By becoming an intermediary in the traditional insurance payment cycle, Klaim is addressing a financial issue that has long been plaguing healthcare providers in the MENA region: delayed and/or rejected claim payments.

When it comes to the financial stability of healthcare providers in the MENA region, there is one particular issue that has long proven to be a pain point for them: delayed and/or rejected insurance claim payments. In fact, as per research done by UAE-based fintech firm Klaim, it takes between 112 and 270 days for healthcare insurers to receive cash for services that are only available through submitted medical claims. "Additionally, between 15% and 30% of medical claims in the UAE are rejected by insurers and must be resubmitted for processing," says Karim Dakki, co-founder and CEO, Klaim. "Often when claims are rejected, the second submission will be ignored. Insurance companies limit entry into their network and negotiate very low rates- a reality that further harms healthcare providers already having to deal with payment delays and complex medical claims processing."

Launched in 2019, Klaim aims to address this issue by becoming an intermediary in the traditional payment cycle. Through this approach, KLAIM then enables quick cash replenishment of a medical entity's insurance claims. But before delving into how this is achieved, it is good to understand the gravity of the core problem. "The payment of insurance claims is a cumulative process, which means it may take up to two years before some claims turn to cash," explains Dakki. "This rate of rejection of medical claims makes it difficult for the healthcare industry to sustain its growth and meet analysts' high expectations." In fact, the ripple effect of what seems to primarily be a finance-related issue for medical firms, is one that can be directly felt by the patients too, says Dakki. "Many healthcare providers, especially small ones and hospitals who can't access business loans, are facing persistent cash flow challenges that threaten their existence, and, sometimes, put the patients at risk," he points out.

The good news, however, is that this problem is solvable. "Although 15%-30% of new claims and 15% of resubmitted claims are rejected, 86% of these claim denials can be avoided," says Dakki. "The lack of better managerial and processing systems is still causing healthcare providers to lose revenue, contributing to the overall cash flow problem." And this is exactly where his enterprise's offering comes in. "At Klaim, we provide access to working capital and a better claim management platform, all under one umbrella," explains Dakki. "Our objective is to help healthcare providers get paid faster for their medical claims. We believe the only way to do this is to have a combination of technology, a claim management platform with automation, and also extend working capital to healthcare providers."

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The first step in this combined process involves healthcare providers to create an account with Klaim, following which the entity's financial performance will be evaluated. After that, once a healthcare provider signs a contract with Klaim, it becomes eligible to receive medical claim payments in cash within seven days. Here, Klaim charges a processing fee, which is calculated as a percentage of the value of a given claim. "We use technology to assess and buy claims that have a very good chance of being paid by the insurer (low-risk claims), and typically reject ones that don't have such chances," explains Dakki. "With this advanced payment system, healthcare providers can cash in on their medical claims quickly, giving them the positive cash flow and working capital they need to support growing operations."