Execute healthcare claims editing more accurately—with less provider abrasion

Claim editing is generally a health plan’s first line of defense within its prospective payment integrity (PPI) program. It’s a practice based on following guidelines and rules from organizations like the Centers for Medicare & Medicaid Services (CMS) and the American Medical Association (AMA) and codifying them into claim editing rules—so how hard can it be to stand up a strong claim editing system? The answer may be surprising.

Some payers develop homegrown claim editing while many others follow the advice of organizations like Gartner, investing in vendor-supplied PPI solutions to alleviate dependency on internal IT. But whether building or buying, health plans must understand and be prepared to handle claim editing challenges or be sure that their vendor solution can.

Recency, compliance, accuracy, and transparency of claim editing is of the utmost importance to a successful claim editing solution. One cannot just “set and forget” claim editing software. It requires constant maintenance and oversight for the highest accuracy and transparency, and there are many resources needed to adequately maintain it.

Payers should consider several best practices when deploying a claim editing solution that pays claims with the highest accuracy and the lowest provider abrasion.

Interested in improving your claim editing process? Cotiviti’s unique approach to prepay claims editing saves payers millions of dollars every year—most often on top of their primary editing systems.

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Extensive clinical resources

A high number of clinical resources is needed to help guarantee that you are maintaining the highest level of payment integrity. And the more variety the better: certified coders, specialized registered nurses, and medical directors have different perspectives and areas of expertise when it comes to researching, building, and maintaining editing policies for regulatory requirements from AMA, CMS, State Medicaid agencies, and other bodies.

Regulatory alignment

When industry sources release new code sets (such as HCPCS, CPT, and ICD-10) each quarter, teams must be prepared to review all new and deleted codes for a clear picture of how changes affect policies. This includes staying abreast of the timeline for these updates, as changes need to be made prior to the effective dates of the new code sets. For example, evolving National and Local Coverage Determinations (NCD/LCD), which often change without notice, require constant review to stay current. Similarly, every state in which a plan has licensed Medicaid business has different payment rules and documentation practices that need to be constantly monitored for change to avoid falling behind on payment integrity practices.

Technical resources and support

Technical resources are also key to updating the claim editing application—especially when there’s a regulatory update or policy change. And there’s no time to wait in a technical request queue, as delays can cause improper payments and noncompliance. Claim editing applications must also reflect software updates released by vendors of integrated claim processing systems. A dedicated technical staff must also translate policies into properly functioning claim edits that accurately fire as close to 100% of the time as possible and maintain those edits for every policy and/or regulatory update. To update systems per these changes, payers may need to hire more technical staff.


Accurate claim editing also depends on a high level of agility. The vast majority of policies will change multiple times during the course of the year—is your team willing and able to handle that volume of change?

To put this need for agility in perspective, it is not uncommon for a health plan to need to update as much as 96% of its policies at least once during the course of a year—with many updated twice or more. This could easily require 10 quarterly/semi-annual industry change reviews (e.g., CPT, HCPCS, ICD) and monthly reference reviews to help maintain the amount of avoided overpayment savings accrued for these policies. When a payer implements a vendor’s software system, it must ensure the vendor is prepared to handle such changes without exorbitant maintenance fees.

Analytic and reporting resources

A health plan building its own or maintaining third-party claim editing software should also employ analytic and reporting staffers to provide leadership with ad-hoc reports and claim spend insights, as well as a strong understanding of provider trends for proactive policy enhancement.

For example, a plan may use analytics and reporting resources to identify potential over-coding rates among certain providers for evaluation and management (E&M) claims, where a level 4 or 5 was coded on the claim unnecessarily. Analysts should be able to prepare reports showing leadership the potential losses from physician office E&M policies not being followed by outlier physicians. With information in hand and leadership approval, the plan would be able to immediately turn on the right editing rule for a specific line of business, targeting only the highest outlier physician offices to start with to minimize abrasion.

Decreased provider abrasion

By creating a fast claim editing process, payers increase cost-effectiveness and decrease the provider abrasion that results from delaying claims payment or recovering overpayments. By implementing an automated claims editing system, supplemented with all the necessary human experts mentioned above, payers gain a payment integrity solution that is constantly and reliably kept accurate and up to date, ultimately satisfying most providers.

Another component for decreasing provider abrasion is being transparent with providers about existing updates, and new claim editing policies. And the user experience for both plans and providers looking into the details of particular claim decisions is an important component of claim editing. For example, a user-friendly system and process allows claim inquiries to be answered quickly and with full, defensible rationale by claim analysts, while extending that same rationale through the plan’s web portal gives providers the convenience of self-service. Together, these factors can help cut out lengthy processes that can frustrate both payers and providers.

Provider abrasion can also be decreased by health plans understanding the relative provider “acceptability” rate of new edits before deploying them, no matter the level of defensibility of the source. . For example, knowing that 75% of providers in a health plan’s region are exposed to the same edits with very low appeal rates would give the payer much less pause to deploy them.

A reasonable solution

Though claim editing can look simple from afar, its many moving parts make it a complex, constantly changing machine. However, it doesn’t need to be overwhelming, and it doesn’t need to increase provider abrasion.

Optimal PPI solutions require significant components to function with speed, efficiency, and transparency. Whether your chosen route is internally made or outsourced, ensure that its total cost of ownership is worth it. When choosing to go your own way or to go with a managed service, be sure that your team has the capacity to research and develop edits, ensure system interoperability, and perform constant maintenance.

Cotiviti is a leading claim editing managed services provider for payers of all sizes, providing highly comprehensive, accurate, and transparent experience for more than two decades. When deploying Cotiviti’s prepay Payment Policy Management along with other Cotiviti payment integrity solutions along the continuum, payer clients are beginning to shift strategies from postpay to prepay claim integrity.

Take a look at our latest study, in which Cotiviti surveyed health plan leaders to investigate the challenges their organizations are facing with balancing prospective and retrospective payment integrity programs.

Download the report


Matthew Hawley
As executive vice president of payment integrity operations, Matthew leads Cotiviti’s payment operations business unit, where he is responsible for the success of Cotiviti’s prospective Payment Policy Management and Coding Validation solutions as well as the content development team. He has been with the organization since 2004.

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