Unlocking the potential of healthcare automation

In recent years, the healthcare industry has increased its adoption of automation as means of achieving operational efficiency without sacrificing quality of care to their members. While RPA is a natural fit for the inefficiencies payers experience across their organizations, many have struggled to develop and implement an automation strategy that truly captures the return they had hoped to achieve.

In a Cognizant study surveying 200 respondents across 10 unique payer organizations with 38 plan subsidiaries, it is clear that payers recognize automation as a valuable tool for improving processes and member care. Over 75% of respondents think automation is either important or critical to their organization and the future of the industry. However, many payers are taking a conservative approach to implementing automation, which is causing them to miss opportunities for savings and efficiencies. Less than half of the payers in the study have a defined automation strategy or fully deployed automation program. Additionally, close to 60% cited “evaluating cost-benefit of use cases” as a barrier to adopting automation.

So, how can payers develop a winning RPA strategy?

  • Establish a Center of Excellence (CoE). The CoE is the engine of the automation program. This group consists of stakeholders, analysts, and IT resources who manage all aspects of the initiative, driving enterprise-wide adoption and guiding the program to maturity. Incorporate automation expertise in the CoE to ensure the initiative is designed and built with a strategic vision, which we discuss here.
  • Understand the business case and ROI. What factors are driving RPA adoption within your organization? This seems pretty straight-forward, but we frequently see payers struggle to articulate why they targeted certain processes and how they will define and track success. We often hear “reducing manual intervention”, which is a solid reason for automating, yet difficult to quantify. Payers must work to define process-level metrics that they can easily track to see how their business is benefitting from automation over time.

    First, define the problem statement for each process. For example: We targeted this process because it is cumbersome and takes most examiners around 6 minutes per claim. Next, put some numbers around it based on what you already know. A typical claims examiner earns $50,000 per year. At an annual volume of 250,000 claims, the manual cost for this process is $540,000. At 6 minutes per claim, that’s 25,000 hours per year, the equivalent of 17 full-time employees (assuming the average FTE works 6 full hours per day, accounting for lunch, breaks, and switching between work items.) If 70% of these claims could be processed successfully with automation, labor savings alone would be $250,000 annually. Total cost savings is dependent on the RPA provider and the total cost of ownership, a necessary factor in calculating overall ROI.

  • Select the right processes. It is tempting to target the most complex processes first. The problem with this approach is that complex processes take longer to automate and require frequent change management, which equates to greater cost to the business. If cost savings is the primary driver, knock out the “easy wins” first: processes with high volumes and low-to-medium complexity that your people do every day or that are causing you to incur penalties. If operational efficiency is the primary driver, explore the work that is creating bottlenecks, work-arounds, or backlog. However, for work-arounds, do consider how those processes will evolve in the near future. If you’re upgrading your claims management system soon, those work-arounds could be eliminated or could change significantly, resulting in additional change management and potential downtime.
  • Avoid implementation silos. Stakeholders across the organization need to be aligned with the initiative from the start, which is why the CoE is so critical. Without this enterprise-wide cooperation, automation opportunities will be missed. Partial RPA adoption only serves to limit the program’s ability to reach maturity, which is where maximum ROI is realized. A mature deployment is generally defined as having 10 or more automated processes in production.

Applying automation to payer processes

In our experience building RPA programs for more than 80 health plans, the departments with the greatest ROI potential are Claims, Enrollment, and Provider Maintenance. Examples of these processes include authorizations, member/provider updates, COB, timely filing, and adjustments to pricing or copays, OOP, diagnostic codes, or fee schedules.

Below are a few examples of how health plans are achieving operational efficiency and cost savings with automation:

For one client, who serves over 400,000 Medicaid members, taking on a new line of business without the aid of automation meant a 172% increase in staffing levels, an added cost of roughly $1 million annually. In addition to the staff increase, this new line of business created unique operational challenges. The plan is required to adapt to new requirements as they roll out, which can be problematic when modifications to their claims management system are required in order to comply. Additionally, processing accuracy of 99% has to be maintained or they risk financial penalties and a poor performance record, which puts their contract in jeopardy. With automation in place, the client continues to meet all requirements and has retained their contract for this business. They currently have 16 automated processes in production, generating 39% cost savings and over 30,000 hours in time savings every year, the equivalent of 24 full-time employees.

A Blue Cross Blue Shield plan with 3.5 million members initially approached HPA to handle a large-scale claims adjustment with a tight deadline. It took five weeks for 25 examiners to clear 40,000 of the more than 100,000 claims. However, with the deadline approaching they knew they couldn’t clear the remaining claims in time. With automation, the remaining 64,000 claims were processed in less than 8 days with a 96% success rate. In total, we have automated six claims adjustments for this client, processing more than 340,000 items and saving the client 13,570 manual hours. Overall, this plan has 36 processes in production, which has saved them nearly $3 million and over 250,000 hours of manual work, the equivalent of 119 full-time employees.

Automation wins aren’t limited to time and cost savings. For a plan processing Texas Medicaid claims, they were required to adhere to program-specific formularies for Medicaid and Children’s Health Insurance Program (CHIP). This required examiners to manually validate against a data crosswalk between National Drug Codes and Healthcare Common Procedure Coding System, as well as a fee schedule issued by Texas Medicaid and Healthcare Partnership. This error-prone process yielded an average processing accuracy of 57% for four years. Within three months of automating, processing accuracy hit 99% and has remained there. Another client contracted to handle Texas Medicaid claims saw a dramatic reduction in complaints and an increase in its STAR Rating as a result of automation. Today, this client’s auto-adjudication rate rests at 84%. HPA automates an additional 12% of the clients’ claims, bringing its total auto-adjudication rate to 96%, a rate that is rare for a plan of its size.

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