What’s the HYPE all about?

Latest Release: 2024 Gartner® Hype Cycle™ for U.S. Healthcare Payers

Gartner has published its highly anticipated Hype Cycle for U.S. Healthcare Payers. HealthEdge® was recognized as a Sample Vendor in two categories. Prospective Payment Integrity Solutions was named in the report since 2019, and we have been recognized for this category 3 consecutive times starting 2022. And AI-Enabled Fraud Detection has been named in the report since 2023, and we have been named as a Sample Vendor for both years – 2023 and 2024.

“This Hype Cycle provides critical input for strategic planning by tracking the maturity level and adoption rate of payer technologies and deployment approaches. U.S. healthcare payer CIOs should use this to plan new and manage existing investments for business optimization and transformation.” (1)

AI-Enabled Fraud Detection

Artificial Intelligence (AI) is one of the most prevalent terms in healthcare publications today, with use cases spanning from clinical to administrative functions. One of the more popular applications of AI in healthcare is fraud detection.

Fraud in the healthcare industry is believed to cost the U.S. healthcare system tens of billions of dollars annually. According to the National Health Care Anti-Fraud Association (NHCAA), financial losses due to health care fraud can range from a conservative estimate of 3% to as high as 10% of total healthcare expenditures. The General Account Office estimates that fraud, waste and abuse may account for as much as 10% of all healthcare spending. With healthcare expenditures now exceeding one trillion dollars every year, over $100 billion may be lost annually due to fraud, waste and abuse.

Health insurance companies are on the front line of detecting this fraud and often bear the brunt of these costs.

A Fresh Approach

The traditional approach to fraud detection and prevention has focused on rule-based systems within the claims processing workflows. This approach, while well-intentioned, is unable to keep up with the growing complexity of claims and sophisticated fraud schemes.

To enhance fraud detection and prevention, HealthEdge solutions seamlessly integrate with AI and machine learning (ML) engines. Additionally, HealthEdge is developing partner integrations to provide customers with built-in fraud detection technology.

Analytics tools by HealthEdge Source™ (Source) offer health plans valuable insights that directly impact their bottom line. Monitor Mode allows payers to view the financial impact of edits or new policies in real-time, while the Retroactive Change Manager automates the management of retroactive policy and pricing changes. Together, these tools streamline workflows, reduce costs, and improve the integrity of the claims process. By analyzing specific providers, regions, configurations, and contracts, business leaders can make well-informed business decisions.

Prospective Payment Integrity

Since their inception, health plans have often struggled to detect and prevent improper and inaccurate claim payments. In fact, Gartner states that “between 3% and 7% of all healthcare claims are paid inaccurately — and only a fraction of those claims payments are later corrected.” (1)

Traditionally, payers have layered multiple editing solutions to address payment integrity concerns. However, this approach has its own drawbacks:

• Each editing solution operates on its own update schedule and data sets, leading to fragmented processes and siloed information.
• The inherent incentive for primary and secondary editing vendors to protect their own intellectual property has hindered collaboration and sharing among stakeholders. This not only hampers the overall accuracy of the payment process, but also perpetuates a cycle of continuous charging for the same issues without any resolution.

What is Prospective Payment Integrity?

“Prospective payment integrity (PPI) solutions enable payers to proactively avoid paying claims improperly, versus paying and then chasing claims dollars. These technologies facilitate accurate claims processing with minimal payment leakage, addressing contracts and services, eligibility, and payment accountability, along with fraud, waste and abuse (FWA). They incorporate claims editing, data mining and complex clinical review, as well as advanced analytics and AI,” notes the Gartner report.

According to the 2024 Hype Cycle, PPI solutions are “early mainstream,” which in our opinion means that many health plans are still evaluating these solutions. This isn’t surprising, given the cost pressure health plans face, and the difficulty in qualifying cost-avoidance savings. Factors such as counterfactual analysis, indirect costs, and data limitations can make it challenging to accurately measure savings. Despite these challenges, PPI solutions are still considered valuable investments for health plans looking to improve operational efficiency. Reducing the percentage of claims that require rework and limiting the manual effort involved are key strategies that health plan leaders believe can help achieve their efficiency goals.

HealthEdge Source challenges the traditional approach to payment integrity by offering a single platform for accessing and leveraging all data for true payment accountability. This platform approach empowers payers to identify the root causes of payment inaccuracy and correct the issues early on, leading to greater efficiency and lower contingency fees. By streamlining workflows and automating processes, Source enables health plans to insource more functionality, reducing reliance on third-party vendors for overpayment and underpayment recovery. This not only saves time and money, but also provides greater control over the claim’s payment process.

Real-World Case Studies: Cost Savings vs. Cost Recoveries

Source’s Data Study team collaborates with health plans to measure the potential savings when implementing the Source payment integrity solution. Here are a few examples of what those savings can be:

• Mid-sized Regional Health Plan (Medicare Advantage):
• Claims Analyzed: 1.7 million claims
• Total Spend: $648 million
• Incremental Savings: 1.6%, or $11.1 million
• Regional Health Plan (Medicaid):
• Claims Analyzed: 2.1 million claims
• Total Spend: $571 million
• Incremental Savings: 1.6%, or $9.1 million
• National Health Plan (All Lines of Business):
• Claims Analyzed: 5.1 million claims from Medicaid and Dual Eligible members
• Total Spend: $790 million
• Incremental Savings: 1.1%, or $8.7 million

(1) Gartner, Hype Cycle for U.S. Healthcare Payers, 2024. Mandi Bishop, Austynn Eubank, Connie Salgy, 29 July 2024

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To learn more about what Source prospective payment integrity solution can do for your organization, visit www.healthedge.com.