As of 2018, private health insurance covered 67.3% of the population, while public health insurance covered 34.4% of the population. Private insurance companies are more prevalent because of their effectiveness, accuracy, and quick speed of processing insurance claims. Private health insurance companies are more efficient because they utilize the services of a third party administrator healthcare company.
Here’s how third party administrator healthcare services benefit health insurance companies and why you should consider engaging their services for your insurance company, too.
1. Third Party Administrators Helps Insurance Companies Detect Common Claim Errors
It’s common for healthcare providers to make mistakes when preparing health insurance claims. Some of them are errors of omission, while others are errors of commission. Medical coding and billing mistakes are especially common given the complex nature of the Current Procedural Terminology (CPT) codes that healthcare providers utilize to prepare medical bills. A simple coding error in the billing management software may have you overpaying thousands of dollars in medical claims.
Although some insurance companies opt to review medical claims independently, the top companies seek health insurance claims repricing services from a third-party administrator. This enables them to process insurance claims faster and more accurately. It pays to enlist the services of a third-party administrator because you save money in the long term by paying accurate claims. Health claims administrators come in handy when you’re dealing with many healthcare service providers, and you process multiple insurance claims in one go.
2. Third Party Administrators Help Companies Lower Their Operational Costs
Health insurance companies with thousands of clients often have to deal with multiple healthcare providers, as the insured persons have the right to select their preferred hospitals. As a result, a health insurance company may process hundreds of insurance claims in a single day or week. To handle the claim processing accurately, you must review the claim closely to detect and correct any errors. This takes time because you have to analyze tons of data before you honor the claim from the healthcare providers.
When you have multiple claims from different hospitals, it will take you more time to review and pay the claims. Certainly, your clients will not be satisfied by the slow claim processing. In such a case, the most effective solution is to engage third party administrator healthcare services to manage your claim processing.
If you choose to review the claims within your company, you will have to hire more employees to fast-track the process. This will inflate your recurrent expenses by a long shot, and the costs would keep on rising as employees demand better terms the more they work in your company. However, when you hire third party administrator healthcare services, you’ll pay less and substantially reduce your recurrent operational costs.
3. A Third Party Administrator Helps Insurance Companies Manage Customer Relationships
As your insurance company grows, you’ll need more employees to work in your marketing and finance departments to help you attract more customers and manage money properly. In the midst of expansion, your customer service department may be understaffed and end up diluting the quality of your service. Hence, existing customers may start complaining of poor customer service, especially when they need your company to correct billing errors or expedite claim processing and payments.
A third party administrator will manage your customer relationships and ensure that all your clients are satisfied. Most customers’ frustration with insurance companies is the sluggish speed of processing and paying a claim when they need it the most. Third party administrators help health insurance companies protect their brand reputation by maintaining quality customer service even as they expand their operations.
Third party administrator healthcare services are beneficial to all health insurance companies, regardless of the size. When you hire a third party administrator, you’ll keep your company’s operational costs low, maintain good customer relationships, and benefit from health insurance claims repricing services.