💵Payments in healthcare

Health Claims Exchange is a block that facilitates electronic claims management throughout the lifecycle of a claim by interacting with payors, patients, healthcare facilities, technology providers and regulators.

In any healthcare ecosystem, the processing of insurance claims involves a long sequence of steps including eligibility checks against payee/payor details, pre-authorisation of request, filing claims, disbursement of payments, audit of logs for regulatory compliance etc.

A typical flow in the processing of a health insurance claim is as follows:

These processes are often manual, paper-based based or implemented in siloed systems. Lack of machine readability, non-standardized & manual adjudication processes, and absence of interoperability make the entire cycle extremely inefficient - thus driving up the cost of processing claims and increasing turnaround time. This in turn puts all the stakeholders at a disadvantage. The high cost of processing a claim also prohibits innovation in insurance products, eventually adversely affecting the goal of minimizing out-of-pocket expenditure. Additionally, the regulators/ policymakers do not have adequate visibility to the whole process and cannot craft data-informed policies or penalise bad actors.

The goal is to create an open, system-agnostic, interoperable Health Claims Exchange as a DPI block that can bring in efficiency, power innovation, and increase visibility.

In the simplest of terms, Healthcare Claims Exchange is a protocol that allows many fragmented solutions in insurance to interoperate. It can visualised as a web underpinning all the individual solutions for each step in the claims lifecycle. Any solution/ model can plug into this exchange to unlock network effects.

A good approach to solving this is to look at how the right modular technical approach and governance can empower market players. A Health Claims Exchange implementation can have the following key components:

• API standards: This outlines the protocol APIs that facilitate requests and responses for all the transactions like authorisations, communications, payments, notifications etc.

• Data standards: The format and definitions of data used in this system need to be standardised at a network level. For achieving semantic interoperability, there should be consensus on terminology and coding systems for clinical resources (medical condition, procedure, treatment etc.) Country-wise contextualisation of existing data standards like SNOMED, ICD-10-PCS, and LOINC is one way to implement this.

• The syntax of the data for multiple transactions also needs to be laid out clearly by defining relevant objects like claims, payments etc. These are nothing but bundling of data in a machine-readable form. These facilitate the flow of data exchange between different systems and data processing in health claim transactions without the need for human intervention. There might be a need to define domain-specific standards like policy and bill markup languages that digitally encode the “insurance product & bills” thus helping with auto adjudication.

Practically, there can be a gateway(s) that performs the functions of verifying participants, routing requests to the right entities and facilitating settlement guarantees via smart contracts. These gateways can refer back to the Payor registry (refer to ID & Registries)to get details of verified players in the ecosystem. They should also be able to talk to the personal health data-sharing network to fetch individuals’ medical history after obtaining consent.

The above two standards (protocol API & data) combined with business policies, governance institutions, and cross-sectoral payments infrastructure for settlements constitute the key components of a health claims settlement network.

The DPI approach of establishing API and data standards is key in unlocking an interoperable, sustainable, and inclusive claims exchange where multiple players can innovate.

How do different stakeholders benefit from a Health Claims Exchange?

The state/ responsible authority can release open-source reference implementations of the software involved to catalyse innovation and accelerate adoption.

The implementation of unifying Health Claims Exchange(s) (can be many exchanges that communicate with each other) has the potential to revolutionise the healthcare sector by significantly enhancing the quality of care, reducing the cost of care to make it universally affordable, reducing administrative burdens, and improving overall access to healthcare services.

Good Design Principles

• Open: Specifications have to be open to promote technical compatibility and promote vendor neutrality.

• Interoperability: The infrastructure should allow for interoperability of stores of values, apps, forms of payments etc.

• Security by design: The payments infrastructure has to be highly secure (mandating encryption, SSL certificates etc.) and not expose the ecosystem players to any systemic risks.

• Low cost: Per transaction cost should be nil/ minimal for the payments infrastructure to work at scale

• Evolvability & programmability: A modern protocol that is form and mode-agnostic and can be programmed to support new use cases

• Reliability & scalability: The systems should be designed to work at population scale with continuous uptime

• Allow user choice: Allow participants to use their choice of technology/solutions to make/ receive payments

• Transparency: Mechanisms to view and verify data trails should be available