Mapping Markets
July 16, 2024

Claims Editing and Submission Market Map: Crucial, complex and crowded

Patrick Wingo's headshot
Patrick Wingo
Head of Research, Elion

This is part of Elions weekly market map series where we break down critical vendor categories and the key players in them. For more, become a member and sign up for our email here.

We’ve covered almost the whole revenue cycle, but one key component has been missing so far: claims editing and submission. It’s a big category with a lot of incumbent vendors, so it requires a bit of background explanation.

Claims Workflow

After a service is rendered, documented, and coded, providers have to submit a claim to payers to actually get paid. However, payers are particular about how the claim is formatted and which data is included, and their bias is toward not paying when possible, resulting in 12-plus percent of claims being denied.

Because of the precision needed to submit a successful claim and the high cost of denials, providers have had to use increasingly powerful claims editing and submission tooling. The process starts with passing the claim through software that evaluates it for accuracy and alignment with billing standards. The specific changes that need to be made depend both on the payer and the types of services rendered. After the claim is “scrubbed,” the claim is electronically transmitted to a clearinghouse, then on to the payer for processing.

How We Got Here

Before electronic data interchange was standardized, providers submitted claims through mail or direct data entry to specific payers, and followed up on problems via phone and fax. After broad adoption of X12 formats, clearinghouses like Change Healthcare, Availity, Experian, Waystar, Apex EDI, and TriZetto emerged to offer electronic claims submission, and with it introduced the software-based claims editing process described above.

Clearinghouse vendors rode the waves of HIPAA, HITECH, and the internet broadly, until nearly all claims were submitted to payers through clearinghouses. In a nutshell, they made it easier for providers to submit claims and get paid, but with more steps in the value chain. This increase in convenience and value chain complexity continued, spawning new variations on this software, such as:

More recently, a new generation of AI and data-centric claims management systems has emerged. These systems initially focused on digital health and ambulatory practices, however, some have expanded into large provider organizations and health systems. These include vendors like Adonis, Apero, Candid Health, Docvocate, Enter Health, and Trek Health.

Cracking the (Adjudication) Code

Between fully outsourced RCM service providers and end-to-end RCM technology vendors, the claims management space is crowded. To stand out, a vendor needs to offer provably better claims outcomes, resulting in a race to crack the payer adjudication code.

The relationship between payers and providers is an asymmetric one. Payers have more scale and more data and, therefore, are able to tweak parameters and drive substantial cost reductions through denials and other forms of non-payment. As a result, providers need tooling to quickly understand payer-specific rules (and how they’re changing over time), and encode those rules into their claims edit workflows.

Doing this well requires two fairly robust technical advancements:

  • Machine learning capabilities to identify potential rules changes.

  • A flexible rules engine for describing how and when to make claims edits.

Scale is a major boon for providing the data and resources required for machine learning success, so for the moment the incumbents have the advantage. However, it remains to be seen whether scrappiness, agility, and risk-tolerance—not to mention a purpose-built, modern tech stack for learning and applying payer rules—will ultimately give newcomers a leg up.