Diving Deeper into Healthcare Claims Audits: Part 1 – Auditor Workflow

Diving Deeper into Healthcare Claims Audits: Part 1 – Auditor Workflow

The first installment in a multi-part series aimed at clinical auditors. Part takes a closer look at 5 trends impacting how health plans manage claims auditing today.

Claims auditing. It’s the core function of any health plan payment integrity operation. Ensuring healthcare claims are paid accurately, both prepay and post-pay, requires claims auditors to determine the correct party, membership eligibility and contractual adherence, as well as detect and prevent fraud, waste and abuse. It’s a tall order, and numerous obstacles stand in the way of performing this task efficiently and effectively. 

In this first installment of a three-part series, we explore the landscape of a claims auditor’s day-to-day, including new challenges and opportunities and how current solutions stand up to these changes.  

Here are the top 5 trends we have identified that impact payment integrity claims review and validation. 

1. Moving Prepay

Long an unattainable goal, health plans are now making significant moves to transition claims recovery to an internal prepay model. Claims auto-adjudication systems are a good first step to achieving this goal, but lack of data visibility throws up major barriers to health plans endeavoring to make real progress. 

Too many health plans lack dedicated data science resources to develop and test sufficient prepay concepts. And, even if they have insights on their most successful post-pay concepts, there may be no ability to store those and apply them prepay. For health plans that have implemented technology, unless those systems seamlessly integrate, achieving significant cost avoidance is difficult. 

Altogether, these manual processes and tight turnaround times add up to pay-and-chase, a prevalent and unsustainable way of processing claims that auditors alone have little power to impact. 

2. Working Strategically with Vendors 

While some health plans completely outsource their claims recovery efforts to service vendors, and others aspire to internalize 100% of those activitiesa blended approach likely yields maximum recoveries at the most optimized cost. Provided your health plan has efficient and transparent methods for communicating, preventing overlap, and evaluating results with vendors. 

Unfortunately, managing suppliers with spreadsheets, status emails and quarterly business reviews keep vendors and internal auditors at odds. To get the most out of your vendor partnerships for claims auditshealth plans need to find effective ways to ensure mutual value: 

  • Share goals 
  • Communicate clearly and consistently 
  • Set expectations on service level agreements, contract terms, etc. 
  • Pay on time 
  • Train vendors on your processes and seek to understand their business, too 
  • Ensure accountability – on both sides 
  • Hold meaningful strategy sessions rather than status updates 

Types of Claims Audits

Claim edits focus on service dates, revenue codes, procedure codes, modifiers, type of bill, units of service, diagnosis, member eligibility, historical claims data, medical necessity, and more 

  • Non-Covered ServicesAccording to Plan Policy
  • Authorization (Days, Level of Care, etc.) 
  • Procedures/Charges 
  • Duplicative Procedures/Charges 
  • Coordination of Benefits 
  • Insurance Liability and Recovery (Subrogation) 
  • CMS National Coding Correct Initiative (NCCI)
  • Medicare Procedure-to-Procedure (PTP)
  • Medicare Add-on Code Edits
  • CMS Professional Component/Technical Component (PC/TC)
  • CMS Global Surgery

3. Minimizing Provider Abrasion 

Health plans are increasingly focused on their provider relationships, not least because members demand a healthy and satisfied provider network. At the same time, claims recovery processes tend to be structured to achieve the opposite, despite auditor best efforts. 

It is hard to link specific language from a provider contract within the claims process if plans are not using OCR technology. And, activities like overlapping medical record requests or requesting full records, just in case, and sending generic letter denials that require significant lift from provider claim departments can undermine these valuable provider relationships by dramatically increasing cost and abrasion 

In fact, recent study found that nearly 1 in 5 providers spend over $500,000 annually on the post-payment audit process, and almost 40% of providers can’t or haven’t calculated the cost. 

The breakdowns in communication that prove costly to providers wreak havoc on health plan bottom lines, too, by minimizing auditor effectiveness and productivity. 

4. Breaking Down Work Silos 

Many of the issues preventing health plans from achieving goals in relation to the trends outlined in this article come down to one simple operations issue: work silosSome of these silos are cultural: multiple departments in a health plan responsible for different areas of claims payment integrity don’t work together towards their common goal. Others are structural: claims auditors using different systems that don’t talk to each other, which can complicate good faith agreements and fail to align teams more closely. 

