Need for Digital Transformation to Enable Payment Integrity Transition to a Prepayment Model
According to business management consulting firm Stonegate Advisors, in the US alone, payment integrity issues have translated to a staggering $800 billion in health care losses each year. This statistic points to a need for a lot of care in making claim payments.
What is payment integrity?
Payment integrity (PI) is the process to ensure that accurate payments are made towards healthcare claims, across pre-pay and post-pay contexts. The word “accurate” encompasses a broad spectrum of behaviour such as the correctness of amount, the right individual (the one covered), and the right service (purpose for which the claim was raised).
This process involves appropriate checks for detection and minimisation (or elimination) of fraud, wastage, abuse, and misuse of healthcare funds. The PI process is arduous, involving tons of paperwork and consuming a lot of time and valuable resources; it is also error-prone.
The process pays itself a hefty fee
According to CMS (Centres for Medicare & Medicaid Services), in FY (financial year) 2020, Medicare FFS (fee-for-service) estimated $25.74 billion in improper payments that included overpayments and fraudulent billings. Less than 10 percent of the money lost to fraud gets recovered, that too only after the fraud is proven in a court. Besides, fraud accounts for only a tiny fragment of the total loss.
The time and cost involved in resolving these issues are enormous. Besides, an estimated $47 billion is used for PI administrative operations. Developing a better payment integrity strategy can translate to huge savings for health plans.
Intelligent solutions to check the drain
Technology is not new in the PI process. However, existing platforms have either not been able to make health plans more efficient or to get them to utilise all the cost-savings opportunities. The solutions have become siloed, leading to communication gaps among departments and internal and third-party resources. These limitations prevent healthcare plans from optimising their payment integrity operations.
On the bright side, such barriers can be remedied. A powerful digital solution can bring agility to the PI process, rendering the organization hyper-productive.*
The hidden cost of money is time
One particular process, the claim audit review, can definitely be improved. Pre-payment model shifts this process from the processes of claim adjudication to payment dispensing, cutting short the timespan taken for completing the claim audit review.
Typically, it takes anywhere from 7 to 30 days for payment to be dispensed after claim adjudication, the duration being dependent on the claim adjudication engine. Most of the delays seen in this step are due to hold-ups in receiving the correct medical documentation needed for review.
Though outpatient and inpatient claims reviews are quicker, facility claims take longer — between 30 and 90 minutes per claim, due to the length of medical documents.
Approximately, the page count is in the 100–1000 range, varying in length proportional to the duration of stay. Clinical nurses are required to skim through every page to gather the required information for the review, which explains the long timelines. The larger the inventory, the longer the time taken to complete each review.
Deploying digital solutions here can help in bringing efficiency and speed to the process of receiving and validating documents. Based on the level of digital transformation that can be deployed in this process, a productivity improvement of 30–80% can be achieved.
Transforming PI with Artificial Intelligence (AI) and Advanced Analytics
AI can significantly contribute to cost-effectiveness across multiple functions by providing them with the following abilities:
- Process large volumes of disparate data and derive actionable insights
- Identify behaviour-based patterns
- Detect and gather evidence against fraud schemes
- Share information between teams
- Reduce provider abrasion
Selecting the right claims for review is important. Too many false positives could impact payer-provider relationships since the review is done before the payment is dispensed. This could affect the provider’s revenue cycle. Also, manual, rules-based claim selection yields an accuracy of less than 28% across all claim types.
Deploying digital transformation solutions can help increase the accuracy of a selected claim while eliminating provider abrasion. There is also an added advantage of reduction in selection turnaround, which can cause potential delays elsewhere in the process.
With deep learning capabilities, payment integrity can achieve greater visibility into details such as providers that have been flagged, trends in provider behaviour, and whom to exclude from audits.
Though adopting new processes can be daunting, an AI-powered technological solution can provide rationale and the details necessary for healthcare leaders to make accurate and effective decisions.
A shift in payment integrity processes will allow payers to focus on proactive efforts, especially when it comes to cost containment.
*For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.