International Journal of Medical Science and Public Health Research
6
https://ijmsphr.com/index.php/ijmsphr
TYPE
Original Research
PAGE NO.
06-11
DOI
10.37547/ijmsphr/Volume06Issue05-02
OPEN ACCESS
SUBMITED
15 March 2025
ACCEPTED
18 March 2025
PUBLISHED
02 April 2025
VOLUME
Vol.06 Issue 05 2025
CITATION
Wazahat Ahmed Chowdhury. (2025). Agile in Healthcare: Streamlining
Medicare and Medicaid Claims Processing While Ensuring HIPAA
Compliance. International Journal of Medical Science and Public Health
Research, 6(05), 06
–
11.
https://doi.org/10.37547/ijmsphr/Volume06Issue05-02
COPYRIGHT
© 2025 Original content from this work may be used under the terms
of the creative commons attributes 4.0 License.
Agile in Healthcare:
Streamlining Medicare and
Medicaid Claims
Processing While Ensuring
HIPAA Compliance
Wazahat Ahmed Chowdhury
Supply Chain Analyst and Agile Scrum Master
MS. in Supply Chain Management, University of Michigan
College of Business.
Abstract:
Healthcare institutions experience major
operational issues while handling Medicare and
Medicaid claims because they must meet strict HIPAA
security standards. The waterfall model method
together with traditional approaches leads to various
delays along with multiple errors in addition to different
compliance risks because of its strict framework. The
iterative collaborative adaptive framework of Agile
methodologies provides healthcare organizations with a
solution to optimize processing claims and minimize
operational problems while maintaining HIPAA
standards. Agile principles serve as the basis for this
paper which investigates methods to enhance Medicare
and Medicaid claims processing systems. The paper
investigates existing claims processing challenges
before exploring how Agile transformations work while
providing strategies to keep HIPAA compliance active
inside Agile organizations. This paper uses case studies
and best practices with future analysis to show how
Agile transforms claims processing in healthcare though
protecting patient information.
Keywords:
Agile Methodologies, Medicare, Medicaid,
Claims Processing, HIPAA Compliance, Scrum, Kanban,
Lean, Healthcare Efficiency, Data Security, Process
Optimization.
Introduction:
The U.S. healthcare system relies heavily
on Medicare and Medicaid programs to insure coverage
for more than 140 million citizens who belong to
different segments of the population. Data processing
systems for programs often perform poorly due to high
numbers of errors and long review durations and
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difficult rules administrators must follow. Health
Insurance Portability and Accountability Act (HIPAA) of
1996 established specific data protection standards
that complicate the process of handling claims.
Traditional project management together with
waterfall-based software development processes face
difficulties with these challenges due to their rigid
linear sequencing system.
The original purpose of Agile methodologies for
software engineering included iterative work alongside
stakeholder engagement with continuous changes to
project demands. Agile principles applied to healthcare
claims processing help agencies improve work
efficiency while they reduce mistakes and achieve
better stakeholder outcomes while keeping HIPAA
rules in full force. This paper delivers an extensive
study showing how Agile processes will revolutionize
Medicare and Medicaid claims document handling.
The research examines both the processing difficulties
of claims and the application of Agile frameworks
together with HIPAA compliance methods and case
study and best practice implementation approaches.
2. Challenges in Medicare and Medicaid Claims
Processing
2.1 Complexity of Claims Processing
The Medicare and Medicaid claims processing requires
complex workflows that engage multiple entities such
as healthcare providers and insurance companies as
well as clearinghouses and the Centers for Medicare &
Medicaid Services (CMS). The entire process demands
an examination of patient eligibility followed by
diagnostic and procedural coding before claiming
submission to subsequent claim adjudication and
payment dispatch. The process contains multiple
stages that introduce potential errors including wrong
coding and incomplete details that result in provider
financial penalties and delayed or denied claims.
2.2 High Error Rates
The Medicare fee-for-service claims payment system
experienced 8.6% improper payment rate in 2022
which led to billions of erroneous disbursements (CMS,
2022). The most frequent payment errors consist of
improper billing codes and absent documentation
together with policy breaches. The payment errors
affecting Medicaid claims grow worse since providers
must deal with different state-level regulations on top
of the usual issues. Organizations must spend
additional resources to manage such mistakes while
suffering delayed reimbursements which harm both
provider monetary stability and patient relationship
trust.
