Make Your Processes More Efficient for COB Cost Savings
It has been estimated that the administrative costs for coordinating benefits is $800 million. Let that sink in for a second – $800 million is a lot of money to spend on a process that can be improved. Other sources say that these administrative COB costs amount to about 12% of a health plan’s total spend, even for MCOs. (Despite reports to the contrary, experts estimate these costs to be the same for public and private payers.)
Coordination of benefits (COB): A process that payers use to determine which benefits should be applied when an enrollee has coverage from multiple payers.
Where managed care organizations (MCOs) are concerned, reducing the administrative burden can seem a little more complex. This article will specifically look at areas where administrative benefit coordination costs can be reduced for MCOs. ClarisHealth can significantly reduce or even eliminate the administrative expense associated with COB while significantly improving member coordination.
Medicare MCOs and Private Payers: Are COB Costs Any Different
On average, health plans have reported that the administrative costs surrounding coordination of benefits equal about 12% of plan premiums. According to Medicare, public payer costs in this area are much lower – around 3%. However, a 2018 AHIP infographic indicates that Medicare administrative costs are much higher, around 13%. We can reasonably assume that Medicaid MCOs and private health plans are paying about the same in administrative costs.
Reducing the costs associated with coordination of benefits often means reducing administrative inefficiencies. The burden of cumbersome, manual admin processes lead MCOs to miss timely provider payments, tightening their provider network and placing an unnecessary burden on patients and providers.
How Medicare (and Medicaid) MCOs Can Reduce Administrative Costs in COB
At ClarisHealth, our work with managed care organizations has given us insight into how coordination of benefits costs can be reduced. Streamlining your COB costs essentially means improving efficiencies in your administrative processes.
Here are 5 ways to accomplish that goal:
1. Think Big Picture
A good area for MCOs to look at when streamlining are internal utilization management programs. These programs may have been tweaked to fit in with legacy processes but now’s the time to revisit UM requirements to eliminate administrative waste.
3. Go Paperless
It has been estimated that health plans would save $47 billion by utilizing digital processes like predictive modeling (which pre-score claims for coordination of benefits). The focus of this suggestion is to not only eliminate paper but to accept the strategy behind that, which is one of focusing on accessible electronic records and documents (rather than having administrative staff manually look for these items).
4. Automate Tasks
It’s worth mentioning that in some ways, effective automation will depend on standardization of plans to decrease benefit exceptions. So as your MCO looks to reduce administrative costs related to coordination of benefits, consider a long-term strategy to mitigate the clog that complex plans create.