5 Reasons Why Payers Should Bolster Payment Integrity

Payers can elevate their payment integrity strategy to do much more than fraud, waste, and abuse prevention. A comprehensive payment integrity strategy is key to lowering costs and achieving higher quality of care for members.

“The real goal of payment integrity is to free up money for improvements that impact patient care,” says Timothy Garrett, MD, chief medical officer, CCS, at Zelis.

When payers reimburse providers fairly and accurately the first time, they have access to more resources for other areas, such as member experience. But there are also many other reasons why payment integrity is key to payer success.

#1 Reduces wasteful spending

With about a quarter of total healthcare spending attributed to waste, there is ample opportunity to cash in on payment integrity for the benefit of payers, providers, and ultimately members. To put it into perspective, new data from the Office of the Actuary at CMS shows that healthcare spending in the US exceeded $4 trillion in 2020.

Preventing fraud, waste, and abuse can make available billions of dollars—between $58.5 billion and $83.9 billion, according to a 2019 study on waste in the healthcare system—but even more can come from reducing administrative complexity and optimizing pricing. The same study found that the industry wastes $265.6 billion on administrative complexity and between $230.7 billion and $240.5 billion on pricing failures annually.

A comprehensive payment integrity solution can streamline the entire claims management process to reduce administrative costs through prevention of improper and incorrect payments before they reach providers. Analytics and pre-payment claim reviews can also ensure services are medically necessary for members.

#2 Addresses administrative complexity

As the research underscores, the administrative side of healthcare is extremely complex. Claims management involves many rules and requirements in order to get providers paid properly for services patients need. Providers also face different rules and requirements from each of their payer partners, which can create friction between the two stakeholders.

Payment integrity can reduce that friction and streamline claims management to get accurate reimbursement out quicker.

“Payment integrity levels the playing field for payers and providers,” Garrett states. “It makes sure that everyone is operating within the rules laid out in regulations and policies as well as clinical guidelines and definitions.”

#3 Maintains compliance with changing rules

Adding to the complexity of healthcare is policy and regulation. The healthcare industry is a heavily regulated space, which significantly impacts how and why payers reimburse providers for care. One such regulation is the No Surprises Act.

“The No Surprises Act bans surprise billing in most situations to protect consumers from exorbitant, unexpected medical bills but it will also fundamentally change how payers and providers interact in certain situations,” Garrett stresses.

Furthermore, this is just one of many rules (e.g., the Transparency in Coverage final rule) that will impact payer pricing and reimbursement.

Tightening payment integrity strategies can help payers comply with new policies and regulations. Payers should keep an eye on their pricing strategies and be prepared to justify reimbursements made to their provider partners.

#4 Aligns with consumerism in healthcare

Addressing the member as a consumer is a major trend in healthcare. Employers have increasingly implemented high-deductible health plans to save costs, putting more onus on the member to pay for care. At the same time, members are demanding more convenient access to their coverage and pricing information. Providing transparency and lower costs is a must for payers.

“If the COVID-19 pandemic has taught us anything, it’s that access to healthcare and its associated costs are of vital importance to everybody,” Garrett explains. “Payers are uniquely situated to impact healthcare costs in a way that is beneficial for us as individuals.”

Payment integrity is one of the tools payers can use to tighten the administrative side of healthcare to lower costs. They can then pass on savings to members while delivering a more seamless, transparent experience.

Additionally, members benefit when providers are paid faster and accurately. They receive accurate medical bills quicker. Payers and providers can also focus more on quality of care, rather than paperwork and reimbursement.

#5 Alleviates workforce challenges

Healthcare has been one of the industries hit hardest by workforce challenges, such as “The Great Resignation.” During the COVID-19 pandemic, healthcare providers experienced extreme burnout and stress while managing record high caseloads of higher acuity patients. Like many other industries, this combination of stress and volume changes led to increased turnover.

Additionally, payers shifted many of their employees home to keep them working safely. There are many signs that remote work is here to stay.

The workforce trends have several implications for payers. First, increased turnover could result in more people enrolled in Medicaid and Medicare. Payers may also notice a shift in their risk pools as people change jobs and enroll in new coverage options.

Payment integrity increases in importance as risk pools shift.

“You need to make sure that payments are accurate because changes in risk pools can lead to an increased chance that you could overspend in some areas, and that leaves less resources to help elsewhere,” Garrett explains.

Internally, payers may also find gaps in their workforce or at least challenges with delivering optimal services while employees maintain remote positions.

“Not being able to find expertise to do payment integrity work internally makes partnering with vendors even more important,” Garrett states. “And the key word is ‘partnering.’”

Payers will have to rely on technology to ensure payment integrity in the current economy. A good partner will also be able to recognize the unique challenges payers face with the workforce to tailor solutions and services that fit the organization’s needs. Automation also enables payers to allow their employees to work remotely in a secure, seamless fashion.