With U.S. healthcare spending projected to exceed $5.3 trillion in 2025, payers are under more pressure than ever to contain inappropriate and wasteful costs that add no value to members' care. A critical part of this effort is ensuring the integrity of claims payments—particularly as the healthcare landscape rapidly evolves due to shifting utilization patterns, new CPT and HCPCS codes, and specialty drug policy changes.
One of the most impactful—and often underutilized—tools in a high-performing payment integrity program is the complex outpatient review.
The care setting is rapidly shifting, with a clear trend away from inpatient hospital stays and toward outpatient and virtual care. Recent Cotiviti data shows a 6% decline in inpatient spending between 2020 and 2024, alongside a 4% increase in outpatient spending. These changes reflect a broader transformation fueled by advances in medical technology and growing patient demand for more convenient, lower-cost care options.
As more procedures are safely performed in outpatient settings, healthcare providers and health plans alike must adapt to new workflows and challenges. More complex, high-dollar procedures are being done in outpatient settings than ever before, further increasing the need for precision and oversight. One key challenge is the complexity introduced when multiple services are delivered in a single outpatient encounter. The more that gets packed into a single visit, the higher the potential for documentation errors, coding inaccuracies, and payment discrepancies.
At the same time, limited internal resources and the constant evolution of clinical and billing policies can leave health plans struggling to keep pace. This creates a gap in payment accuracy—one that traditional review processes often can’t fully address.
Compounding the issue is the growing administrative burden associated with these reviews. Health plans are under increasing pressure to reduce administrative costs while maintaining payment integrity. Rising medical loss ratios (MLRs) make this balancing act even more critical: The average MLR rose 1.6% year-over-year in Q2 2024 to 86%, up from 85% in Q2 2023, with all but one major carrier reporting increases. As administrative costs climb, and MLR thresholds tighten, plans must prioritize identifying incorrect payments to protect margins and improve overall efficiency.
Complex outpatient reviews are designed to fill that gap. By diving deeper into high-risk, high-volume claims, these reviews help detect issues that standard methods may overlook. They are especially valuable in identifying errors related to bundled services, drug administration, and evolving care protocols.
Despite the growing volume and complexity of outpatient care, many health plans still take a narrow approach to outpatient reviews. Services like ambulatory surgeries, specialty drug infusions, and advanced imaging require in-depth clinical reviews to uncover errors not caught by standard claim edits. The specificity of outpatient coding, especially with drugs or surgical codes, means that coding errors, incorrect modifiers, or missing documentation can go unnoticed unless you’re doing a comprehensive clinical review.
Complex outpatient reviews offer health plans the ability to:
While many health plans already perform outpatient chart reviews, these efforts are often limited in scale, focusing on lower-risk claims and missing opportunities in high-cost, high-variability areas. Expanding the scope of complex outpatient reviews can significantly improve payment accuracy without increasing friction with providers.
The key is to balance scale with accuracy. As review programs grow, audits must be rooted in clinical rationale and supported by thorough documentation—not just automated code checks. This approach helps ensure accuracy while maintaining provider trust.
With the right combination of clinical expertise, comprehensive medical record access, and advanced analytics that identify the right claims for review, health plans can identify a broader range of inappropriate payments. This not only drives cost savings but also strengthens the integrity of the overall payment system in a healthcare environment that continues to grow in complexity.
As the healthcare system continues to evolve, ensuring payment accuracy in outpatient settings will be critical—not just for cost containment, but for maintaining trust and sustainability across the care ecosystem.
Cotiviti’s Clinical Chart Validation solution delivers a comprehensive program of complex prospective and retrospective claim reviews of inpatient DRGs and postpay reviews of outpatient, skilled nursing and inpatient rehabilitation, short stay, and readmission claims. Read our fact sheet and learn how we can reduce annual inpatient spend by 3–6% by preventing or correcting inappropriate payments.