Policy Based Payment Reconciliation
Direct payment from CMS to the issuer puts the onus on the issuer to make certain that their data is accurate since there will no longer be adjustments based on the issuer calculations. 820s are here and they have payers judiciously reviewing all of their processes to make certain that all the numbers add up. This is one of the most topical concerns for payers today to ensure that the policy-based payment processing, which began last month when The Centers for Medicare & Medicaid Services (CMS) started using the Healthcare Insurance Exchange (HIX) 820, communicates remittance information for four types of payments and charges, including:
- Advance Payment of the Premium Tax Credits (APTCs)
- Cost Sharing Reductions (CSRs) Advance Payments
- Individual and SHOP User Fees
- Reinsurance, risk adjustment and risk corridor payments
The challenge with this new process is the frequency with which the payer needs to reconcile their information with the government 820s. A payer will generally receive one HIX 820 per month via Electronic File Transfer (EFT). Headaches will result when errors, caused by manual or semi-automated processes, strain internal processes to keep up with the volume. The Challenge Any variance is cause for concern, and if the variance is more than 10 percent, CMS will withhold 25 percent of their payments beginning in May. While this is a significant financial motivation to get it right, the withholding will further increase to 50 percent starting in July. The challenge for many payers isn’t the process itself, but making sure the complexity and sheer volume of information is managed correctly before remittance.
The Solution – Membership Reconciliation
Managing 820s with an automated membership reconciliation process, data inaccuracies put payers at risk of being out of compliance, in addition to incurring financial loss and leading to customer dissatisfaction. With the complexity of processing and collecting premiums, payers need to ensure their data remains accurate and reliable. While many solutions provide reconciliation and reporting for a discrete process, they often can’t dynamically adapt to the changes needed to meet CMS updates, resulting in additional software development, coding and testing. Often homegrown systems pale in comparison to an end-to-end solution that is highly configurable and automates the entire process. Peace of mind that all the details are handled to ensure accuracy and future regulatory changes are covered under periodic software updates builds confidence that you never experience an out-of-variance withholding.
This whitepaper explores the advantages of automating the membership reconciliation process and how they far outweigh the costs, leading to a faster, more controlled reconciliation and producing greater confidence in the results and stronger revenue to the bottom line.