Rod DunlapHealth insurers have long sought to increase the rate of automation in claims processing. The basic incentive is cost: A claim requiring human intervention costs approximately $4 to process, while an auto-adjudicated claim costs approximately $1. Considering that approximately 3 billion healthcare claims are filed each year, extending auto-adjudication rates by even a few percentage points could have a significant financial impact.

How best to achieve higher automation rates presents a challenge. One option has been to add functionality to existing, decades-old auto-adjudication platforms. Modifying fragile legacy systems, however, is extremely costly and cumbersome. Moreover, constantly changing regulations and insurance guidelines mean that system modifications can be out of date by the time they’re implemented.

An alternative approach is to invest in new auto-adjudication platforms that are more agile and effective. These new platforms, however, can be cost prohibitive and take several years to implement.

The Advantages of Robotic Process Automation

The rapidly expanding field of robotic process automation offers a third option that is technically viable and cost-effective. Robotic process automation applications use rules-based logic to automate the review and resolution of common claims issues. Because they run as allocated resources on local servers and have minimal impact on underlying infrastructure, robotic process automation tools can operate as an extension of existing adjudication systems. Cost is another advantage. A digital robot that replaces five to 10 human claims processors costs as little as $10,000 to $15,000 a year, including license fees, deployment, and maintenance. In terms of unit cost, a robotic process automation solution can process a claim for as little as $1.25. Robotic automations also can be developed, implemented, and operational in a matter of weeks, providing the flexibility needed to adapt to frequent changes required by mandates and regulations.

Several health insurers have implemented robotic process automation to extend the functionality of existing adjudication platforms and increase auto-adjudication by more than 10 percentage points. In a pioneering project, Blue Cross Blue Shield of North Carolina saved $11 million and reduced claims processing staff from 425 to about 300 over the course of 18 months. The project involved a team of eight software engineers, analysts, and testers who developed a robotic engine and systematically expanded the application’s capabilities to automate the review and resolution of a range of common claims issues including duplicate claims, authorization, diagnosis, and billing.

A New Role for Claims Processing Staff

Not all claims can be managed using a robotic process automation solution. In developing such a solution, claims issues that arise frequently are ideal candidates for rules-based automation, while unusual claims that require specialized knowledge or research are tagged as exceptions and routed to claims processing staff. For example, if someone suffers an injury while riding in a friend’s car, the question of whose insurance will be liable for the injury requires a person to research the policies of the respective companies involved. Or if a claim is accompanied by a physician’s letter stating why a particular treatment is required, a staff member must review that letter against the insurer’s coverage standards.

In addition to reducing the number of claims processing staffers an insurer requires, robotic process automation dramatically changes the nature of the job for staffers who remain. Relieved of the burden of having to process routine claims, reviewers in a highly automated environment are free to spend most of their time working on unusual and unique cases that require industry experience and knowledge of the insurer’s policy guidelines to address, which places a premium on these qualifications.

Claims Processing Management Considerations

Robotic process automation also redefines management approaches to assessing the efficiency of a claims processing operation. Traditionally, reviewer performance has been based on claims processed per hour. With robotic process automation, that measure of productivity should be expected to decline significantly because the routine, easy-to-resolve claims are taken out of the mix. In fact, a high claims-per-hour rate by staff reviewers could suggest that the robotic process automation solution is leaving money on the table and setting the exception bar too low.

By the same token, over-engineering the solution should be avoided, and an optimal robotic process automation initiative identifies where to draw the line of automation. Although even highly unusual claims can be automated, the cost in terms of time and effort outweighs the benefit. In other words, at some point it becomes more cost-efficient to have a staff member review an unusual claim that arises once a month than it is to write a software code to process that unusual claim.

A Means for Achieving Optimum Automation Rates

Today, traditional auto-adjudication platforms process approximately 80 percent of healthcare claims without human intervention. Although extending that rate by 10 to 12 percentage points has been a longstanding goal of healthcare insurers, existing technology options aimed at increasing automation rates have been ineffective. The recent emergence of robotic process automation offers a viable and attractive alternative.


Rod Dunlap is a business process automation director at Alsbridge, headquartered in Dallas, Texas.

Publication Date: Monday, June 06, 2016