Canadian Underwriter

HEALTHCARE CLAIMS MANAGEMENT gets the Internet treatment

June 1, 2001   by Brenda Rusnak, CEO, ACTIVE Health Management Inc.

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Compounded by consumer needs and stiff competition within the industry, insurance companies are forced to find new and innovative ways to differentiate themselves from their competitors. It is no longer enough to improve the efficiency of internal administration, insurers must provide value-added services to customers and fulfill the consumer’s desire for instant gratification. As a matter of survival, insurance companies need to provide superior levels of efficiency, information and service in the claims handling process. And at the same time, they must continue to solve the problem of claims volume and costs.


Current claims service methods are often supported by inflexible legacy systems that are costly to integrate, difficult to extract information from and lack the functionality for managing and tracking the results of healthcare initiatives. Typically, healthcare information relating to an insurance claim is stored in several files and at different locations. This results in redundant data entry and the inability to collect and use archived information to determine trends, track results, and predict outcomes.

Then there is the problem of having more than one payer involved in a single claim. An ideal system should allow an insurance company (ie. motor vehicle carriers) to deal with multiple payers. Simply put, if a system or service can effectively eliminate or reduce the administrative chore, the insurer can save money. Fortunately, new technology provides some answers to this dilemma.


Still, the objective is not to replace an existing system, but rather to integrate the benefits of advanced technology, particularly through secure Internet access to files for insurers and healthcare providers. And, through automation and simplification of time-consuming tasks such as determining eligibility, enrolling for health benefits, managing a referral, processing a claim, reimbursing for a claim, finding quality healthcare providers and determining the best healthcare options for claimants, insurers will benefit from inexpensive, flexible and secure solutions.

With current technology, insurers and healthcare providers can have the ability to view common patient/claimant files online in its most current form, without any risk of violating patient confidentiality. Valuable predictive information based on historical patient/claimant files is easily extractable. The insurer, for example, can choose a number of variables common to a particular claimant and come up with the average cost, duration, and outcome of various rehabilitation approaches. This information assists insurers in setting the necessary reserves and in determining whether a treatment plan is reasonable and necessary.

Healthcare providers, on the other hand, can use this information to identify high risk therapies so that patients experience better, more rapid clinical outcomes, while reducing or eliminating waste from ineffective treatment options and unnecessary treatments.

Technology can enable insurers and providers to compare provider outcomes with peer groups for similar patient populations. Subsequently, the treatment pattern and outcome analysis can be conducted, and the ultimate goal of improving treatment success rates can be achieved.


Paperwork is the bane of most third-party payers. And the lack of simplification and streamlining of healthcare billing causes even more frustration. Typically, such practices vary from provider to provider, with some billing for service on a weekly basis, while others wait several months to issue an invoice. As a result, adjusters are often unaware of the treatment provided until weeks or even months after the service is rendered. This, unfortunately, affects several management processes, ranging from the appropriate reserves to ensuring that the claimant is getting appropriate treatment within appropriate time frames, and at a reasonable cost.

It is now possible for adjusters to receive information about healthcare services provided to their claimants. This information can be received at regular intervals and streamlined, freeing insurers from being bombarded by paper invoices. The two step process of authorizing payment and producing a cheque is reduced into one. In addition, bill audit technology reduces the number of errors such as duplicate billing and billing of unauthorized services. Experience suggests bill audits alone can cut at least 5% of total healthcare costs.


Technology now exists which allows stored information to be shared, blended and analyzed, without violating patient confidentiality. All participants involved in an insurance claim – the adjuster, case manager and healthcare professional – can effectively work together on a common claim, enabling them to communicate, exchange information and perform transactions, which further simplifies claims management, reduces costs and enhances accessibility and service to claimants. In the end, there is higher claimant satisfaction and lower costs associated with each claim. By incorporating inexpensive, flexible and secure solutions to their systems, all participants in healthcare will reap the benefits of modern technology.

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