Frequently Asked Questions
INDUSTRY CONTEXT
What is payment integrity in healthcare?
Payment integrity is a comprehensive discipline within health plan operations. It encompasses:
- Prepay review: Catching billing errors and overpayments before a claim is paid
- Post-pay audit: Identifying and recovering overpayments after the fact
- Coordination of Benefits (COB): Determining which payer is primary when a member has multiple plans
- Fraud, Waste & Abuse (FWA) detection: Using analytics to identify patterns of improper billing
- Subrogation: Recovering costs when a third party is liable
- Vendor and appeals management: Overseeing the full ecosystem of PI programs
TL;DR: Payment integrity = the full system health plans use to prevent and recover improper payments across the claims lifecycle.
Why is payment integrity important for health plans?
Payment integrity is one of the highest-leverage cost containment levers available to health plans. Done well, it prevents overpayments before they occur, recovers funds after the fact, and provides the data needed to fix root-cause billing problems — directly protecting the plan’s medical savings.
Health plans that treat payment integrity as a strategic function — not just a compliance checkbox — see compounding returns. A centralized PI function can coordinate across Coordination of Benefits, FWA, Appeals, Subrogation, Provider Communications, and Vendor Management to eliminate duplicated effort and uncover systemic issues that point-solution vendors miss.
Without enterprise-level visibility, plans face a recurring “pay-and-chase” cycle: paying claims, auditing post-payment, and chasing refunds. Each cycle creates administrative costs and strains provider relationships. Moving more activity to prepay, supported by advanced analytics, breaks that cycle.
TL;DR: Payment integrity directly improves a health plan’s medical savings — and when run strategically, prevents overpayments rather than just recovering them.
What payment integrity gaps exist at most health plans today?
The most common gaps are fragmented systems that can’t share data across internal and vendor-managed audits, limited analytics capabilities that rely on manual review, and the absence of a unified workflow for tracking claims from identification through recovery — resulting in duplicate work, missed opportunities, and poor vendor accountability.
In consultations with health plans, ClarisHealth consistently finds four recurring gaps:
- Coordination failures: Internal and third-party audit work isn’t reconciled, leading to duplicate claim reviews and conflicting results.
- Analytics limitations: IT resource constraints prevent plans from building internal predictive modeling capabilities.
- Vendor accountability gaps: Goals aren’t clearly set or tracked, making it impossible to measure vendor ROI accurately.
- Siloed operations: Legacy tools focus narrowly on one PI function without connecting to the broader picture.
These gaps compound over time. Each siloed system creates a new blind spot, and without a common data layer, root cause analysis is nearly impossible.
TL;DR: The core gap at most health plans is a lack of integration — across systems, teams, and vendors — that prevents payment integrity from operating as a single strategic program.
What kind of solution best addresses payment integrity challenges?
An enterprise payment integrity platform that integrates prepay and post-pay workflows, internal and vendor-managed audits, and analytics into a single system of record. Point solutions address only one function and create data silos that cause inefficiency. Comprehensive technology eliminates those silos and enables end-to-end program management.
Health plans evaluating payment integrity technology should look for these capabilities:
- Vendor overlap management: Prevents duplicate auditing of the same claims by multiple vendors
- Predictive modeling and advanced analytics: Prioritizes high-value claims for review before payment
- Configurable workflows: Supports the specific processes of each PI function without custom development
- Provider engagement tools: Facilitates clean communication and documentation exchange with providers
- Medical records storage: Centralizes clinical documentation tied to specific claims
- Financial recovery management: Tracks recoveries through the full lifecycle, including appeals
- Unified reporting and dashboards: Provides one view of PI performance across all programs and vendors
This closed-loop architecture is what ClarisHealth calls Total Payment Integrity — an approach that treats the entire claims payment accuracy program as one interconnected system.
TL;DR: Look for a platform that unifies all PI functions under one data model — not a collection of point solutions that require manual reconciliation.
How does AI improve payment integrity?
AI improves payment integrity by enabling predictive claim selection, pattern-based FWA detection, and automated routine reviews — allowing payment integrity teams to focus human expertise on complex, high-value cases. The result is faster identification, fewer missed recoveries, and lower administrative overhead.
AI in payment integrity operates across several functions:
- Predictive claim prioritization: Models trained on historical claims data identify which claims are most likely to have been overpaid, so auditors review high-value targets first.
- Anomaly detection: Machine learning surfaces unusual billing patterns that rule-based edits miss — including new fraud schemes not yet in a vendor’s rule library.
- Automation of routine reviews: Standard coding edits and eligibility checks can be automated end-to-end, freeing analysts for clinical judgment tasks.
