Why Payment Integrity’s Black Box Problem Is Getting Worse, Not Better

New podcast episode: Payers often think adding more vendors is the answer, but without visibility into the entire program, the benefits can be minimal.

Michael Axt knows payment integrity from both sides of the table. Before coming to ClarisHealth as its new CEO in April, he spent years building a career on the vendor side, leading strategy at Cotiviti and spearheading product innovation initiatives at Zelis.

One problem he’s noticed: many payers think more vendors automatically equals more coverage. But a more fragmented solutions stack can actually prevent them from identifying and taking advantage of opportunities for cost savings and maximizing value.

“Just adding more vendors without effective management and visibility really runs the risk of overspending on duplicative findings . . . and it can result in a lot of provider abrasion.”

— Michael Axt, CEO of ClarisHealth

Michael talked about the pitfalls of relying solely on vendors for reporting and analytics, how to optimize the PI technology stack, and the importance of trust between payers and providers on a recent podcast episode with Fierce Healthcare. These are some of his key insights into the state of PI today.

More vendors don’t automatically result in more savings

Whether a payer has a small stack of specialized vendors or has gone all-in on third-party support with solutions, the reporting from each is often limited, and payers must pull reports together manually.

If health plans can’t manage those vendors effectively, draw meaningful insights from analytics, and act on them, it doesn’t matter if they’ve invested in best-of-breed solutions — they won’t be able to unlock the full scope of savings opportunities.

“It feels like a bit of a black box. So when you just stack more of those together, it doesn’t necessarily help — it creates more opacity to the total program.”

Payers are still relying on spreadsheets and multiple dashboards

Michael notes that managing each solution, vendor, and team separately results in a disconnected, siloed perspective. Without a tool to stitch them together into a single comprehensive view, payers lack full visibility into their program, including opportunities for strategic cost management. Nor can they efficiently coordinate communications and requests with providers to reduce abrasion and improve their experience.

At the same time, providers have moved much faster to integrate AI into revenue cycle management than payers have into claims and payment accuracy, adding to the financial squeeze on payers.

“There are teams out there that are still using spreadsheets to manage these complex programs. And these are programs that are processing billions of dollars in spend.”

A vendor-agnostic platform not only simplifies operations but also supports optimization, clarity, and confidence by providing the ability to view analytics directly, without the risk of vendor bias.

“It’s hard to trust that decisioning support if it’s coming from one of the vendors who has a vested interest in seeing more claims flow through them,” says Michael.

A way to relieve provider abrasion

Michael acknowledges a longtime tension between payers and providers stemming from ongoing financial pressures, but he emphasizes that both sides want to deliver high-value care and compensate providers appropriately.

Finding common ground is especially critical as payers increasingly focus on identifying opportunities for savings, which he characterizes as “not necessarily getting more aggressive, but in some ways getting more thoughtful and also more analytically based, so you can make determinations as a payer right the first time.” The shift to prepay, facilitated by AI, can further reduce friction.

Ultimately, he says, reducing costs and improving affordability requires “protecting the value of every dollar,” with less of it spent on waste, errors, or administrative overhead. “Paying the claims accurately and paying for the care intended is in everyone’s best interest,” he says.

A future of full visibility

In the near term, Michael sees platforms like Pareo expanding into additional cost management categories like utilization management, risk adjustment, and out-of-network services. Five years from now, he envisions PI becoming even more advanced, with payers able to see touch points and analytics across the full spectrum and scope of the claim life cycle — how decisions were made, impacted each other, and led to the outcome, rather than as a series of disconnected steps.

“One can get excited about a version where you have a platform and a system where all of this is viewed as one seamless continuum,” he says. “Streamlining that process, the feedback loop that could be generated with that type of full continuing view, I think is just incredible.”

Learn more about Michael’s perspective and predictions about payment integrity by listening to the full podcast episode: