Off the shelf, Pareo met the 500 capabilities Blue Cross Blue Shield of Michigan required in order to modernize their payment integrity system. But for them, it was the commitment to innovation and expandable ecosystem that made the case for partnering with ClarisHealth.
- Blue Cross Blue Shield of Michigan
- Headquarters: Detroit, Mich.
- Independent licensee of Blue Cross Blue Shield Association with 4.5 million members
- Pareo client since 2020
- Pareo Supplier Optimization, Pareo Audit, Pareo Blue
- Kimberly Jones-Schneider, Director of Payment Integrity Operations and Recoveries
An assortment of homegrown systems had served Blue Cross Blue Shield of Michigan and their payment accuracy function well for over a decade. But starting in 2017, the organization began to compete on a national scale for increasingly sophisticated employer groups. They knew their payment integrity initiatives offered value. But they also knew there were easier, more reliable methods of demonstrating that value to clients. Learn how they made the business case for Pareo, the technology platform that has yielded success for many Blues plans, and how it will help them reach their goals.
Self-built Systems Bring Challenges
It was 2018 when Kimberly Jones-Schneider began to realize they had a data insights challenge on their hands. The year before, Blue Cross Blue Shield of Michigan started marketing a new bundle of payment accuracy programs to groups of large self-funded employers. To serve these ASO clients, they built a tool to track claims savings and issue invoices accordingly.
As the director of payment integrity operations and recoveries, Jones-Schneider knew they were creating value for their clients – throughout payment integrity, not just enhanced programs. But by reporting only on the enhanced services, they were limiting the total value to their customers.
The customer invoicing accuracy aspect was the number one priority, so that’s where they started. To assure the accuracy of the invoicing, BCBSM audited their applications.
“You never want to have issues with data when you’re invoicing a customer,” says Jones-Schneider. “To be objective, we had an outside firm evaluate the applications we were using, and they identified 25 applications that were outdated and needed to be re-built.”
With the state of their technology systems proving to be a key barrier to their competitiveness, BCBSM began the process of exploring an updated technology ecosystem.
Over the previous 11 years, BCBSM had worked with various IT contractors to build applications to manage claims, identify opportunities and support workflows. They were nominally connected to each other but beginning to show their age. And the demands on these solutions were only increasing.
Serving ASO clients
In recent years, ASO group clients have become savvier about payment integrity. Charged with reducing their healthcare costs, they wanted to know specifics around how BCBSM was generating claim savings, program by program.
“In the past, they might have asked questions around what we are doing for provider audit, subrogation and fraud, along with our payment accuracy rate,” relates Jones-Schneider. “Now, they want to know, in detail, about our strategy, our services suppliers, our current and planned programs, our total savings rate, savings by program, in-state versus out of state audits, and more.
“Our coordination of benefits, internal data mining, provider audit, fraud waste and abuse and other individual programs were yielding savings,” emphasizes Jones-Schneider. “But because they are relatively disconnected, it’s difficult to communicate the totality of that value story.”
At the same time, BCBSM wanted to optimize their payment integrity program by gaining keener insights into how different concepts were performing. Jones-Schneider knew that with the right technology, they could more proactively identify opportunities and move savings upstream.
Prospective cost avoidance holds valuable savings for health plans, but it also relies on fast access to accurate information. The legacy systems in place meant it was taking too long to get the data that would enable the plan to “lift and shift” savings.
“We even worked toward enterprise reporting over the last year teaming up with all of the functional areas across all three lines of business, getting their reports and merging them together,” says Jones-Schneider. “But because it’s still largely a manual effort and not real-time data, it was a challenge to provide a complete picture of all the value across the enterprise – and deliver at scale, if needed – down to the group level.”
Altogether, BCBSM knew it was time to address the gaps in their technology systems – and secure their competitive advantage in the process.
3 Goals for an Enterprise Payment Integrity Technology Platform
To ensure the organization was set up for success with current identified needs as well as anticipated future growth, BCBSM developed a list of 500 capabilities a new payment integrity solution would need to accommodate. These capabilities center around three major goals.
1. Streamline vendors and take more ownership
Like many health plans, BCBSM has long relied on outsourcing claims identification and recovery as a key part of its payment integrity initiatives. However, using three different tools to manage these relationships created burdensome manual work that prevented her team from gaining the insights they needed to take inventory of their supplier strategy. And as the industry evolved, Jones-Schneider began to sense that the supplier industry had stagnated. BCBSM was interested in gaining more control of their claims processes as a key value driver.
“Some services supplier relationships aren’t structured to offer maximum value to the health plan,” shares Jones-Schneider. “We want to be able to see the audits that are hitting the same type of claims, the same providers over and over again so we can move those prepay, initiate provider education, or otherwise save on contingency fees.”
