3 Payment Integrity Strategies for Payers in 2023

The healthcare system in the United States continues to face unprecedented levels of change. Providers are seeing lower admissions than before the pandemic while also facing rising labor and supply costs. Payers are working to maintain effective networks to manage out-of-network claims and reduce overall healthcare expenditures while striving to grow member enrollment. Members are dealing with increased financial responsibility, with many also contending with medical debt. In short, the healthcare system faces a seemingly bleak future.

Fortunately, numerous opportunities are available for the healthcare system to achieve new levels of efficiency, generating savings by avoiding waste and costly manual intervention. Payers can look no further than their payment integrity practices to reduce provider abrasion, improve member experience, and free up resources for innovation.

Here we look at three payment integrity strategies health plans and third-party administrators can take to ensure success in the year ahead.

Vendor consolidation

Mergers and acquisitions are a staple of the healthcare industry. Payers are experiencing technology bloat as a result, having to manage acquired systems, legacy technology, and spot solutions across their enterprises. This reality leads to increased costs to maintain and manage infrastructure and inefficiencies for end users who must use different systems to complete their tasks. Above all, a lack of system interoperability means organizations lack visibility into their overall performance.

Research estimates that the average organization has more than ten vendor relationships for a single initiative. Therefore, reducing the number of vendors or finding a single vendor that can provide a multitude of services can help streamline operational efficiencies.

“Having a seamless workflow in which claims and information flows is key to a smooth claims and payments process. Without this, the system is broken and drives the inaccurate payment of claims up. Inaccurate payments, in turn, causes provider abrasion when you have to claw back the money already paid,” says Timothy Garrett, MD, Chief Medical Officer at Zelis.

“When you have multiple vendors in a given workflow,” he continues, “it is key to ensure there is an open pipe of data flowing both ways to ensure all components of the claim are available to ensure timely and accurate payments while also making the providers happy.”

Payers must do their due diligence in reviewing vendor relationships to determine opportunities to improve performance and reduce spending.

“Make sure you look at your vendor partnerships and determine where the synergies are, where the duplicity is, and how this aligns with your long-term growth and innovation plans,” advises Jaret Giesbrecht, Senior Vice President of Payment at Zelis. “Technology partners should enable you to innovate and grow, not be a blocker.”

Medicare Advantage

Medicare Advantage has become a hotly contested market for payers. And that is going to continue into the foreseeable future.

In 2022, nearly half of all eligible Medicare population (28 million lives) were enrolled in MA plans, with the average beneficiary having the choice of nearly 40 plans. According to estimates from the Congressional Budget Office, the percentage of Medicare lives covered by MA plans is expected to grow to 61 percent over the next decade.

But not everything is rosy. “Medicare Advantage enrollment is the highest it’s ever been, more Medicare Advantage claims are getting denied than ever before, and legislative burdens abound,” Garrett notes, referring to findings from a recent Office of Inspector General investigation.

The review of claims from June 2019 revealed that eighteen percent of payment denials were for claims that met Medicare coverage rules and billing rules of MA plans, which delayed or prevented payments for services that providers had already delivered. OIG cited human error and manual reviews by MA plans were the chief culprits.

MA plans “rely on their staff to manually review some requests for payments before approving or denying them. However, these manual reviews are susceptible to human error,” the authors noted.

A more robust payment integrity strategy can eliminate these delays and headaches. “Look at your payment integrity workflows and include pre-pay review. There is a shift from abrasive, post-pay reviews to more streamlined pre-pay reviews,” adds Giesbrecht.

Optimization and automation

Administrative complexity and fraud and abuse are responsible for an estimated $265.6 billion and $58.5–$83.9 billion in wasted healthcare spending, respectively. Therefore, improving efficiency is key to reducing waste.

Despite payer interest in growing and optimizing their operations, many still suffer from inefficient approaches to payment integrity, according to the Zelis Payment Harmonization Index.

“Thirty percent of respondents are operating at inefficient levels. There are a lot of opportunities for these organizations to evaluate their payment integrity programs and identify obstacles to an optimized program. The cost of inefficient claims is arguably quite high among these respondents,” warns Garrett.

Payment accuracy executives seeking to reduce denials should look more closely at improving claims adjudication.

“When we look at the journey through payment integrity, claims adjudication is at the core. However, about half of respondents to the index rely on both manual and automated reviews for their payment integrity operations. This is a great area of opportunity when it comes to streamlining your payment integrity operations,” Garrett maintains.

“The adage ‘an ounce of prevention is worth a pound of cure’ really rings true here,” he says. “Not only do pre-pay reviews reduce claw-back processes and provider abrasion, but they also prevent costly overpayments. In addition, pre-pay reviews ensure that you are paying the right claims at the right price at the right time.”

Increased automation is the key to avoiding denials to improved claims adjudication in 2023.

“Automation and customization should go hand in hand because we believe that the latter within claims editing workflows is key to helping reduce provider abrasion and improper denials,” stresses Giesbrecht. “Automate data flow and integrations while also customizing the solutions you leverage to be applied to each unique provider contract your payer organization maintains. Make sure to ask your vendor partner about customizations to reduce denials and how the vendor handles provider appeals.”

Payers have an important role in ensuring that the trillions of dollars spent annually on healthcare in the US go to effective and affordable care. By improving their payment integrity operations, they can ensure that providers are properly paid in a timely fashion and members realize the benefits of a given health plan. In addition, greater efficiency and automation can eliminate waste, avoid delays, and ensure proper payments the first time around.

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Zelis harnesses data-driven insights and human expertise as scale to optimize every step of the healthcare payment cycle. We partner with more than 700 payers, including the top-5 national health plans, Blues plans, regional health plans, TPAs and self-insured employers, 1.5 million providers and millions of members, enabling the healthcare industry to pay for care, with care.