No matter the source, work silos make it difficult for auditors to get true insights into where inventory is and what claims are being worked, as well as the status of those claims. In this environment, it’s also near impossible to share relevant insights across the organization. 

Transparency is the new business paradigm, especially when designed to empower each stakeholder to offer their maximum value. 

5. Reducing Administrative Burden 

How much time do your auditors spend working claims versus updating spreadsheets and tracking down status updates? For many health plans, working with claims, suppliers, providers and other departments, are all juggled with a collection of vendor, internal and offline systems.  

Manual workarounds that increase administrative complexity prevent auditors from focusing on core jobs. Moreover, these activities can’t be easily reported on, making it difficult for health plans to smartly staff internal departments and confidently evaluate vendor performance. 

Your health plan is not alone. About $330 billion is wasted every year on administrative complexity, or 10% of annual healthcare spending in the U.S. A significant portion of this waste could be addressed with integrative technology to break down data silos, robotic process automation to automate repetitive tasks, and visual reporting to gain a clearer picture of what’s working and where improvements need to be made. 

Next Steps 

In part two of our series on healthcare claims audits we will look at new solutions that have emerged to address these trends headon, solutions that promise to increase auditor productivity exponentially. 



Talk to ClarisHealth about how Pareo®, a total payment integrity platform, is driving innovation at health plans. 

Why we focus on the problem, not the health care solution

Why we focus on the problem, not the health care solution

ClarisHealth CEO Jeff McNeese shares how our tech company created a solution born directly out of the frustrations with the healthcare industry, by experienced healthcare workers.

A major health plan client came to us recently and asked “Can you partner with us on this healthcare solution?” And it’s honestly one of the best compliments our organization can receive. Why? They know we understand their challenges as if we were working alongside them, and that puts us in a position of solving problems, allowing us to hit the ground running. This unique knowledge of health plan challenges proves useful when you’re evaluating potential technology partners. 

Consider a recent conversation we had with a health plan leader regarding advanced technology. The leader shared with us a frustration they had when approached by technology vendors who claimed to have a health care solution. But, this leader told us, when it came down to serious discussions, he often uncovered that the technology vendor knew a lot about tech but next to nothing about the industry, much less the problems facing it. 

Instead, the vendors in question wanted the health plan to tell them how to solve their problems. “We aren’t in the technology business, we are in the healthcare business. I don’t have the solutions. That’s why I’m coming to you!” the health plan leader recounted to us. 

This perspective has opened up a lot of dialogue for us internally around what it takes to be a good problem solver and why our experience matters so much. How are we able to, as one client told us recently, “see the problem as if you’re working alongside us”? With so many technology companies entering the advanced technology space, how clearly are they able to see the acute pain points facing the industry without having much healthcare experience? 

Good question. We know the problems that plague health payers because we’ve been in your shoes. Our company is a well-curated collection of folks from various walks of healthcare life: payer, provider and, of course, members and patients. Some of our team members, those in the Services department, are even working as Auditors, Data Miners and Overpayments Specialists — just like you. 

It’s our history and our commitment to deriving insights from the pain points these front-line employees bring to us, that allows us to be more effective problem solvers. And it’s not far fetched to admit that we love the problems — because that better positions us to solve them. Here’s what keeps us motivated to redefine the vision of technology in the health payer space. 

Problem-solving Mindset

We’ve been where you are today: stymied by processes that don’t work, and stuck in a situation where you are asked to deliver more with fewer resources. And, while we actively follow industry updates, including changes in compliance and legislation that are sure to affect our clients, perhaps more importantly, we listen. We seek opportunities to hear directly from industry leaders what works and what doesn’t in terms of technology solutions for payers. 

We aren’t the only technology company offering a solution by digging into the problem. Waze confounder Uri Levine says, “Fall in love with the problem not the solution, and the rest will follow.” When we can place ourselves in our clients’ shoes, we can see more clearly the pain points — big and small — that prevent health plans from managing payment integrity in an effective way. Understanding and accepting that the nature of problem solving has many ups and downs is something we embrace. 

