The right payment solution at the right time: 3 takeaways from Cotiviti’s new research

Preventing an inappropriate claim from being paid in the first place versus recovering an overpayment after the fact is always the ideal approach for health plans—but in many cases, this simply isn’t possible. For example, identifying fraud or abuse typically requires health plans to retrospectively analyze patterns of paid claim behavior to identify the aberrance, and high-dollar, complex claims often can’t be fully analyzed prepayment while still meeting prompt-pay requirements. Therefore, the most successful plans take a measured, thoughtful approach to moving payment integrity concepts from retrospective to prospective—while ensuring their prepay and postpay programs share information with each other as efficiently as possible to optimize the payment integrity cycle.

To find out where health plans are in their journey to a true enterprise payment integrity strategy, Cotiviti worked with HealthPayerIntelligence to survey more than 100 payer executives about their successes and challenges. 57% of our respondents come from health plans with fewer than 500,000 members, while 18% come from plans with more than 1 million members. Here are the most critical takeaways we learned.

1. As long as high accuracy is maintained, provider abrasion is not a significant concern in shifting from retrospective to prospective payment integrity. 42% of respondents indicated that providers have responded positively to their organization’s shift from postpayment to prepayment, while 38% said the response has been very positive. As one chief financial officer of a managed care plan noted, “Providers like speed of payment. They like clarity, and they like transparency. To the extent that our prepayment services could provide those things, it was absolutely preferable.” To maintain positive provider relationships, however, accuracy becomes increasingly important when shifting from postpay to prepay approaches. Indeed, survey respondents indicated that when implementing new prepay solutions, high accuracy is a more important factor than the average savings rate delivered by the solution.
2. Both internal and external misalignment can hamper prepayment strategies. Outside of disruption caused by the COVID-19 pandemic, the largest number of respondents indicated their prepay efforts have been challenged by risk of provider appeals (28%) and misaligned third-party vendors (28%). Misaligned incentives between internal prepay and postpay teams (25%) was also a significant factor. Many payers use multiple vendors for both prepay and postpay concepts to maximize savings, as a second-pass or “final filter” solution will catch additional errors that slipped through the first-pass solution. But this makes it all the more crucial for the plan to ensure that knowledge is shared between systems and teams. This may take the form of applying knowledge gained about providers retrospectively to prevent future overpayments. Or applying predictive analytics to retrospective results to help payers select clinical charts associated with claims with a higher probability of containing errors.
3. Automation is the key to scalable success in prospective payment integrity. 27% of survey respondents indicated that their efforts to implement prepayment strategies have been hampered by insufficient resources. Many smaller plans in particular simply don’t have the human or technological capital to catch complex improper claim scenarios before claims are paid, requiring a vendor that can deploy both advanced analytics and human-powered clinical review. As the managed care plan CFO stated, “We’re looking for automation as much as possible. We’ll probably invest in a few more staff resources, but for the most part, we’re going to try it from an automated standpoint. We’re leaning heavily on artificial intelligence.” Added another health plan CFO, “I feel confident that payment integrity is going to remain an area that payers realize it is not better for them to do it themselves.”

Ultimately, our research confirmed what payers need most is a partner that is prepared to help them at an enterprise level across the prepay and postpay continuum—one that can holistically evaluate which areas are suboptimized with respect to both savings and provider abrasion and then deploy the right intervention at the right time.