Maximizing efficiency and profitability are crucial for health plans. However, managing premium billing can be a time-consuming and error-prone process. Often overlooked, premium billing processes typically are rife with manual processes that waste time and resources while delivering inaccurate invoices. More insurers are turning to dedicated software to automate and streamline processes, delivering tangible premium billing software ROI.
Here are a few ways premium billing software delivers cost savings and enhances revenue compared to traditional premium billing processes:
Time Savings
Our customers often report they experience a substantial return on investment in time saved. Premium billing software saves time in the following ways:
Process Automation
Process automation is an obvious form of time savings that results from an investment in premium billing software. Automating repetitive billing processes – like managing retroactive billing adjustments, generating invoices, generating payment reminders, generating delinquency notifications, matching payments, and more – enables significant staff time savings in the billing process. For many of our clients, that means redeploying billing staff to more strategic pursuits or growth without the need to add billing staff.
Improved Accuracy
Certifi’s solution has several features that improve premium billing accuracy, including:
- Validating Inbound Data – Often billing errors result from upstream enrollment data issues. Performing inbound data validation can uncover issues with enrollment data that impact billing accuracy.
- Invoice Variance Checks – Automating invoice variance checks can identify potentially inaccurate invoices before you send them.
- Locking Invoices – Less sophisticated billing solutions often enable users to modify invoice data – like dollar amounts – after invoices have been sent instead of creating adjustments. That can significantly impact future billing, remittance, and reporting accuracy. Locking invoices after they’re available prohibits edits that may have future consequences.
How do those features save time? Improved premium billing accuracy can significantly reduce inbound member calls and staff rework required to rectify inaccuracies.
Reduced maintenance costs
It’s not uncommon to see homegrown, on-premise premium billing solutions. Those solutions typically are old – we recently encountered a 40-year-old billing system accessed through DOS – and managed by an individual or team. Ensuring the stability and security of those on-premise systems is difficult and system maintenance time adds up.
Transitioning to a cloud-based solution ensures consistent stability and security improvements while minimizing maintenance costs.
Increased Revenue
Time savings is commonly associated with premium billing software ROI. But software can also help grow revenue. Here’s how:
Accurate Remittance
Do you pay broker or agent commissions based on received premiums? If you pay them based on premiums billed, you’re likely losing money. If the customer fails to pay, you’ve paid a broker money you haven’t received. Billing systems that track payments and remit only based on payments received can increase your revenue.
Offer More Payment Options
More isn’t always better, but having the right payment options available to members and customers can improve on-time payment rates while limiting write-offs.
Take the case of Medicare Advantage or supplemental Medicare policies. In many cases, these are elderly members who may not have fully transitioned to the cashless society like younger members. As a result, they still pay for many items with cash or check, rather than a card. These members may be less likely to use your member portal to sign up for automatic ACH withdrawals. And processing checks is more costly to your business than more electronic payment processing.
But there is an option – retail cash premium payments – that can deliver electronic payment data – minimizing staff time trying to match unknown checks to members. Certifi’s retail cash network has thousands of locations across the U.S. where members can take a bar-coded invoice to make a cash payment. We then receive that data electronically to automate payment matching. It’s a good fit for products that target elderly people and have low dollar premium amounts.
Automated Delinquency
Another way to maximize revenue is to follow up on delinquent payments. Many health plans don’t because of the cost of manually producing notifications, especially when chasing relatively small premiums for subsidized products like Medicare Advantage or ACA plans.
It doesn’t have to. Billing software can automate the delinquency management process – generating delinquency communications you can mail and/or email, cutting down on the costs associated with managing delinquent accounts and maximizing revenue.
Better Retention
Though many factors determine whether a customer or member will continue to use a health plan, a superb billing experience is one of them. Poor billing experiences like the one that the Gaffers experienced may lead to member and customer churn. Error-free billing can help improve member and customer retention, a crucial factor in growing revenue.
Upselling and Cross-Selling Opportunities
You likely don’t associate billing with upselling/cross-selling. But invoices can be much more effective than traditional mail for putting the right message in front of a member or customer. Why? Because bills get read. Whether you drop a message on the invoice or stuff a marketing message in the envelope, the odds are high that the member will see the message. Premium billing solutions that allow configurable messages or marketing inserts can improve upsell and cross-sell revenue.
Improved Business Insight
You’ve probably heard the saying “Data is the new oil.” Take Netflix, for example. They leverage user data to inform their content creation and acquisition strategies. By analyzing viewing habits, ratings, and search queries, Netflix identifies trends and tailors their content offerings to what viewers are most likely to enjoy. This data-driven approach has helped them become a leader in the streaming service industry.
Leveraging your billing and payment data to gain valuable insights can lead to positive business outcomes, like increased profitability or revenue. Premium billing software can help by enabling the export of detailed financial information for your general ledger, reporting platform, or data lake. Traditional snapshot-based billing makes that type of analysis difficult.
Not so with modern premium billing solutions. By reviewing data at an individual transaction level, you’ll better understand premium billing financials, which can help you optimize products, analyze distribution networks, and more.
Certifi’s health insurance premium billing and payment solutions help healthcare payers improve billing accuracy while reducing administrative costs.