- Root cause analysis: AI identifies upstream patterns in billing or coding that explain recurring overpayments, enabling process fixes rather than endless recovery cycles.
The most effective implementations pair AI with human clinical expertise. AI flags and prioritizes; clinicians make the final determination on complex or contested claims.
Note: When evaluating AI claims from vendors, ask: What data was the model trained on? Who validates AI-driven recommendations before they reach a provider? AI is a tool, not a replacement for payment integrity expertise.
TL;DR: AI makes payment integrity smarter and faster — but the best outcomes come from AI working alongside experienced payment integrity professionals, not replacing them.
What is the difference between prepay and post-pay payment integrity?
Prepay payment integrity identifies and corrects claim errors before payment is issued — preventing overpayments at the source. Post-pay payment integrity audits claims after payment to identify and recover funds already disbursed. Both are essential, but prepay is more cost-effective because it avoids the administrative burden of post-payment recovery.
Prepay (also called “shift left”) benefits:
- Prevents overpayments rather than chasing refunds
- Reduces provider abrasion — providers prefer not receiving and returning incorrect payments
- Lowers administrative cost per recovery dollar
Post-pay benefits:
- Catches errors that prepay screening missed
- Enables deeper clinical review that isn’t feasible in a prepay timeframe
- Provides a safety net for high-complexity claims
Leading health plans run both in an integrated program, using prepay to handle volume and post-pay for deeper review of complex claims.
TL;DR: Prepay prevents. Post-pay recovers. The strongest programs do both — with prepay handling the majority of volume.
SOLUTION & TECHNOLOGY
CLARISHEALTH & PAREO
Why should a health plan choose ClarisHealth as its payment integrity technology partner?
ClarisHealth offers the only payment integrity platform built to manage the entire PI program — internal and vendor activity, prepay and post-pay, analytics and recovery — in one system. Our team brings 20+ years of domain expertise, and our platform Pareo® is recognized by the Everest Group as a Major Contender in its 2024 Payment Integrity Solutions PEAK Matrix® Assessment.
Four things distinguish ClarisHealth as a partner:
- Comprehensive platform: Pareo® covers every payment integrity function in one system, eliminating the data silos created by point solutions.
- Domain depth: Many team members have 20+ years in payment integrity — we bring a consultative approach, not just software.
- Transparency: Pareo® provides complete visibility into all PI activity, vendor performance, and claim outcomes — with accountability at every step.
- Measurable outcomes: Our approach is focused on root cause resolution, not an endless pay-and-chase cycle.
TL;DR: ClarisHealth combines the industry’s most comprehensive PI platform backed by 20+ years of operational expertise — supported by independent analyst recognition.
What ROI can health plans expect from payment integrity technology?
Health plans using enterprise payment integrity technology commonly achieve year-one value through higher prepay cost avoidance, improved vendor efficiency, and lower administrative costs. Overall, plans that have adopted Pareo® have reported up to 3X ROI[AB1] [JB2] [AB3] [JB4] . (Source: Hobson Study)
These returns come from three compounding sources:
- Insourcing savings: Moving work from contingency-fee vendors to internal teams lowers the cost per recovered dollar significantly
- Vendor efficiency gains: Consolidated oversight reduces duplicate effort and improves the ROI of each vendor relationship
- Pre-payment growth: Expanding prepay programs prevents overpayments from occurring — the most cost-effective form of payment integrity
TL;DR: Plans using Pareo® commonly achieve 3x ROI in their enterprise PI platform.
What is Pareo® and what does it do?
Pareo® is ClarisHealth’s enterprise payment integrity platform. It integrates all claims overpayment inventory — prepay and post-pay, insourced and outsourced — into a single operating system for payment integrity. The name comes from the Latin ‘to reveal,’ reflecting its core purpose: providing complete visibility across every PI program and stakeholder.
Clients describe Pareo® as a payment integrity operating system because it unifies:
- Claim inventory management across internal teams and external vendors
- Workflow and case management for every PI function
- Vendor performance tracking and overlap management
- Analytics, reporting, and dashboards
- Medical records and documentation storage
- Recovery and financial management
With Pareo®, health plans have a single source of truth for all payment integrity activity — no more reconciling data across disconnected systems.
TL;DR: Pareo® is the operating system for payment integrity — one platform that connects every team, vendor, and program under a common data model.
What results can health plans expect in the first year of using Pareo®?