As BCBSM further develops their internal expertise, insights into vendor and analytics performance will ensure they structure their cost-containment programs for maximum savings potential.
2. Enact more prospective cost avoidance
BCBSM has targeted moving toward more payment error prevention, but hardcoding changes in their primary claims editor can be extremely expensive. One edit they pursued in the past, for example, cost over $900,000. A solution that will accommodate prospective cost avoidance through edits they own and develop, timely workflows and supplier tools is essential.
“The closer we can get to intervention at the provider level, the better off we’re going to be. We’re looking for low-cost options to change behavior, and to utilize the technology that the suppliers we’ve decided to partner with have,” says Jones-Schneider. “But we want to get to the point where we can use technology to learn from what’s happening in post-pay, create our own prepay edits and save even more money.”
3. Prove value on a national scale to better compete
BCBSM is in a unique position among state health plans where its affiliation with other independent Blues plans allows it to serve employers with a national presence. To continue to serve this motivated segment of the market to a high degree, their chosen payment integrity solution needs to help them operationalize national-level reporting. This reporting also must allow them to set benchmarks for savings and gauge their performance against those.
“We want to know that every time we touch a claim, that effort translates to value,” explains Jones-Schneider. “Depending on outdated data extracts is not enough.”
Finding a Solution and Setting up for Success
Because BCBSM was already operating with applications they had built on their own, they first looked to their IT and application management functions. But they discovered rebuilding and otherwise modernizing their existing solutions with internal resources would take at least a year.
“We couldn’t discount the hard and soft costs associated with building on our own,” says Jones-Schneider. “The time to build, the need to keep updating, and the constant administrative upkeep was a risk we didn’t want to take.”
Working with ClarisHealth
With this realization in mind, they turned to ClarisHealth. They first encountered ClarisHealth in 2018. Since that time, even more of their fellow Blues plans had found success with the Pareo technology platform.
“ClarisHealth, off the shelf with Pareo, had already developed most of the 500 capabilities we had identified,” says Jones-Schneider. “And because of their structure, we would have access to constant innovation that evolves ahead of our growing needs.”
Once the decision was made to adopt an external technology solution, BCBSM worked to ensure all of their processes were in place to ensure a smooth implementation. They identified every function related to payment integrity and reviewed every program, their data sources and how they were calculating value. According to Jones-Schneider, laying this groundwork can be time intensive but is worth the effort.
“We wanted to make sure we could take full advantage of the Pareo platform. So, we did a lot of work up front to validate data and where value is coming from. Working together internally toward this project for so long – and then with ClarisHealth – created a fundamental understanding that allowed us to move faster in the end.”
Even before signing the contract, BCBSM worked with ClarisHealth as an innovation partner to develop a technology solution to operationalize home and host revenue optimization and national reporting for ASO customers among the Blues plans. That project furthered the relationship between the two organizations.
“The teams have really collaborated, and there’s been a lot of knowledge sharing,” shares Jones-Schneider. “We were well prepared and speaking the same language, which lessens the frustration that can accompany a major technology implementation.”
Replacing 25 systems takes time, and the ClarisHealth team has been working with BCBSM to automate formerly manual processes. BCBSM is looking forward to the near future with Pareo in place when they can take advantage timely and efficient access to data.
Real-time dashboards will ensure anyone in the organization who needs insights will have those at their fingertips. Without having to wait for monthly or quarterly reports, they can act on trends and opportunities as they happen. They also can answer questions and articulate precise value to their clients, while drill-down information provides trust in the numbers.
As Jones-Schneider says, “The faster we can be up and running with Pareo, the better off we’re going to be.”
Harnessing the value of Pareo
In addition to confidence in the data, Pareo Supplier Optimization and Pareo Audit will allow third-party vendors and internal auditors both to work more efficiently on creating savings. And Pareo Blue will allow them to coordinate seamlessly with other Blues plans on home and host savings and ensure payment integrity parity so they can compete strongly for national account business.
“Being able to articulate national value is important,” says Jones-Schneider. “Knowing all Blues plans are on the same page by calculating and aligning on a shared definition of value will provide insights that make us all stronger.”
Fully implementing Pareo will be the culmination of years of work and planning for BCBSM. But it’s also in some ways only the beginning, according to Jones-Schneider.
“Today, we have an internal team that looks for opportunity. And right now, with so much going on, spending your time trying to find a needle in a haystack may not be the right prioritization. But next year, with Pareo, those opportunities will be much clearer, and they’ll be able to make those recommendations more easily.”
These insights also will pave the way for making the business case for increasing the skills of internal staff members to include more coding, claims adjudication and pricing expertise. As a result, they’ll be able to own even more of the payment integrity function and associated savings.
“So much opportunity is on the horizon,” concludes Jones-Schneider. “The next year is going to be really exciting.”