2.3 Processing Delays
Medicare claims take 15 to 30 days for completion, but
Medicaid claims may consume more time because each
state runs separate adjudication procedures. The
process becomes more prolonged when claims need
appeals or additional paperwork because this leads to
additional delays in resolution times. Provider
operations suffer interruptions that result in staff
dissatisfaction together with dissatisfied medical service
users.
2.4 HIPAA Compliance
Under HIPAA regulations health organizations must
protect protected health information (PHI) by ensuring
confidentiality together with integrity and availability.
The necessary security elements for claims processing
systems include both encryption technologies together
with access regulations and audit trail systems that stop
data breaches. Sanctions for HIPAA non-compliance can
be substantial since per violation fines may exceed $1.5
million according to HHS (2023). The challenge of
ensuring compliance proves difficult to maintain system
efficiency in claims processing operations.
2.5 Legacy Systems and Technological Barriers
Most healthcare institutions continue to handle claims
using years-old legacy system platforms. Due to their
rigidity as well as their unfeasible connection to
contemporary technological solutions and error-prone
nature these systems prove problematic. Healthcare
organizations face substantial funding hurdles when
they need to modernize or replace their outdated
systems which restricts their ability to implement new
modernized solutions.
3. Agile Methodologies: A Paradigm Shift
Scrum and Kanban together with Lean constitute agile
methodologies created to overcome problems found in
waterfall methods during software development. Agile
puts primary focus on teamwork between multiple
departments
while
providing
ongoing
project
assessment and incremental work cycles. Core
principles are:
•
Iterative Development
: Small functional work
increments can be delivered which allows stakeholders
to test and refine everything frequently.
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•
Customer Collaboration
: The project team involves
stakeholders to verify that solutions fulfill their
requirements together with their expectations.
•
Continuous
Improvement
:
The
team
uses
retrospectives as a process to determine system or
process inefficiencies.
•
Adaptability
: Our organization reacts swiftly to
changing requirements that include new regulations as
well as technological advancements.
Healthcare practitioners implement Agile in two major
domains: they apply it to create claims processing
software platforms while simultaneously optimizing
their operational workflows. The Agile approach
supports better efficiency in handling claims
processing through its combination of collaboration
and quick cycle development.
4. Applying Agile to Medicare and Medicaid Claims
Processing
4.1 Agile Frameworks for Claims Processing
Agile frameworks demonstrate excellent compatibility
with claims processing through multiple frameworks
including:
Scrum:
Scrum divides work efforts into sprints which
run for 2-4 weeks using multiple functional teams to
produce gradual increments. Scrum methodology
allows teams to build automated coding software in
addition to real-time eligibility examination features
and anti-fraud systems.
Kanban:
The Kanban system displays workflow
progression through tracking that observe tasks
starting from the claim submission step to review and
adjudication completion. This method enables teams
to detect limits and enhance processing speed through
improved throughput.
Lean:
Under Lean principles organizations eliminate
needless costs and deliver peak value to their clients.
The implementation of Lean techniques will enhance
processing workflows by removing redundant
operations which include manual data entry as well as
unnecessary approval requirements.
4.2 Key Agile Practices
Organizations should utilize this set of Agile practices
to enhance their claims processing operations
including: -
User Stories
: The requirements should be defined
through stakeholder perspectives when performing
tasks (for instance “I need real
-time claim status
updates to enhance cash flow as a provider”). The use
of user stories ensures developers tackle significant
problems which exist in real-world situations.
•
Daily Standups
: Daily meetings between teams help
teammates stay connected while resolving problems
while sustaining development speed.
•
Continuous
Integration/Continuous
Deployment
(CI/CD)
: CI/CD tools enable software developers to
provide frequent system updates for claims processing
which delivers both enhanced performance and shorter
interruption times.
•
Retrospectives
: Team performance enhances through
regular assessment sessions which let members
evaluate past accomplishments together with observed
difficulties to develop consistent betterment practices.
•
Test-Driven Development (TDD)
: The testing process
must occur before programming to ensure new
functions satisfy their functional duties and regulatory
mandates.
4.3 Benefits of Agile in Claims Processing
Agile methodologies deliver multiple advantages for
managing Medicare and Medicaid claims and their
associated processes including:
•
Reduced Error Rates
: A testing process followed by
stakeholder responses enables the detection of early
errors that enhance claim reliability.
•
Faster Processing Times
: The implementation of
automated
workflows
leads
to
successive
improvements that minimize adjudication processing
time along with payment delivery duration.