Where does this love of problem solving come from? It starts with how we came to be a technology company. ClarisHealth was initially a services vendor. We grew frustrated by tools that didn’t serve our purposes, even simple things like automated time and date stamping on claims. This frustration triggered the development of what would become known as Pareo, a “nerve center” technology that integrates the varied data and viewpoints into a single source of truth. 

Today, health plans who are weary of outdated processes, of promises to help that fell short, of hearing the same rhetoric thrown their way, suddenly see the power of Pareo. And they get excited. Excited about the potential for transformation — moving away from what has become acceptable in this industry to what is possible. That excitement is contagious. It’s what keeps us going.

Here to Transform the Industry

Not everything about Pareo is sexy or glamorous. Imagine you had the best house in the world but the plumbing was not well done. It would quickly become a place you would not want to live in. Similarly, it may be cooler to throw out buzzwords like AI or Blockchain or NLP, but Pareo focuses on solving the real-world practical issues that prevent health plans from scaling a PI organization. We see Pareo as the plumbing, that foundational set of solutions, enabling PI leaders to build a fully integrated ecosystem where they can drive scale and efficiency.

The use of a design-thinking process helps ClarisHealth dig in and understand the problem, quickly model and deploy a solution. Through the years we’ve realized that it’s vital to ensure we are solving a big enough problem. It’s not our goal to offer yet another technology solution that is destined to become siloed. Rather, we want to elevate the whole industry

Our clients see this vision and through them, we are changing the way payment integrity processes are run. It’s the friendliest sort of disruption — from those in the trenches with payers, seeking to find a way through.

Focusing on health plan challenges is why we envisioned and built Pareo as a platform. Not only does it integrate seamlessly with many other best-in-class solutions, it’s also developed in a way that allows it to be continually tweaked and customized. In other words, we haven’t built a software and stuck it on a shelf. Our team is, at every stage of a project, creating a solution that meets the specific needs of a health plan. And what’s more, the various modules in Pareo get better and smarter as more health plans use them – a benefit that all of our clients feel in the way of continual updates. 

For those of you new to Pareo, we are glad you’re open to learning more about our transformative vision. And to those who have believed in us, thank you for continuing to support us and allowing us to take this dream of a better payment integrity solution — Total Payment Integrity — all the way to the top.

Talk to ClarisHealth about how Pareo® comprehensive payment integrity technology is helping health plans deliver on their most advanced digital strategies.

An Aggressive Plan to Move your Claims Recovery to Prepay Status

An Aggressive Plan to Move your Claims Recovery to Prepay Status

Transitioning more payment integrity operations to internal prepay is more than just a pipe dream for health plans

Transitioning prepay. It’s the holy grail for health plans — and viewed as equally unattainable. And, in the not-so-distant past, this viewpoint would have been correct. But now, with the assistance of innovative technologies, health plans can take an aggressive approach to transitioning claims recovery to an internal prepay model. Here’s a look at the challenge of transitioning to prepay, the solution we propose, and why your health plan can’t continue the business-as-usual efforts in this area. 


The “Challenge”

Historically, health plans applying post-pay concepts in a prepay environment have been mutually exclusive ideas

In today’s market, it’s essential for health plans to get a handle on payment accuracy. But, without the proper technology tools in place, it’s difficult for payers (and other healthcare stakeholders) to gain true visibility into their operations. In the case of third-party technology suppliers, who rely on their partners to perform at peak level, these murky waters may prove especially hard to navigate. 

Without comprehensive insight and management, it is very difficult for payers to move the needle on claims recovery. Especially when attempting to shift claims from post-pay to prepay, though doing so promises improved efficiencies and higher rates of return for health plans. We see two common barriers to making this shift:

  1. Even if your third-party vendors possess the kind of technology that would enable you to move more claims to prepay resolution, health plans have no ability to store the most successful concepts and apply advanced analytics prepay. 
  2. Even if you do have insights, limited data analytics resources prevent you from taking full advantage of advanced technology.

You may know that some health plans have been able to shift claims recovery efforts to internal prepay activities, but do you fully understand how? In part, successful plans achieve this by breaking down data barriers. With the right solution in place, payers can actually overcome the limitations that poor data visibility place on them. 


Why Prepay is an Urgent Concern

Health plans need the efficiencies that comprehensive payment accuracy technology brings, and prepay is an opportunity to make quick strides. 

