A Better Way to Conduct Medical Claims Audits

Jun 15, 2021

Making the case for taking back control of your health plan’s medical claims audits

If your health plan hasn’t handled medical claims audits with your own resources, you’re not alone. While the task is necessary to reducing your claim spend, it historically has been easier to let service vendors shoulder the burden. But technology advances have shifted this dynamic. How can you conduct complex audits – including IBR, DRG, E/M and more – on your own without adding new skilled staff members or reducing your effectiveness?

Barriers to Conducting Your Own Medical Claims Audits

Before we explore why the time has come to reexamine your approach to complex audits, let’s review why health plans have hesitated to take on this program themselves.

Process inefficiencies

The primary barrier is justifying the amount of time and effort it takes to conduct these audits. Even before review commences, retrieving, tracking and storing clinical documentation can prove difficult. Some providers may proactively send records, but many health plans don’t have automatic retrieval and overlap controls in their legacy systems.

From there, manually reviewing medical records and bills page-by-page, line-by-line is incredibly inefficient. So inefficient, it may prove impossible to make progress on shifting this activity prospective. These long lag times increase provider abrasion and strain staff members.

In addition to being time consuming, relying solely on manual reviews also increases the likelihood of errors and makes it difficult to proactively discover key areas of growth. Add in mandatory reviews for minimum dollar thresholds – regardless of hit rates – and it’s difficult for health plans to reconcile the low ROI.

Resource constraints

Another inherent constraint is the highly specialized resources this activity requires. Nurse coders are difficult to recruit and expensive to staff. Hiring nurses poses fewer barriers, but investing in coding training and certifications for them takes time and doesn’t address the efficiency issue. And applying highly skilled staff to low value manual tasks is unsustainable. Health plans can’t risk being slow to respond to potential opportunities because skilled resources are occupied working inventory instead of identifying new trends.

Altogether, these barriers force health plans to work harder instead of smarter. By minimizing the progress that can be made on the core value, many organizations are leaving money on the table.

Reasons to Consider Reducing Reliance on Vendors

On the other hand, third-party services vendors have positioned themselves to take advantage of economies of scale not readily available to health plans. With a deep bench of skilled resources and extensive experience handling medical claims audits, they can absorb training lead time and push ideation forward.

But the recent trend of services vendor consolidation has made solely relying on suppliers for programs or innovation a risky prospect. In fact, some health plans have realized the multiple vendors they had stacked for complex audits have condensed down to, effectively, a single option.

Moreover, because of the skilled resources and time involved with clinical claims reviews, working with an outside vendor is a relatively high-dollar line item. It often amounts to an average 25% contingency rate on recoveries. While that may be a fair price, this traditional approach is not scalable. No matter how you grow your recoveries and your program, your effective rate of return on investment never changes.

As a result of these changes in the market and the need for scalable solutions that progressively impact ROI, health plans have been searching for an alternate path. Recent advancements in technology have poised digital innovation as the most practical – and accessible – option for progressive cost-containment strategies.

Making the Case for Internalization

Technology – powered by A.I., particularly – has leapt forward dramatically in recent years. For health plans, these advancements mean tedious and high-compute tasks alike can be automated. And, because of their ability to dramatically reduce administrative complexity, these solutions are more readily accessible.

This progress has yielded real benefits for health plans that want to control their own medical claims audit strategy. OCR turns medical records, itemized bills and other clinical documentation into structured, searchable text. Natural language processing and machine learning applications of A.I. can surface high-likelihood line items, spot trends and get smarter over time to improve auditor efficiency. Automated work processes plus intelligent selection means health plans can use clinical resources like nurses or coders more strategically.

Integrative solutions allow for additional efficiencies and effectiveness, supporting health plans that need to augment internal efforts with vendor activity and claims selection expertise. And a technology-first strategy means the more audits your health plan works, the more cost-effective the process becomes. Unlike a pure outsourced solution, the ROI on a SaaS platform increases over time as health plans insource more work without necessarily increasing resources.

Jumpstart Your Efforts with ClarisHealth

Whether you have limited clinical audit resources and are seeking greater efficiency and claim selection assistance or are starting this program from scratch, ClarisHealth’s SaaS platform Pareo offers hybrid delivery models designed to plug-in at the point of growth for health plans. Pareo Clinical incorporates detection, management, workflow and engagement solutions to give you the ability to aggregate information, automate operational activities, and access expertise. As a result, you can drive greater business optimization.

With Pareo Clinical, health plans can internalize their pre- and post-pay complex audit strategies on an advanced platform that incorporates machine-learning to intelligently surface items worthy of further review. ClarisHealth can provide the analytical expertise to assist your health plan in claim selection as well as provide additional clinical SMEs to augment internal efforts, thereby addressing the limiting factors that have inhibited plan growth in this area.

Pareo Clinical offers an integrated advanced technology platform that empowers health plans in both a pre- and post-pay setting to:

  • Select the appropriate claims to audit
  • Comprehensively track and manage medical records and clinical documentation workflows
  • Integrate audit workflow and inventory management
  • OCR and perform predictive analytics for IBR, DRG and E/M reviews
  • Realize up to a 3x lift in auditor productivity and performance
  • Improve selection analytics to enhance accuracy and reduce provider requests through a platform that continuously learns

As a result, plans can reduce expense by nearly 70% over traditional outsourced arrangements. Much of these enhancements can be initiated in a prepay environment, adding significant value and further reducing cost. And plans can take full control of the clinical documentation process, thus improving the provider experience and ensuring chain of custody for the use of the clinical record across other health plan functional areas.

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