Reviewing the drivers, restraints, challenges and opportunities for healthcare payer technology in 2022.
A year ago, as 2020 turned to 2021, we were looking forward to a fresh new year filled with promise. Vaccines, official work-from-anywhere policies — including the office — and the prospect of getting “back to normal.” Reality has differed somewhat from these expectations, but those organizations that kept pace with healthcare payer technology trends and kept focus on mission and long-term strategy continued to weather the uncertainty and even thrive. In fact, 2021 made another strong case for health plans succeeding with technology.
If your health plan felt less prepared, you may have increased the intensity of your strategic planning efforts to ensure your organization is on the right track. To that end, let’s explore the industry drivers, restraints, challenges and opportunities impacting these strategies as we kick off 2022.
Drivers: Top Motivators for Health Plans in 2022
As in 2020, in 2021 the novel coronavirus pandemic dominated healthcare headlines and responses. It stands to have an outsized impact on the industry for years to come. And even as we shift to long-term endemic approaches, the need for innovative solutions continues to accelerate.
Because COVID-19 so efficiently highlighted known gaps in the healthcare system – including how far behind many stakeholders are digitally – it is the source of the primary drivers for healthcare payer technology. Health plans must take care of these imminently or risk falling even further behind.
Calls for increased transparency
In the past, we predicted that “health organizations will need to make real upgrades in technology if they haven’t already, or face issues meeting government regulations.” Recently, two rules and one law brought this prediction to the forefront. Though the pandemic delayed compliance, 2022 will see these in action.
First, the rules against information blocking emphasize the need for greater healthcare data interoperability. CMS remains committed to this initiative and published several updates as health plans continue to push for increased data sharing. Improvements in care quality and decision-making and progress on value-based care programs should result.
In addition, CMS has ramped up enforcement of the price transparency rule. The number of items, medications, procedures and services that must be clearly listed with prices continues to expand in the name of patient safety and quality care. A “shoppable” experience for consumers presumably will follow.
Finally, the No Surprises Act took effect on January 1. It is aimed at mitigating the effects of surprise medical bills consumers receive when they inadvertently receive care from out-of-network providers. As a result, payers and providers must coordinate prior to the patient billing process, identify bills protected by the NSA and proactively communicate with affected consumers. It could affect 10 million insurance claims annually.
The ultimate goal of technology is to break down barriers and allow information to empower a better healthcare system. Health plans have realized advanced technology is only as good as the data that fuels it. With interoperability, data accessibility and transparency as a focus, health plans will naturally evolve to start questioning any process within their organization that inhibits information sharing.
“Health plans that are able to adapt to changing trends are far better positioned for long-term success.” FierceHealthcare
Improving data accessibility extends to internal operations at payers as well. The modern work-from-anywhere environment has arrived. The technology that supports it must follow. Health plans have adapted to the “do more with less” credo that pervades most industries, but manual and labor-intensive processes only contribute to the administrative burden. This gap proves even more costly in a tight labor market where skilled workers demand more seamless workflows and greater overall job satisfaction.
By adopting integrative technology platforms, health plans can eliminate data silos and improve collaboration and oversight. As payers start to experience the big picture benefits of advanced technology, organizations will be able to work towards becoming more proactive and less reactive.
Changes in membership mix
Health plans have started to experience shifts in their lines of business. This era has brought an influx of members into Medicare Advantage and Medicaid and record enrollment in ACA plans. While commercial, employer-sponsored plans remain the norm, how consumers think about healthcare coverage has changed for good.
Members are tasked with owning their own healthcare experience and expect the relationship with their health payer to be frictionless and intuitive. Not meeting consumer demand will open payers up to disruption. But if health plans make technology decisions with their eye firmly on the member, they also will find numerous opportunities to improve payment accuracy.
Changing competitive landscape
Increasing consolidation among health systems and payers also is motivating health plans to innovate. They understand that relying on legacy technology and paper-intensive processes minimizes the ability to scale. Health plans are taking steps now to upgrade their position.
And not a moment too soon. The long-predicted disruption to healthcare has arrived as top retailers have become major players in the industry. In an increasingly consumer-driven environment, demonstrating value to members and employers is key. Payers with a tech-first mindset – and the ecosystem to match – will have the strategic advantage in these situations.
