4 Key Factors to Optimize Payment Integrity Performance
Introduction
Healthcare costs are expected to rise 8% over the next year, due to inflationary pressures and increasing utilization rates. Provider billing processes continue to increase in complexity, while the Department of Justice estimates that fraud, waste and abuse may account for up to 10% of all healthcare spending. While payment integrity remains a strategic tool to curb these rising costs of care, its performance is held back by aging legacy systems, inefficient processes, and growing provider abrasion.
Maximizing payment integrity performance boils down to optimizing these four dynamic and inter-connected factors:
Data
Content
Provider Relations
Yield Management
Data
Data is the lifeblood of a successful PI operation. Without comprehensive access to trusted payment integrity data, it is difficult or impossible to tell the story and make objective, strategic decisions that improve cost and quality. As payment integrity has grown rapidly over the last 15+ years, aging technology coupled with the explosion of new audit vendors and concepts has led to the fragmentation of this important data. This fragmentation leaves health plans with blind spots and incomplete views of audits, concepts, and vendor and provider performance.
Though most plans have access to the basics—such as Claim, Member, Provider, and Audit Savings data—many lack access to the granular and longitudinal data that can answer the big questions like:
- Where can we immediately reduce provider abrasion without reducing our savings?
- Which providers and facilities could benefit most from provider education outreach?
- What is our conversion rate of findings to accrued savings by audit, and by vendor?
- How are my vendors performing from a cost and quality standpoint?
- Where can we easily find more savings this year to close the gap and meet our targets?
Health plans struggle to access this crucial data by themselves due to the enormous effort required to set up the ever-growing list of secure file exchanges, maintain them, manage the integration and data transfers, and then scrub, analyze and homogenize the data into a single repository. This doesn’t even include managing the reporting, access, security, and system updates.
Despite these hurdles, health plans must fine-tune payment integrity based on their specific network, geography, product types, and competitive landscape. Without a full data picture, health plans risk missing key insights that can identify the most impactful adjustments that drive cost efficiency and improve quality.
Comprehensive access to all payment integrity data—including audit performance, appeals and overturns, chart requests, findings, accrued savings, and conversion rates—enables health plans to make smart adjustments that boost savings while reducing provider abrasion for a realistic, attainable win-win.
Data is the backbone of payment integrity departments, and it enables them to optimize the content they rely on to detect savings opportunities in the first place.
Content
As previously mentioned, all these factors are interconnected, making data the key driver for content and its optimization. So, how do we define content?
Content refers to the edits and concepts that detect overpayments and ultimately drive savings. There are no silver bullets when it comes to concepts—it requires tens of thousands of concepts to meaningfully drive savings. But this content is constantly changing based on many external factors, such as emerging public health conditions (e.g., COVID), new discoveries (e.g., drugs, therapies), legislation and regulatory forces, core system configuration changes, billing patterns, provider contract agreements and their negotiations, and more.
Leaders often ask:
- Which concepts are good candidates for migration to pre-pay?
- Which concepts are best suited for post-pay?
- Which concepts are best managed by internal audit teams, and which are ideal for powerful specialty vendors?
- Which concepts are degrading in performance, and which show promise?
The answer is: it depends. It depends on the health plan and its team, network, findings, claims, geography, products, rules, exclusions, contracts, regulations, core system, and so on. Ultimately, this variability underscores the critical role of data.
Health plans demand flexibility and control to manage concepts throughout their lifecycle. They need to be able to make micro-adjustments to their payment integrity strategies where needed and objectively measure the overall performance of their content.
Provider Relations
Providers are the most important partner in the delivery of care to members, and ensuring they’re reimbursed accurately and on time is a top goal for any health plan. Yet, errors in the payment process occur 7-10% of the time, and scrutiny on claims has recently surged by up to 4X due to rising cost pressures and an increase in billing complexities.
PI departments apply varying standards and concepts for premier providers (e.g., Mayo, John Hopkins, or the largest provider in a rural setting) or plans owned by providers. That said, there are certain concepts that don’t drive as much abrasion (like duplicates or COB—unless your vendor has already taken the money from the other Payer) and others that do (medical necessity). Distinguishing between genuine appeals and noise is essential.
Often, the knee jerk reaction to noise is to turn off a concept. Without access to granular data, when a market gets a complaint from a Provider and in turn reaches out to the PI department, the only option left is to shut down the concept. This effectively tosses out the champagne with the cork, rather than fine-tune the concept and localize its application. Provider abrasion affects savings significantly. Without access to robust data, the PI department will struggle to identify the underlying causes which can lead to missed savings.
Yield Management
When we reference yield management, we’re talking about the recovery process and conversion rates. Though most PI departments know yield management is an important factor driving savings, they’ve grown used to low yield rates, blaming the erosion on the ‘nature of the beast’. Over the last 20+ years, as payment integrity emerged and evolved, teams and processes have adapted reactively. This has left many PI departments to operate with disconnected legacy systems and manual processes, eroding value and savings.
Imagine you have a bucket with multiple leaks, and you’re trying to fill it with water. Instead of fixing the leaks, you keep pouring more water in, but 50% of it continually gets wasted.
Similarly, with conversion rates at 50%-60%, PI departments are looking for more vendors and concepts instead of investing in a better platform. The value and savings continue to drain.
Now imagine the CFO raises the savings goals at the end of the quarter or year. PI teams must work even harder to meet the targets, but their efforts are held back by outdated operations.
How do legacy systems and manual processes stifle yield management metrics?
Plans must review and validate audit vendor findings, requiring detailed analysis and administrative work across multiple systems of record, files, contracts, metrics, and data. This tedious process means some claims will time out and expire before they can be processed.
The process involves numerous hand-offs between teams. Without transparency, timed hand offs, and clear measurement of each step, claims can be ‘lost’ in the system, falling through the cracks with little accountability. It is often caused by the inability to measure or manage the claim through the lifecycle.
Complicated and dynamic rules mean some ‘findings’ fall out of bounds. The boundaries are often hard to decipher, leading to recoveries that prompt provider appeals and ultimately get overturned. This erodes savings and increases abrasion.
Many health plans aren’t taking advantage of automatic offsets when providers fail to respond to recoveries. Without automation, rules, and technology in place, administering these offsets becomes too difficult, leading to millions in missed savings.
When overpayments are found and ultimately validated, the recovery process is often lengthy due to manual administration of sending and tracking letters, causing delays and eroded savings.
If health plans could raise conversion rates to the high 80s, the same teams, vendors, concepts, and efforts could drive higher savings while reducing provider abrasion and administrative costs. Better yield management leads to lower abrasion, lower costs, higher savings, and improved per-user efficiency metrics.
Conclusion
The four dynamic and interconnected dials to turn for higher savings are Data, Content, Provider Relations and Yield Management. Yield management has the most significant impact on cost and quality, driving higher savings. Focusing on yield management improves data, optimizes concept selection, enhances provider relations, increases savings, and reduces abrasion. It helps health plans understand concept trends and values, allowing for pre-pay moves or configuration changes. Yield management data provides crucial metrics like conversion rate, chart selections, and appeal overturn rate, revealing the strengths of your audits and vendors.
About Us
ClaimShark (www.claimshark.com) was purpose built to drive higher Payment Integrity (PI) savings and control the four factors impacting savings. ClaimShark is a cloud-based PI platform to help drive higher savings through better insights, higher conversion rates and lower provider abrasion. It helps the PI department to manage the entire process from vendor management, findings validation, recovery, appeals, reporting, and insights. To find out more about ClaimShark, please email info@claimshark.com