We get it. You have a laundry list of to-do’s, all vying for top priority. Digital-first strategy, member experience improvements, optimizing costs and outcomes — these are all important goals. But, it could be that a focus on claims recovery gives your health plan the breathing room it needs for these significant investments. And as professional program integrity problem solvers, we think a shift to prepay is a valuable opportunity for health plans looking to gain traction on aggressive payment accuracy targets. 

We aren’t alone in suggesting a technology solution to improve claims recovery (and management in general). Earlier this year, Fierce Healthcare pointed out, down to the dollar, how much it costs a payer to manage claim inquiries. “When a provider contacts a payer to check a claim status, it takes an average of 14 minutes and costs the provider $7.12… multiplied by millions of requests each year, the time and money add up. In 2018 alone, providers made 173 million claim status inquiries by phone, fax or email.” 

Investing in data analytics is a growing trend. In fact, 60% of surveyed health executives say they are investing more in predictive technologies in 2019. Claims recovery will continue to be an important facet of your health plan’s payment accuracy operations. With the right solution in place, the ability to shift to internal prepay concepts will be in your hands. 


The “Solution”: Pareo® is How

With a centralized solution like Pareo in place, everyone can get on the same page, including vendors and other departments responsible for payment accuracy. 

It may take time, it may necessitate a change in how you do things, but we believe all health plans have the opportunity to deploy a centralized solution for payment accuracy (and reap the benefits). Here’s an idea of how a PI solution like Pareo works from a holistic vantage point to quickly turn around recoveries at your health plan: 

Our team works with you to develop a specific implementation and use plan for Pareo that meets (and often exceeds) the goals you’ve outlined for your plan. If shifting to prepay cost avoidance is a goal of your health plan, Pareo is the comprehensive solution that will help you get there.

Talk to ClarisHealth about how Pareo® advanced payment integrity technology is helping health plans deliver on their most advanced digital strategies.

Managing Medical Record Requests a problem? We’ve got the solution.

Managing Medical Record Requests a problem? We’ve got the solution.

How to manage medical record retrieval processes with multiple clinical audit vendors.

Is your health plan missing out on the potential of having multiple clinical audit vendors because you’re concerned about overlapping medical record requests? That uncoordinated approach to medical records retrieval is unnecessary in the modern age of vendor coordination and provider communications. 

For health plans that are ready to maximize their returns, improve recoveries and avoid the abrasion created by redundant medical record retrieval processes, Pareo® is your answer. Pareo is a comprehensive payment integrity solution that works by making data more accessible, connecting it to multiple stakeholders and managing real-time communications (including those related to the claims process and associated with technology vendors). With these efficiencies in place, health plans are able to maximize their recoveries by adding clinical audit vendors. Data is no longer siloed — it can be seen, used and leveraged by health plans. That’s the power of Pareo. 

Overlapping Medical Record Requests Begone

Suppose your health plan were to prioritize adding clinical audit vendors without a broader management tool in place. One of the very real side effects of this practice is overlapping medical record requests. It’s frustrating for everyone, especially providers who seek to prioritize patient care over cumbersome administrative processes. 

In instances where health plans have a lot to lose (recoveries, valuable providers, plan members), clear communication is crucial to success. We understand that our clients need to do more than just talk at stakeholders; they need to intelligently coordinate with vendors, providers and members in a streamlined but meaningful way. 

Unfortunately, some of the payers we speak with feel forced into an impossible decision: improve provider relationships OR recoveries. This approach, while understandable, is unnecessary. What if you could do both? What if expanding recoveries through adding vendors — a smart strategy for scaling health plan payment integrity operations — wasn’t stressful on providers? 

Harmony: Vendor Coordination + Provider Communications

By eliminating the fear of overlapping medical record requests, you are free to stack the best vendors to your advantage. Directing vendors to laser focus on their area of expertise creates more potential for finding anomalies; for example, having vendors concentrate on a line of business (e.g. Medicare Advantage, Medicaid, commercial). Data tells us that any time a health plan adds a vendor in a multi-pass capacity, their ability to increase recoveries improves dramatically. 

But don’t leave providers out of the loop. Health plans often run a planned series of audits that parallel those that a provider performs. With Pareo, each party can be on the same page about these audits; knowledge and understanding of them beforehand can minimize redundancies, says Healthcare Finance.  But as we all know, it’s not as simple as straightforward communication between a payer and a provider. Vendors are an important component as they rely on data to deliver results. 

