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Payment Accuracy & Integrity Solutions 2023
Financial Outcomes Top of Mind
Author
Joe VanDeGraaff
Author
Ruirui Sun
Payers take on financial risk for members and pay for healthcare expenditures based on various plans and reimbursement types. Due to the complexity of reimbursement contracts, many factors (e.g., coding and billing errors, fraud, waste) can contribute to payers sometimes underpaying or overpaying provider organizations. Payment accuracy and integrity solutions help payers make accurate payments and recover losses when overpayments and fraud occur. This report—KLAS’ first on this market—aims to identify the main capabilities these solutions provide and show early findings on customer satisfaction with vendors’ performance.
Note: Research in this report is based on feedback from interviewed payer customers. This report is not intended to compare measured vendors’ technological capabilities.
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Key Findings:
- Vendors That Provide Pre-Payment & Post-Payment Solutions: Cotiviti and Optum Provide Broadest Solutions; Outcomes and Value for Customers Vary, Particularly with Optum
- Vendors That Provide Pre-Payment Solutions: Zelis Healthcare Customers Are Most Satisfied; Lyric & HealthEdge Customers See Outcomes but Want More Proactive Engagement & Functionality
- Vendors That Provide Post-Payment Solutions: Conduent & EXL Used for Payment Recovery & Analytics Respectively; Customers of Both Report Receiving Value
Market Introduction
Payment accuracy and integrity involves several steps, and KLAS research finds that payer organizations normally use multiple vendors for different steps (i.e., pre-payment vs. post-payment) and for different capabilities (i.e., claims editing, payment recovery). Some vendors say they provide broad capabilities across most or all areas, while others focus on providing offerings for certain steps in the payment accuracy and integrity cycle. These solutions are typically used across all different lines of business. Historically, payers and vendors have focused on correcting under- or overpayments when they occur; more recently, the market has emphasized accuracy before payments are made.
What KLAS Does
KLAS is a healthcare-focused research firm whose data helps provider, payer, and employer organizations make informed software and services decisions. Our reports exist because customers (including health plans) speak with KLAS and share invaluable insights; all performance data is based on feedback from these interviewed customers.
Key Definitions
Note: This is not a comprehensive list of payment accuracy and integrity processes but rather a list of the major components.
Pre-payment: Processes that ensure accuracy before payment is made
- Claims pricing: Calculates accurate pricing for which payer is liable based on reimbursement methods and related rules
- Provider education: Instruction for/engagement with providers to help facilitate accurate coding and claims submission
- Claims editing: Reviews and tests rules to ensure consistency and accuracy of items listed on a medical bill
Post-payment: Processes that identify or recover losses after payment is made
- Coordination of benefits (COB): Determines members’ primary coverage/plan; mostly done post-payment (some vendors may offer ways to identify COB-related issues pre-payment)
- Data mining: Identifies and recovers billing or payment errors through data analytics
- Subrogation: Reimbursement for payers by the party at fault who caused damage to the member
- Credit balancing: Identifies overpayment to provider organizations and manages credit balances
- Fraud, waste, and abuse (FWA): Detects, corrects, and prevents fraud, waste, and abuse (which account for a large portion of costs for payers)
Key Industry Trends
- Payers are looking for increased accuracy and savings by using multiple vendors for different lines of business/types of bills as well as for different functionalities/processes.
- Vendor business models are evolving to include software/SaaS (in addition to services and contingency models).
- Payers are looking to focus more on pre-payment solutions to ensure accuracy before payment, marking a shift away from the traditional pay-and-chase model. This prospective payment model is expected to reduce administrative costs for both payer and provider organizations.
- Due to friction in payer-provider relationships, many payers are recognizing the need to improve collaboration with provider organizations. Friction in these relationships can not only add more administrative costs for both parties but also be detrimental to the patient experience. As payers work to be more proactive and more accurate in payment efforts, they anticipate that provider relationships will naturally improve and desirable networks will be better sustained.
Writer
Natalie Hopkins
Designer
Bronson Allgood
Project Manager
Andrew Wright
This material is copyrighted. Any organization gaining unauthorized access to this report will be liable to compensate KLAS for the full retail price. Please see the KLAS DATA USE POLICY for information regarding use of this report. © 2024 KLAS Research, LLC. All Rights Reserved. NOTE: Performance scores may change significantly when including newly interviewed provider organizations, especially when added to a smaller sample size like in emerging markets with a small number of live clients. The findings presented are not meant to be conclusive data for an entire client base.