Knowledge Hub

Payment Integrity

What is Payment Integrity in Healthcare?

Payment integrity in healthcare are specialized teams and departments within Payers, Insurers and Government agencies that ensure payments for health services are accurate, valid, and compliant with contractual agreements, regulations, and policies. Payment Integrity teams build strategies with a goal to prevent errors, fraud, waste, and abuse in the healthcare payment system, ultimately promoting financial accuracy and sustainability.

Key areas of focus of payment integrity in healthcare include:

1. Claims Accuracy: Ensuring that the information submitted on healthcare claims is accurate and supported by appropriate documentation.

2. Contract Compliance: Processing claims to determine the appropriate reimbursement amount based on contractual agreements and fee schedules.

3. Fraud Prevention: Employing advanced analytics and technology to identify patterns and anomalies that may indicate fraudulent activities.

4. Audits and Compliance: Conducting internal reviews and audits to assess the accuracy of claims processing and adherence to organizational policies.

5. Provider Credentialing: Verifying the qualifications and credentials of healthcare providers to ensure they meet established standards.

6. Data Analytics and Predictive Modeling: Utilizing data analytics to analyze historical claims data for patterns, trends, and potential areas of risk.

7. Coding Accuracy: Ensuring accurate and compliant assignment of diagnostic and procedural codes on claims.

8. Policy Adherence: Ensuring that claims are in accordance with the payer’s coverage policies and guidelines.

9. Provider Education: Offering training and educational resources to healthcare providers on proper billing and coding practices.

10. Coordination of Benefits: Coordinating healthcare benefits among multiple payers to prevent overpayment or underpayment of claims.

Efforts in payment integrity are critical for maintaining the financial stability of healthcare organizations, controlling healthcare costs, and ensuring that patients receive appropriate and necessary care. By proactively addressing inaccuracies and potential fraud, payment integrity initiatives contribute to a more sustainable and efficient healthcare system.

What is the impact of Technology on Payment Integrity Operations?

Technology has played a significant role in transforming and improving payment integrity within Payers. The adoption of advanced technologies has enhanced the accuracy, efficiency, and effectiveness of processes related to claims processing, fraud detection, and overall payment integrity. Here are several ways in which technology has impacted payment integrity:

1. Advanced Analytics: Analyzing the vast amount of healthcare data including Member, Provider and Claims data helps in detecting potential overpayments, fraud, waste, and abuse.

2. Predictive Modeling: Predictive analytics and machine learning algorithms can predict potential payment integrity overpayments and risks before they occur, enabling proactive intervention.

3. Fraud Detection: AI and machine learning algorithms can analyze historical claims data to identify unusual patterns indicative of fraudulent activities.

4. Automation: Automation can streamline all aspects of Payment Integrity

5. Documentation: EHRs improves access to medical documentation, reducing errors in coding and opportunities where there are potential over coding.

6. Robotic Process Automation (RPA): RPA automates repetitive and manual tasks in Payment Integrity

7. Platforms & Software applications: Having a Payment Integrity wide platform helps streamline the process of identifying overpayment, managing vendors, activities and accelerating recovery

8. Audit Platforms: Having robust platforms have improved the efficiency of audits like Coordination of Benefits (COB), Clinical, DRG, Itemized Bills and compliance audits

Overall, the integration of technology into payment integrity processes has streamlined operations, reduced the risk of errors, enhanced fraud detection capabilities, and contributed to a more efficient and secure healthcare payment ecosystem.

How important is Payment Integrity to Payers?

For Payers, Payment integrity is very important to maintain financial sustainability, regulatory compliance, and the delivery of high-quality care to members. Ensuring accurate reimbursement for healthcare services, preventing overpayments, fraud, waste, and abuse contributes to the financial stability of payers. Adhering to payment integrity practices ensures compliance with healthcare regulations and standards, avoiding legal repercussions and financial penalties. Having transparent Payment integrity policies ensures trust between healthcare providers and payers. Finally, Payment Integrity enhances the efficiency of claims processing, reducing administrative burdens and improving overall operational efficiency. For all of these reasons, Payment Integrity is very important to Payers.

Why would a health plan need a comprehensive database of their PI data?

A centralized and comprehensive database can play a crucial role in supporting various aspects of payment integrity processes. Payment Integrity happens across the life cycle of the claim in both pre-pay and post-pay scenarios and is handled by multiple stakeholders including internal teams within Payers and vendors that specialize in different areas of Payment Integrity. Without a central and comprehensive database that tracks all aspects of Payment Integrity, vital information is siloed and leads to inefficiencies. Having a central data repository helps with insights and identify patterns, trends, and potential anomalies that can help improve savings, reduce abrasion and improve efficiency. A comprehensive database is a foundational element for effective payment integrity within Payers.

