Reasons for Delays in Claims Processing
While most claims received are clean, there are a sizable percentage of claims that require additional information, leading to longer processing times. When asked about the reasons for delays in claims processing, companies indicated several reasons for these delays. The reasons most often indicated were either coordination of benefits (COB) provisions specified in the policy or lack
of information on potential preexisting condition investigations (indicated for 25 percent of pended claims in each case).
Other reasons frequently mentioned for delays in processing were lack of information to determine medical necessity (19 percent) and questions about premium payment (8 percent). It should be noted that some of these areas might overlap. For example, some claims that may be pended as potential fraud may be due to a suspicion of a fraudulently completed application for insurance where preexisting conditions may have been intentionally omitted.
Time for Claims Investigation
The amount of time it takes to investigate a claim that does not pass claim edits varies according to the reason for pending. The number of days it takes to process these claims can vary on average by almost three-fold. Claims that caused the longest delay on average were those that involved some preexisting condition determination. On average these claims took 27 days to resolve.
Almost as long to resolve were claims involving lack of necessary information to determine medical necessity (24 days). Some of the work in resolving these claims may involve requesting further information from the member and physicians and/or consultation with medical directors and expert consultants. Investigations of potential fraud averaged 19 days, while eligibility determinations took, on average, 10 days.
Reasons for Claims Denial
In addition to pended claims, claims processing may also result in the denial or rejection of claims. These claims may very well have come in as clean claims; however, some reason has been determined for the nonpayment of the claim. On average, 14 percent of claims received were denied for payment.
Almost half of all claim denials (48 percent) were due to the submission of a duplicate claim. Some plans indicated that though a claim may have been initially submitted electronically, there often is a paper claim received that unnecessarily follows up to confirm the submission.
A claim for a noncovered benefit, or for an individual who is no longer covered or whose policy has lapsed, each represented about 20 percent of rejected claims.