8 Best Practices for Efficient CDH Administration

Leveraging platform data and metrics, Alegeus shares benchmarks and best practices that translate into tangible cost savings for your business. Follow the best practices and calculate the savings.

Best practice #1: Increase auto substantiation rates

On average, Alegeus clients auto-substantiate 81 percent of their CDH payment transactions, and on the the high-end, clients auto-substantiate 95 percent of transactions.

To increase your auto-substantiation rate:

  • Upon renewal, require employers to capture co-pays
  • Ensure claim substantiation is set to recur
  • Review and optimize your IIAS configuration settings
  • Integrate insurance claims

You could save: $0.03 center per participant, per month for every 5 percent increase in auto-substantiation. That’s $1,800 saved for every 5,000 participants each year.

Best practice #2: Integrate interactive voice response (IVR)

An interactive voice response system improves efficiencies over live-person operations and participant satisfaction by providing information at the touch of a button, without incurring hold-times. Two out of three Alegeus clients have IVR access enabled.

To optimize your IVR ROI:

  • Make it the first option for participants to check balances, get card information, and find transaction history
  • Write meaningful scripts that inform participants of other self-service options, such as mobile and online access
  • Leverage analytics to track interaction frequency, channel, and top call reasons
  • Ensure your IVR is set up to support call volume

You could save: $0.20 per participant, per month simply by enabling IVR access. That’s $1,000 saved for every 5,000 participants each month.

Best practice #3: Transition manual claims to electronic submissions

On average, Alegeus clients incur a 14 percent manual claim rate, with some reaching as high as 92 percent. To convert repeat manual claim offenders to electronic submissions, you must track and communicate to these participants.

To best position electronic claims:

  • Remove the manual claim form from your website, and replace it with a mail-order request form while also directing participants to electronically file claims on the website
  • List the most efficient claim/reimbursement method on the physical form
  • Use every opportunity to educate consumers about the benefits of mobile and online access, reimbursement times, etc.
  • Implement a marketing communications plan to convert repeat offenders

You could save: $3,600 by reducing manual claims by 15 percent for 5,000 participants, or $0.06 per participant, per month. That’s $3,600 saved for every 5,000 participants each year.

Best practice #4: Reduce claim denials

Once you understand the top reasons for claim denials, you can reduce them and improve the participant experience. Today’s average Alegeus client incurs a 4 percent denial rate.

To reduce your claim denial rate:

  • Each quarter, review your most common denial reasons and evaluate their root cause
  • Provide training, education, and clarity about your claim policies at opportune times
  • Act against denials. For example, target participants who incur denials due to insufficient FSA funds for increased future-year elections. Or, for “No MCC Found” denials, check the group setup
  • Optimize proactive alerts so participants are given the chance to remedy issues within their control before they are denied
  • Employ marketing strategies that target high-denial groups

You could save: $0.013 per participant, per month with every 15 percent decrease in the denial rate – and you’ll improve consumer satisfaction too. That’s $780 saved for every 5,000 participants per year.

Best practice #5: Increase debit card transactions

When participants use their debit card, you save money and increase efficiency. Nearly three out of four transactions are made with a debit card. However, some Alegeus clients have only debit card transactions while others have none.

To drive debit card utilization:

  • Make carded accounts the default option
  • Provide employer use cases that address employee pain points and educate the value and benefits of the debit card
  • Up-charge for non-carded accounts, because they are more expensive for you to service
  • Don’t assume a plan cannot be carded. Even HRAs have benefits, such as pharmacy, that may qualify for card transactions

You could save: $0.03 cents per participant, per month, or $1,800 annually for every 5,000 participants for whom you can increase card utilization by 15 percent.

Best practice #6: Automate account enrollment

When possible, encourage employers to provide enrollment files and leverage online enrollment.

To drive auto-enrollment:

  • Generate enrollment files with pre-populated, current-year data. This gives employers a starting point to manage employees before returning the file to you for import into your admin system
  • Identify groups that use a benefit enrollment platform. Simple integration may enable online enrollment
  • Practice consistent pre-enrollment communication with employers, and use the opportunities to include and reinforce file specifications
  • Consider incentives for employers that provide enrollment files or support online enrollment

You could save: $0.03 per participant, per month with 100 percent auto-enrollment. That’s $1,800 saved for every 5,000 participants each year.

Best practice #7: Encourage direct deposit

Reimbursements through direct deposit are a win-win. You save man-hours and speed the time it takes to pay participants. Today, Alegeus clients use direct deposit forty-three percent of the time.

To reduce paper check payments:

  • Enable direct deposit on your participant portal
  • With every mailed check payment, include a message that explains how much faster they could have received payment and how much more secure it is
  • Include a direct deposit form with your claim form
  • Schedule regular marketing campaigns that target consumers who consistently choose repayment by check

You could save: $0.70 per payment. For every 5,000 payments you convert to direct deposit, you save $3,500.

Best practice #8: Automate participant communication

Collect email addresses and drive participants to use automate communications – all while saving money and improving engagement.

To drive consumers toward automated communications:

  • At account enrollment, require email addresses and collect mobile numbers so participants can receive year-round engagement communications
  • Create marketing campaigns that target participants who have not provided an email address and consider incenting participants to provide them
  • Because they cost more to administer, consider an employer penalty for accounts without an associated email address

You could save: $0.09 per participant per month. For every 5,000 participants enrolled in automated communications, you save $5,400 per year.

The big picture

Whether you’re able to implement all these best practices or need to start with your top priorities, the savings add up fast! Implement all of the best practices and you could save more than $.50 per participant, per month. At 5,000 participants, that’s more than $30,680 a year!

  • #1 Auto substantiation: $1,800
  • #2 IVR: $12,000
  • #3 Electronic claim submission (15% conversion): $3,600
  • #4 Claim denials (15% decrease): $780
  • #5 Debit card transactions (15% increase): $1,800
  • #6 Automated enrollment (100%): $1,800
  • #7 Direct deposit (5,000 payments): $3,500
  • #8 Automated communications: $5,400

Don’t forget that Alegeus offers turnkey marketing materials that can be customized for your business and automated direct-to-member communications. Be sure to speak with your account executive to begin your strategy and find out how to maximize your efficiency using free tools from Alegeus.

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