How to Build a Business Case for Premium Billing Software

Organizations have competing priorities. Getting new premium billing software – especially in large organizations with many competing priorities – can be difficult.

That’s why you must build a business case for your solution. That may take various forms – a written document, a presentation, a meeting, or a series of conversations.

Whatever the format, building a business case for software involves demonstrating the potential benefits and return on investment (ROI) of the software. Here are eight steps to follow to build a winning business case for premium billing software:

Identify the Business Problem or Opportunity

The first step in developing a compelling business case is identifying the business problem you’re looking to solve. Many health insurance plans leverage one – or many – legacy billing platforms. Or, they use billing modules bundled with their core admin solution. Both are dated and likely missing key features that improve billing accuracy. Plus, they don’t scale well due to their technology infrastructure.

The business problem to identify may include the following:

  • Reduce manual processes. Many premium billing solutions lack truly integrated delinquency management processes. As a result, you must perform manual work. That usually takes the form of manual mail merges or other letter generation tactics. Premium billing software with an integrated delinquency management function can save time through automation.
  • Improve the member experience. Many legacy billing solutions don’t make it easy to make a payment. Maybe they don’t allow you to quickly pay an invoice without logging in. Or, they don’t have a retail cash payment option, which is desirable for low premium bills like those for Medicare Advantage members or exchange members who receive a subsidy. Or, they may not allow flexibility on which day to make an auto-payment. Or, members may not have access to a payment portal to see an invoice or payment history. Whatever the case, more payment flexibility and better access to payment data can lead to a better member experience.
  • Improve on-time payments – You may be spending a lot of time – and money – chasing late payments and writing off significant amounts due to non-payment. Software that encourages automatic payments, makes it easy to pay online, includes additional payment flexibilities, and automates delinquency communication can improve on-time payments while reducing write-offs.
  • Improved visibility into the billing process – Your legacy or underperforming billing solution may have limited reporting capabilities. Modern billing software likely has more reporting flexibility, including standard reports like premium history, payment reporting, aging reports, suspense reports, delinquency balance reports, adjustment reports, and more.

Define the Software Requirements

After defining the problem you need to solve, it’s time to understand the features required to solve that problem. Among the requirements you may consider when building a business case for premium billing software:

  • Cloud-based – Cloud-based solutions likely are more performant and easier to set up and use. They typically include regular vendor updates and new capabilities – without costly development costs. 
  • Delinquency management – Many bundled billing solutions lack integrated delinquency capabilities. That leads to manual work that wastes time. Look for a solution that includes the ability to create notification templates that enable tailored messages and letters to specific populations for better results.
  • Payment Portal – An integrated payment portal means you need not build your own. Features may include:
    • Mobile-friendliness 
    • The ability to set up recurring payments
    • Single sign-on for seamless handoff from your member portal
    • Invoice presentment
    • Billing and payment history
  • SSO/API Integrations – Single sign-on delivers a better user experience. A robust API makes it easy to display information – like payment history or amount due – in your member portal.
  • Supports All Product Billing – Whether it’s managing subsidies in your ACA product, incorporating low-income subsidies in Medicare Advantage, or consolidating invoices in group billing, make sure the product supports all your billing needs and rules.
  • Reporting Requirements – Define the data and reports you need to manage your billing process to ensure the vendor can send you the required reporting data.

Research Software Options

Now it’s time to research available software. Good sources of information include:

  • Analysts – Gartner provides coverage for the payer industry and can be a good resource if shopping for software. If you have access to a Gartner analyst, schedule an inquiry to discuss premium billing solutions.
  • Peers – You’ve likely got a network of peers with experience using the software. Contact them to see who they would recommend.
  • Partners – Your core admin vendor, consultants, or other partners may have interacted with billing vendors before. Ask them for feedback.
  • Google – Google can also be your friend. Searching for “health insurance premium billing software” will likely deliver solutions for your vendor list.

Calculate ROI

You’ll need to show a return on investment (ROI) to move your project to the top of the list. Typically, ROI from premium billing software includes:

  • Time savings – If you know how long specific manual tasks take – like reconciling lockbox payments – you can estimate how long those tasks may take in the software. For example, we leveraged artificial intelligence to improve productivity by four times when matching check payments without a payment stub to an account. But you’ll likely also save time generating delinquency notifications, generating and sending invoices, managing software, etc. Develop an estimate of how many hours you expect to eliminate and the average cost.
  • Reduce Churn – Because premium billing software delivers a better member/customer experience, it may help you reduce churn, especially in competitive markets where customers have multiple options when choosing insurance. A reduction in churn can be hard to isolate and measure, but calculating the revenue from a small reduction in churn can help quantify the impact a better billing experience may have.
  • Eliminate software maintenance costs – If you’re using internally developed and maintained billing software, replacing it can save labor and hosting costs. Calculate the cost of maintaining and supporting that software and incorporate it into your ROI calculation.

There may be other elements to your ROI calculation, like the ability to scale your billing operation without introducing additional labor costs. But the three categories above offer a good baseline, to begin.

Prepare the Business Case

Now that you’ve determined what problems you’re trying to solve with premium billing software, defined your requirements, done your vendor research, and developed an ROI model, it’s time to put all that data into the business case. As we said earlier, the format may vary, but outline each item above. 

Don’t underestimate the value of knowing your audience. Who is the ultimate decision-maker? What elements of a business case will be most impactful? Lead with that. Do they prefer numbers and graphics? Use those. Tailoring the business case to your audience will improve its effectiveness.

By following these steps, you can build a compelling business case for premium billing software that will help your organization make an informed decision and maximize the benefits of the investment.

Certifi’s health insurance premium billing and payment solutions help healthcare payers improve member satisfaction while reducing administrative costs.

Download a Guide to Premium Billing Software for Health Insurers

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