At the same time, health plans will see more technology vendors looking to leverage experience with other industries into similar successes in the healthcare sector. Technology can help rapidly improve ROI on the claims overpayment prevention and recovery process. But health plans will need to shrewdly evaluate these solutions to ensure a good fit.
Restraints: Navigating the Roadblocks Health Plans Face
Health plans have long known the advantages of advanced healthcare payer technology. But the usual suspects continue to block progress. Slim margins, data security concerns and shortages in skilled workers could prevent health plans from making headway on their goals this year.
Uncertain medical loss ratios
The uncertainty around how the ongoing pandemic will affect medical loss ratios has some health plans putting strategic technology investments on hold. Profits and operating margins at insurers go up and down, quarter by quarter, leading to conservative financial outlooks. Combined with the historic struggles to efficiently and effectively transition to digital processes, taking on new technology projects may feel too risky in the short-term. But the status quo may prove even more risky.
Health plans can overcome this perceived risk by seeking out solutions that surface quick wins and set them up for long-term advantages. Look for speed to value. Enterprise healthcare payer technology that is easy to implement, builds empathy with stakeholders, improves efficiency and reduces team frustration will pay dividends.
Concerns about data security
Dealing with large amounts of patient data makes health plans a prime target for security breaches. And the entire industry trying to quickly integrate numerous data sources has the potential to create vulnerabilities in the system. But health plans moving too slowly with technology adoption can lead to irreparable harm as well.
Current manual approaches to PHI – locally stored data, desktop applications, paper faxes, etc. – are even more vulnerable than secure digital processes. Modern technology, on the other hand, can grant you more control. It allows you to be more granular when granting access to PHI, for one. It also creates a digital log of access. For even greater peace of mind, seek out HIPAA-compliant technology vendors that pursue HITRUST CSF and SOC 2 certifications.
Unexpected costs of outsourcing
Consolidation abounds in the payment integrity services vendor industry as well. For some services, this trend means payers may have only one or two vendor choices available to them. Reduced innovation and rate negotiation capabilities may result. However, health plans already had identified internalization strategies as an area of opportunity to counter unpredictable costs associated with outsourcing. And technology advances make it more practical to conduct complex audits — including IBR, DRG, E/M reviews and more — internally without adding additional skilled staff or reducing effectiveness.
A strategic combination of insourcing and outsourcing activity based on health plan core competencies will optimize spend. A partner and technology that allows you the flexibility to decide – service by service – whether to outsource or insource based on your cost-benefit analysis will better poise your health plan to scale effectively.
Challenges: Factors for 2022
Internal restraints aren’t the only barrier to success with healthcare payer technology. Let’s look at the broader industry factors that could challenge health plans in 2022.
At the beginning of the pandemic, providers bore the brunt of the financial burden. The nature of their burden has shifted more to an overall stress on their workforce, but their survival is still at risk. Healthcare payer technology strategies will need to support this valuable group. Without a broad network of providers, health plans will find it difficult to advance on engaging members and lowering healthcare costs. Health plans that use technology to focus on this relationship can overcome this challenge. Consider solutions that ease providers’ claims payment administrative burden and support real-time communication.
Barriers to adoption of risk-based models
Those providers participating in alternative payment models better navigate industry disruption than their fee-for-service counterparts. They also are more likely to pursue population health improvements that stand to keep their patients healthier. As a result, a recent survey found that health systems are increasingly open to risk-based arrangements. But significant partnership, data integrity, reporting and technology barriers persist.
Health plans can support providers in this transition with healthcare payer technology that overcomes trust and abrasion issues. Increase data transparency so both sides of the relationship are working from the same playbook. Come to agreement on interpretations of value and quality. And measure everything: clinical quality, consumer experience, return on investment, and more. Then share those data insights and work together on continuous improvements and innovations.