Why is it important for a health plan to have a PI technology solution partner?

Payment Integrity Technology solution partners contribute to the streamlining of payment processes, reducing manual errors and improving overall operational efficiency. The right solution partner is an extension of the Payment Integrity team making sure the technology solution aligns with the long-term goals and vision of the health plan and the payment integrity department.

How is Artificial Intelligence impacting Payment Integrity?

Artificial intelligence (AI) is significantly impacting Payment Integrity in healthcare by revolutionizing the way organizations detect, prevent, and recover improper payments. Artificial Intelligence has a significant impact on Fraud Detection, Anomaly Detection, Predictive Modeling, Clinical Documentation Analysis. Technologies like Large Language Models are impacting the efficiency of Clinical Audits and Contract compliance.

What are the trend in Payment Integrity to watch out for?

Several trends are shaping the landscape of Payment Integrity in healthcare, driven by advancements in technology, changes in regulatory requirements, and evolving fraud schemes. Key trends in Payment Integrity are increased emphasis on Pre-Pay detection, Insourcing, data analytics, integration of Artificial Intelligence and Machine Learning, provider Education and Coordination of Benefits Automation.

Coordination of Benefits

What is Coordination of Benefits?

Coordination of Benefits (COB) determines the order in which multiple insurance plans should pay claims for a patient’s healthcare services when the patient is covered by more than one insurance plan. COB ensures that the total benefits paid by all insurance plans do not exceed the actual expenses incurred by the patient or healthcare provider. Coordination of Benefits helps avoid overpayment, reduces the financial burden on patients, and establishes clear guidelines for the order in which insurance plans contribute to covering healthcare expenses.

Why would a health plan want to have a high performing internal coordination of benefits team and increase their internal COB findings?

Most Payers have an internal Coordination of Benefits team but rely heavily on external vendors to help with most of the COB activities. While there are good vendors in the Coordination of Benefits space, most Vendors are incentivized to find overpaid claims and consequently, cost avoidance and updates to Member enrollments (Term dates) are deprioritized. Having an internal team that is empowered with technology that is in par with or better than Vendors technology brings a holistic approach to coordination of benefits, ensuring accurate claims processing, minimizing overpayments.

Why would a health plan want to increase their cost avoidance related to Coordination of Benefits?

Having the ability to uncover potential other insurance coverage for Members and moving that information upstream to the pre-pay side before Claims are paid has a positive impact on Provider Relations, minimizes Provider abrasion and reduce administrative costs of Pay and Chase.

Clinical Audits

What are Clinical Audits?

Clinical audits in Payment Integrity involve a systematic review of healthcare claims, medical records, and clinical documentation to ensure that services billed align with the care provided, meet medical necessity criteria, and comply with coding and billing guidelines. These audits focus on evaluating the clinical appropriateness, accuracy, and completeness of healthcare services rendered to patients. Clinical audits may encompass a wide range of healthcare services, including inpatient and outpatient procedures, diagnostic tests, surgeries, treatments, and prescription medications. Trained auditors, often including healthcare professionals such as nurses, physicians, or certified coders, analyze medical charts, Itemized Bills, treatment plans, progress notes, and other relevant documentation to assess the appropriateness of billed services.

What are DRG Audits?

DRG audits, also known as Diagnosis-Related Group audits, are a type of review conducted to ensure the accuracy and appropriateness of Diagnosis-Related Group assignments in healthcare claims. DRGs are a classification system used to categorize patients into groups based on similar clinical characteristics and resource utilization patterns. The primary purpose of DRG audits is to verify that the assignment of DRGs accurately reflects the severity of illness, complexity of care, and resource utilization for each patient encounter. DRG audits help ensure that healthcare providers are coding and billing for services in accordance with established coding guidelines, documentation requirements, and regulatory standards.

What are Itemized Bill Audits?

Itemized bill audits are reviews conducted to examine individual line items on healthcare claims to ensure accuracy, completeness, and compliance with coding, billing, and reimbursement guidelines. These audits scrutinize detailed charges for services, procedures, supplies, and medications listed on patient claims, submitted documentation or statements. Itemized bill audits validate the charges billed for services, procedures, supplies, and medications against contractual agreements, fee schedules, and reimbursement policies. Auditors compare billed charges with standard rates, allowable amounts, and negotiated discounts to identify discrepancies and potential overcharges.