•
Enhanced
Stakeholder
Satisfaction
:
Through
collaboration, providers ensure their solutions fulfill
payer and patient needs.
•
Scalability and Adaptability
: The agile system design
demonstrates the ability to cope with growing insurance
claims and follows regulatory adjustments.
•
Cost Savings
: The Agile method works to decrease both
incorrect payment costs and administrative expenses
through its approach.
5. Ensuring HIPAA Compliance in an Agile Environment
Agile
high-speed
work
methods
present
implementation challenges to HIPAA compliance which
organizations
can
overcome
through
proper
preventative measures. The following methods will help
Agile processes achieve compliance with HIPAA
requirements:
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5.1 Secure Development Practices
•
Encryption
: Protecting PHI requires deployment of
encryption protocols which should include AES-256
encryption for data stored on systems and TLS 1.3
encryption for data that moves between systems.
•
Access Controls
: The healthcare organization will
establish role-based access controls (RBAC) which only
permit authorized staff to gain access to PHI.
•
Audit Trails
: System activities must be recorded
thoroughly to monitor user access and PHI
modifications.
•
Secure Coding
: It should follow guidelines for secure
coding from the Open Web Application Security
Project (OWASP) to stop the system from having
vulnerabilities.
5.2 Incorporating Compliance into Agile Workflows
•
Compliance User Stories
: The system should
incorporate HIPAA requirements through user stories
that precisely state business needs (the first user story
occurs as follows - "A compliance officer needs to log
all PHI access so we can perform audits").
•
Definition of Done (DoD)
: The DoD should include
HIPAA regulatory requirements as standard criteria
across all its increments.
•
Automated Compliance Testing
: Staff should conduct
automated HIPAA compliance tests during every sprint
for early detection of potential problems.
•
Regular Security Audits
: At the end of each sprint tests
should be conducted to check compliance status and
detect potential weaknesses.
5.3 Training and Awareness
•
Every member of the team must receive complete
instruction regarding HIPAA rules together with secure
Agile practice methodology.
•
All team members should understand a fundamental
awareness about security while developers prioritize
PHI protection at every development cycle.
•
Teams should prepare their incident response by
participating in regular data breach simulations
5.4 Third-Party Vendor Management
The claims processing workflow includes working with
external service providers who serve as clearinghouses
or cloud service providers. To ensure HIPAA
compliance:
•
The practice requires all vendors who manage PHI to
sign Business Associate Agreements.
•
Healthcare organizations should audit vendor security
practices using both internal audits and external
certifications like HITRUST or SOC 2.
•
Regular assessment of vendor performance will verify
their continuous adherence to standards.
5.5 Risk Management
•
The organization needs to perform routine risk
assessments that detect weaknesses in Agile processes
and systems.
•
Put in place solutions for vulnerability treatment
through penetration testing and vulnerability scanning
and incident response planning.
•
The organization should allocate priority to address its
most serious compliance problems based on risk
assessment.
6.
CASE STUDIES
6.1 Case Study 1: State Medicaid Program
A Medicaid state program encountered 15% denial of
claims because its processes involved manual work and
coding mistakes. The organization implemented Scrum
to create an AI-driven coding tool which would operate
as an interface with its claims processing system. A staff
composed of coders and IT developers and compliance
officers worked together alongside each other within
two-week sprints to provide continuous enhancements.
Real-time coding recommendations within this tool
decreased the 15% claim denial rate by 60% during its
sixth month of use. Improved processing time became
half as long due to reduced times from 40 days to 18
days while HIPAA requirements remained satisfied by
encryption methods and RBAC regulations and regular
security audits. The project achieved its objectives
which resulted in implementing the solution to
additional state-run programs.
6.2 Case Study 2: Medicare Advantage Plan
The Medicare Advantage plan utilized Kanban to
enhance its claims adjudication procedure. Observing
the process on the Kanban board helped the team
discover operational blocks in their manual review and
documentation verification steps. Through the
implementation of automated decision-support tools
the adjudication process duration decreased by 16 days
from 28 days to 12 days. The Kanban workflow included
security requirements to uphold HIPAA compliance and
staff conducted biweekly reviews regarding these
requirements. The healthcare providers experienced
substantial satisfaction because accelerated payments
improved their financial performance.
