Payers Reduce Administrative Costs by Going Back to Basics with Payment Integrity

Jun 6, 2023

In the face of economic and hiring constraints, payment integrity leaders are prioritizing these 4 best practices to shift to an enterprise strategy that offers proven value.

How can a strong payment integrity foundation reduce administrative spend?

Health plan leaders acknowledge that challenges abound in meeting payment accuracy goals. Communication with providers, aging technology solutions, industry mandates, siloed data, hiring challenges, and budget constraints all present hurdles. At the same time, payment integrity is still rising in organizational strategies.

In this environment, payers are prioritizing best practices on proven standards that guarantee a return on investment. They’re going back to basics — and finding real value in the process.

Here are the top four best practices payment integrity leaders are focusing on to strengthen their programs and strategies.

1. Quantify the value of outsourcing to support strategic goals

Outsourcing claims overpayment reviews and audits to third-party vendors is a common approach payers take to manage payment integrity. On average, payers use two to seven vendors to help cover their programs. But, at an average IT cost of $250k per vendor, this strategy may prove inflexible in the face of concerns around administrative costs. On top of this, running an array of vendors creates too much manual work to chase valuable insights.

Many payers are finding that using technology to right-size these vendor relationships offers more value for both sides:

  1. Standardized data integration can lower the cost of vendor implementation and onboarding.
  2. Integrating these vendors with the help of a payer-controlled technology platform offers a near real-time and longitudinal view into performance metrics representing true efficacy.

From there, payment integrity leaders can use the information generated by more traditional recovery efforts to surface trends and overpayment traits that are prime to shift to prepay and/or insource. Instead of finding the same recoveries over and over again, they position vendors more strategically as outsourced R&D and specialized experts.

2. Maximize recoveries to support a shift to prepay

Most payers continue to goal toward a model of primarily prospective cost avoidance. And with good reason. According to a recent industry report:

“Prospective payment integrity decreases administrative burden for both payers and providers by significantly improving the accuracy of the initial claims determination and payment.”

But there are two things to keep in mind with this goal. The first is, due to timing and complexity, a certain percentage of overpayments always will be recovered retrospectively. The second is, comprehensive post-pay recovery forms the foundation of accurate prepay programs.

Consider the use of predictive analytics to generate prepay concepts. This technology relies on compiling historical results to improve precision. By ensuring all areas of payment integrity are covered — coordination of benefits, data mining, medical record review, contract compliance, and fraud and abuse detection — a more complete picture of post-pay activity emerges. And a thorough post-pay strategy that produces aggregated insights also helps leaders further evaluate provider claim submissions for education opportunities.

This coordinated root cause resolution effort not only leads to prepay savings, it gives payers an opportunity to optimize costs by revealing areas of their post-pay program that could be shifted internal.

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3. Reduce manual-heavy processes to support insourcing

Insourcing claims overpayment audits can lead to significant cost savings — as much as 70% over outsourcing. Efficient insourcing strategies require three assets: analytics content, staff expertise, and scalable technology. Requirements that can be a real challenge for payers that want to optimize costs:

  • Complexity in medical billing and policies leads to constant changes and a need to keep ahead with new ideas.
  • The specialized resources that drive internal programs are difficult to source and expensive. Meaning payment integrity organizations can’t simply hire their way to greater effectiveness. Manual, repetitive processes monopolize the time and focus of the experts that are on staff.
  • Payment integrity technology stacks today are often fragmented, aging and costly to maintain. Many teams have normalized logging in and out of five or more systems daily (including vendor portals) with few documented processes to support them.

Automating workflows to create efficient, dynamic processes and integrating siloed tools to reduce context switching can offer hard — and soft — benefits to payers. The benefits can include increasing claims throughput, increasing overpayment identification and recoveries, improving staff productivity, and increasing staff morale by enabling them to focus on more meaningful work.

This automation and related efficiencies can yield a 50% cost savings. With the right talent — and IT infrastructure to maximize auditor productivity and accuracy — payment integrity organizations can make the most of internal resources.

4. Eliminate information silos to support data interoperability

In theory, key departments such as Claims Operations, Provider Audit, SIU and Network Management integrate harmoniously with Payment Integrity. They have the same goal, after all: pay claims right the first time.

In reality, the division of tasks, technology, data, goals, incentives and budgets across multiple departments perpetuates misalignment. And the competing IT priorities and resources swiftly leads to inefficiency, often in the form of information silos.

In an enterprise view of payment integrity, on the other hand, a shared view of information supports shared goals. This integrated approach is best achieved with a comprehensive technology platform.

Unifying the people, processes, and data powering claims payment accuracy onto a single platform builds a payment integrity operating system that allows payers to drive value at scale. Visibility into the entire claim lifecycle — from edits to prepay, to insourced and outsourced recovery, all the way to appeals and disputes — can generate program analytics that fuel transformation. The result? Industry-leading ROI and reduced administrative costs.


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Looking Ahead

Payers that double-down on these basic payment integrity competencies are driving an industry shift toward payment accuracy. And they’re doing it by creating an environment of prevention through continuous improvement and proactive engagement. The future may be unknown, but payers that employ an enterprise payment integrity strategy enabled by technology aim to be ready.

Source: Originally published at Fierce Health Payer


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