In the first year after adopting Pareo®, health plans typically recover overpayments 50% faster, increase total recoveries by 31%, and increase claim identifications by 21%. These gains come from Pareo®’s ability to integrate data across systems, automate recovery workflows, and provide analytics that surface high-value targets. (Source: ClarisHealth client benchmarking data)
These improvements are driven by four platform capabilities:
- Data integration: Connecting claim data from all sources — internal systems, clearinghouses, and vendors — into one view
- Process digitization: Replacing manual, paper-based workflows with trackable, auditable digital processes
- Content scalability: Managing a growing library of clinical and coding edits without proportional headcount increases
- Recovery automation: Automating demand letters, follow-ups, and status tracking to accelerate the collection cycle
TL;DR: First-year Pareo® adopters average 50% faster recoveries, 31% higher recovery amounts, and 21% more identifications vs. prior-year baselines. (Source: independent analysis of ClarisHealth client data)
How can payment integrity operate more strategically within a health plan?
Payment integrity becomes strategic when it moves beyond recovering found revenue to actively shaping the plan’s financial performance, provider relationships, and member experience. This requires connecting PI data to enterprise-wide business goals — and presenting insights to leadership that demonstrate impact beyond the recovery ledger.
Payment integrity organizations have strategic leverage across three areas:
- Medical savings: Prepay programs directly reduce the plan’s medical expense — a metric that matters to senior leadership and group clients.
- Provider relationships: Clean, accurate claims processing builds trust with network providers; reducing post-pay clawbacks reduces provider friction.
- Member experience: Accurate claims adjudication prevents billing disputes that damage member satisfaction.
Payment integrity leaders who can quantify their contribution across these dimensions — not just in recovered dollars — are positioned to secure more investment and operate at a higher level of strategic influence.
TL;DR: PI becomes strategic when it demonstrates impact on medical savings, provider trust, and member experience — not just dollars recovered.
How long does it take to implement a payment integrity platform?
Implementation timelines for enterprise payment integrity platforms typically range from 3 to 9 months depending on the scope of integration required, the number of data sources being connected, and whether the plan is running parallel programs during transition. ClarisHealth works with each health plan to develop a phased implementation roadmap that prioritizes the highest-value workflows first.
Key factors that influence timeline:
- Data source complexity: The number and variety of claim feeds, vendor systems, and internal databases being connected
- Workflow configuration: How much the platform needs to be tailored to existing PI processes vs. adopting best-practice templates
- Change management: Staff training and adoption timelines, particularly for teams transitioning from legacy tools
- Parallel operations: Whether the plan needs to run existing systems concurrently during transition
TL;DR: Most implementations range 3–9 months. A phased approach — starting with highest-ROI workflows — delivers value before full deployment is complete.
When is insourcing payment integrity better than outsourcing to vendors?
Insourcing is most advantageous when a health plan has sufficient claims volume to justify internal investment, wants greater control over data and methodology, and is paying high contingency fees to vendors for work it could perform at lower cost internally. Enterprise technology like Pareo® enables insourcing by giving internal teams the tools that were previously only available through vendors.
Signs that insourcing makes sense:
- You’re paying 20% contingency fees to vendors on recoveries you could do internally.
- You lack visibility into what your vendors are doing and why.
- Your internal team has the clinical and coding expertise but not the technology platform.
- You want to build prepay capabilities that most vendors don’t offer.
Outsourcing still may make sense for:
- Specialized or low-volume audit types where internal expertise doesn’t exist
- Surge capacity during high-volume periods
- Highly specialized clinical reviews (e.g., complex DRG validation)
Most mature PI programs run a hybrid model: a strong internal program for high-volume, repeatable work, in combination with vendors filling specialized or overflow roles — managed and measured through an enterprise platform.
TL;DR: The right answer is usually a hybrid: insource what you can do cost-effectively, and use vendors for specialization — with full transparency into both through your platform.
What compliance and regulatory standards does payment integrity address?
Payment integrity programs address a range of federal and state regulatory requirements, including CMS rules on improper payments, HIPAA data handling standards, ACA provisions related to MLR (Medical Loss Ratio), and state-specific look-back and refund requirements. A robust PI program is also a key defense against CMS audits and OIG scrutiny.
Key regulatory touchpoints for payment integrity:
- CMS improper payment rules: Federal programs (Medicare Advantage, Medicaid managed care) have specific requirements for detecting and reporting improper payments.
- HIPAA: All claim data handling, transmission, and storage must comply with HIPAA privacy and security rules.
- Medical Loss Ratio (ACA): Accurate claims payment directly affects MLR calculations — overpayments that are not recovered inflate the medical expense ratio.
- State look-back requirements: Most states specify how far back a health plan can audit and recoup overpayments (commonly 12–36 months, varying by state).
- OIG and DOJ scrutiny: FWA detection programs demonstrate compliance posture and reduce regulatory risk.
TL;DR: Payment integrity is both a financial and a compliance function — and the documentation, audit trails, and reporting it generates are critical evidence in regulatory reviews.