Payment Accuracy & Integrity Solutions: Mapping out a Complex Market

Payer organizations are responsible for making payments toward their members’ healthcare services. They have to ensure that payments are accurate, resolve any under- or overpayments, and detect patterns of fraud, waste, and abuse (FWA). Thus, investing in payment accuracy and integrity solutions is a top priority for payers. Payment accuracy and integrity involve multiple steps, and payer customers often use multiple vendors to effectively cover all steps and make payments across lines of business. In October, KLAS published the 2023 Payment Accuracy and Integrity Solutions report—our first on this highly complex and important segment.

The Payment Accuracy and Integrity Life Cycle

Because KLAS has never reported on this market before, we created an introductory section (which is free on our website) to outline the main aspects of payment accuracy and integrity. Capabilities are divided into two main groups: pre-payment (which focuses on ensuring accuracy before payments are made) and post-payment (which focuses on identifying or recovering losses after payments are made). Vendors often focus their offerings on certain capabilities, and some vendors provide broad capabilities across both pre- and post-payment steps.

While the chart above provides a high-level look at payment accuracy and integrity, it is not an exhaustive list of all involved processes. For example, one process that is not heavily discussed in the report is complex claims audit, which itself is a broad process that contains several smaller steps (such as hospital bill review, DRG claims review, and specialty drugs review). Several vendors provide solutions for complex claims audit, and in the future, KLAS hopes to be able to dive further into those solutions as well as solutions for other payment accuracy and integrity processes. 

Current & Future Market Trends

The payment accuracy and integrity market has seen many changes over time, and this report also looks at the current state of the market as well as key trends that are occurring. Most payer organizations work with several vendor solutions, which differs from other HIT markets that are seeing trends toward consolidation. Due to the complex nature of payment accuracy and integrity, most vendors have very specific areas of focus, and products are not often comprehensive or directly comparable. Using multiple solutions enables payers to maximize their savings opportunities. 

One key trend in this market is the shift from the traditional pay-and-chase model to pre-payment accuracy. Historically, payer organizations focused on post-payment processes, recovering losses, and correcting errors after payments are made to provider organizations. In recent years, pre-payment processes have become more of a priority. Avoiding errors in payments can reduce friction between payers and providers, enabling them to have better relationships. 

Looking ahead, many payers want their vendors to provide more guidance and expertise while navigating payer-provider relationships and making payment decisions. Although payers utilize technology to make payments, the process of paying for members’ care is still very affected by human decisions, and there are many gray areas (especially regarding claims editing). Payers are looking to their vendors—many of whom are veterans in this market—for help in navigating these decisions. Additionally, some payers are interested in potentially using AI technology to augment various processes, such as finding edits, managing policies, and detecting fraud, waste, and abuse.

What’s Next?

The recently published report is just the beginning of what KLAS plans to do in the payment accuracy and integrity market. We will continue to monitor vendor performance in this space. (For current insights on vendor performance, see the 2023 report.) While all vendors are currently grouped together in one payment accuracy and integrity segment, we hope to further break out the segment by pre-payment and post-payment capabilities to provide a deeper, more accurate understanding of how these solutions perform. KLAS also recognizes that there are many other vendors in this market segment that we aren’t measuring, and we aim to include new and upcoming vendors that offer payment accuracy and integrity solutions. KLAS encourages all payer customers to share their experience with their payment accuracy and integrity vendor via our website.

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