Enter Pareo Clinical.

Pareo Clinical: Eliminates Risk Around Medical Record Requests + Retrievals

Tackle risk, reduce inefficiencies, increase nurse auditor throughput, improve your net promoter score (NPS) and increase recoveries with Pareo Clinical. Our solution provides gates and custom logic that streamline the medical records retrieval process to coordinate with vendors, eliminate duplicate requests and auto-route submissions to the appropriate auditor with smart tagging so nothing gets overlooked. 

To enhance communication, our solution creates a unilateral or bi-lateral portal of communication for our clients that allows them to not only communicate with vendors but with another very valuable player: providers. We understand that in today’s IT ecosystem, a true solution has to “speak” with multiple stakeholders in a way that removes redundant, wasteful processes. 

Those communications streamline activities that can be automated. But perhaps just as important, Pareo allows for sophisticated coordination between all stakeholders. With our technology, even pending requests — days outstanding, notes on interactions, etc. — can be tracked to prompt proper follow-up strategies. These efficiencies mean more clinical audit vendors and less abrasion with providers. In today’s world where health plans are being asked to do more with less, a scalable, comprehensive solution is the strongest way forward. 

Learn more about how Pareo supports health plans, providers and third-party vendors

Talk to ClarisHealth about how Pareo®advanced payment integrity technology is helping health plans stride confidently into an uncertain future.

Modernizing communication with providers

Modernizing communication with providers

Time to move past playing telephone with providers. Here’s a better communication strategy for health plans. 

By relying on fax machines and snail mail to communicate overpayments, underpayments, denials, and just about everything else, the payer-provider relationship sometimes looks like very dysfunctional pen pals. The cost of managing this unwieldy process is too high for both parties, but new options for electronically communicating are emerging. Here’s a candid look at how your health plan can modernize its approach to provider communication. 

What solutions have been proposed to improve payer-provider communication?

Remember the grade-school game of telephone? You sit in a circle and pass a message around by whispering it into the ear of the person next to you. Then the last person has to say to the group what they heard and often, the message varies hilariously from the original. What’s been happening between payers and providers isn’t all that different, only it’s not very funny. 

There are real costs and consequences associated with poor communication. And besides, moving away from telephone conversations is considered a first-step solution to improve provider communication. So what’s replacing phones and fax machines?

Two solutions have emerged as leaders in the effort to improve traditional communication problems: the Blue Button initiative and electronic payer-provider portals. Each is complex in its own right but are summarized below: 

    • The Blue Button initiative was introduced last year and aims to provide greater access to claims data. Several ONC/CMS proposals have been issued to promote health data sharing, more broadly, across healthcare organizations. These initiatives tend to be more focused on healthcare point-of-care decisions, though, rather than getting paid. Recently, CMS announced the Medicare Blue Button, a pilot program planned for launch next month. Other data sharing initiatives involving APIs have also been recently announced. 
    • Electronic payer-provider portals are solutions more focused on communicating about claims: overpayments, underpayments, denials, prior authorizations, medical records documentation. Last year, CMS administrator Seema Verma stated she wants physician fax machines gone by 2020, replaced by digital health information exchange. But to be effective, digital health information available via portals should be all-electronic, real-time communication in order to truly drive engagement and efficiencies.

What’s clear is that outdated methods of communicating between payers and providers will no longer suffice, either due to regulation or market demand. Furthermore, in order to meet consumer demand, payers and providers have to find a better way to share data. 

“People die because we don’t provide access to data in a real-time basis. The most important thing we can do is figure out how to coordinate that care in real-time so we can directly impact and save lives,” says a leading Blues plan president and CEO.

Where does Pareo® fit in? 

Pareo is a technology solution for health plans that fosters improved communication with providers through native, built-in tools. By automating some communication needs, streamlining others, and eliminating errant messages entirely (such as duplicate medical requests), Pareo allows health plans to make strides in digitizing health communications with providers. Importantly, a communication and engagement module like ours can serve to bridge the gap between data sharing and actually getting paid (something payers and providers alike appreciate). 

