Key Takeaways
- Nearly 90% of health plans report meaningful levels of payment inaccuracies, according to a HealthEdge® study.
- Shifting from postpay (retrospective) to prepay (prospective) claims processing helps catch errors before payments go out, reducing costly rework and provider friction.
- Fragmented, multi-vendor systems are a leading cause of payment inaccuracy. Consolidating onto a single, AI-powered platform helps close that gap.
- One national health plan reduced its edit turnaround time from three months to hours and saved over $200 million annually after adopting an integrated payment accuracy approach.
- Health plans that prioritize prospective payment integrity report stronger compliance, fewer disputes, and better member and provider experiences.
Moving from postpay to prepay claims processing lets health plans catch payment errors before they happen, rather than chasing them down after the fact. This shift, often called prospective payment integrity, reduces administrative rework, lowers claim spend, and improves relationships with both providers and members. Below, we break down what’s driving the shift, the challenges health plans still face, and what an integrated approach to payment accuracy looks like in practice.
What Is the Difference Between Prepay and Postpay in Healthcare Claims?
Postpay (or retrospective) processing identifies overpayments and underpayments after a claim has already been paid, which means health plans must recover funds through often lengthy and contentious processes. Prepay (or prospective) processing, on the other hand, catches inaccuracies before the payment is issued. That difference matters more than it might seem: 95% of health plans say they’re actively prioritizing a shift toward prospective payment integrity, and 73% are already leveraging pre-payment edits and validations to keep inaccurate claims from reaching adjudication in the first place.
What Challenges Do Health Plans Face in Achieving Payment Accuracy?
Health plans today are navigating a new era of member and provider expectations. Both groups want faster, more transparent transactions, and health plans are under pressure to identify incorrect payments, along with their root causes, before they become bigger problems.
While the scope of payment accuracy work varies by organization, most health plans share the same underlying goals: prevent poor-quality claims upfront, avoid downstream costs where possible, and recover improperly spent funds when prevention isn’t enough. Achieving these goals is harder than it sounds, largely due to a few recurring obstacles:
- Organizational fragmentation. Breaking down cultural, technical, and departmental silos requires sustained, top-down leadership.
- Difficulty quantifying prevention. It’s hard to put a dollar figure on the value of education and error prevention compared to recovered dollars.
- Workflow coordination. Aligning pre-payment and post-payment teams, which often operate under different incentives, remains a persistent challenge.
These challenges are widespread. A HealthEdge study found that nearly 90% of health plans experience meaningful levels of payment inaccuracies, with over a third reporting error rates above 10%, well above the long-assumed industry benchmark of 3–7%. Outdated, fragmented systems and heavy reliance on manual workflows are two of the biggest contributors, cited by 18% of surveyed health plan leaders as a primary barrier to accuracy.
What Are the Benefits of Shifting from Postpay to Prepay?
Moving from postpay to prepay, gives health plans more predictive control and directly addresses the fragmentation and coordination challenges above. While the transition can be organizationally complex, the payoff is substantial. Health plans that make this shift typically see:
- Improved accuracy of claims reimbursement and greater payment transparency, leading to stronger provider relationships
- Fewer redundant tasks, less staff frustration, and meaningful time savings
- Lower overall claim spend and cost per claim processed
- Improved claim denial rates and fewer claims requiring rework
- Reduced volume of claims-related provider inbound calls
- Better member and provider experiences overall
- Earlier identification of provider billing patterns that need correction or education
These outcomes aren’t hypothetical. One health plan with more than 60,000 streamlined its editing solutions from 3 to 1 and achieved a 500% savings increase, including more than $1 million in edits.
What Does an Integrated Approach to Payment Accuracy Look Like?
As the digital healthcare platform landscape evolves, health plans relying on fragmented, multi-vendor stacks often find themselves patching a broken system rather than fixing it. An integrated infrastructure approach is emerging as the clear alternative.
Payment Accuracy Edge™, formerly HealthEdge Source™, is the prospective payment integrity & accuracy solution from HealthEdge. The integrated solution offers health plans a centralized repository of data that supports multiple functions, including claims reimbursement, editing, clinical reviews, modeling, and analytics. Rather than managing separate tools with conflicting update cycles, health plans running on a single, unified platform can streamline operations, build stronger vendor partnerships, and take control of a comprehensive claims payment strategy. This consolidation also creates the technical foundation needed to apply artificial intelligence (AI) to high-impact areas like pre-payment edits and fraud detection, which health plan leaders identify as the areas most likely to benefit from AI.
See how a large national health plan worked with Payment Accuracy Edge to improve claims editing transparency, increase payment accuracy, and reduce processing delays. Download our case study: Transforming Payment Accuracy and Otrperational Efficiency at a Large National Health Plan
Frequently Asked Questions
What is the difference between prepay and postpay in healthcare claims?
Prepay (prospective) processing catches inaccuracies before a claim is paid. Postpay (retrospective) processing identifies errors and pursues recovery after payment has already gone out. Health plans that shift toward prepay models reduce administrative burden, lower claim spend, and improve provider satisfaction by resolving issues earlier in the process.
Why do health plans struggle with payment accuracy?
Payment accuracy challenges typically stem from organizational silos, fragmented vendor systems with out-of-sync update cycles, and frequent Centers for Medicare and Medicaid Services (CMS) policy changes. According to HealthEdge research, nearly 90% of health plans report meaningful levels of payment inaccuracies, confirming this is a systemic issue rather than an isolated one.
How does AI improve payment accuracy for health plans?
AI helps health plans automate routine claims tasks, detect billing anomalies earlier, and pinpoint the root causes of payment inaccuracies before a claim is paid. This shifts the operating model from reactive recovery to proactive accuracy, supporting more consistent financial outcomes across the organization.
Is a single-solution payment accuracy platform better than using multiple vendors?
For most health plans, yes. Multi-vendor systems often create data silos, conflicting update cycles, and higher administrative overhead. A single, natively integrated platform gives health plans one source of truth, reducing errors and improving coordination across claims operations.