An untold cost-control story: The role of payment integrity

Of the $3.6 trillion spent on health care in 2018, the National Health Care Anti-Fraud Association estimates that tens of billions of dollars were lost due to health care fraud.The scale of this problem demands that insurers take responsive action and implement strategic solutions to avoid potentially serious financial losses for health plans.

There are many opportunities for errors, fraud and abuse in today’s increasingly tech-driven health care industry. Those seeking to profit from questionable claims also have easier access to tools and information that create business risk and increase possibilities for cost inefficiency.

Enter the focus on payment integrity: comprehensive programs designed to identify and take action on invalid or inaccurate claims. An effective payment integrity program is crucial during 3 key stages of claims processing:

  1. Pre-adjudication, or the period during which eligibility of charges is established.
  2. Prepayment, or the point after the claim has been received but before it has been paid.
  3. Recovery, meaning the period after a claim has been paid but a refund is owed.  

Payment integrity is more than just a behind-the-scenes operational capability to help employers make sure their health plan is paying claims appropriately. Increasingly, it’s becoming a strategic imperative for an industry looking to make health care more affordable for everyone. 

3 Key Takeaways

  1. An effective payment integrity program uses everything from complex, automated technologies to focused, hands-on reviews by specialty physicians and claims professionals.
  2. The challenge is that the payment integrity approaches of various insurers can vary widely, and the success or failure of these programs can impact costs in significant ways.
  3. One of the keys to effective payment integrity is getting in front of potential issues before a claim is paid, as this is the least disruptive time to provide accurate payment.

“The thing about payment integrity is that it often goes unnoticed and therefore undervalued,” says Ruby Kam, Vice President, Strategic Initiatives with UnitedHealthcare National Accounts. “It’s important to remember that these programs are working, and they’re working well. They’re actively generating significant savings for our clients.”

Payment integrity support

Many employers take for granted that health care dollars will be paid out only for fairly priced, necessary and eligible services used by eligible members. Given the nature of payment fraud and abuse, employers look to their insurers to help combat these wasted costs.

The challenge is that the payment integrity approaches of various insurers can vary widely, and the success or failure of these programs can impact costs in significant ways. An effective payment integrity program is multi-faceted, using everything from complex, automated technologies to focused, hands-on reviews by specialty physicians and claims professionals.

The list of payment integrity solutions includes but is not limited to:

  • Health care artificial intelligence.
  • Patterning algorithms.
  • Geographic price comparisons.
  • Machine learning.

When it comes to payment policy specifically, consider the following examples related to reimbursement:

  1. Maximum Daily Frequency: This rule enforces guidelines for the maximum number of times a procedure or service can be billed each day.    
    • Example: An immunization can only be billed once per day. An appendectomy is limited to 1 procedure because a person only has 1 appendix.
  2. Technical Validation: Rule ensures accurate payment by preventing 2 entities from billing for the same technical component of a service.
    • Example: An MRI, the technical component of the service, cannot be billed by the facility and the physician who reads the results.
  3. Bundling: Occurs when multiple procedure codes are billed for a group of procedures covered by 1 comprehensive code
    • Example: Provider billed for screening and office visit separately when the screening would be included in the office visit.

Payment integrity capabilities like these have helped UnitedHealthcare deliver its clients a $29.162 PMPM savings, or almost $350 in savings per member annually.

The insurer employs a highly advanced and coordinated system of checks and balances so claims are paid appropriately. This includes methods to prevent duplicate payments and payments for items or services not actually provided.

“Our teams are constantly iterating and releasing,” says Kate Ifversen with UnitedHealthcare Payment Integrity Strategic Development. “We’re continually mining data, refining our approach and applying this evolving intelligence across our book of business. Employers who work with us are getting the benefit of immediate, real-time updates as new payment protection solutions roll out. Whereas, for other insurers that purchase our payment integrity solutions, there can be a time lag because those entities are restricted by scheduled release cycles. Or, those other insurers may elect to use more of a baseline version of the solution, limiting their access to its full capabilities.”

Proactive payment integrity

One of the keys to effective payment integrity is getting in front of potential issues before a claim is paid, as this is the least disruptive time to provide accurate payment. For example, coordination of benefit reviews can occur before the payment cycle begins, as can detailed reviews of payment policies that may affect the claim.

Sample process related to payment policy:

This graphic shows the steps that take place as part of UnitedHealthcare’s payment policy solution.

In addition to this focus on medical claims, working with providers is another key element in any successful payment integrity program.

“Our payment integrity processes work seamlessly with our provider networks,” Ifversen says. “We consider these programs to be an important part of how we engage with providers. They represent a meaningful tool for developing trust and valuing accuracy.”

As an issue that affects the bottom line for employers and their employees, health care fraud demands serious and strategic solutions. To learn more about these and other payment integrity solutions, reach out to your consultant, broker or UnitedHealthcare representative.

Footnotes

  1. National Health Care Anti-Fraud Association. “The Challenge of Health Care Fraud.” nhcaa.org, February 2020.
  2. Based on 2018 UnitedHealthcare ASO data analysis.