Pareo enhances Provider Communication efforts through: 

  • Faster payments with less manual intervention
  • Improving trust/NPS with providers
  • Facilitating alternative payment models
  • Growing recoveries

Payers need a way to see the bigger picture — a way to aggregate data and make informed decisions quickly. With an electronic provider communication mechanism in place (like Pareo), data sharing initiatives like Blue Button and APIs become actionable ways to move the needle and, even more importantly, save lives.

Talk to ClarisHealth about how Pareo®advanced payment integrity technology is helping health plans successfully implement their digital-first strategies. 

What makes value-based care programs work? 3 keys to success

What makes value-based care programs work? 3 keys to success

Following up on our previous article, we look more closely at what successful value-based care initiatives have in common.

It’s not all that surprising that one of our recent blog posts, Medicare for All: Should it be feared by health plans? has quickly become one of our most popular. Value-based care programs, like what the federal government has switched to, are at the forefront of discussions regarding the future of healthcare. And a recent survey indicates that providers are actually willing to take on more risk under alternative payment models, which signals well for value-based care adoption. 

But it takes awhile to implement value-based care programs and that may leave many health plans wondering what they can do to be proactive. Here are 3 strategic initiatives your health plan can pursue today to ensure value-based care programs will be successful on down the road. 

1. Communication

We’ve talked a lot lately on the blog about communication and collaboration and with good reason: the future of healthcare demands it. As care models shift, the need to work effectively with other vested parties is paramount. 

Take for example a recent panel in which industry experts (18 in all) were asked to define the term “value-based care.” While the term “value-based payment” was broadly agreed on, experts could not come to a consensus on the meaning of value-based care reports FierceHealthcare. “In addition to these specific gaps in communication, the study highlighted just how valuable it can be for industry leaders to convene with others who may not share the same perspective,” says Meredith Williams, M.D.

Health plans can prepare for  value-based care by fostering better communication with internal and external stakeholders. As Williams points out above, sitting down with other experts in the industry to get on the same page is a powerful — and unprecedented — move. 

2. Transparency

Alongside value-based care runs another initiative: transparency. Real-time access to crucial medical details, patient access to data, and upfront pricing are goals associated with successful value-based care programs. 

True transparency is only possible when health organizations have a firm grasp on data. Yet interoperability remains a struggle: 74% of respondents in this survey list the “ability to aggregate and share information as an extremely important need over the next three years.” By 2020, 59% of healthcare payments will be from value-based care models, and that means health plans need to work now on integrative data strategies. 

A shift towards transparent practices can directly affect your health plan’s relationship with providers. The ability to collaborate with elements of the healthcare trifecta (patient, provider and payer) will grow increasingly important for health plans seeking to thrive in a value-based care environment. “If value-based care is about aligning what works best for the patient to a hospital’s financial incentives, then insurers and providers must work together to create the best outcomes,” writes Healthcare Finance

3. Technology

With communication and transparency as actionable goals for health plans seeking to prepare for value-based care, technology is a third and crucial piece of the puzzle. With the right technology solution, health plans can improve communication and engagement with key stakeholders while promoting more transparent data practices. “Data is much easier to connect with when you are able to see it in real-time,” notes Jason Medlin, ClarisHealth VP of Marketing & Business Development. 

Investing in IT and technology to foster innovation was a featured conclusion of the Deloitte report “The Health Plan of Tomorrow.” Switching from volume to value in healthcare models will require a sophisticated technology strategy. The goals of value-based care programs — largely focused on access to patient care data — are not currently achievable at many health plans. 

The fastest way to transform? Technology, says Healthcare Finance. A comprehensive payment integrity solution should also provide a way of interpreting big data to transfer into actionable insights. “Once an organization has its data and is able to analyze it, it can then pinpoint opportunities for changing the practice to improve efficiencies without compromising quality outcomes — and for improving patient care overall.”

The Healthcare Trifecta Matters More Than Ever

Payers, providers and patients make up what we refer to as the “healthcare trifecta,” and the effectiveness of this relationship directly correlates with the success of value-based care models. Even as payers and providers work towards improved collaboration and communication, health plan members also  seek more ready access to information. Health plans who focus on supporting and improving their relationships with providers and patients are poised to adopt value-based care more successfully.

Talk to ClarisHealth about how Pareo®advanced payment integrity technology is helping health plans successfully implement their digital-first strategies.