An organization we have been in conversation with was concerned about their ability to complete 60,000 claims a month accurately using OCR (Optical Character Recognition) technology. "Optical character recognition, usually abbreviated to OCR, is the mechanical or electronic translation of images of handwritten, typewritten or printed text (usually captured by a scanner) into machine-editable text" (Wikipedia). OCR is the industry accepted standard. This is a relatively simple answer in some regard. For instance, the first question I needed to uncover was what the organization wanted the error rate to be on 60,000 claims? Of course, the company was a little unsure how to answer that because the obvious answer was none, or 100% defect free. However, there is no perfect process; obviously there has to be some rate of error built into their costs. .
Two solutions were introduced to the payer, one of which was OCR technology. The OCR technology has an error rate of 4%. What? Four percent sounded great! As a consumer myself, I think that anything above 90% is just fantastic. However, the reality is 4% would cost this organization $720,000 a month in errors. Back up... where did I get this figure from... let me explain! The average claim mistake will cost an organization anywhere from $300 to $400, on average. However, if the form sent through OCR was a UB92 it could cost the organization up to $1,000 per mistake. I used a conservative $300 to base my analysis off of; and, I used the 60,000 claims for my model. The other solution positioned to the provider was a double-blind key method. And based upon its 99% defect free rate, this would bring their cost of quality to $3,000 a month; a far better deal for the organization employing this method for converting paper claims to EDI.
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