Why Prospective Payment Integrity Solutions Are Must-Have Tech for Health Plans

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What are Prospective Payment Integrity (PPI) solutions anyway?

PPI solutions enable health plans to proactively avoid paying claims improperly. They include features like:

  • Claims editing
  • Data mining
  • Complex clinical Review
  • Advanced analytics and AI

With minimal payment leakage, they also address:

  • Contracts
  • Services
  • Eligibility
  • Payment accountability

How is that different from how claims are paid today?

The most popular payment method today for health plans is the pay-and-chase method. With this strategy, payers conduct claims quality assurance after claims are paid.

As per Gartner 3%-7% of healthcare claims are paid inaccurately the first time, with only a small portion of those claim payments later corrected.

Unlike previous payment strategies, PPI technologies like Source from HealthEdge ensure proper payment the first time, directly confronting improper claims payment activities.

Why PPI practices will become industry standard by 2027…

There are a number of reasons why PPI technologies like Source will become industry standard within the next few years. These include:

Increasing claims complexity due to:  

  • COVID-19 payment policy exceptions
  • Specialty drugs
  • Medically complex patients
  • Value-based payment arrangements

In-demand and complex capabilities built into PPI solutions like:  

  • Social analytics
  • Predictive modeling
  • Machine learning
  • AI-enabled fraud reduction, case management and payment integrity
  • Ongoing expansion and scaling of virtual care solutions leading to increased fraud in areas like durable medical equipment (DME) and prescription drugs.

 Why are PPI solutions not industry standard now?

Some health plans may be hesitant to implement PPI solutions today because the ROI for cost avoidance is harder to calculate than for cost recovery. Additionally, payers often implement incentives for staff to open cases for post-pay audits that create an unintended disincentive for PPI.

Finally, “Few payers have an enterprise payment integrity program that provides governance and oversight across all regions, products, provider networks, capabilities and vendors. Fragmented procurement and operations of PPI solutions diminishes the ROI of cost avoidance or, at least, accurate aggregation of savings realized across the organization and provider networks.”

Implementing change and choosing the right solution for the future

Implementing PPI solutions may include foundational change at some health plans—shifting focus from KPIs based on recoveries and other post-pay activities to prospective avoidance. It’s imperative that payers choose the right partners that offer a modular approach to implementation.

Additionally, Gartner outlines the following key offerings in PPI solutions that health plans should consider.

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To learn more about the future of prospective payment integrity solutions and other technology trends for healthcare payers, access the Gartner® Hype Cycle™ for U.S. Healthcare Payers, 2022.

GARTNER and Hype Cycle are a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved.

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