How the Nation’s Largest Publicly Operated Health Plan Doubled Recoveries Within One Year

With: Erik Chase, Senior Director of Claims Payment Integrity

It’s a tough market for health plans. With value-based care directives continually challenging resources, ongoing debates over insurance access, and a demand for transparency, payment integrity has never been more important. Learn how one ClarisHealth client used Pareo® to initiate a payment integrity process in their organization, one that allowed them to double recoveries within their first year.  

About L.A. Care Health Plan

L.A. Care Health Plan is the nation’s largest publicly operated health plan, serving 2 million members through multiple lines of service. They have operated for 20 years, during which time their service lines have grown to include: Medicaid; dual-eligibles; and the healthcare exchange, which includes a delegated model. Within their lines of service, the health plan is directly responsible for about 1 million Medicaid enrollees, 15,000 duals, and 72,000 exchange enrollees while the remaining membership is delegated to L.A. Care’s Plan Partners.

Much of L.A. Care’s growth has occurred in the last few years when the health plan doubled its membership, growing in size from 1 to 2 million. When Erik Chase, director of payment integrity for L.A. Care, joined the health plan in 2017, he saw that the plan’s growth necessitated change within the organization.

“As we continue to grow and experience changes in leadership, we knew that we needed to separate out and create a fully functioning payment integrity department,” explains Chase, whose newly formed department had previously been housed under the claims department.

Client Profile

  • L.A. Care Health Plan, Los Angeles, CA
  • Pareo® client since 2017
  • Challenge
    • Complex payment integrity and claims payments
  • Goals
    • Build a payment integrity function to proactively recover claims overpayments
  • Solution
    • Pareo Total Payment Integrity
  • Department Structure
    • The payment integrity department has 3 verticals: SIU, Waste & Error, and Recovery. Erik Chase is responsible for the Waste & Error and Recovery verticals, with a staff of 15 that report directly to him.

A Solution for Growth

L.A. Care Health Plan needed a solution that would be scalable within their new Payment Integrity department. “Claims payment is not easy. It’s very complex. There’s going to be things that mess up. There’s going to be configuration and IT issues,” says Chase.
The solution that would be right for L.A. Care would have to be one that could recover claims and mitigate improper payments moving forward.

Prior to bringing Chase onboard and forming a separate payment integrity department, the organization had already begun to focus on their recoveries process. However, the organization’s efforts were stymied by lack of a comprehensive solution. According to Chase, L.A. Care’s old payment integrity process “just wasn’t conducive to what we needed to really expand.”

To facilitate growth, the team was interested in bringing several third-party services vendors on board, but they knew that their health plan would need to be able to effectively track overpayments and audits to integrate with vendor efforts.

The health plan considered their options: building a payment integrity solution or buying one. Chase and the team turned to other health plans to find out what solutions they were using for payment integrity. They found that the other plans they spoke with were using “home grown repositories and things of that nature,” says Chase.

As for buying a solution, the team’s initial impression is that there wasn’t much on the market that would suit L.A. Care’s specific payment integrity needs.

The Decision to Buy Pareo®

Chase found the few solutions available on the market tended towards case management repositories that didn’t suit L.A. Care’s needs. As for building a payment integrity solution internally, the health plan has a review board made up of leadership from different departments. At an internal review meeting, when Chase and his team presented their department’s needs assessment, L.A. Care’s IT department realized building a solution wasn’t their best option.

“IT leadership understood how time consuming, resource intensive, and costly it would be to build something internally,” explains Chase. Chase’s departmental needs assessment indicated that the health plan would need to find a solution that could integrate with multiple vendors, capture payment integrity activity, and manage all the data in a centralized hub.

“Fortunately, we came across ClarisHealth and they had the solution,” says Chase.

Chase says that once he found Pareo®, ClarisHealth’s Total Payment Integrity technology platform, the decision was easy. A similar self-built solution “to really get something that has the functionality of Pareo, would have astronomical costs associated with it,” says Chase.

Outsource to insource

With Pareo, L.A. Care can fully scale their payment integrity department, something that is immensely valuable to a health plan focused on growing recoveries. While L.A. Care is actively seeking to grow their internal payment integrity staff, in the interim, Pareo’s vendor management functionality has filled in the gaps and taken a lot of the workload off Chase’s team.

