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Mon Aug 30 2021
What is a Smart Contract?
Developed to automate payments, smart contracts are self-executing digital contracts on the blockchain. A smart contract is written by code to hold and execute an agreement between two ends on a decentralized blockchain. Smart contracts facilitate the management of projects on the blockchain and ensure the safety and security of the transactions, making them irreversibly trackable and auto-executable. Smart contracts allow reliable transactions to carry out between multiple anonymous pirates without the need for a third-party legal system or a central authority.
Why does health insurance need smart contracts?
Health insurance is a multi-billion market with hundred of thousands of daily billings and transactions that need to be carried on by highly experienced medical billing specialists and accountants. To get more insights into the health insurance market volume, the top 4th market leaders closed a total of 230 Billion USD in direct premiums written in 2018.
What is the most dominant pain point in the current health insurance system?
Medical billing errors
Medical billing is the process of confirming and following up on medical claims for health insurance companies to clear payments for services received by patients in healthcare institutions. Medical billing aims to translate the healthcare service into billing claims, following medical codes such as CPT®, ICD-10-CM, and HCPCS Level II classification systems. Medical billing is a complicated and sensitive math because any false interpretation can cause significant errors in the billed amount, which could cause financial liabilities for both health insurance companies and healthcare institutions that provide the medical service.
What causes medical billing errors?
1. Data Deficit
The failure of providing medical data to health insurance companies to support claims always causes rejections or delays of the claims.
The patient data center collects and tracks all the given medical services to the patient in any medical institution. Making it easier for medical billers to find all the data they need in one place, without the need to contact service providers.
2. Upcoding errors
Upcoding is the billing of patients for more complicated procedures and higher services than they actually received due to coding errors by entering false diagnoses or diagnostic scan measures.
3. Incorrect patient Information
Entering false patient information causes claim denials, an easily preventable error by referring to a reliable patient data source.
provides a patient data center that includes all the essential patient’s data such as name, address, birth date, insurance information, previous treatment, and medical history.
Why could smart contracts be a revolutionary move in health insurance?
1- For health insurance companies
Using smart contracts in multiple layers of health insurance will eliminate errors and prevent overbilling results from upcoding. Health insurance companies can code their policies into the smart contracts to auto-execute the policies without the need for revisions by officers, which can save billions in revenue from billing errors besides reducing the corporate spending on employment as smart contracts will substitute multiple tasks that employees typically carry out.
2- For medical service providers
Smart contracts will save healthcare institutions and medical service providers’ money by substantially reducing claim denials and delays. Claim rejection after providing medical services could put a significant liability on the healthcare institution if it couldn’t reach back the patients and bill them directly the cost of the services.