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Figure 1: Reduction in Claim processing time after Kanban Implementation
7. Challenges and Mitigation Strategies
7.1 Resistance to Change
Organizations in healthcare tend to oppose Agile
implementation because of established procedures and
regulatory requirements as well as doubts about Agile's
suitability. To overcome this resistance:
•
Stakeholders need to attend learning programs that
teach them about Agile advantages.
•
Begin with small demonstration projects which will
show immediate success while winning support from
the organization.
•
Obtain leadership support to advance Agile
implementation and connect it to established
organizational targets.
7.2 Balancing Speed and Compliance
Agile project delivery speed poses challenges for
healthcare organizations to comply with HIPAA’s strict
requirements. Mitigate this by:
•
Compliance tasks must become part of every project
sprint to prevent them from being treated as add-on
responsibilities.
•
Security as well as compliance verification runs
automatically through real-time tools designed for
automation testing.
•
Every Agile team should have at least one compliance
specialist as part of the team structure.
7.3 Resource Constraints
The implementation of Agile platforms requires
specialist teams along with training and tool acquisition
which might create financial difficulties. Address this
by:
•
Management of initiatives should focus on important
projects for automation which reduce human errors.
•
The organization benefits from using cloud-based
platforms to decrease infrastructure expenses.
•
Our organization uses open-source Agile tools as cost-
saving instruments.
7.4 Integration with Legacy Systems
Agile adoption faces obstacles from legacy systems
because these systems do not adapt well. Strategies to
address this include:
•
The implementation of APIs enables organizations to
merge older systems with new Agile-developed
solutions.
•
A formal technique to replace legacy systems through
modular replacements will be implemented gradually.
•
Organizations should work with vendors who focus on
legacy system modernization.
8. Best Practices for Implementation
Agile implementation in Medicare and Medicaid claims
processing requires organizations to follow several best
practices including:
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Start Small
: Start by automating eligibility verification
since this pilot project will establish expertise while
proving valuable outcomes.
Engage Stakeholders
: Solutions should be designed by
combining the requirements of providers and payers
along with patients and compliance officers at an early
stage.
Leverage Technology
: Organizations need to use cloud
platforms alongside artificial intelligence (AI) and
robotic process automation (RPA) as modern solutions
to increase productivity alongside better compliance.
Monitor Metrics
: The tracking of important
performance indicators known as KPIs evaluate how
well the project is proceeding by monitoring claim error
rates together with processing times as well as
compliance audit results.
Foster a Culture of Agility
: Organizations should
support team collaboration together with experimental
work and continuous knowledge acquisition at multiple
team levels.
Iterate and Scale
: Agile implementation should be
modified through lessons learned from preliminary
projects to enable organization-wide deployment.
9. Future Directions
The utilization of new technology along with Agile
principles creates substantial benefits for the claims
processing system. The implementation of artificial
intelligence (AI) fits into automated systems to conduct
predictive fraud detection and offer real-time coding
support to healthcare facilities. Blockchain technology
enhances patient health information security through
transparent systems that maintain unalterable activity
logs for PHI. The adaptable nature of Agile proves itself
to be a perfect framework for implementing new
technologies which supports regulatory compliance
requirements during their changes.
The implementation of Agile helps healthcare
organizations transforms when CMS installs value-
based care models through adaptations to bundled
payment methods and accountable care organizations
(ACOs) frameworks. Through its framework Agile
facilitates quick development and stakeholders' team-
up which helps healthcare organizations remain ahead
when faced with regulatory transformations and
market fluctuations.
CONCLUSION
Agile methodologies provide organizations with an
effective framework that transforms Medicare and
Medicaid claims procedures to resolve longstanding
problems in errors and delays and compliance issues.
Healthcare organizations attain workflow streamlining
and enhanced efficiency and better results for
healthcare providers and insurers and their patients
through iterative development and stakeholder
collaboration and continuous improvement models.
Achieving HIPAA compliance needs an Agile
environment to implement proactive approaches
consisting of secure development practices and
compliance integration as well as comprehensive
training
.
The combination of research examples and
industry best practices demonstrates how Agile brings
substantial transformations to the healthcare sector.
The future of healthcare industry development will
greatly depend on Agile because it will lead to
innovative approaches to efficiency and patient-
focused care at every stage including claims processing.
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1.
Centers for Medicare & Medicaid Services. (2022). 2022
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U.S. Department of Health and Human Services. (2023).
HIPAA
Enforcement.
Retrieved
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https://www.hhs.gov/hipaa.
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Schwaber, K., & Sutherland, J. (2020). The Scrum Guide.
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