🩺 1. How Claims Work Today (and Why It’s Terrible)

The legacy workflow:

1. Provider → Insurer: Doctor submits a claim (EDI 837 file) to the insurer.
2. Insurer → Adjudication Engine: Automated rules check the CPT codes, ICD codes, plan benefits, network contract, and medical necessity.
3. Provider → Payment: Insurer pays part, denies part, sends “Explanation of Benefits” (EOB).
4. Member → Confusion: Member gets multiple, inconsistent bills.
5. Appeals / Adjustments: Provider resubmits or negotiates — months later.

Problems:

• The system assumes fraud and error by default → over-verification.
• Thousands of CPT modifiers and “bundled” billing rules.
• Network contracts and PBMs distort the true price.
• Members are billed before claims are settled.
• Providers have no idea what they’ll actually get paid.

🔧 2. ClearHealth’s Alternative: Simplified, Transparent Adjudication

The key concept:

Every claim should resolve instantly and transparently — like a credit card transaction.

To achieve that, you replace opaque EDI + claims adjudication logic with a transparent, rules-based engine and real-time pricing APIs.

🔹 Core Principles

🧮 3. Example: The “Modern Claim” Lifecycle

1. Member visits provider (cash pay or direct bill)
2. Provider submits claim → ClearHealth API (FHIR Claim resource)
3. API validates CPT code + ICD code + NPI + timestamp
4. Pricing engine looks up Medicare rate → applies 1.2x multiplier
5. Member sees instant cost breakdown:
      Service: Office Visit (99213) - $115
      Plan Responsibility: $0 (pre-deductible)
      Member Owes: $115 (HSA-eligible)
6. Payment processed automatically (from HSA or card-on-file)
7. Provider receives ACH payment in 48 hours
8. Claim recorded → deductible & OOP balance updated

Result: No waiting, no mail, no surprises.

⚙️ 4. Tech Architecture for Claims

📜 5. Handling Providers Without EDI

Providers don’t need to use EDI if you:

• Provide a web dashboard for uploading invoices.
• Accept PDF or JSON claim forms → OCR or structured upload.
• Automatically generate CMS-1500 claim forms for compliance.
• Return instant adjudication + ACH payment.

You can still maintain a legacy EDI gateway for compatibility (via Change Healthcare or Eligible.io), but it’s optional.

🧠 6. AI/LLM Role in Claims Simplification

AI can be leveraged responsibly in three areas:

1. Code Validation: Detect mismatched or redundant CPT/ICD codes.
2. Duplicate Detection: Spot repeated services for same member/date.
3. Language Simplification: Translate claim/EOB details into plain English for members.

Example: “Your doctor billed $115 for a standard office visit. This counts toward your deductible. You owe $115, which can be paid from your HSA.”

💵 7. Claims Transparency = Cost Control

A transparent, reference-based system means:

• Providers bill what’s reasonable (since they know the reference rate).
• Members see the true cost → behavioral pressure to choose value.
• No need for prior authorizations for most outpatient services.
• Drastically reduced administrative overhead (~50% less than legacy insurers).

🧩 8. Third-Party Integrations You Could Use

🧭 9. The Business Win

If traditional insurers spend 15–20% of premium on admin and claims processing (the “medical loss ratio” admin load), you can do it for 4–6% — while delivering faster payments and total price transparency.

That difference alone is your margin advantage.

By redesigning claims processing around transparency, real-time pricing, and simple APIs, ClearHealth can create a health plan that truly reimagines healthcare — for members and providers alike.