The Complex Landscape of Payment Integrity

The $9 billion payment integrity industry continues to grow at a compound annual growth rate of 7%, largely due to higher U.S. healthcare spending and more complex billing processes. These issues create greater challenges than ever before as payors seek the best approach to choosing a payment integrity solution to optimize their cost containment capabilities.

By addressing top payment integrity challenges, payors can more effectively navigate the complexities of the healthcare landscape, leading to better financial outcomes, improved provider relationships, and a more sustainable healthcare system.

Let’s take a closer look at the top five payment integrity challenges payors face today:

1. Inappropriate billing

One of the biggest headaches for payors and a driver of the need for a strong partnership with a reliable payment integrity vendor are billing issues caused by coding errors, duplicate charges, waste and abuse, and more. In the United States alone, an estimated one-third of medical claims are paid incorrectly each year, contributing to more than $1 trillion in annual waste and abuse. We can attribute the persistence of inappropriate billing to several factors, including the complexity of the healthcare system, the lack of standardization in coding and billing practices, and the difficulty of detecting and preventing fraudulent activities.

Moreover, the manual nature of many claim processing systems and the lack of advanced technology adoption have made it challenging for payors and TPAs to identify and address these issues. Long remittance cycles for insurance claims are another significant culprit, with nearly one-third of healthcare providers waiting to collect debts that exceed $100,000, further compounding the financial strain.

Today’s innovative healthcare payors and TPAs are turning to integrated solutions that span the life of a claim. The combination of advanced code editing, clinical negotiation, itemized bill review, and post-pay strategies like subrogation, coordination of benefits, and data mining span pre- and post-payment integrity, and go beyond a one-size-fits-all approach to identify and correct errors, prevent overpayments, and maximize cost savings.

2. Legacy systems

Healthcare is a mammoth and intricate system with many moving parts and is notoriously resistant to change and historically slow to adopt new technologies. This slow adoption often is caused by concerns over compliance issues and/or organizational cultures that are hesitant to change practices, frequently resulting in persistent legacy systems, data silos, and increased administrative burden. From a billing perspective, these factors contribute to manual and frequently tedious processes requiring significant overhead, ultimately leading to higher claim processing error rates and operational costs.

Traditional payment integrity solutions focus on simple, automated code edits, but today comprehensive coding is much more complex with many regulations and rules, particularly with the expansion from ICD-9 to ICD-10.  To deal with the increased complexity, payment integrity vendors are turning to AI innovations like machine learning, which are revolutionizing payment integrity processes and driving more accurate payments. With AI-powered payment integrity, payors can be more predictive, real-time, and compliant, which empowers more strategic work.

By partnering with experienced payment integrity providers, healthcare payors can benefit from cutting-edge technology and deep expertise, enabling them to identify and address billing issues more effectively, reduce administrative burdens, and increase cost savings.

3. Payor/provider abrasion

While payment integrity solutions aim to increase payment accuracy, an unintended consequence can be tension between providers and payors. Providers may take issue with reduced reimbursement, delayed payments, recovery of overpayments, confusion over suggested edits and the administrative work necessary to resolve these issues.

Claritev uses a multi-pronged approach to minimize provider abrasion. We start by working the editing function into repricing so that it doesn’t delay the process. Medical professionals confirm edits that aren’t black and white to help ensure they are accurate, and we offer providers clear, detailed explanations to our suggested changes to minimize confusion. We are so confident in our payment integrity approach that we use our solutions on claims from the more than 1.4 million providers who participate in our networks.

4. Complex policies and benefits customizations

Employer groups’ customization of benefit packages as well as complex payor-specific exclusions, which identify and exclude certain services, procedures, or diagnoses from reimbursement, pose a significant challenge for healthcare providers. The unique rules and policies for each payor or employer group make navigating the system and ensuring proper reimbursement a daunting task, often resulting in delayed payments and increased administrative costs.

To address this issue, we have developed a holistic approach to payment integrity that offers clients standard concepts with yes/no options to choose on/off for Advanced Code Editing.

Claritev’s flexibility in accommodating specific policies empowers healthcare payors to streamline their processes, reduce administrative burdens, and ensure more accurate and timely reimbursements. We handle benefits customizations, analyzing eligibility and examining claims pre- and post-payment.

5. Resource drain from multiple vendors

Payors have traditionally employed multiple vendors and solutions, each supporting a different business unit or targeting a specific use case (e.g., duplicate claims, subrogation, coordination of benefits, auditable claims, and claims with missing data).

This fragmented approach often leads to inefficiencies, inconsistencies in processes, and potential gaps in coverage, ultimately hampering the overall effectiveness of payment integrity efforts. This is why Claritev offers a complete suite of payment integrity solutions and works to simplify the implementation process for clients already using one of our solutions.

Next Steps

The US healthcare system faces a significant challenge in ensuring accurate and efficient claims payment. With healthcare costs at an all-time high, payors and providers must take proactive steps to address this issue head-on. Claritev is committed to partnering with organizations to identify errors on claims, improve payment accuracy, and prevent overpayments. Our tested and proven approach, backed by use on our own extensive network, can easily be extended to your organization’s claims, as well.

To learn more, visit our payment integrity services page. Ready to talk? Email us at [email protected].