According to Chase, this effect is especially seen in his department’s vendor file submission process and management. “It puts the onus on the vendors to make sure they’re submitting things in the right fashion so we can really focus on just managing overpayments, identifying and approving those, and making sure the dollars come in the door.”

Implementation

L.A. Care purchased Pareo in Q3 of 2017, and implementation took 3-5 months, which was in line with expectations, according to Chase. He explains that much of the implementation time was spent configuring the platform to suit L.A. Care’s needs.

“The ClarisHealth team is very agile,” says Chase. “They know it’s not a one-size-fits-all solution.”

The process began with a kickoff meeting to set expectations and a project plan. Chase credits the ClarisHealth team with being “really effective at keeping L.A. Care on track,” noting that relationships with technology vendors can be the opposite.

Configuring workflows

During implementation, each workflow was configured to the specific needs of L.A. Care’s payment integrity department. These configurations included adjusting what business lines were available to which provider, thus allowing L.A. Care to control the LOBs they want a provider to focus on. ClarisHealth’s team also made customizations to the first- and second-pass data mining vendor data feed integrations.

The most difficult part of implementation? Not fully understanding what the department needed until implementation was underway, says Chase. He says that although it was difficult, ClarisHealth helped L.A. Care define their payment integrity process by identifying elements and best practices that led to improved functionality for the health plan.

Managing the change

In addition, it was crucial that vendor concerns over potential disclosure of proprietary information were addressed early on, says Chase. These concerns were mitigated with the help of ClarisHealth.

Learn how the L.A. Care Health Plan payment integrity team has continued to progress on their goals in season 2 of the Payment Integrity Perspectives podcast.

To navigate staff through implementation, Chase says that leadership was transparent with employees, explaining the vendors they were bringing on and what those vendors would do. This gave his team time to prepare for the changes.

“It’s really very, very efficient for them,” notes Chase who says that while volume has increased, his staff can handle it “because of the efficiency offered by Pareo.”

Pareo in Action – The Results

The most impressive benefit from L.A. Care’s implementation of Pareo has been the health plan’s ability to double recoveries within the first year of their new payment integrity department.

“With the clarity that Pareo has given us, we’re able to track recoveries monthly, and in the first year, we doubled our recoveries from the previous year,” says Chase.

Pareo helped L.A. Care define processes in payment integrity. Staff were able to clearly see responsibilities within the platform itself due to an administrative ability to assign roles and accesses to users, a feature Chase says has been particularly helpful in workflow.

In just the first 6 months after purchasing Pareo, L.A. Care was able to:

  • Report accurately on information
  • Expand their vendor footprint
  • Continue to grow staff
  • Operate the payment integrity department as an internal vendor for the health plan

Chase notes that the support from ClarisHealth has been excellent, and that if something is needed outside their weekly check-ins, the response is prompt.

Real-time metrics

Another game-changer with Pareo has been the ability for L.A. Care to specify vendor oversight, allowing for yearly planning meetings that are data-driven and result in accurate projections, which also can be logged in Pareo and tracked.

“Pareo gives us real-time data that we can use for conversations during monthly reporting to make sure we are tracking towards those goals,” says Chase.

Internal capabilities for the newly-formed payment integrity department have grown tremendously with Pareo. Internal audits are handled through concept creation with the platform. Dollars are tracked relative to a concept, with rules incorporated. Data is run through these custom queries, offered up for review and validation, and then with the push of a button an overpayment letter is generated.

“That’s given us a lot of capability, internally,” says Chase, especially since this process used to be done manually by L.A. Care with a spreadsheet.

Looking forward

Chase’s growing payment integrity department plans to expand their functionalities by incorporating Pareo’s claims detection analytics feature set into their system, which will help them internalize concept generation.

“We’re definitely very satisfied,” says Chase. “Pareo is helping us scale and be a more mature payment integrity department.”

How Can Pareo Help Your Health Plan?

Whether you’re growing a payment integrity from the ground up, or looking to optimize existing payment accuracy processes, Pareo is the industry’s only integrated technology platform for health plans seeking comprehensive access and scalability. Learn more about what we can offer your health plan by contacting us today.

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