Payment Integrity: Can We Get It Right?

Payers are capitalizing on payment integrity trends more than ever before, but inaccuracies continue to plague the healthcare system—contributing to the estimated $760-$935 billion dollars in annual health system waste. Administrative complexities and pricing failures are expensive for payers and increase provider abrasion and healthcare costs for members.

The problem is multi-faceted, which is why most payers take a disjointed approach to solving the 5-8% of claim dollars paid inaccurately. Multiple departments within a payer organization may use various methods, investing in duplicative solutions with separate incentives. While this may address individual problems within a department, the larger issues of transparency for providers and solving for the source of inaccuracies remain elusive.

With reliance on multiple vendors (and instances) throughout the organization, several main issues contribute to miscommunications, lack of transparency, and improper payments:

Out-of-sync update cycles: Vendors often deploy update cycles at different times, resulting in policy and fee schedules that conflict. While sometimes entire teams at payer organizations are employed to manage and coordinate the multitude of updates, they remain daunting and disruptive.

Lagging updates: Payers routinely receive or make updates to policy and fee schedules after the regulatory deadlines with further delays due to IT implementation and testing of updates. This, of course, leads to claims being improperly paid and contributes to downstream payment integrity activities that could have been prevented with up-to-date data.

A complex, siloed stack of solutions: Many payers have spent 30+ years adding technologies and processes that lead to a tangled web of data compounded by vendor management challenges, conflicting results, and costly upkeep.

“The goal is to tie together disjointed components of the payment process so that complex communications can be translated into a common language.”  – Jared Lorinsky, Chief Strategy Officer, Burgess

Recognizing these issues, some payers with enough internal expertise, IT maturity, and certain provider characteristics, opt to insource payment integrity capabilities. While this approach removes the problems associated with reliance on multiple vendor solutions, it also eliminates the possibility for vendor insights and collaboration while taxing internal resources.

Alternatively, too much reliance on vendors often keeps payers focused on incremental savings and relinquishes control (and insight) of payment integrity functionality. This model continuously patches a broken system and hinders long-term business goals and opportunities for transformation.

As we move beyond interoperable systems toward the opportunity for complete digital transformation, the question remains: how can we walk a fine line that involves the right vendors for their expertise and insight without overcomplicating an already complex system?