by Scott Whyte
Advisory Board Member
Though fighting COVID-19 is still top of everyone’s mind, it is important to think ahead about the downstream effects of the pandemic. One that comes immediately to my mind is the challenge health insurance companies will face not just right now but in the longer term. Today, the impact for payers is not as immediately damaging as it is for providers, who are seeing the fiscal crunch hit as a result of having to forego the elective procedures that deliver their small margins while taking on huge additional COVID-related expenses. For payers, many have reduced co-pays and provided easier access to COVID testing—but the bigger impact is certainly coming.
Because of the coronavirus, a flurry of new claims will be submitted, creating new patterns and needs that previously did not exist. Virtually every American will be affected by COVID-19 through their health insurer in some way– either directly through in-hospital emergency care, urgent care visits, remote and telehealth visits to address questionable symptoms or proceed with standard wellness checks, as well as for antibody and virus testing, and, ultimately, vaccines. There are indirect of effects of COVID-19, too, since patients were forced to move out standard visits for pre-existing conditions, which could result in longer term effects for diseases and conditions that aren’t related to COVID-19 but likely could have been addressed earlier. Some payers have reduced co-pays and provided easier access to COVID testing. However, there will still be a cost impact, as well as processing challenges as legacy claims systems are not equipped to adapt quickly to managing exception-based processing.
Machinify, a healthcare technology company and ClearDATA customer, is using AI (Artificial Intelligence) to identify long-term coronavirus impacts on payers and provide technology solutions for them to course correct and radically improve efficiency.
The company recently issued a report that outlines the downstream effects of COVID-19 on payers and provides solutions to minimize the anticipated negative financial impact payer organizations will face in the coming months. As just one example, payers will likely soon receive an onslaught of claims directly linked to COVID-19 infection, which requires oversight that these claims are properly submitted because—as noted in Machinify’s report—under new rules, providers are not supposed to forward claims to payers for which they’re getting reimbursed via payments from the Federal government. It’s going to get complicated looking for claims that would result in double payments, even if unintentional.
Machinify is offering up several predictions in their report, including:
- Rise of downstream COVID-19 linked claims
- Rise of new class of improper claims submissions
- Spike in claims volume
- Rise in overpayment
- Expansion of recovery claims backlogs
- Emergence of new types of claims
- Prior-authorization likely put on pause
If we look at their findings about a rise in overpayment, we see they cite the industry as having a 10-15% rate of claim overpayment. They assume a 10% increase in claims due to COVID-19, which they say could result in overpayments ranging from $20B to $61B.
The report also charts the wave of new claims coming as elective surgeries that were put on hold get scheduled during the second half of this year. The uncertainty around when these procedures will take place and how they’ll be paid will likely impact how plans and premiums are structured for 2021.
Machinify offers solutions to help protect the compressed margins payers face by using the cloud (secured by ClearDATA) to provide unlimited elastic capacity to take on increased volume, AI to predict claims that are likely to have been paid in part or full by the federal government, graphs for every covered life in real-time, and much more.
I’m impressed by this report and Machinify’s work to drastically improve healthcare efficiency using AI. If you would like to learn more, please see the article from Machinify’s Cofounder and President, Tony Miranz, on Medium.
You can learn more about Machinify here.