How to Modernize Health Plan Premium Billing

In February, Humana announced a value creation plan designed to streamline the business and enable an investment of $1 billion into their core Medicare Advantage product. The company aimed to modernize its technology to realize cost savings, savings that could then be reinvested in the company’s Medicare Advantage products.

Many insurers look to add technology to claims processing or the member experience to streamline processes and save time and money. But there’s an often-overlooked process that typically involves a significant amount of manual work and dated technology that leads to a poor member experience: Health plan premium billing.

Modernizing health plan premium billing can obviously save the billing team time. But it also impacts other units of the organization. For example, improved billing accuracy can result in a reduction in the number of member calls related to billing. Plus, if you’re replacing a legacy billing solution maintained by your technology team, you’ll free them to focus on other initiatives. Finally, improving your billing process can result in higher on-time payment rates and even increase revenue by reducing write-offs due to unpaid bills.

With that in mind, here are some tips to consider when modernizing your premium billing process and software.

Think Modular

As we discuss our premium billing solutions with health plans, one complaint keeps surfacing. Many insurers use the billing module provided by their core administration software provider. At some point, that probably made sense. They’re likely bundled in the cost of the complete solution and they may have a good relationship with the vendor.

The problem: As we’ve found, most core admin vendors built solutions to manage claims or some other disparate workflow. As a result, they’re great at claims administration, but not so great at billing. They lack some basic features — like payment portals or integrated delinquency management — that lead to more manual work.

As a result, for a best-in-class solution that streamlines processes, the best option is to consider a modular billing solution. Leveraging web services or other integrations, these systems can ingest enrollment and rate data, subsidy information (like low-income subsidies for Medicare Advantage) and any additional charges (like late enrollment penalties), generate invoices, distribute those invoices, manage payments, remit payments to appropriate parties (like brokers) and manage the delinquency process. Premium billing solutions are typically much easier to implement than a core admin solution and are designed to integrate better because they’re modular.

As a result, the best solution for most health plans is an integrated modular software approach, with distinct, best-in-class solutions.

Leverage APIs and other Integration Methods

Some insurers don’t want to stitch together multiple products into a cohesive solution. The good news: stitching together multiple products isn’t very challenging. We use multiple methods to ingest data from upstream and downstream data sources. Whether that’s via web services/API, SSO, or a flat file data exchange, integrations can be fully automated to streamline processes and deliver a seamless user experience.

For example, if you have a member portal and want to pull in invoice information, API calls make that a seamless member experience. Alternatively, you can leverage a single sign-on integration (SSO) to send members to an external portal to access that information. Either way, the key is investigating APIs and other integration methods to ensure they meet your potential use cases.

Think Data Quality

It’s common for billing managers and their teams to have many reconciliation processes in place to ensure the accuracy of the invoices they generate and the payments they receive. It’s a time sink. The billing software you use should eliminate as much of that data reconciliation as possible.

System design can improve data quality. Most health plan premium billing systems aren’t built using accounting practices of balanced debits and credits. If they are, every dollar can be accounted for both as a debit and credit. That balance — enforced by the software — can improve data accuracy while eliminating a lot of manual reconciliation.

The process of creating invoices can also enforce accuracy. Leveraging a process that locks invoices before making them available to members can also improve data accuracy. Once an invoice is locked, no further modifications can be made, eliminating data quality issues introduced by someone changing data after an invoice has been sent.

Integrate a Payment Portal

Many core admin systems merely generate invoices. As a result, they don’t include common payment features. Health insurers using those solutions either build their health plan payment portal, for example, or, worse, go without.

An online payment portal is a must. It delivers a better payment experience for a member while also eliminating a lot of work for your billing team. If you collect portal payments, you’ll minimize the number of checks you receive. As a result, you’ll also minimize the number of checks that arrive without any account information, forcing someone on your staff to review and apply the payment.

Second, you don’t want to build a payment portal. So look for a health plan premium billing solution that includes an integrated payment portal. Even better, ensure you can SSO into that portal to create a unified member experience.

Include Configurable Communications

Delinquency management is another feature commonly missing from core administration platforms. As a result, many health plans have manual processes to extract data and merge it into a Word doc to send a delinquent payment letter.

Look for health plan premium billing software that can eliminate that work. You can automate delinquency management based on events. Those events can generate configurable communications. Specific populations can receive unique letters. Or you can generate a different first and second warning. By setting up automated, configurable delinquency letters based on real-time data, you’ll not only save administrative time but also improve the member experience.

Make Payment Easy

Finally, the goal of your premium billing process is to maximize on-time member premium payments. To do that, you need to make paying a premium easy. Some ways to do that:

  • Make it easy to pay online — Members expect to be able to pay bills, including their premium billing, online. Make sure you have a payment portal they can access to review past and current invoices and payments as well as make one-time or recurring payments.
  • Offer multiple payment options — Offering multiple payment options also simplifies the payment process. In addition to credit/debit cards and ACH/checks, an option for low premium payments like Medicare Advantage members can be a retail cash pay solution. Members take their invoices to a national pharmacy chain or other retail stores to make a payment. For elderly members, this may be a convenient payment method.
  • Encourage auto-pay — Finally, encourage auto-pay. Members appreciate the convenience and auto-pay ensures an on-time payment. Offering several days on which you’ll collect the funds — say the first, fifth or tenth of the month. Doing so enables members to choose a day of the month on which you will retrieve funds from their bank account.

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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