Payment integrity is rapidly elevating in significance at health plans coinciding with technological innovation. If leaders can take advantage of the marriage of the two, greater transparency around payment accuracy and elevated value can result in this new normal.
Payment integrity as a niche industry has existed for nearly 25 years, making a significant impact in the healthcare space in that time. Once considered “found revenue,” payment integrity is now an essential aspect of health plan operations. The evolution is seen by the shift of payment integrity from a single department to a large-scale strategy that involves many key aspects. Areas such as contractual compliance, prepay and post-pay claims auditing, coordination of benefits (COB), and fraud mitigation just to name a few – all growing in importance.
Healthcare payers stand at a crossroad in the journey to a payment integrity new normal. How will they scale their overpayment avoidance efforts in an era of technology enablement and stakeholder engagement?
On the one hand are barriers that historically have prevented them from reaping the full benefits of such a function, including:
- Data shortfalls
- Siloed operational dynamics
- Compliance mandates
- Constantly changing and increasingly complex coding guidelines
- Outdated technology and processes
- Dependence on resource-intensive structures
On the other hand is tremendous opportunity as payment integrity takes the spotlight for its potential to deliver value across health payer operations — all while enhancing, rather than eroding, delicate provider network relationships.
Let’s explore what trends are driving this change, how technology innovations are accommodating, and how they combine to affect the future of payment integrity.
Market Factors Driving Change
There are many factors that play into why the industry is shifting, but it all boils down to innovation. Health plans are seeking efficiency gains and more effective processes. And manual, resource-stretched operations are simply not enough to keep up with the fast-paced changes that the industry is facing.
Many health plans have long relied on outsourcing claims overpayment identification and recovery. These third-party vendors provide valuable and much needed subject-matter expertise and staffing. But many vendors operate on contingency models where financial incentives may not align with the increasing pressure health plans face to transform old models of doing business to minimize the administrative burden on providers.
And recent trends of vendor consolidation may necessitate a change in strategy – one that takes greater control over these programs and considers internalizing key payment integrity efforts. But the lack of strong, in-house subject-matter expertise, highly specialized workflow technology and robust analytics could be holding plans back from achieving this goal.
To fill these gaps and optimize control of these critical functions, plans have begun adopting an outsource-to-insource approach, enabling them to insource part of their auditing work, and outsource the aspects the plan cannot facilitate. Equipped with analytics and IP in the claim selection process, plans can efficiently identify and work claims internally – saving money on contingency fees and rationalizing the outsourced piece to harness unique subject matter expertise and augment internal resources.
This hybrid approach allows health plans to address the limiting factors that have long-prevented internalizing auditing processes while mitigating the risks of vendor consolidation.
Increased Health Plan Awareness of the Value of Payment Integrity
In an ongoing effort to manage costs and operating margins, health plans have integrated payment integrity as a critical function, seeking opportunities to reduce claims overpayments and associated administrative costs by millions of dollars annually.
Effective and efficient claims auditing is a highly complicated process. Health plans face the need to spend more money and resources recovering more and more overpayments. According to COB Smart, “payment integrity is worth $362 billion to the healthcare industry as a whole, in medical cost savings and decreased overpayments.”
Forward-thinking plans have realized that there is a greater payoff when focusing efforts on prepay cost avoidance, as opposed to recovery. Implementing a payment integrity strategy that prioritizes proactive cost-containment not only puts plans ahead of the easy-to-do-business-with curve, but also presents the opportunity to improve monetary returns beyond industry averages. Ultimately, it becomes a win-win strategy.
As payment integrity complexity has increased, regulatory pitfalls have intensified. Data privacy and security laws, along with data interoperability mandates, have health plans seeking solutions that are HIPAA compliant, tech-forward and reduce administrative burden to maintain patient privacy and ensure provider and member satisfaction.
With many in the industry trying to keep up with the pace of change, quick integration of numerous data sources has the potential to create vulnerabilities in the system. On the other hand, some health plans are moving too slowly with technology adoption that could lead to irreversible harm.
Those organizations still utilizing outdated approaches to protected health information (PHI) – such as paper faxes and locally stored data – are particularly vulnerable. The time is now to find a solution that complies with government regulations and ensures the safety of valuable information.
Self-funded employer groups are increasingly demanding robust and tailored payment integrity initiatives because healthcare costs are one of their biggest budget line items. As a result, health plans have placed greater emphasis on exceeding performance expectations for ASO group clients by paying claims at a high accuracy rate and keeping costs at a reasonable level.
But payers must go beyond performance expectations and fully demonstrate their capabilities and efficiency by being more transparent with clients. That’s why many are looking to increase visibility around data, providing ASO groups access to real-time information on performance and accuracy rates. By having a solution in place, information can be easily shared with these groups, and health plans can further strengthen relationships and trust.
Technology Innovation on the Rise
Looking at the market factors that are driving change, we can see that innovative solutions are needed to keep up with the complexity. And in most cases, technology holds the key.
Platform Integration to Improve Efficiency and Effectiveness
Technology solutions themselves are not a new entrant in payment integrity. However, the way they are currently deployed means some health plans are inefficient and missing out on cost-savings opportunities. These solutions have become siloed, creating tension between departments, as well as internal and third-party resources, due to lack of communication.
We regularly hear from health plans about limitations that prevent them from optimizing their payment integrity operations:
- Legacy, aging systems that are too complex to update and too expensive to support
- Lack of insights into the claim lifecycle – that have been exacerbated by the pandemic
- Over-dependence on vendors for staffing and subject-matter expertise
- Balancing cost recovery incentives with provider network net promoter scores
But luckily, these barriers can be remedied by having an integrative technology platform in place. Creating a unified information stream provides full transparency and visibility into cost containment efforts. Disconnected functions can achieve alignment on current and future goals while reducing unnecessary burden on providers, members and vendors. Payers can confidently take on vendors for additional resources and expertise without adding to administrative lift.
Breaking down silos and offering consolidated insights supports payers in becoming more strategic about payment integrity.
Artificial Intelligence and Advanced Capabilities
In the vein of technology innovation, it’s important to consider advanced capabilities, such as artificial intelligence, for their ability to transform health plan operations. Though it may pose a shift from traditional processes, its rapid uptake by the industry means it will play an outsized role into the future.
We have already seen how applications of A.I. provide health plans with the ability to:
- Process large volumes of disparate data, make connections, and derive actionable insights
- Identify behavior-based patterns and detect outliers
- Detect fraud schemes and gather evidence
- Share information between teams
- Reduce provider abrasion
With these benefits, A.I. has proven to be a large contributor of practical value to cost-containment programs – across multiple functions:
To enhance the value of information exchanged between fraud and payment integrity, A.I. has developed into a true solution. With deep learning capabilities, payment integrity and the SIU can gain greater visibility into which providers have been flagged, different trends in provider behavior, and who to exclude from audits if they are under investigation.
Claims selection for clinical validation uses machine learning capabilities to select claims for reviews based on clinical rationale, while OCR technology quickly scans bills and puts that information on a digital interface.
Adopting new processes can be a daunting task. But ultimately, a technology solution that is powered by A.I. makes the most of limited resources, providing rationale and details to support decisions made by healthcare leaders accurately and efficiently.