“Fifty percent of health system respondents pointed to strategic partnerships with payers as their top external challenge to transitioning to risk-based payment strategies.” Fierce Healthcare
Changing political landscape
A new administration took office last year, including new leaders at government healthcare agencies. Stabilizing the coronavirus response, expanding healthcare coverage and addressing the consumer cost burden continue to feature on the agenda, which most healthcare stakeholders should welcome. Whether or not additional legislation will pass or market changes will be introduced is currently unknown. But agile, tech-forward health plans will be positioned to succeed no matter what happens on this front.
Opportunities: Chances to Excel with Healthcare Payer Technology
While challenges abound in an uncertain healthcare environment, so does opportunity. Changing member behavior, motivated employer clients, technology advancements and cross-functional collaboration offer health plans the chance to succeed with their digital transformation goals.
Members open to engagement
The past two years have opened up new and unexpected avenues for member engagement. People want to hear more from those responsible for their care. They have embraced home health and telehealth. And they have welcomed technology overall into their healthcare unlike ever before. At the same time, the consumer healthcare cost burden is set to hit over $491 billion and maintain an annual growth rate of 10% per year for the next five years. How can health plans proactively maneuver through this dynamic?
Payers have caught on to the fact that providing improved member services is a differentiator in a consumer-driven market. By offering convenience and addressing social determinants of health, plans can offer broader benefits with perceived higher values while lowering costs. CMS has made it easier for health plans to offer supplemental benefits, another incentive for offering them. With health plans expanding coverage in this area, digital health adoption will continue to grow.
“Leveraging the power of your lifestyle and combining it with research and technology will enable people to take full control in their health journey. With the cost of healthcare rising, providing tools to prevent or reverse diseases that could be costly for patients and the system is a win-win.” Health plan Chief Innovation Officer
Employer clients embrace payment integrity
A record number of employees are covered by self-funded plans — 64% in 2021. Moreover, it’s estimated that self-insured employer groups make up 70-80% of commercial health plan business. With employers across the board reporting elevated healthcare costs, and hesitating to pass on these increases to employees, payers have a significant opportunity to excel.
These customers are increasingly focused on savings opportunities, including payment accuracy programs. Payers that can provide greater visibility into payment integrity value are better positioned to offer uniquely competitive products and programs to this highly desirable client base.
Advancements in technology
Technology advancements continue, as API standards are enacted and artificial intelligence capabilities improve. Plans can leverage the mountains of data they collect through improved data analytics technology, reducing time to reports and empowering real-time decision making. And these advances have arrived just in time. Through secure integrations, data sharing could be a hurdle that health plans finally surpass.
Health plans will have to overcome learning curves, fear of change and other internal challenges as they select solutions and look for increased returns. The vast majority will look to outside vendors to cover these gaps. But integrative technology platforms are more commonplace, and predictable costs will make these burdens easier to bear. Off-the-shelf solutions that are easily configurable will prove more cost-effective than custom-built technology.
Modernizing the SIU
Expansion of digital healthcare may prompt more incidents of improper payments and bad actors. But A.I. also has pushed forward opportunities to proactively combat fraud, waste and abuse. By going deeper and wider into the data to push likely leads to you, new schemes won’t pass you by. This improved technology can better integrate the SIU with overall payment integrity as well.
Traditionally a siloed function at health plans, innovative SIU leaders have latched onto the potential of advanced anti-FWA solutions to make needed changes to their business models. No longer content to wait for leads, they are working with payment integrity counterparts, identifying prevention opportunities and realizing impressive ROI in the process.
These cognitive collaboration capabilities are available to all health plans if they utilize the right technology solutions. Empowering users to break down barriers within their organization will drive efficiencies and advancements along the payment integrity continuum.
Partner to Make 2022 the Best Year Yet
Health plans can stay ahead of the curve by making strategic investments in change, particularly surrounding transparency. Integrative technology and shifts in payment accuracy approaches will allow payers to continue to gain ground and focus on proactive efforts, particularly when it comes to claims recovery and payment integrity.
Extending your competitive advantage transcends trends. Fortunately, a comprehensive technology platform like Pareo allows health plans to scale and improve processes, harness the power of A.I., increase medical savings, and accelerate ROI. Talk to ClarisHealth about how Pareo can keep you a step ahead of healthcare payer technology trends – no matter what the future brings.
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